Shareholder activism in q1 2019 - Activist Insight

[Pages:15]SHAREHOLDER ACTIVISM IN Q1 2019

- APRIL 2019 -

THE DEFINITIVE QUARTERLY ANALYSIS OF SHAREHOLDER ACTIVISM WITH DATA COMPILED, ANALYZED, AND PUBLISHED BY ACTIVIST INSIGHT.

CONTENTS

03 GLOBAL OVERVIEW 05 U.S. OVERVIEW 06 U.S. CAMPAIGNS 07 CANADA OVERVIEW 08 CANADA CAMPAIGNS 09 EUROPE OVERVIEW 10 EUROPE CAMPAIGNS 11 ASIA OVERVIEW 12 ASIA CAMPAIGNS 13 AUSTRALIA OVERVIEW 14 AUSTRALIA CAMPAIGNS

DEFINITIONS PRIMARY FOCUS ACTIVIST: AN INVESTOR WHICH ALLOCATES MOST, IF NOT ALL OF ITS ASSETS TO ACTIVIST STRATEGIES. PARTIAL FOCUS ACTIVIST: AN INVESTOR WHICH FREQUENTLY EMPLOYS ACTIVIST INVESTING AS PART OF A MORE DIVERSIFIED STRATEGY. OCCASIONAL FOCUS ACTIVIST: AN INVESTOR WHICH EMPLOYS AN ACTIVIST STRATEGY ON AN INFREQUENT BASIS.

UNLESS OTHERWISE SPECIFIED, DATA ARE GLOBAL AND NOT LIMITED BY MARKET CAPITALIZATION. ALL DATA PRESENTED HEREIN ARE SOURCED BY ACTIVIST INSIGHT ONLINE. MARKET CAP DATA ARE ACCURATE AS OF MARCH 31, 2019. ALL PERCENTAGES ARE ROUNDED TO THE NEAREST WHOLE NUMBER, WHICH MAY CAUSE SUMMATION ERRORS.

KEY HOVER: PRIMARY DATA HOVER OVER THE ITEM TO ACCESS FURTHER INFORMATION WHEN YOU SEE THIS ICON (DESKTOP ONLY).

KEY TAKEAWAYS, WITH REFERENCES TO CORRESPONDING DATA POINTS IN TABLES.

DATA INQUIRIES, INCLUDING BESPOKE REQUESTS: DATA@

PRESS INQUIRIES: PRESS@

SHAREHOLDER ACTIVISM IN Q1 2019

GLOBAL OVERVIEW

- Q1 2019 WAS THE QUIETEST OPENING QUARTER TO A YEAR BY NUMBER OF COMPANIES PUBLICLY SUBJECTED TO ACTIVIST DEMANDS SINCE 2015.

- THE NUMBER OF COMPANIES PUBLICLY FACING IMPACTFUL CAMPAIGNS IN Q1 FELL TO ITS LOWEST SINCE 2014.

- BASIC MATERIALS COMPANIES REPRESENTED 17% OF COMPANIES PUBLICLY SUBJECTED TO ACTIVIST DEMANDS IN Q1 2019, A RECENT Q1-HIGH.

SERVICES

19%

ACTIVIST TARGETS

NUMBER OF COMPANIES PUBLICLY SUBJECTED TO ACTIVIST DEMANDS BY TIME PERIOD.

YEAR

FULL YEAR

Q1 YTD

2013

609

204

2014

647

219

2015

780

278

2016

891

361

2017

858

309

2018

935

368

2019

-

295

IMPACTFUL CAMPAIGNS

NUMBER OF COMPANIES PUBLICLY SUBJECTED TO ACTIVIST DEMANDS MADE BY PRIMARY, PARTIAL, OR OCCASIONAL FOCUSED ACTIVISTS.

YEAR

FULL YEAR

Q1 YTD

2013

382

114

2014

416

116

2015

518

167

2016

576

222

2017

539

181

2018

544

209

2019

-

155

FULL YEAR

Q1

935 891 858

YTD

780

609 647

361

368

278

309

295

204 219

2013 2014 2015 2016 2017 2018 2019

FULL YEAR

576

Q1 YTD

518

539 544

416 382

222

209

167

181

155

114 116

2013 2014 2015 2016 2017 2018 2019

ACTIVIST TARGETS BY SECTOR

HOVER: PRIMARY DATA

SECTOR BREAKDOWN OF COMPANIES PUBLICLY SUBJECTED TO ACTIVIST DEMANDS BY TIME PERIOD.

FULL YEAR

Q1 YTD

SECTOR

2016 2017 2018 2016 2017 2018 2019

BASIC MATERIALS

15% 14% 15% 14% 12% 14% 17%

CONGLOMERATES

1% 1% 0% 0% 1% 0% 0%

CONSUMER GOODS 8% 8% 9% 7% 9% 10% 11%

FINANCIAL

22% 21% 20% 26% 28% 19% 21%

HEALTHCARE

8% 10% 10% 7% 9% 9% 8%

INDUSTRIAL GOODS 7% 8% 9% 7% 9% 11% 8%

SERVICES

22% 22% 21% 21% 17% 20% 19%

TECHNOLOGY

16% 14% 13% 14% 13% 13% 12%

UTILITIES

2% 2% 3% 2% 2% 4% 3%

ACTIVIST TARGETS BY MARKET CAP

HOVER: PRIMARY DATA

MARKET CAP BREAKDOWN OF COMPANIES PUBLICLY SUBJECTED TO ACTIVIST DEMANDS BY TIME PERIOD.

FULL YEAR

Q1 YTD

SECTOR

2016 2017 2018 2016 2017 2018 2019

LARGE CAP (> $10B)

18% 19% 21% 24% 26% 28% 28%

MID CAP ($2B - $10B)

16% 17% 16% 17% 17% 17% 20%

SMALL CAP ($250M - $2B)

24% 25% 24% 22% 25% 22% 18%

MICRO CAP ($50M - $250M) 19% 20% 16% 19% 16% 14% 17%

NANO CAP (< $50M)

22% 20% 23% 18% 15% 20% 17%

MICRO CAP

17%

NOLOGY

2 %

CONSUMER GOODS

11%

IGNODOUDSSTRIA

8 %

SMALL CAP

18 %

IAL

%

UTILITIES - 3%

HEALTHCARE L

8%

FINANC

21

BASIC MATERIALS

17%

TECH

1

NANO CAP

LA

17%

CA P

%

RGE CAP

28%

MID

20

SHAREHOLDER ACTIVISM IN Q1 2019

GLOBAL OVERVIEW

- THE U.K. HAD ITS BUSIEST Q1 IN RECENT YEARS, WITH 17 COMPANIES FACING PUBLIC ACTIVIST DEMANDS. - AUSTRALIA RANKED THE SECOND BUSIEST COUNTRY IN Q1 2019, WITH 25 COMPANIES FACING PUBLIC ACTIVIST DEMANDS. - PORTUGAL AND RUSSIA EACH RECORDED THEIR FIRST PUBLIC ACTIVIST TARGETS IN RECENT YEARS.

FULL YEAR

Q1

GLOBAL

2016 2017 2018 2016 2017 2018 2019

NUMBER OF TARGETS 891 858 935 361 309 368 295

HOVER: COUNTRY DETAILS

MOST COMPANIES TARGETED

FEWEST COMPANIES TARGETED NO COMPANIES TARGETED

11

NUMBER OF COMPANIES PUBLICLY SUBJECTED TO ACTIVIST DEMANDS BY COMPANY HQ & TIME PERIOD.

U.S. OVERVIEW

SHAREHOLDER ACTIVISM IN Q1 2019

- THE NUMBER OF U.S.-BASED COMPANIES FACING PUBLIC ACTIVIST DEMANDS IN Q1 2019 FELL TO A RECENT Q1 LOW, BEHIND THE RECORD PACE SET IN Q1 2018. - 56% OF U.S.-BASED COMPANIES PUBLICLY SUBJECTED TO ACTIVIST DEMANDS IN Q1 2019 HAVE A MARKET CAP OF OVER $2 BILLION, A RECENT Q1-HIGH. - BASIC MATERIALS COMPANIES MADE UP 14% OF U.S.-BASED COMPANIES FACING PUBLIC ACTIVIST DEMANDS IN Q1 2019, A RECENT Q1-HIGH.

L UTILITIES - 4%

SERVICES

21%

U.S. ACTIVIST TARGETS

NUMBER OF U.S.-BASED COMPANIES PUBLICLY SUBJECTED TO ACTIVIST DEMANDS BY TIME PERIOD.

YEAR

FULL YEAR

Q1 YTD

2013

328

121

2014

379

144

2015

432

174

2016

491

221

2017

470

191

2018

493

227

2019

-

189

IMPACTFUL CAMPAIGNS

NUMBER OF U.S.-BASED COMPANIES PUBLICLY SUBJECTED TO ACTIVIST DEMANDS BY PRIMARY, PARTIAL, OR OCCASIONAL FOCUSED ACTIVISTS.

YEAR

FULL YEAR

Q1 YTD

2013

211

68

2014

260

84

2015

317

119

2016

329

144

2017

287

113

2018

284

124

2019

-

97

FULL

YEAR

491

493

Q1

470

YTD

432

379

328

221

227

174

191

189

144 121

2013 2014 2015 2016 2017 2018 2019

U.S. ACTIVIST TARGETS BY SECTOR

HOVER: PRIMARY DATA

SECTOR BREAKDOWN OF U.S.-BASED COMPANIES PUBLICLY SUBJECTED TO ACTIVIST DEMANDS BY TIME PERIOD.

FULL YEAR

Q1 YTD

SECTOR

2016 2017 2018 2016 2017 2018 2019

BASIC MATERIALS

9% 8% 9% 8% 8% 7% 14%

CONGLOMERATES

1% 1% 0% 0% 1% 0% 0%

CONSUMER GOODS 7% 7% 9% 8% 8% 10% 9%

FINANCIAL

24% 22% 18% 27% 27% 20% 21%

HEALTHCARE

8% 12% 12% 9% 13% 11% 10%

INDUSTRIAL GOODS 7% 6% 8% 8% 8% 11% 8%

SERVICES

24% 25% 25% 21% 18% 23% 21%

TECHNOLOGY

19% 17% 16% 16% 14% 14% 13%

UTILITIES

2% 2% 3% 3% 3% 4% 4%

HEALTHCARE

LOGY

CGOONOSDSUMER

9 %

10%

TECHNO

13

%

BASIC MATERIALS

14%

INDGUOSTORDIASL

8%

FINANCIA

21%

FULL YEAR

317 329

Q1

YTD

287 284

260

211

144

119

113 124

84

97

68

2013 2014 2015 2016 2017 2018 2019

U.S. ACTIVIST TARGETS BY MARKET CAP

HOVER: PRIMARY DATA

MARKET CAP BREAKDOWN OF U.S.-BASED COMPANIES PUBLICLY SUBJECTED TO ACTIVIST DEMANDS BY TIME PERIOD.

FULL YEAR

Q1 YTD

SECTOR

2016 2017 2018 2016 2017 2018 2019

LARGE CAP (> $10B)

22% 24% 28% 26% 32% 34% 35%

MID CAP ($2B - $10B)

16% 18% 19% 17% 18% 20% 21%

SMALL CAP ($250M - $2B)

22% 25% 23% 20% 24% 22% 20%

MICRO CAP ($50M - $250M) 21% 18% 16% 21% 16% 13% 17%

NANO CAP (< $50M)

19% 14% 14% 15% 10% 11% 7%

SMALL CAP

20%

MICRO CAP

17 %

NANO CA

7%

MID CAP

21%

LARGE CAP

35%

U.S. CAMPAIGNS

SHAREHOLDER ACTIVISM IN Q1 2019

- ACTIVISTS GAINED 53 BOARD SEATS AT U.S.-BASED COMPANIES IN Q1 2019, A RECENT Q1-LOW. - 11 U.S.-BASED COMPANIES FACED PUBLIC ACTIVIST OPPOSITION TO M&A DEALS IN Q1 2019, A RECENT Q1-HIGH. - AS A PROPORTION OF ALL PUBLIC DEMANDS, M&A & BREAKUP ACTIVISM AT U.S. COMPANIES IN Q1 2019 REACHED A RECENT Q1-HIGH.

PUSH FOR M&A

18 COMPANIES

BOARD-RELATED

43%

OTHER - 1% BUSINESS STRATEGY

REMUNERATION

U.S. ACTIVIST DEMANDS BY TYPE

HOVER: PRIMARY DATA

DEMAND TYPE BREAKDOWN OF PUBLIC ACTIVIST DEMANDS MADE AT U.S.-BASED COMPANiES BY TIME PERIOD.

FULL YEAR

Q1 YTD

DEMAND TYPE

2016 2017 2018 2016 2017 2018 2019

BOARD-RELATED

44% 41% 39% 48% 45% 42% 43%

BALANCE SHEET

9% 8% 7% 6% 5% 3% 6%

M&A & BREAKUP

17% 14% 18% 13% 9% 12% 14%

BUSINESS STRATEGY 6% 7% 7% 6% 4% 6% 5%

OTHER GOVERNANCE 19% 23% 23% 22% 28% 32% 25%

REMUNERATION

4% 5% 4% 5% 5% 3% 6%

OTHER

2% 3% 2% 1% 4% 2% 1%

M&A-RELATED

14%

SBHAELEATNCE

6 %

6% 5%

OTHER GOVERNANCE

25 %

BOARD SEATS GAINED BY ACTIVISTS IN THE U.S.

NUMBER OF BOARD SEATS GAINED BY ACTIVIST NOMINEES AT U.S.-BASED COMPANIES BY METHOD & TIME PERIOD.

FULL YEAR

METHOD

2016 2017 2018

CONTESTED VOTE

MEETINGS SEATS WON

25 26 23 27 34 31

SETTLEMENT

SETTLEMENTS SEATS WON

169 118 143 244 175 236

TOTAL SEATS WON

271 209 267

2016 3 3 68 96 99

Q1 YTD

2017 2018

6

1

8

3

49 54

78 85

86 88

2019 1 0 35 53 53

M&A & BREAKUP ACTIVISM IN THE U.S.

NUMBER OF COMPANIES PUBLICLY SUBJECTED TO M&A-RELATED ACTIVIST DEMANDS AT U.S.-BASED COMPANIES BY DEMAND TYPE & TIME PERIOD.

FULL YEAR

Q1 YTD

DEMAND TYPE

2016 2017 2018 2016 2017 2018 2019

PUSH FOR M&A

70 71 83 18 22 27 18

OPPOSE M&A

36 17 29 9

3

6

11

SPINOFF / BREAKUP

16

8

17

8

0

6

7

OPPOSE

M&A

MPANIES

SPIN

7 CO

11 CO

OFF

/

BREAKUP

MPANIES

KEY U.S. CAMPAIGNS LAUNCHED IN Q1 2019

*APPROXIMATE VALUES IN USD AND AS OF MARCH 31, 2019.

ACTIVIST

COMPANY

VALUE OF STAKE*

PUBLIC DEMANDS?

STARBOARD VALUE

BRISTOL MYERS-SQUIBB

$47M

YES

Starboard Value withdrew its opposition of the company's bid for Celgene in March.

STARBOARD/ELLIOTT MGMT.

eBAY

$1.5B (COMBINED)

YES

EBay announced it was launching a strategic review in March, settling with Starboard Value and Elliott Management in the process.

BLUEMOUNTAIN CAPITAL

PG&E

$143M

YES

PG&E unveiled a new CEO and 10 new board members in early April, following pressure from BlueMountain Capital Management.

TOP U.S. ACTIVISTS IN Q1 2019

TOP PRIMARY & PARTIAL FOCUSED ACTIVISTS BY THE NUMBER OF NEW ACTIVIST INVESTMENTS MADE AT U.S.-BASED COMPANIES IN Q1 2019.

ACTIVIST

NEW INVESTMENTS CAPITAL INVESTED

NOTABLE CAMPAIGN(S)

STARBOARD VALUE

7

$2.3B

EBAY, DLTR, ZAYO, BMY

SABA CAPITAL MGMT.

2

$68M

VTA, BQH

ELLIOTT MANAGEMENT

1

$1.3B

EBAY

CARL ICAHN

1

$635M

CZR

PAULSON & CO

1

$487M

NEM

SHAREHOLDER ACTIVISM IN Q1 2019

CANADA OVERVIEW

- THE NUMBER OF CANADIAN COMPANIES PUBLICLY SUBJECTED TO ACTIVIST DEMANDS IN Q1 2019 SLIPPED TO 18, DOWN FROM 32 IN Q1 2018. - CANADIAN COMPANIES FACING PUBLIC IMPACTFUL CAMPAIGNS IN Q1 2019 FELL TO THE LOWEST LEVELS SEEN IN Q1 IN RECENT YEARS.

- FIVE CANADIAN BASIC MATERIALS COMPANIES FACED PUBLIC ACTIVIST DEMANDS IN Q1 2019, A RECENT Q1-LOW.

MATERIALS

8%

UTILITIES TECHNOLOGY

FINA

22

FULL YEAR

75

CANADA ACTIVIST TARGETS BY SECTOR

HOVER: PRIMARY DATA

Q1 YTD

70 66

SECTOR BREAKDOWN OF CANADA-BASED COMPANIES PUBLICLY SUBJECTED TO ACTIVIST DEMANDS BY TIME PERIOD.

CANADA ACTIVIST TARGETS

56 56

57

NUMBER OF CANADA-BASED COMPANIES PUBLICLY SUBJECTED TO ACTIVIST DEMANDS

SECTOR

FULL YEAR

Q1 YTD

2016 2017 2018 2016 2017 2018 2019

BY TIME PERIOD.

YEAR 2013

FULL YEAR 56

Q1 YTD 17

BASIC MATERIALS

35% 30% 37% 33% 39% 38% 28%

CONGLOMERATES

0% 0% 0% 0% 0% 0% 0%

SERVICES

BASIC

6%

CONSUMER GOODS 5% 5% 3% 0% 6% 6% 11%

6%

2

CONSUMER GOODS

11% 6%

2014

56

19

2015

70

27

27

30

32

FINANCIAL HEALTHCARE

15% 18% 23% 30% 28% 28% 22% 9% 9% 5% 3% 0% 6% 11%

2016

66

30

17

19

18

18

INDUSTRIAL GOODS 5% 7% 7% 3% 6% 6% 11%

INDUGSOTORIDASL

11%

NCIAL

%

2017

57

18

SERVICES

15% 16% 13% 20% 6% 6% 6%

HEALTHCARE

11 %

2018

75

32

TECHNOLOGY

15% 14% 11% 7% 17% 6% 6%

2019

-

18

2013 2014 2015 2016 2017 2018 2019 UTILITIES

2% 2% 1% 3% 0% 3% 6%

IMPACTFUL CAMPAIGNS

NUMBER OF CANADA-BASED COMPANIES PUBLICLY SUBJECTED TO ACTIVIST DEMANDS BY PRIMARY, PARTIAL, OR OCCASIONAL FOCUSED ACTIVISTS.

YEAR

FULL YEAR

Q1 YTD

2013

30

5

2014

30

6

2015

38

11

2016

37

18

2017

28

7

2018

38

11

2019

-

4

FULL YEAR

38 37

38

Q1 YTD

30 30 28

18

11

5

6

11

7 4

2013 2014 2015 2016 2017 2018 2019

CANADA ACTIVIST TARGETS BY MARKET CAP

HOVER: PRIMARY DATA

CAP

MARKET CAP BREAKDOWN OF CANADA-BASED COMPANIES PUBLICLY SUBJECTED TO ACTIVIST DEMANDS BY TIME PERIOD.

O

NAN

2

FULL YEAR

Q1 YTD

2%

SECTOR

2016 2017 2018 2016 2017 2018 2019

MICRO CAP

11%

LARGE CAP (> $10B)

18% 9% 17% 30% 11% 25% 17%

MID CAP ($2B - $10B)

14% 19% 9% 10% 22% 13% 22%

SMALL CAP ($250M - $2B)

15% 23% 25% 13% 22% 19% 28%

MICRO CAP ($50M - $250M) 21% 18% 9% 20% 17% 9% 11%

NANO CAP (< $50M)

32% 32% 39% 27% 28% 34% 22%

SMALL CAP

28 %

LARGE CAP

17%

MID CAP

22%

SHAREHOLDER ACTIVISM IN Q1 2019

CANADA CAMPAIGNS

- BULLRUN CAPITAL WON FOUR SEATS AT GROWMAX RESOURCES IN THE ONLY CONTESTED VOTE IN CANADA IN Q1 2019. - THE NUMBER OF PUBLIC BOARD-RELATED ACTIVIST DEMANDS MADE IN CANADA FELL TO A RECENT Q1-LOW. - NON BOARD-RELATED GOVERNANCE SHAREHOLDER PROPOSALS MADE AT CANADIAN COMPANIES FELL TO A RECENT Q1-LOW.

CANADA ACTIVIST DEMANDS BY TYPE

HOVER: PRIMARY DATA

DEMAND TYPE BREAKDOWN OF PUBLIC ACTIVIST DEMANDS MADE AT CANADA-BASED COMPANiES BY TIME PERIOD.

FULL YEAR

Q1 YTD

DEMAND TYPE

2016 2017 2018 2016 2017 2018 2019

BOARD-RELATED

44% 40% 50% 40% 39% 48% 41%

BALANCE SHEET

12% 12% 10% 15% 12% 5% 7%

M&A & BREAKUP

13% 16% 9% 4% 9% 5% 7%

BUSINESS STRATEGY 4% 7% 6% 4% 0% 2% 7%

OTHER GOVERNANCE 19% 16% 15% 29% 27% 26% 28%

REMUNERATION

8% 10% 10% 8% 12% 14% 10%

OTHER

0% 1% 0% 0% 0% 0% 0%

7% M&EALA- TED BSUTRSIANTEESGSY 7%

OTHER GOVERNANCE

28 %

BOARD SEATS GAINED BY ACTIVISTS IN CANADA

NUMBER OF BOARD SEATS GAINED BY ACTIVIST NOMINEES AT CANADA-BASED COMPANIES BY METHOD & TIME PERIOD.

FULL YEAR

METHOD

2016 2017 2018 2016

CONTESTED VOTE

MEETINGS SEATS WON

9

8

13

3

8

10

18

0

SETTLEMENT

SETTLEMENTS SEATS WON

23 15 20 8

31

32

31

11

TOTAL SEATS WON

39 42 49 11

Q1 YTD

2017 2018

2

2

9

3

2

4

3

5

12

8

2019 1 4 3 4 8

REMUNERATION BSAHLEAETNCE

10% 7% R OPPOSE M&A 1 COMPANY

PUSH FOR M&A

1 COMPANY

BOARD-RELATED

41%

M&A & BREAKUP ACTIVISM IN CANADA

NUMBER OF COMPANIES PUBLICLY SUBJECTED TO M&A-RELATED ACTIVIST DEMANDS AT CANADA-BASED COMPANIES BY DEMAND TYPE & TIME PERIOD.

FULL YEAR

Q1 YTD

DEMAND TYPE

2016 2017 2018 2016 2017 2018 2019

PUSH FOR M&A

7

8

6

0

2

1

1

OPPOSE M&A

6

6

5

2

1

2

1

SPINOFF / BREAKUP

0

1

1

0

0

0

0

KEY CANADA CAMPAIGNS LAUNCHED IN Q1 2019

*VALUES IN USD AND AS OF MARCH 31, 2019.

ACTIVIST

COMPANY

VALUE OF STAKE*

PUBLIC DEMANDS?

M&G INVESTMENTS

METHANEX

$760M

YES

M&G Investments is seeking four seats on Methanex's board, with concerns about capital allocation and corporate governance.

MANGROVE PARTNERS

TRANSALTA

$99M

YES

Mangrove Partners is calling on TransAlta's CEO to provide detailed explanations for a debt issuance to Brookfield Renewable Partners.

CRESCENDO PARTNERS

STUART OLSON

UNDISCLOSED

YES

Crescendo Partners sent a letter to the board of Stuart Olson in January, seeking board seats and the sale of the company to a third party.

TOP CANADA ACTIVISTS IN Q1 2019

TOP PRIMARY & PARTIAL FOCUSED ACTIVISTS BY THE NUMBER OF NEW ACTIVIST INVESTMENTS MADE AT CANADA-BASED COMPANIES IN Q1 2019.

ACTIVIST

NEW INVESTMENTS CAPITAL INVESTED

NOTABLE CAMPAIGN(S)

MANGROVE PARTNERS

1

$99M

TA.TO

SANDPIPER GROUP

1

$38M

DRA-U.TO

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