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Jul 24, 2020

The week in investor relations: Help for activists and an uptick in M&A

This week’s other IR-related stories that we didn’t cover on

– The SEC’s proposed changes to 13F filings could allow activists to better hide their positions in companies, warned lawyers and advisers who spoke to the Financial Times (paywall). Currently firms with more than $100 mn in US stocks need to disclose their positions once a quarter, but that would rise to $3.5 bn under the suggested change. The move would offer ‘another significant shield’ for activists, said Jim Rossman, Lazard’s head of shareholder advisory.

– The FT noted that a vote on climate issues at Mizuho Financial Group may be a sign that more ESG proposals will target Japanese companies. While the vote failed to receive enough support to pass, the fact that around a third of investors backed the resolution serves as a warning to other companies, said fund managers. The proposal called on Mizuho to improve disclosure on climate issues and align its operations with the Paris emissions goals. 

– Tesla is knocking on the door of the S&P 500 after revealing its fourth consecutive quarterly profit, reported the Wall Street Journal (paywall). The electric vehicle manufacturer’s stock has surged this year despite the Covid-19 pandemic, making it the world’s largest carmaker. The S&P 500 rebalances four times a year but can add or remove constituents at any point. The criteria for inclusion say companies ‘must report an accumulated profit over four consecutive quarters, including the most recent,’ noted the article.

– Nine out of 10 companies on the S&P 500 released a sustainability report in 2019, according to a new study from the Governance & Accountability Institute. That’s up from 86 percent in 2018 and 75 percent in 2014. The report found 51 percent of companies reported using the Global Reporting Initiative framework, while 14 percent ‘presented alignment’ with the Sustainability Accounting Standards Board. Around a third of companies reported in line with specific UN Sustainable development Goals and around two thirds responded to the CDP disclosure project. 

– The M&A market is showing signs of picking up after a string of mega-mergers were announced in July, reported the Economist (paywall). The article noted Chevron’s $13 bn acquisition of Noble Energy, Adevinta’s $9.2 bn purchase of the eBay Classifieds unit, and Analog Devices’ $19.8 bn deal for Maxim Integrated. Companies with strong profits during the pandemic are the most likely to get back to M&A first, noted the article, quoting Eamon Brabazon of Bank of America.

And to recap, here are IR Magazine’s stories posted this week:

SEC approves revised proxy adviser reforms
Reddit users submit comment letters on SEC’s proposed 13F rule change
World’s largest firms failing on succession-planning disclosures
Equality in IR 2020: Social media highlights
FRC calls for improved forward-looking reporting around Covid-19
Wednesday winner: Manulife US REIT’s thought leadership attracts investors
Rise in management discussion of racism at investor-facing events
IR teams adapt and innovate in face of Covid-19 pandemic
Institutions take growing role in activism
TILT Holdings brings in Gary Santo as head of capital markets and IR
Covid-19: Investor communications during Q2 earnings season and beyond