The week in investor relations: Private equity pays top dollar, Engine No 1 invests in GM and UK companies make progress on board diversity
– Private equity firms are paying premiums for public companies not seen for two decades, according to the Financial Times (paywall). The paper reported that the average premium paid for European companies is 45 percent in 2021, the highest level since data firm Refinitiv began keeping records in 1980. The average premium for US companies this year is 42 percent, the highest for 22 years. Some bids have gone much further and offered ‘almost 70 percent above the prior share price,’ noted the article.
– CNBC reported that activist investor Engine No 1, which rose to prominence after waging a successful campaign to gain board seats at ExxonMobil, on Monday announced an investment in General Motors, signaling support for the automaker as it transitions to electric vehicles. GM, unlike ExxonMobil, is taking actionable steps in what the firm believes is an imperative for long-term success: linking ESG criteria to economic outcomes.
– Major UK companies are making progress on gender diversity but still lack women in the most senior positions, reported The Guardian. The proportion of women on boards of FTSE 100 companies stands at 38 percent, the highest level on record, finds research by Cranfield School of Management. Only eight companies in the FTSE 100 have a female CEO, however. Across the wider FTSE 350, companies have exceeded the target set by the Hampton-Alexander review of having at least 33 percent female representation on boards.
– Reuters reported that Glass Lewis recommended that NextGen Healthcare shareholders elect management’s slate of directors, joining ISS in supporting the board and management over the company’s founder, Sheldon Razin. Razin, who has served on the board since 1974, has nominated four directors and criticized the company’s financial returns. ‘Given the circumstances, we believe shareholders will likely be best served by supporting the board’s current slate, one that already reflects a significant refreshment that includes the company’s recently hired CEO and three other brand-new nominees,’ the Glass Lewis report said.
– Activist investor Carl Icahn has announced a holding in Southwest Gas and called for the US utility to ‘drop its rumored acquisition of natural gas company Questar Pipeline,’ reported CNBC. Southwest’s stock price rose 7 percent following the news. In a letter to the Southwest board made public, Ichan wrote that ‘the purchase of Questar you are currently being rumored to make at the price you are willing to pay will make all past errors pale in comparison’. Southwest had not immediately responded to a request for comment, said CNBC.
– Mars CEO Grant Reid warned that ‘all too often’ corporate commitments to cut greenhouse gas emissions fall short and threaten to undermine their credibility and necessary change on climate action, according to The Guardian. Reid’s comments, and those of Mars’ chief sustainability and procurement officer Barry Parkin, come after the climate activist Greta Thunberg condemned many of the climate actions promised by global leaders as so much ‘blah, blah, blah’.
– Standard Chartered is set to face a vote next year on whether the bank is adapting enough to meet its net-zero commitments, reported Bloomberg. Non-profits Market Forces and Friends Provident Foundation have co-filed a resolution with the bank, calling for it to ‘match its net-zero rhetoric with action’. The filing requests that the bank manage exposure to fossil fuels in line with a scenario of net-zero global emissions by the middle of the century, set up short, medium and long-term targets for fossil fuel exposure and stop financing of new or growing fossil-fuel projects, said Bloomberg.