Shareholder Activism

Nelson Peltz picks good time to scrub P&G

15 Feb 2017

The $230 bln Tide-to-Crest conglomerate was improving steadily even before the pushy investor came calling. While Gillette faces bigger threats, Peltz's proposals for P&G are a mystery for now. Either way, consumer stocks are well positioned for a tougher economic environment.

Turning table on activist runs $10 bln risk at CSX

15 Feb 2017

The railroad quickly acceded to Mantle Ridge's idea to install Hunter Harrison as CEO. Now it's balking at the fund's outsized demands for pay and board seats. Drawing the line on comp and giving shareholders a say is laudable, but a long fight threatens CSX's big market gains.

Viewsroom: The cost of jingoism

2 Feb 2017

President Trump's trade-tariff threats and his temporary immigration ban risk undermining business-friendly policies like deregulation and tax cuts. Meanwhile, he has nominated a Supreme Court justice. And Under Armour takes center stage in the battle for shareholder rights.

Insurgency is logical byproduct of Alcoa spinoff

1 Feb 2017

Alcoa coped with an irrational aluminum market by plowing capital into expensive acquisitions. Management hoped a separation would attract investor attention to its Arconic parts business, and provide a cozy escape hatch. It got what it wanted – but in the form of a proxy fight.

Avis steers wrong way to avoid investor hazard

24 Jan 2017

The $3.2 bln rental-car outfit adopted a poison pill after its biggest shareholder refused to renew a standstill agreement. Avis worries big buybacks will give hedge fund SRS creeping control without paying a premium. A simpler, fairer solution would be to pay dividends instead.

Italy is a flytrap for activist investors

19 Jan 2017

The euro zone's third-biggest economy offers some ideal conditions for shareholder activism – and some great reasons to stay away. A fight between Elliott Management and railway-signal maker Ansaldo STS shows plenty of both.

Starboard takes tricky tack with Rockwell deal

1 Dec 2016

The activist wants the aircraft-parts maker to consider ditching a $6.4 bln tie-up with B/E Aerospace. Grounding the merger has merit, but Carl Icahn and others have had mixed results agitating against M&A. A Trump-inspired rally in Rockwell's stock complicates Starboard's case.

Consultant Cognizant gets some useful free advice

28 Nov 2016

Pushy hedge fund Elliott wants the $35 bln IT services provider to buy back stock and pay a dividend. As Cognizant's revenue has grown over 100-fold since 1999, its margins have been curiously stable. Focusing more on efficiency and returning capital to investors are good tips.

Chinese insurer’s board battle could backfire

23 Nov 2016

The mass resignation of CSG's management team after a hostile takeover by activist conglomerate Baoneng Group puts the profitable firm's fate in limbo. If Baoneng wants to prove itself as a strategic investor, it should look before leaping into boardroom battles.

Detractors give central bankers too much credit

26 Aug 2016

Federal Reserve Chair Janet Yellen and other rate-setters stand accused of pursuing policies that only help the rich. Yet the supposed beneficiaries complain that loose money depresses returns and distorts markets. Both sides overestimate central banks’ control over the economy.

China’s big banks enjoy calm before the storm

26 Aug 2016

Net profits at CCB and BoCom are stable, as are bad-loan ratios: a pleasant surprise given the wider backdrop. This partly reflects a growing gulf in asset quality between large banks and their smaller peers. The giants are probably also putting off recognising bad debts.

Bank activists could try their luck in Europe too

16 Aug 2016

ValueAct's 2 percent stake in Morgan Stanley has parallels with Knight Vinke's 2013 cage-rattling at UBS. That example aside, European banks have mainly dodged investor activism due to the threat of ever-higher capital requirements. There are early signs this could be changing.