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The Standout Activist Moments From 2020

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Here are our standout activist moments from 2020. Disagree? Want us to focus more on certain areas? Send your feedback to me or [email protected].

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Activist Moments From 2020

Landmark Moment

With the kaleidoscope repeatedly and thoroughly shaken throughout 2020, it’s far from a given that any of the big moments of the year will mean much for the future. That said, there were shocks all over the world, including Unibail-Rodamco-Westfield’s loss to former Unibail CEO Leon Bressler – the first activist proxy fight victory in France for years. In another year, the three-way settlement between Twitter, Elliott Management, and private equity firm Silver Lake Capital would have been pretty notable. But Starboard Value’s rout of GCP Applied Technologies in late May (the activist’s first at a vote since 2014) was a sign that activists need not pack up for the year and may have helped spark activism’s modest comeback in the second half of the year.

Courtroom Drama

Litigation played a big role in 2020, from Driver Management’s strategy shift from ballot box to legal means, or Institutional Shareholder Services (ISS) suing the Securities and Exchange Commission over new proxy advisory firm rules. But the case with the most impact on activism is likely to be Steve Wolosky’s lawsuit against Williams Cos. for an unusually low poison pill threshold. Issuers got away with implementing pill defenses in 2020 but their anniversaries will prompt major headaches for companies with still-depressed share prices.

Disappointment

Shareholder activists had been making a lot of progress in Japan in recent years but that mostly reversed this year despite campaigns shifting from large caps to smaller issuers. Perhaps the biggest disappointment was the reported involvement of some government ministries in the proxy fight at Toshiba. A thorough investigation would be a good way to make sure that activists continue to have confidence in improved corporate governance there in future.

Social Justice Warrior

Isn’t everyone now? At least three ESG-flavored activist funds have launched this year and one of the most notable, Engine No. 1, is waging a noisy proxy fight against Exxon Mobil in part to ensure the oil major increases its focus on renewables. Asset managers and proxy voting advisers are progressively tightening their standards on board diversity, as well as expanding the definition to include ethnic diversity and sexual identity. Leading the pack is the NYC Comptroller, Scott Stringer, whose team reported that its engagement and shareholder proposal efforts forced 20 companies to begin searches for diverse directors. Next year’s category winner could be the first investor to use proxy access to advance boardroom diversity.

Unlikely Campaign

Rarely activists target well-performing companies, but a dearth of obvious opportunities in the U.S. may have prompted some activists to look deeper. Walt Disney is an unlikely activist target both because it is very large and has been performing very well over the past decades. However, Dan Loeb's Third Point Partners thought earlier this year things could be improved, calling on Disney to focus more resources on its fledgling streaming service Disney+ to better compete with market leader Netflix. As Disney+'s subscription numbers blew past the most optimistic forecasts, Third Point should be pleased.

Another contender is Crown Castle International. Not very often a company whose stock has consistently beaten the S&P 500 Index is facing an activist challenge. Yet Elliott Management thinks the broad market is not the right yardstick to compare Crown Castle's performance. Instead, Elliott noted Crown Castle underperformed substantially its two more focused competitors.

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