M&A, ESG and director nominations top 2018 activist issues

The key activist trends of 2018 centered around M&A activity, ESG issues and activist director nominations, according to a leading expert.

Josh Black, editor-in-chief at Activist Insight, tells Corporate Secretary sister publication IR Magazine: ‘Prior to the end of year turmoil in the markets, activism in 2018 was all about dealing peaky valuations, either by capitalizing through a push for M&A or hunting for bargains in places like the UK and Japan.

‘An interesting byproduct was a number of activist campaigns at companies that would previously be considered challenging, such as Campbell Soup with its high insider ownership.’

Black also notes the importance of ESG in activism this year. ‘Another thing 2018 might well be remembered for in years to come is the adoption of ESG by activists,’ he says. ‘At least one impact fund – ValueAct Capital – has been allocating capital far and wide, while the likes of Apple and Destination Maternity had to answer to activists bringing novel criticisms. How far this trend goes will be a key question for 2019.’

On the company side, there were more aggressive attempts to frustrate activist director nominations in the US.

‘This was met with mixed success across different state courts and regulators, and an intense lobbying effort to convince Congress or regulators to restrict the operation of proxy voting advisers,’ says Black. ‘The potential for regulatory change has whipsawed throughout 2018 and remains balanced on a knife-edge.’