Activist investing in Europe is keeping pace with record highs
Despite or perhaps because of Brexit, activism in Europe remains at elevated levels.
Activist Insight data, revealed in the 2017 edition of Activist Investing in Europe in association with international law firm Skadden, Arps, Slate, Meagher & Flom LLP, suggest that activity in the U.K. is flat with 2016 at a historically high number, while Germany has become more active. France may keep pace with, or even exceed, last year’s numbers, while Switzerland and Italy have both lagged previous years’ activity.
More than 100 European-based companies had been publicly subjected to activist investor demands by the end of September 2017, and although this number is slightly lower than the same period last year, it signals that the future of activism on the continent looks secure.
M&A remains a catalyst of activism in Europe, with campaigns initiated following the announcement of deals involving Safran, Clariant and Stada. However, operational activism at Rolls-Royce Holdings, Stock Spirits, Nestlé and Danone, among others, has also been in vogue.
Activist activity is expected to exceed or at least match previous levels as far back as 2013, in the U.K., France and Germany.
*All YTD figures as of September 30.
The report, which includes country profiles of the U.K., France, Germany, Italy and Switzerland, features data and analysis from Activist Insight, the leading provider of information on shareholder activism worldwide, and legal analysis from Skadden’s shareholder activism team.
A breakdown of the country-by-country activity is below.
Foreign interest in activism
Notwithstanding a growing number of homegrown activists, Activist Insight found that the level of campaigns from activists based outside of Europe is at an absolute high, with 29 companies publicly targeted by foreign activists.
Year-to-date, 72% of “foreign” activist campaigns were led by U.S. activists.
Josh Black, editor of the report and Editor-in-Chief at Activist Insight, commented: “Activist interest in Europe has been strong in 2017, with a rise in foreign-led campaigns and local players continuing to demonstrate that they have the ambition to target Europe’s largest companies. Activists were largely indifferent or opposed to Theresa May’s corporate governance reforms, but Brexit has certainly done little to deter them from pursuing campaigns at U.K. issuers.”
Armand Grumberg, Head of European M&A for Skadden, commented: “Recent activity clearly demonstrates that no European issuer is immune to shareholder activism, including large-cap companies. With activists currently pressing European companies at near-record numbers, it is critical that boards and management teams are fully prepared to respond to an activist attack and are generally willing to take into account the concerns of their shareholders and address weaknesses in their governance and operations, sure up their transactions and deliver on their promises.”
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About Activist Insight
Since 2012, Activist Insight has provided its clients with the most comprehensive information on activist investing worldwide. Regularly quoted in the financial press, Activist Insight is the trusted source for data in this evolving space. In 2016, Activist Insight launched Activist Insight Shorts after acquiring Activist Shorts Research. Activist Insight offers three great products: Activist Insight Online, Activist Insight Shorts and Activist Insight Monthly – the world’s only magazine dedicated to activist investing.
About Skadden, Arps, Slate, Meagher & Flom LLP
Skadden is a global leader among law firms involved in mergers and acquisitions and other corporate transactions, and a top adviser for clients on corporate governance, takeover preparedness, contests for corporate control, proxy fights and other forms of shareholder activism. Skadden provides clients with an integrated team from different areas of law, including attorneys from its M&A, corporate governance and litigation practices. Its diversity of experience helps clients address the full spectrum of issues presented by activists and is key to helping its clients prepare for and respond to activist shareholders advocating strategic, financial or structural changes.