July 28, 2013 7:04 am
Activist investors target bigger
companies
By Ruth Sullivan
Activist investors are building up stakes in larger, high-profile
companies. Large companies are twice as likely to be targeted by
activists as in 2010.
Global activist shareholders stepped up investments in companies with a
market capitalisation of more than $10bn by 104 per cent between January
2010 and the end of June, according to Activist Insight, the data provider.
The findings come as
Nelson Pelz, the activist investor
and founder of investment firm Trian Partners, called for a shake-up at
PepsiCo earlier this month, urging
the US drinks group to merge its snack business with
Mondelez, the snacks group spun out
of Kraft Foods, in a $60bn deal.
Dell shareholders, including
activist investor
Carl Icahn, also
voiced dissatisfaction earlier this month over the terms of a
proposed buyout offer, which led to the PC maker postponing its shareholder
vote.
“The past few years have seen increased support for activists among other
shareholders and an increase in the level of activist fundraising. As a
result, activists are building significant stakes in much larger companies,”
said Kerry Pogue, managing director at Activist Insight.
About 60 public campaigns by activists, all still running, were initiated
this year, although fewer are expected to be launched during the rest of
2013. A trend to focus on fewer companies when launching campaigns, drawing
in several activists at the same time to gain muscle, is beginning to
emerge.
Out of 57 companies where global activists initiated public action in the
second quarter of this year, over 10 per cent had more than one activist
involved.
Between April and June, the most popular strategy among global activist
investors was to try and gain seats on company boards. Twenty-five attempts
were made.
Proposals for share repurchase campaigns comprised 12 per cent of their
activity during the same period.
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