September 11, 2023
More Companies Facing Multiactivist “Swarms”
This recent Sullivan & Cromwell publication, 2023 Corporate Governance Developments, gives an excellent overview of Board and Committee agenda topics that are relevant right now. On activism-related developments, it highlights this challenging trend:
Large-cap companies are increasingly being targeted by multiple activists at the same time (referred to as a “swarm”). According to data from Lazard (available here), 13% of all companies targeted by an activist campaign during Q1 2023 were subjected to multiple new campaigns that were launched within the same quarter.
Swarms will intensify the challenges posed by an activist campaign as the target company will need to engage simultaneously with different funds that have varying time horizons and potentially competing objectives.
The alert notes that providing clear and consistent messaging to shareholders and activists about your strategy and business is key whether you’re dealing with a single campaign or a swarm with different objectives. John has also blogged about the importance, in light of this trend, of thinking critically and objectively about your vulnerabilities and taking steps to address them.
– Meredith Ervine