Shareholder Activism

CEO nostalgia won’t bring back the alpha

29 Mar 2023

Activist Carl Icahn wants Illumina’s Jay Flatley back at the helm of the US biotech firm. He’d be joining the zeitgeist: UBS and Disney have both reinstalled former CEOs too. Competence has value, but past performance doesn’t guarantee greatness. Long tenure brings its own risks.

Xavier Niel can feast on European telco misery

27 Mar 2023

The French tycoon has assembled a privately owned telecoms empire worth about $33 bln, Breakingviews calculates. Behind the scenes he’s manoeuvring to further spread his wings. Purchases of stakes in Vodafone and Luxembourg-based Millicom signal the scale of his ambition.

Salesforce is stuck with its pricey acquisitions

20 Mar 2023

Pushy investors persuaded the business software developer to cut back on M&A, but undoing past deals would be tougher. Offloading $28 bln Slack, $16 bln Tableau or $7 bln MuleSoft looks to be more trouble than it’s worth. Integrating them is a better, albeit slower, approach.

Big Oil’s old profligacy lives on Down Under

15 Mar 2023

Chevron, Shell and others are ploughing some Ukraine-related windfall earnings into new projects, but sharing the lucre with shareholders too. Australia’s Santos is being stingier, with governance and climate concerns to boot. Its lagging stock is dry powder for activists.

Icahn reacts audaciously to Illumina’s audacity

14 Mar 2023

The mouthy billionaire wants three board seats at the $36 bln biotech company and for it to spin off Grail. Boss Francis deSouza overpaid to buy back the cancer detection business and took on too much regulatory risk. Some oversight is warranted, but a 1% stake only buys so much.

Capital Calls: Carlsberg CEO exit

7 Mar 2023

Concise views on global finance: Asia will be a key battleground for the $21 bln Danish brewer’s next boss.

Adani contrarian is a win for Hindenburg, too

3 Mar 2023

GQG’s $1.9 bln investment is a fillip for the tycoon. But shares of his firms are close to the short-seller’s target. And a court has ordered India’s securities watchdog to probe its allegations. Even if cleared, Adani may struggle to secure the backing of mainstream financiers.

Spotify’s next act: hosting ad lollapalooza

24 Feb 2023

The music service attracted activist ValueAct as founder Daniel Ek starts to whack costs. Yet rather than cutting its way to profit, Spotify could stem its losses by nabbing a quarter of the streaming and podcasting ad pie. It’s a tough but plausible performance to pull off.

Scrap-car deal battle is a heaping mess

23 Feb 2023

Ritchie Bros’ $7 bln deal for salvage-yard operator IAA has seen dueling activists, wild synergy projections, and a big hit to the buyer’s stock. The deal’s value looks slim unless optimistic promises pan out – the problem is, they include gains investors can get on their own.

TCI’s Airbus fury may have collateral benefit

22 Feb 2023

Hedgie Chris Hohn says the plane maker’s plan to buy a 30% stake in Atos’s cyber arm will destroy value. He’s probably right, but private investors take a back seat in defence deals, where governments call the shots. His salvo might however help Airbus drive a harder bargain.

Disney clash with activist Peltz will have sequel

16 Feb 2023

While the $200 billion media company’s new cost-cut program persuaded cage-rattler Nelson Peltz to call off his bid for a board seat, there’s much more to do. If his previous campaigns at P&G and DuPont are a guide, what looks like a harmonious ending may only be an intermission.

Microsoft can answer antitrust “Call of Duty”

13 Feb 2023

UK regulators say selling the video game would ease their concerns over the software giant’s $69 bln purchase of Activision Blizzard. A disposal would be chunky, and boss Satya Nadella won’t want to leave it behind. But even without the franchise, the acquisition still stacks up.

KKR can limit the pain of Elliott’s telco blitz

13 Feb 2023

The activist is disrupting the buyout group’s bid for German phone masts firm Vantage Towers. With a 5.6% stake, Paul Singer’s fund is expected to block the delisting until it gets a big payout. But unlike previous Elliott campaigns, KKR has various ways to insulate itself.

Gautam Adani’s woes were in banks’ plain sight

8 Feb 2023

Barclays, Standard Chartered, Deutsche Bank and others helped the Indian tycoon supersize his empire. A $110 bln share rout exposes their willingness to ignore warnings and take a narrow view of risk on lucrative relationships. As Adani struggles, the questions will get louder.

Japan activists seek smaller fish to fry

7 Feb 2023

With the Toshiba campaign stuck in the mud, some investors are eying easier prey. Elliott Management is angling for $6 bln Dai Nippon Printing; Oasis is after a $2 bln elevator maker. If these less ambitious campaigns don’t pay off, it’ll send gadflies back to the drawing board.

Nordstrom will be back on discount rack soon

3 Feb 2023

The department store chain’s market value surged 20% to $4.1 bln on news that pushy investor Ryan Cohen is lurking. His meme-stock following outweighs any retail savvy. Bed Bath & Beyond, which he targeted, is near bankruptcy and other activists have struggled in the sector, too.

Jeff Smith makes for a substitute Warren Buffett

30 Jan 2023

The activist’s $500 mln investment backing a deal by equipment auctioneer Ritchie Bros has come under fire. His support echoes Buffett’s moves at Occidental and elsewhere. Though the Starboard boss lacks folksy shine, he might be up to playing the role in all the ways that count.

Vodafone stake-builder sends fuzzy breakup signal

24 Jan 2023

UAE telecoms group e&’s 12% holding in its $31 bln UK peer makes it seem like a full bid or a breakup lies just around the corner. But the $61 bln Middle East stake-builder doesn’t seem that keen. And most of Vodafone’s many locales look hard to split off anyway.

Salesforce’s activists have an easy job

23 Jan 2023

Corporate cage rattler Elliott took a stake in the $150 billion tech firm alongside Starboard. They might want board seats or say in founder Marc Benioff’s successor. But the company is a better builder than buyer. With growth out of fashion, that’s naturally a good place to be.

Capital Calls: Activism, Bond spat, Airline M&A

18 Jan 2023

Concise views on global finance: Aggressive shareholder campaigns picked up in 2022, but activism is becoming an overcrowded strategy. Meanwhile, M&A machine Melrose takes on a fight that might not be worth winning, and German airline Lufthansa eyes a stake in Italy’s ITA.