Activists Going After Larger European Companies

What the activism world is talking about

Shares in Israel’s Mellanox Technologies have risen about 6% after Starboard Value disclosed a stake in the semiconductor company last week. In the filing, Starboard said it had been following Mellanox for years, as part of its coverage of the semiconductor industry, and had “been noting the growing disparity between [Mellanox’s] margins, growth, and stock price performance compared to its peer group.” The activist said its interest was “solely based on [its] view that tremendous value can be created through operational improvements or other strategic alternatives,” warning that it may seek a board refreshment if the company’s current board and management are not willing to work with the activist.

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News of Starboard’s position came hours after competitor Marvell Technology Group announced a $6 billion acquisition of Cavium. In the past, Mellanox has received takeover bids from Marvell. On Tuesday, the Israeli company said it “welcomes the input and investment” of all its shareholders.

What we’ll be watching for this week

Voss Capital is betting on a housing market boom

Housing MarketThe Voss Value Fund was up 4.09% net for the second quarter, while the Voss Value Offshore Fund was up 3.93%. The Russell 2000 returned 25.42%, the Russell 2000 Value returned 18.24%, and the S&P 500 gained 20.54%. In July, the funds did much better with a return of 15.25% for the Voss Value Fund Read More

  • Will AkzoNobel shareholders approve a spinoff of the Dutch paint maker’s specialty chemicals unit at the company’s extraordinary meeting Thursday?
  • Will shareholders join activist investor Sandon Capital in opposition of a merger between Australian lottery companies Tatts Group and Tabcorp, or will investors vote in favor of the deal Thursday now that the transaction has been approved by a competition tribunal?
  • Will the three nominees of Israeli activist investor Amir Efrati be appointed to the board of Israeli biotechnology company Kamada on Thursday?

Short update

Shares in ShotSpotter traded down 12% after activist short seller Richard Pearson published a negative report against the gunfire alert company. The report said the company hasn’t generated profits or meaningful cash in over 20 years. Pearson also accused the company of using technology that does not work and providing law enforcement with false data.

The short seller claimed the company went public in June because private equity firms no longer wanted to fund it. “The purpose of this IPO was simply to allow insiders and [private equity] investors to exit an otherwise unsellable, money-losing investment,” Pearson said. “On December 4th, 8 million shares will be released from lockup, allowing these investors to finally sell.” He presumed ShotSpotter shares will plummet by around 80% once the IPO expires.

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Chart of the week

Proportion of Europe-based companies publicly subjected to activist demands with a market capitalization of above $2bn.

*All figures are as of November 24 in the respective year.

Article by Activist Insight

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Since 2012, Activist Insight has provided its diverse range of clients with the most comprehensive information on activist investing worldwide. Founded by Nick Arnott and Kerry Pogue with the objective of providing unmatched intelligence to professionals in the global activist investment space, Activist Insight made its entry into the market with online information product, Activist Insight Online. Activist Insight Monthly, the world’s only monthly magazine dedicated to shareholder activism, soon followed, granting its readership access to the thoughts and opinions of key industry professionals, while providing an editorial vehicle for the data trends uniquely aggregated from Activist Insight Online. In 2013, Activist Insight’s sister business, Proxy Insight, was co-founded by Nick Dawson and Nick Arnott.