News

December 27, 2018

Activist Investors Gain Clout as Stocks Tumble – Bruce Goldfarb in the WSJ

A record of more than 280 companies around the world with market values of more than $500 million were publicly subjected to activist demands in 2018

By Cara Lombardo

Investors are recognizing the benefits of speaking up and doing so early in campaigns, said Bruce Goldfarb, head of Okapi Partners LLC, a proxy-solicitation firm that helps activists and companies communicate with shareholders.

“It’s to their advantage to put their mouth where their money is,” he said.

Directors have come to realize that even companies largely owned by friendly shareholders aren’t immune to activist onslaughts, advisers say.

Despite a slumping stock and repeated strategic missteps, Campbell for years avoided activists, partially because a more than 40% stake owned by heirs to the soup dynasty acted as a deterrent. But in September, Daniel Loeb’s Third Point LLC teamed up with one of the heirs to launch a proxy fight to replace the food maker’s entire board.

The two sides engaged in a heated back-and-forth up until a few days before the shareholder vote, when they struck a settlement adding two Third Point nominees to the board and giving the fund input on another new director and on Campbell’s new chief executive.

Activists themselves are evolving, in many cases by toning down their rhetoric and elevating issues that matter to the shareholders whose support they increasingly need.

Read the full story online, here.