Activist shareholders are increasingly targeting mid-sized companies as investor disruption looks set to reach record levels in 2014, law firm Linklaters LLP said in a report today.
Investors such as Bill Ackman and Dan Loeb, who seek to shake up the way companies do business, started 272 campaigns against companies in the first six months of 2014, putting this year on track to beat last year's total of 520 campaigns, the report said.
"We are seeing an increased focus this year on companies in the $250 million to $2 billion market cap range and across the board, the activists are enjoying increasing success," Ralph Wollburg, head of Linklaters' Global Corporate Advisory Group, said in the report.
Activist investors campaign to change management, push for higher dividends or spur asset sales in companies to increase value for shareholders. The U.S. accounted for 81 percent of public investor activism in the first six months of the year, according to the report, which also said that a large number of activist campaigns in Europe are thought to remain secret. Seeking boardroom representation is the most popular tactic among activists, accounting for 41 percent of all campaigns in 2014.
Most recently, U.S. activist hedge fund Elliott Management Corp. amassed a new activist stake in advertising company Interpublic Group of Cos. and is seeking talks with management and the board to push the group to sell itself, Bloomberg News reported July 24. Energy company Apache Corp. is facing a breakup battle after activist hedge fund Jana Partners LLC disclosed a $1 billion stake in the oil and natural gas company and pushed it to sell its international operations.
Activity in Europe has been limited, with the most prominent campaign being Elliott Management's calls for WM Morrison Supermarket Plc to create a separate company for its real estate, saying it would immediately lift shares in the retailer. Shares in Morrison have lost 34 percent of their value so far this year, making the company the worst performer in the U.K.'s benchmark FTSE 100 index.
To contact the reporter on this story: Dinesh Nair in London at dnair5bloomberg.net To contact the editors responsible for this story: Aaron Kirchfeld at akirchfeldbloomberg.net Elizabeth Fournier, Matthew Campbell