Tag archives: activist

A UK dispute sheds light on the duties of a dissident director

A recent decision of the UK’s High Court — Stobart v Tinkler [2019] EWHC 258 (Comm) — has been released following a dispute between directors of a large infrastructure company (the “Company”). The decision, and the circumstances preceding it, serve as a cautionary tale about the duties of a dissident director and of board members in the context of proxy contests.

The board dispute was initiated by a founder and significant shareholder of the company (the “Dissident Director”). After his resignation from the office of CEO in 2017, the Dissident Director remained with the Company as … Continue Reading

When defamation in hostile proceedings leads to serious consequences

It will come as no surprise to those who have participated in a proxy fight to learn that these disputes can be heated affairs.   Parties to a fight will routinely seek to discredit the other side to bolster their own narrative or otherwise gain a strategic advantage.  In such an atmosphere, it can be difficult to draw the line between behaviour that’s merely aggressive and behaviour that crosses into unethical or illegal territory.  A recent U.S. District Court case, Eshelman v. Auerbach et al, ­provides an example of the serious consequences that can ensue for those who cross this … Continue Reading

Lesson Learned: An Examination of Trends in Shareholder Proposals

Shareholder proposals are often viewed as an essential tool for maintaining corporate accountability, but what role do they play in shaping corporate governance? ISS Analytics recently published a study  (the Study) that reviewed the impact of shareholder proposals on corporate governance practices among U.S. companies since 2000. The Study offers helpful insights into shifting trends in corporate governance and investor attitudes, and provides important lessons for Canadian issuers.

A brief history of shareholder proposals in the U.S.

According to the Study, after a significant surge in the number of governance proposals in the early 2000s, the number of proposals … Continue Reading

Webinar – Corporate governance, shareholder activism, and hostile M&A: Key developments in 2018 and a look ahead

Walied Soliman and Orestes Pasparakis, co-chairs of Norton Rose Fulbright’s Canadian Special Situations team, will host a 60-minute webinar on corporate governance, shareholder activism, and hostile M&A on Tuesday, February 12, 2019 at 12 p.m. EST. To sign up, please click here.

Our Special Situations team played a leading role in some of the most complex and high-profile corporate governance, shareholder activism and hostile M&A matters of 2018. The webinar will highlight some of the key trends and developments in 2018 and trends taking shape in 2019.

This will be essential viewing for directors and executives at public companies, … Continue Reading

CEO Activism: A Double-Edged Sword?

In a recent study published on SSRN by the Rock Center for Corporate Governance at Stanford University, authors David F. Larcker, Stephen Miles, Brian Tayan and Kim Wright-Violich argue that CEO activism – the practice of CEOs taking public positions on environmental, social and political issues not directly related to their business – is a “double-edged sword”: CEOs who take public positions might build loyalty with employees, customers or constituents, but these same positions can inadvertently alienate important segments of those populations.

The authors – who aimed to better understand the implications of CEO activism by examining its prevalence, the … Continue Reading

Kingsdale Releases 2018 Proxy Season Review

Kingsdale Advisors has released its annual Proxy Season Review for 2018. The Review examines trends observed in 2018, predicts issues on the horizon, and provides advice to both issuers and activists in the marketplace.

In what follows, we pick out just a few of the important trends that emerge from Kingsdale’s analysis. The complete report can be viewed here.

Public activist activity remains healthy

Kingsdale counts 29 public proxy contests for the year to date. Though not reaching the high-water mark set in 2015 (55), the 29 public fights so far this year are up by 38%, as compared … Continue Reading

Activist Insight Monthly features interview with Co-Chairs of Canadian Special Situations team

This month’s edition of Activist Insight Monthly, which focuses on Canada, features an in-depth interview with Walied Soliman and Orestes Pasparakis, Co-Chairs of Norton Rose Fulbright’s Canadian Special Situations team. The interview focuses on recent trends our team is seeing in the Canadian marketplace, including activist short selling, settlements, and the continued rise of “nice” activists.

The publication can be found here (sign-up required).… Continue Reading

Activists knocking on the door

The Canadian Real Estate sector may be in for a shake-up. Reuters recently reported (here) that activists may be eyeing real estate investment trusts (REITs), and their approximate combined C$67 billion in market capitalization, as ripe targets for activist campaigns in light of: attractive prices, vulnerability in the market based on uncertainty surrounding the effects of interest rate shifts, and potential opportunities to unlock unrealized value.

In particular, with the Canadian REIT index down approximately 7% since August 2016, activists may ramp up efforts to target REITs for activist campaigns. Recent interest rate hikes may have … Continue Reading

The drivers and consequences of settlement agreements in proxy fights

Activist interventions are being increasingly resolved by way of settlement agreements, with 3% of activist interventions in 2000 having resulted in a settlement agreement versus 16% in 2011.[1] In light of this emerging trend, the Columbia Business School recently published a paper, Dancing with Activists, in which the authors sought to provide the first systematic analysis of the drivers, nature, and consequences of such settlements. The authors identified 4 main drivers of settlement agreements: (1) the activist’s stake; (2) market reaction to a SEC Schedule 13(d) filing; (3) settlements in past engagements; and (4) past firm performance.… Continue Reading

Members of Special Situations team weigh in on Canadian activism in Ethical Boardroom Magazine

Members of Norton Rose Fulbright’s Canadian Special Situations team have weighed in on shareholder activism in Canada with an article in the Spring Edition of Ethical Boardroom Magazine. The article, written by Trevor Zeyl (assisted by Joe Bricker), offers insights on shareholder activism in Canada in the past year, and some predictions for 2017 and beyond. The Spring Edition of Ethical Boardroom can be viewed here (free subscription required): https://ethicalboardroom.com/ethical-boardroom-spring-2017/.

Stay connected with Special Situations Law and subscribe to the blog today.Continue Reading

Our Top Five Tips for Companies and Boards in advance of the 2015 Proxy Season

As a new year begins, it is always a good time to take stock of the successes of the past year and look forward to doing even better in 2015. Shareholder activism will continue to be a “hot topic” for publicly listed issuers in 2015. Here is a checklist of our top five tips to help ensure a smooth year to come:

1.            Have an Effective Communication Strategy – Having a great corporate strategy that no one knows about will not help your business. Whatever the industry, it is important that internal and external stakeholders are regularly kept informed … Continue Reading

2014 Q3 Proxy Update

The 2015 proxy season is fast approaching, PwC and Broadridge released a quarterly research report  which reviews proxy related data from 4,113 shareholder meetings
held between January 1 and June 30, 2014 and  highlights several themes and trends that may inform how shareholders and companies will interact on four key issues:

Director Elections: Director elections continue to attract widespread voting, with 93% of elections at large companies garnering votes between 90-100%. In contrast, only 75% of voted shares were cast in the 90-100% range for small-cap firms. Moreover, of the 22,554 directors up for election, roughly 5% failed to … Continue Reading

Defensive Tools in Shareholder Activism: The “Voting Pill”

In today’s Financial Post,  Barbara Shecter highlighted the use of modified shareholder rights plans (colloquially known as “poison pills”) as an emerging defensive tool against opportunistic shareholder activism in Canada.  Traditionally, poison pills are used by boards of target companies as defensive tools to guard against unsolicited takeover bids.  By expanding the typical definition of “beneficial ownership” in a poison pill (which is typically limited to concepts of ownership and is used to determine whether the poison pill is triggered) by including securities that a shareholder does not own but has a right to vote or the right to … Continue Reading

Shareholders Shaking Up Japan

A Japanese research firm suggests that there may be a record 14 shareholder proposals (all with the intention of creating higher returns) that will be made in the next few weeks as annual general meeting season begin in Tokyo and elsewhere.

Why is this surprising? In the past it has been uncommon for shareholders in Japan’s institutions to oppose company resolutions. Activists were considered ‘bad guys.’ What has changed this dynamic is the creation of the Stewardship Code (the “Code”) under the tutelage of the economically driven Prime Minister Shinzo Abe. In force since May, it already has been followed … Continue Reading

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