Activist investors plan to resume trading in 2021
Prepare for an upsurge in activist campaigns next year, especially in the energy sector.
After a gloomy year, activists and the companies they target are gearing up for a busier year 2021. While some companies have rushed to protect yourself with poison pills and other measures to ward off hostile bids when markets fell in March, others were less cautious.
Instead, these companies have worked to tell investors their stories, how they handled the pandemic and their plans, said Bruce Goldfarb, managing director of proxy firm Okapi Partners. Barron. “It’s almost avoidance of proxy combat,” he said, adding that the measures they took were both “proactive and prophylactic.”
Many of these companies may have narrowly avoided proxy battles as activists sidelined amid the volatility. But new opportunities for activists have emerged as the market recovery has exposed new sets of underperforming companies.
An excellent example: the energy sector, grappling with low prices in the event of a pandemic and numerous debts, could see a jump in militant activity. The stocks did not recover and the consolidation began. Elliott Management allegedly tried to break up
(ticker: CVX) resumption of
(NBL). At the start of last week,
(WPX) announced its intention to merge, prompting analysts to predict other companies who can join.
Companies whose stocks are depreciated, for whatever reason, have always attracted the interest of activists. Next year shouldn’t be any different.
Write to Carleton English at [email protected]