As we previously discussed, the use of share buybacks has accelerated in recent years, both in Canada and the United States. This has sparked anxious debate over the extent to which buybacks can form part of an effective long-term growth strategy. Particularly in the United States—where buybacks hit a record of more than $1 trillion USD in 2018 following tax reforms—commentators have blamed buybacks for various ills, including wage stagnation, income inequality, and underinvestment in R&D. In response, some U.S. legislators have sought to curb their use, such as by tying buybacks to conditions including paying employees a certain … Continue Reading
Buoyed by an improved economic climate and unprecedented success in 2013, shareholder activists are expected to significantly influence the 2014 M&A landscape. As shareholder activism becomes more widespread, activists are becoming increasingly ambitious and creative in their approach.
Last year saw a rise in the power and influence of activist hedge funds. In 2013, activist hedge funds managed over $93 billion, a 42% increase from 2012. With more capital, activist hedge funds have been able to target larger and more sophisticated companies.
Shareholder activists are also looking to expand their geographic reach. Despite confidence in the North American market, in … Continue Reading