What We Do
We are singularly focused on company-side shareholder activism defense. We advise public companies on how to plan for the day when they may be targeted by an activist investor and, if targeted, how to execute a highly strategic and calibrated shareholder activism defense. We work in close coordination with the company’s legal and other advisors.
Activism Vulnerability Assessment:
We assess a company’s vulnerabilities to an activist investor. We take a very holistic view of a company’s vulnerabilities, including, not only a company’s structural vulnerabilities, but also its corporate governance, board composition, shareholder ownership profile, shareholder engagement, strategic direction, financial, operating, and stock price performance, capital allocation, M&A history, and plans for creating shareholder value. Understanding the company’s vulnerabilities not only enables us to develop a mitigation plan, but also it allows us to factor these issues, as necessary, into the company’s shareholder activism defense plan.
Activism Threat Assessment:
We assess how likely it is that a company may be targeted by an activist investor. We work with the company’s management and board to understand why the company would be an attractive target for an activist investor, what would be an activist investor’s potential investment thesis, and what would be some of the likely ways that an activist investor would seek to approach the company and execute on its investment thesis. Among other things, we want to help the company identify all the obvious paths that an activist investor may focus on for “unlocking” shareholder value. Depending on the company’s size and industry and taking into consideration the extent to which peer group companies have been targeted, we may also be able Identify some of the activist investors that could be potentially interested in targeting the company.
Activist Investor Engagement:
We assist companies in planning and structuring their engagement with activist investors. We help identify which members of the board and/or management should be on the “front lines” in engaging with the activist investor. Relying on the age-old axiom that “you only have one chance to make a first impression,” we help companies plan for their first meeting with the activist investor that indicates a strong interest in constructively engaging with the activist investor and understanding its views and perspectives on the company’s plans for creating shareholder value.
We walk the board and management through some of the more common “what if” scenarios they will encounter if the company is targeted by an activist investor and then discuss various possible responses, the pros and cons of each of these responses, and the potential impact and outcomes that could result from these responses. By highlighting these scenarios and the range of responses early on, our goal is to help the board and management be more proactive and strategic, rather than reactive, if and when the company is targeted by an activist investor.
We are battle-tested and have extensive experience in defending companies against proxy contests, special meeting demands, consent solicitations, and other activism campaigns. We are very familiar with the activist investor toolbox. An activism campaign can be likened to a game of chess and we have a deep understanding of the “chessboard,” the rules, and the winning strategies. Nevertheless, we keenly understand that activism defense is not a game and that the stakes are incredibly high for the company, the board, and the management team. We also understand that a strong shareholder activism defense is a team effort and we work collaboratively with the company’s board and management and its legal, public relations, proxy solicitation, financial, and other advisors to ensure we bring to the company a well-coordinated, highly strategic approach for defending against an activist investor.