In this article, we present the list of 15 recent activist investor campaigns. Click to skip ahead and see the 5 Recent Activist Investor Campaigns.
It's never a dull day in the markets with activist investors deploying all kinds of strategies in the race to unlock and maximize hidden value in highly undervalued stocks. Since 2017, campaigns by activist investors that purchase minority stakes and push for strategic changes have been on the rise. While the activism eased during the Covid 19 pandemic, they have increased in recent years with the easing of COVID-19 restrictions and the opening up of the global economy.
The impact of activist investors is growing in the US and worldwide, depicted by a tidal wave of campaigns spread far and wide. Often referred to as corporate raiders, activist investors acquire minority stakes in companies they feel are trading below their fair value. They buy stakes to influence management, operations, and policies to try and unlock any hidden value.
Activist investor's ultimate goal is to improve the performance and value of the companies they invest in. Consequently, they use tactics not limited to public campaigns or private negotiations. In extreme cases, they engineer proxy fights calling for management changes and seats on the board in the race to influence policies.
Carl Icahn, Bill Ackman, Nelson Peltz, and Daniel Loeb are some of the notable names called in the same breath with the biggest activist campaigns. The corporate raiders have been on a roll in recent years, with most engineering campaigns on stock valuations tanking at the height of the pandemic. In the race to pursue strong financial returns and strategic accountability, investors are increasingly taking on executives they feel are underperforming.
Activist's campaigns were on a roll in 2022, buoyed by tumbling markets that provided a leeway for activist investors to target stocks that had plunged significantly. More than 900 companies were targeted by activist investors, up 6% from 2021.
In the first quarter of 2023, 69 new activist campaigns were the second-highest number since 2019. By the end of the year’s first half, there were about 850 campaigns, much higher than the 762 campaigns recorded in the first half of 2022. Additionally, 85% of the campaigns had an ESG component, with corporate governance the most common theme.
Stocks in the consumer goods industry remain the most targeted as they play host to larger companies with low debt levels and strong cash generation prospects. Their scale often offers activist investors a reason to push for cost-cutting and divestments, operational improvements, and adoption of new technologies.
Activist campaigns targeting financial institutions surged by more than 60% in the first half of the year as the banking crisis was escalating in the US. However, the scrutiny eased as the half came to an end amid improving fundamentals.
In the first half of the year, activist campaigns targeting the Technology sector stood at 25%, followed by Industrial at 21% and Healthcare at 13%. The campaigns were vast and concentrated on companies with a market capitalization of above $10 billion at 24% of the campaigns. A good number of the campaigns also came with M&A demands. On the other, activism has increased in the Utilities sector amid deteriorating performance on concerns about the economy. The health services sector has not been spared either.
The increase in activist campaigns came with a new trend dubbed swarming that involves pursuing campaigns in companies already targeted by activists. Some of the companies targeted as part of the new strategy included salesforce.com, inc. (NYSE:CRM), The Walt Disney Company (NYSE:DIS), Bayer Aktiengesellschaft (NYSE:BAYRY), and Seven & i Holdings.
15 Recent Activist Investor Campaigns
Source:unsplash
In addition, activist campaigns used to be more relaxed than they were. In the past, the corporate raiders would take a strong stand and fight through a proxy contest. The companies are listening to shareholders more and engineer board nominations to influence policies. Proxy fights and lawsuits appear to have taken a back seat.
In recent years, activist investors have also been looking into Europe as a more attractive market, which explains why the region accounted for the lion's share of new campaigns. While there was a 34% decline in activist campaigns early in the year in the US, there was a 30% increase in Europe. Activist investors are increasingly targeting large European companies offering greater growth and returns potential.
Despite the uncertainties in the global markets amid monetary policy disparity and recession risks, activist investors continue to push companies with the number of global campaigns holding above the four-year average.
Our Methodology
Activist campaigns are always cropping as institutional investors like hedge funds scan the market for undervalued stocks that can generate significant returns once strategic alternatives are triggered. We have compiled a list of the most recent activist campaigns an ranked them based on when they occurred.
The Walt Disney Company (NYSE:DIS) was the subject of an aggressive activist investor campaign early in the year over claims it was in crisis for shedding more than $120 billion in market value in 2022. Trian Partners was the lead activist investor pushing for strategic changes at the entertainment company to try and maximize shareholder value.
Trian Partners’ Nelson Peltz started making the case for replacing Michael Forman in the media and entertainment conglomerate. Trian, which held $1 billion worth of stakes in The Walt Disney Company (NYSE:DIS), did not spell out reasons for its call.
However, a back and forth between the activist investor and the company would end after Disney delivered a raft of business initiatives, including plans to reinstate dividends by the end of the year. Trian dropped its campaign after the announcement.
SiriusPoint Ltd. (NYSE:SPNT) is a company that offers insurance and reinsurance products and services for various lines worldwide. It's been targeted by activist investors, the most recent being from Third Point, which owns a 9% stake in the company valued at about $1.4 billion.
The activist investor considered taking the insurance company private as one of the ways of unlocking shareholder value. However, the activist investor could not reach an agreement with SiriusPoint Ltd. (NYSE:SPNT), hence pulling back on any deal.
Masimo Corporation (NASDAQ:MASI), a monitoring technologies, automation, and connectivity solutions company, has been targeted by Politan Capital, which holds a 9% stake. The activist investor kicked off a proxy battle in May with the aim of fixing what it dubbed as broken corporate governance.
The investor cited the $5 billion drop in market value after the company reached a deal to acquire audio company Sound United for $1 billion. Politan Capital also raised concerns about Masimo Corporation (NASDAQ:MASI)'s capital allocation and board oversight.
In addition, the activist investor has taken issue with what it terms an unfocused strategy, therefore calling for management change. The size of the CEO and founder employment agreement also aggrieved it.
The proxy battle would come to an end after shareholders voted in favor of the hedge fund nominees to the board. The activist investor has since put the activism aside, opting to work from inside to try and unlock value.
After a turbulent 2022 that saw Salesforce, Inc. (NYSE:CRM) come under pressure, it would catch the attention of activist investor Elliot Management at the turn of the year. The activist investor started pushing for strategic alternatives that it felt would impact the company's fortunes.
The hedge fund started pushing for its own candidates in the company as one of the largest shareholders with stakes valued at billions of dollars. Nevertheless, the push for board seats would only last a short time as Salesforce, Inc. (NYSE:CRM) delivered impressive Q4 results, prompting the hedge fund to reconsider its stance. In a joint statement, it emerged Elliott Management won't be pursuing its director nomination, averting a potential proxy fight.
Carl Icahn, an activist investor, has launched a fierce proxy fight with Illumina, Inc. (NASDAQ:ILMN), a company that makes and sells life science tools and integrated systems.
Early in the year, Icahn accused the board of poor oversight, especially with regard to the acquisition of cancer test maker Grail for $7.1 billion.
Icahn's resistance to the deal stems from Illumina, Inc. (NASDAQ:ILMN)'s decision to close it without approval from antitrust regulators in the US and Europe. The activist investor embarked on a campaign urging the company to unwind the absurd and questionable deal. He also called for the CEO to step down while pushing for board seats.
The activist investor garnered enough support in May to oust the biotech company's board chair, John Thompson, in May. However, CEO Francis DE Souza survived the chop from the nine board members. Icahn also ended with three seats on the board.
Freshpet, Inc. (NASDAQ:FRPT), a company that manufactures and sells natural fresh meals and treats for dogs and cats, has been the subject of a fierce activist investor campaign. Jana Partners has been pushing for aggressive changes at the company after acquiring stakes when the company's stock dropped by 74% last year.
At the time of the investment, the activist investor felt the company was mismanaged and needed management and board changes. Consequently, it waged an activist campaign that resulted in the firm gaining four seats on the board in May, which it is using to advocate for changes.
Jana Partners has been pushing for changes in how the company allocates capital and its corporate governance. The appointment of four directors leaves it in a solid position to supervise capital expenditures and position it for a possible sale.
Cardlytics, Inc. (NASDAQ:CDLX) is a company that operates as an advertising platform in the US and the UK. It offers a proprietary platform that allows marketers to reach customers through their network. CAS Investment Partners, which owns a 16% stake in the company, announced in June plans to meet with management to analyze strategic alternatives to enhance stockholder value.
The activist investor believes the company can improve operational efficiencies and work to address its capital structure. It also started pushing for board composition. The investment firm also reiterated it supports the current CEO, who assumed the role in September of last year.
8. Jana Partners at Mercury Systems, Inc. (NASDAQ:MRCY)
Activist Campaign: June 2023.
Mercury Systems, Inc. (NASDAQ:MRCY) is a technology company that manufactures and sells components, products, and subsystems for the aerospace and defense industries. Activist investor Jana Partners targeted the company after increasing stakes to 8% in June.
The activist investor started pushing for board seats as it sought to play a role in defining the company's policies and future. To avert a fierce proxy battle, the company reached a voting agreement that saw Jana's managing partner, Scott Ostfeld, appointed to the board. With the agreement, Jana Partners also agreed to support any Mercury Systems, Inc. (NASDAQ:MRCY) incentive plan amendments.
Together with its subsidiary, Sportsman’s Warehouse Holdings, Inc. (NASDAQ:SPWH) operates as an outdoor sporting goods retailer offering products like backpacks, camp essentials, canoes, and Kayaks. Cannell Capital, which owns a 9.8% stake in the company, has been pushing for management changes to bolster the company's fortunes.
In July, the investment firm sent a letter to the company's board urging all of them to resign. The hedge fund also proposed five people to be nominated as a replacement. Discussion between the firm and the company broke down on May 5 as Cannell Capital dubbed the proposed agreement as too restrictive.
The proposed agreement required the hedge fund to offer support to all board measures over the next two years in exchange for appointing a nominee.
OneSpan is a company that designs, develops, and markets digital solutions for identity authentication. The company is the subject of an activist campaign by investment firm Legion Partners Asset Management, which believes the company is going in the wrong direction.
The firm has since written a letter to the company; making it known it is not happy with the push to pivot away from growth and pushes to focus on cash flow optimization and capital returns. The hedge fund believes the proposed changes are a distraction to the company's bid to achieve fair value for shareholders.
Therefore, it is calling on management to focus on committing 30% off plus adjusted margins for earnings before interest taxes, depreciation, and amortization. It also wants the company to increase its capital returns by more than $ 50 million and pursue a possible sale of the company.
