Shareholder Activism

Japan’s virtuous M&A circle starts with 7-Eleven

5 Dec 2024

The battle for control of $45 bln convenience store owner Seven & i is being cheered in Tokyo. It’s evidence of progress in the drive to improve efficiencies in the world’s third-largest economy. It could also be a sign of what’s to come if officials make the right next moves.

Tycoons’ odd telco bets mask a greater logic

26 Nov 2024

In recent years high-profile, rich investors like Carlos Slim have snapped up stakes in the likes of $19 bln BT. These haven’t always yielded juicy returns, nor prompted strategic shifts. But as a bet on much-needed consolidation, they may yet end up looking smart.

Elliott puts too many eggs in Honeywell’s basket

13 Nov 2024

The pushy fund manager’s effort to cleave the $150 bln conglomerate is backed by its biggest investment ever. A breakup like ones at other creaking empires such as GE makes sense, but invoking those successful splits is risky. A projected uplift of at least 50% looks optimistic.

French fries make a tasty $11 bln takeover target

5 Nov 2024

Lamb Weston, which sells spuds to McDonald’s and others, is under pressure from pushy investor Jana. A bolder turnaround plan could get messy and leave it a hard-to-value oddball anyway. It’s a better side dish for a peer like agribusiness giant Cargill or cereal company Post.

Vivendi activist’s critique falls on deaf ears

1 Nov 2024

Pushy fund CIAM reckons a planned carveup of the 10-bln-euro media empire favours the controlling Bolloré clan. That’s true. Yet the split at least eases a conglomerate discount. And since voting it down would be a leap into the unknown, investors will probably just stay in line.

One valve would release pressure at Air Products

17 Oct 2024

A $15 bln commitment to clean hydrogen is weighing on the industrial gas producer. The weakness has attracted attention from pushy investors over governance and capital usage. Selling some of the unproven green energy would help 80-year-old boss Seifi Ghasemi deflate the tension.

Elliott takes flyer with elite intimidation status

14 Oct 2024

The hedge fund escalated its battle with $18 bln Southwest and CEO Bob Jordan by calling for a shareholder meeting to shake up the board. It’s a rare public clash as companies increasingly acquiesce to pushy investors. If the airline prevails, it may embolden others to push back.

Pfizer’s M&A disease brings activist cure

7 Oct 2024

The pharma giant generated over $30 bln of extra cash during the pandemic, then spent over twice as much on questionable deals. With shareholders sitting on a loss under CEO Albert Bourla, Starboard will push for a return to former CEO Ian Read’s parsimony.

Southwest’s new flight plan carries excess baggage

27 Sep 2024

The $18 bln airline expects seat fees to help lift its operating margin to 10%, but not until 2027. Captain Bob Jordan and his crew also have consistently missed targets. A tough overhaul and a weak track record will weigh them down in the dogfight with pushy investor Elliott.

Rentokil’s US bug invites management fumigation

11 Sep 2024

The $13 bln pest controller’s shares fell 18% amid a new warning on growth. CEO Andy Ransom’s depleted credibility will embolden activist Nelson Peltz. A new boss or a private equity owner might better protect Rentokil’s US market share amid its tricky Terminix integration.

Murdoch dissident chases another unpromising lead

9 Sep 2024

Hedge fund Starboard wants to rid $15 bln News Corp of super-voting stock that gives the media mogul and his family de facto control. Other founders have relented elsewhere. Narrowing the Wall Street Journal owner’s bad-governance discount, however, will be as elusive as ever.

Price may be Couche-Tard’s lowest Seven & i hurdle

21 Aug 2024

The Canadian suitor may be able to cut enough costs to offer a 40% premium for its rival, valuing it at $59 bln. But antitrust concerns might require selling some US assets. And the target's status in Japan as a quasi-national asset will complicate attempts to seal a deal.

Southwest shareholders needn’t act like passengers

14 Aug 2024

Rabble-rouser Elliott escalated its battle with the $15 bln airline by unveiling a dissident board slate. The timing is odd: sitting directors just won overwhelming support. It’s a question of persuading investors they deserve a smoother ride than sheep-like flyers tolerate.

Starbucks has too many baristas in the boardroom

12 Aug 2024

The $90 bln coffee chain’s US sales are down as growth in China flags. Add a newish CEO and it seems a tasty brew for rabble-rousers like Elliott. But the complex interplay between former boss Howard Schultz, angsty labor reps and even more activists threatens a bitter finish.

Reckitt gives weak scrub to valuation stain

24 Jul 2024

The $40 bln Dettol maker is selling cleaning brands and pledging to exit its baby milk unit. The result should be a leaner company and less depressed share price. But the lack of a clear timeline limits the benefit and leaves investors fretting over infant formula litigation.

Smith & Nephew faces long and painful activist fix

4 Jul 2024

Cevian has taken a 5% stake in the $11 bln underperforming London-listed medical equipment maker. Curing its depressed share price will require deep operational surgery. While that may take time, a breakup could be a second treatment further down the line.

Autodesk left a door ajar for its pushy investor

18 Jun 2024

Despite a plum niche developing software for architects, the $50 bln firm’s performance has sagged. Rabble-rouser Starboard Value has cookie-cutter fixes. But the company’s hand is weakened by poor disclosure that invites gripes about activists’ favorite target: executive pay.

Japan’s value push is starting to lose momentum

14 Jun 2024

Notwithstanding big activist campaigns, tallies of shareholder proposals tabled for company annual meetings this month look underwhelming. The stock rally is fast fading too. Japan has a long history of disappointing investors. The stakes for how fund managers vote are rising.

Barbarians at Southwest gate overdo upgrade plea

13 Jun 2024

The $17 bln airline’s slow response to weak performance made it an easy target for pushy investor Elliott. Boss Bob Jordan may struggle to keep his job, let alone reshape the business model. Yet his new dissident is too facile about jettisoning defining parts of the culture.

Texas Instruments: don’t mess with Elliott

7 Jun 2024

The $175 bln chipmaker is in a sensible expansion mode, but the pushy hedge fund raises reasonable concerns about cash flow. Even after generous US subsidies, it will take big uplifts in customer orders and market share to justify the investment. There’s scope to scale back.