Shareholder Activism

Peltz pulls his punches on P&G’s weak governance

7 Sep 2017

The Trian boss wants the $235 bln toiletries giant to restructure and pursue M&A to rev up growth. He blames directors for tolerating mediocrity yet declines to target any of them. It’s a missed opportunity. The company’s CEO-heavy board is bucking the tide of corporate America.

Elliott shows tail wags dog in German M&A

4 Sep 2017

The U.S. investor has nudged Bain and Cinven into paying minority shareholders in drugmaker Stada 12 pct more than others got last month. Germany’s odd rules and passive investing make it all too easy for holdouts who own small stakes to throw their weight around.

Europe’s consumer giants are overindulging on ads

1 Sep 2017

Companies like Nestlé and Danone spend twice as much on marketing than U.S. peers relative to sales. They defend such profligacy by pointing to superior revenue growth. True, sales are better, but not by much. With activists circling, plump ad budgets are ripe for cuts.

Elliott’s Stada shakedown is cheeky but rational

31 Aug 2017

The hedge fund wants the private equity firms buying drugmaker Stada to pay 74.40 euros for its minority stake. That’s nearly 50 pct above the firm’s value before Bain and Cinven began bidding. Yet Elliott has a point: the buyers could pay up and still make a respectable return.

Activists lack salve for hospitals’ financial ills

21 Aug 2017

Hefty debt, rising costs and painful changes to health insurance make the likes of Tenet and Community Health easy patients for pushy shareholders like Glenview. But the usual remedies will achieve little and there are few obvious buyers. Palliative care may end up an option.

Sempra $9.5 bln Oncor fine print bears close read

21 Aug 2017

The $29 bln energy company has bested Warren Buffett’s bid for the bankrupt utility and given pushy hedge fund Elliott a sweeter deal. But the transaction looks rushed and leaves Sempra with undisclosed partners and limited control. Such terms may give shareholders a nasty shock.

P&G’s best defense shouldn’t be a takeover offense

18 Aug 2017

As the consumer giant faces a proxy fight with activist Nelson Peltz, one idea doing the rounds is to consider an acquisition. The trick is to find a target as alluring as Gillette once was. The more obvious candidates - Colgate, Clorox and Kimberly-Clark - don't really stack up.

Ackman needs sharper ideas guys on his ADP payroll

17 Aug 2017

Activists succeed by pursuing clear, deliverable goals, such as ditching non-core units or removing failing executives. Urging the employer-services firm to become an agile software company is nothing of the sort. Investors are giving the Pershing Square boss a deserved raspberry.

Elliott is grasping at straws in Oncor battle

17 Aug 2017

The hedge fund says it has enough debt in the bankrupt utility to block Warren Buffett’s $18 bln offer. Yet the move makes little sense in the absence of a firm alternative. The judge is likely to see through Elliott’s posturing, as is the Omaha sage, who refused to up his bid.

Elliott finds part-victory in Akzo defeat

16 Aug 2017

The U.S. activist failed to arm-twist the Dulux paint maker into a merger with PPG. The Dutch group has, though, committed to a full breakup and put two solid new members on the board. It’s a decent result for Akzo’s investors – although less than Elliott’s might have wanted.

Danone can stomach new activist investor

15 Aug 2017

Hedge fund Corvex’s reported stake in the yoghurt maker may be small, but it puts pressure on management to meet its new margin target. Danone was once shielded from a Pepsi bid by the French state. If new investors bring good ideas and discipline, such defences won’t be needed.

Akzo and Elliott are trapped in a lose-lose battle

11 Aug 2017

The Dutch paint maker has won a legal victory over its biggest shareholder, which is trying to oust the chairman. The increasingly pointless fight is likely to drag on beyond September’s shareholder meeting unless new CEO Thierry Vanlancker can make both sides see sense.

EQT drills too deeply to sell its Rice deal

4 Aug 2017

The U.S. natural gas producer has projected implausible new possible synergies for its $6.7 bln deal. EQT also is brushing aside an admitted conglomerate discount. It's dubious logic considering how insiders could reap healthy payouts simply for making the company bigger.

Passive investing won’t really devour capitalism

4 Aug 2017

Paul Singer is the latest financier to warn about the danger of index funds and ETFs, calling their apparent stability "unsustainable and brittle," and a threat to free markets. Too much passivity might be a problem one day. But oversized hedge-fund fees are an immediate one.

ADP owners cash checks from Pied Piper Bill Ackman

27 Jul 2017

The $50 bln payroll processor's stock shot up 11 pct after Bloomberg reported the hedge-fund manager had built a stake. Neither Ackman's high-profile stumbles nor the middling performance of activists broadly proved a deterrent. Following blindly is a dubious investment strategy.

Nestlé is behind in consumer goods bake-off

27 Jul 2017

In a slow sales environment, global food giants need a new growth recipe. Danone and Unilever are both buying higher-growth companies and using fashionable cost cutting philosophies to improve profitability. Bigger rival Nestlé is trying too, but less convincingly.

Barnes & Noble sale has plot logic but no ending

25 Jul 2017

An activist wants the $560 mln U.S. bookstore chain to go private. That makes sense for a fading business that needs work. The problem is finding a buyer on the other end. Amazon’s Whole Foods deal has everyone thinking. But Barnes & Noble may be nowhere on Jeff Bezos’ list.

Akzo’s misguided strategy will weather CEO change

19 Jul 2017

The Dutch paint maker’s new boss Thierry Vanlancker inherits his predecessor’s fanciful mid-term targets. The goals are backed by Chairman Antony Burgmans, a key opponent of a deal with PPG who may now find his position strengthened. Real change at Akzo is even less likely.

Peltz goes for the close shave at Procter & Gamble

17 Jul 2017

Unlike his last proxy fight at DuPont, the activist is taking a more surgical approach, lobbying for one board seat at the $223 bln razors-to-detergent conglomerate. Trian is also supporting management and not calling for a breakup. Shareholders would be daft to turn him down.

Elliott renews totemic siege of Dutch boardrooms

7 Jul 2017

The U.S. hedge fund has launched a new legal bid to dismiss Akzo Nobel chair Antony Burgmans. The move may not revive the Dutch group’s sale to PPG that Elliott wants. Yet after defeat in a separate case, it shows activist investors haven’t given up on the Netherlands just yet.