Activism Flashcards
Elliott Management activism 2013
NetApp, Hess
Factors for shareholder vulnerability
- Shareholder base
- Valuation
- Return of capital
- Operating Performance
- Potential Suitors
- Defense profile
- Governance
Current activist environment (2013)
Longer-term capital Institutional investor support Emerge >5% Forums, new Short activism Settlements Large companies
Key Players in Shareholder Activism
Bill Ackman - Pershing Square David Einhorn - Greenlight Capital Carl Icahn Daniel Loeb - Third Point Nelson Peltz - Trian Barry Rosenstein - JANA Ralph Whitworth - Relational Investors
Four objectives of activist campaigns
M&A
Balance Sheet
Governance
Operational
Four broad tactics of activist investors (in order of increasing hostility)
Private discussions with management
Media and PR campaign
Proxy contest
Lawsuit
Bill Ackman - Firm
Pershing Square
Daid Einhorn firm
Greenlight Capital
Carl Icahn firm
Icahn & Co
Daniel Loeb firm
Third Point
Nelson Peltz firm
Trian
Barry Rosenstein firm
JANA
Ralph Whitworth firm
Relational investors
Bill Ackman - selected campaigns
Wendy's JC Penney Target Fortune Brands Kraft Foods Canadian Pacific Railway
David Einhorn - selected campaigns
St. Joe
Moody’s
Lehman Brothers
Green Mountain
Carl Icahn - Selected campaigns
TimeWarner Yahoo! Genzyme Motorola Clorox CVR Energy
Daniel Loeb - selected campaigns
Cypress
TXC Resources
Marathon
Yahoo!
Nelson Peltz - selected campaigns
Heinz State Street Wendy's Dr. Pepper/Snapple IngersollRand
Barry Rosenstein - selected campaigns
Alcoa Charles River PRG Schultz TNT The McGraw-Hill Companies Marathon
Ralph Whitworth - selected campaigns
Home Depot Sprint SPX EA PMC-Sierra PepsiCo
Bill Ackman - “Playbook”
Private discussions; less likely to settle once public
8-10- investments represent 90% of AUM
Sizeable report and analyses
Icahn - “Playbook”
“Sell the company” activist
Begins with industry thesis, then identifies targets (e.g. natural gas, biotech)
Investors have mixed view; reputation for not always picking strong slate
David Einhorn - “Playbook”
Often sells short
Public presentations to support investment theses
Tends not to initiate proxy fights
Daniel Loeb - “Playbook”
Inactive for years before Yahoo! campaign
Letters criticizing management
Aggressive, personal tactics
Barry Rosenstein - “Playbook”
Liked by institutional investors and ISS
Campaigns are always about ideas, never personal
Has never had to go to vote
Nelson Peltz - “Playbook”
“Operational activist”, known for identifying “simple fixes”
Highly respected for white papers and work done on portfolio companies
Inclined to work with management privately
Loeb 2007
Cypress Semiconductor
