Board representation remains key goal for shareholder activists
The number of companies that faced public requests by activist hedge funds increased by 23 percent in the first half of the year compared with the same period last year, according to a report by Activist Insight.
The most common demand made by activists was for board representation at 168 of the 300 companies targeted in the first half of 2015. This is far higher than the 28 campaigns that pushed for a sale of the company to a third party, the 26 that had a ‘business focus’ and the 25 that centered on the removal of a CEO or other board member, the report notes.
In total, activist funds are expected to target about 500 companies for the 2015 full year, based on an average projection rate taken from the second halves of the years 2010 through 2014, Activist Insight says. At that rate, the number of companies targeted will have grown for a sixth straight year. In all of 2014, activist hedge funds targeted 417 companies, compared with 367 the year before, 273 in 2012 and 143 in 2010, the earliest data shown in the report.
The US was the site of 216 of the 300 activist campaigns in the first half of this year, followed by Europe with 31, Canada with 21, Asia with 12 and Australasia with 10, according to the report. The rest of the world saw 10 campaigns.
The proportion of activist demands that were at least partially met rose two percentage points to 67 percent in the first half of this year from 65 percent in the same period last year, the report says. Of the 107 campaigns with a clear outcome in the first half, 81 were settled, 26 went to vote in favor of the activists and 22 were withdrawn.