Activist campaigns fall as they lose momentum in Europe

Activist funds open 63 new fronts, 19% less. Campaigns remain stable in the US and Asia, but are down 52% in Europe.

In the first quarter of this year, activist investors have launched 63 new campaigns around the world, 19% less than the 78 in the same period last year, given the loss of momentum in Europe, according to data from Barclays and published byr The Harvard Law School Forum on Corporate Governance. With these figures, its activity goes back to the levels of 2020, when 64 campaigns were announced. Shareholder activism continues to play an important role, especially in the United States and Asia Pacific, where these hedge funds petition and pressure companies to make changes in management or promote the sale of assets or merge with another group and so on. raise its value on the stock market, sometimes demanding its entry into the boards.

The United States continues to be the main base of action for activist funds. 29 campaigns have been launched there, one less. Among them, Elliott Investment Management, which revealed at the beginning of the year a stake valued at more than $1 billion in Match Group, the owner of the dating applications Tinder and Hinge. In March, Paul Singer’s fund managed to get two of his representatives to join the board of Match Group, with which it also agreed to an exchange of information “to facilitate collaboration in order to generate sustainable value for all shareholders.” This move attracted a second fund, Anson Funds Management, which met with Match Group to make changes in management and for the group to promote artificial intelligence in its products.

Growth in Asia

Activism grows in Asia Pacific by almost 18%, with 20 campaigns, compared to 17 in the first quarter of 2023. One of the most active funds is Oasis Management Services, based in Hong Kong, which has led three of the large campaigns region of. Such as the purchase of 9.6% of the Japanese pharmacy operator AIN Holdings to protect shareholder value; and plans to sell its 13% stake in retailer Tsuruha Holdings. It has also opposed an offer by the management of Taisho Pharmaceutical to buy the shares of the Japanese pharmaceutical company for $5 billion to delist it from the stock market since it considered that the acquisition price was too low and harmed minority shareholders.

In Europe, on the other hand, they have fallen by 52% in the quarter, with eleven campaigns (23 a year earlier), a decrease attributed to the fact that large global activists, such as Elliott, TCI or ValueAct, focused on already existing campaigns or They focused on other markets. Among the open fronts in Europe, the London hedge fund Bluebell Capital Partners stands out, which asked BP to increase its investments in oil and gas production, reducing the allocation for renewable energies, and to increase the return of capital to shareholders. .

Like Oasis Management, which has acquired about 5% of the Irish prepared food manufacturer Greencore since, according to several sources, it would not be satisfied that it has not paid dividends since 2020 despite having a lower debt level than their rivals.

Performances

Precisely, the Hong Kong fund Oasis has been the most active in the first quarter, with four major campaigns undertaken in the world: Greencore, in Europe, and those of Taisho Pharma, AIN Holdings and the technology company NEC, in Asia. Along with Oasis, Elliott Management has also started four new campaigns: Match Group, the American e-commerce company Etsy, the Japanese real estate company Mitsui Fundosan and the Scottish fund The Scottish Investment Trust. Two new fronts were opened by activists Engine Capital, Land & Buildings, Curi RMB Capital, Icahn Enterprises and Silchester International Investors. These eight activist funds deployed 33% of the campaigns counted between January and March.

Among the issues that lead them to take positions in companies, the most common was the intention to make changes to the boards of directors. It appeared in 49% of the campaigns. Mergers and acquisitions have taken a backseat, entering 29% of campaigns to date. Among them, pushing for the sale of the entire company has been the most popular demand, suggesting that activists are pushing to speed up processes to anticipate interest rate cuts.

 
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