Activists Sought and Won Board Seats in 2012: Report

James Willhite

News Editor

Activist investors hungrily sought board representation last year. And in most cases, they got what they wanted, according to a new report from Activist Insight.

Among the 135 activist campaigns tracked in the report, 58 put forward board candidates and, of those, 45, or 80%, were successful. Activists most often won board seats through access to the company’s proxy, the report said.

The next most popular strategy was to push for a company to sell itself, with 28 of the 135 campaigns pushing for such a move, as Carl Icahn successfully did with both Par Pharmaceutical and Amylin Pharmaceuticals. A push for a spin-off or sale of a business division occurred 26 times, the removal of a chief executive or other board member was sought 23 times, and in 16 instances investors sought to force a company to initiate a share repurchase plan. The report did not include success rates for those goals.

Financial services companies were targeted by 26% of the campaigns, the largest share in the group. Other popular industries were technology, which comprised 21% of the campaigns, and services, at 18% of the total.

The amount of money activists spent acquiring their stakes grew by 34% to just over $12 billion last year, from slightly less than $9 billion in 2011, with the average initial investment growing to around $110 million from just over $80 million the year before. At the same time, the percentage stakes that activists gained through those investments did not show a similar increase, indicating that the investors targeted larger companies, according to the report.

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