Activists True Track Record
Capitalizing on an Activist’s True Track Record in Your Defense
Shareholders need to know if activist investors have protected shareholders from downside risk at companies they have previously targeted or rather played fast-n-loose in their quest for short-term gains.
Clear and candid communications of the underlying facts are the key to successfully beating the odds.
- Beyond the obvious – understanding the activist beyond its track record.
- How have the companies with which the parties have previously been involved behaved on matters of governance?
- Does an in-depth analysis of former targets reveal poor or overly aggressive accounting or reporting practices?
- Has the activist signed off on actions concerning management compensation or other “hot button” issues that conflict with its current statements and assertions?
- Does a review of all historical proxy advisory firm analysis regarding dissidents, including a review of all relevant ISS investor decks, reveal any inconsistencies?
- Beyond the activist – understand the effects on the company.
- How have companies successfully defended themselves against the activists?
- What techniques can be used to keep the management and the employee base focused on optimal execution and not the activist fight?
- What actions can be taken to enhance free cash flow prior to the next reporting period?
- Beyond the investors – understand the effects on all stakeholders.
- Which issues may cause the press and the government to form a negative view of the activist and its activities?
- Did employee issues surface at prior targets that had an adverse effect of the target company?
- Did a prior target have any business dealings with unscrupulous entities or individuals – including suspect foreign governments?
- Are there political considerations to take into account concerning the activists’ demands?
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Senior Managing Director, Leader of Private Capital Advisory Services