Activist investors target more than 100 European companies

More than 100 Europe-based companies have been publicly subjected to activist investor demands in campaigns up to the end of September 2017, according to the latest Activist Insight report.

And although this number is slightly lower than the same period last year, it signals that the future of activism on the continent looks secure, adds the activist data provider.

M&A remains a catalyst of activism in Europe, with campaigns initiated following the announcement of deals involving Safran, Clariant and Stada. But operational activism at Rolls-Royce Holdings, Stock Spirits, Nestlé and Danone, among others, has also been in vogue.

The 2017 edition of ‘Activist Investing in Europe’, produced by Activist Insight in association with international law firm Skadden Arps Slate Meagher & Flom, also suggests activity in the UK is flat, with 2016 having seen a historically high number of campaigns, while Germany has become more active.

France may keep pace with, or even exceed, last year’s numbers, while Switzerland and Italy have both lagged previous years’ activity. Activist activity is expected to exceed or at least match previous levels as far back as 2013 in the UK, France and Germany.

Notwithstanding a growing number of homegrown activists, Activist Insight finds that the level of campaigns from activists based outside of Europe is at an absolute high, with 29 companies targeted by non-domestic activists: year to date, 72 percent of non-domestic activist campaigns were led by US activists.

In a statement accompanying the data, Josh Black, editor of the report and editor-in-chief at Activist Insight, comments: ‘Activist interest in Europe has been strong in 2017, with a rise in foreign-led campaigns and local players continuing to demonstrate that they have the ambition to target Europe’s largest companies.

‘Activists were largely indifferent or opposed to UK Prime Minister Theresa May’s corporate governance reforms, but Brexit has certainly done little to deter them from pursuing campaigns at UK issuers.’

Armand Grumberg, head of European M&A for Skadden Arps, adds in the same statement: ‘Recent activity clearly demonstrates that no European issuer is immune to shareholder activism, including large-cap companies.

‘With activists currently pressing European companies at near record numbers, it is critical that boards and management teams are fully prepared to respond to an activist attack and are generally willing to take into account the concerns of their shareholders and address weaknesses in their governance and operations, shore up their transactions and deliver on their promises.’