Not at Any Price – Contested M&A, The New Normal
What Changed? Friendly, board-supported M&A transactions, are routinely being challenged by shareholders. While this is not a new phenomenon, the frequency and organized public nature of shareholder opposition to announced transactions has caught many public companies by surprise. In the past, institutional shareholders unhappy with a deal might have just sold their shares or privately […]
Riyaz Lalani is Managing Director, and Dan Gagnier is Founder and Managing Partner at Gagnier Communications. This post is based on their Gagnier Communications memorandum.
What Changed?
Friendly, board-supported M&A transactions, are routinely being challenged by shareholders. While this is not a new phenomenon, the frequency and organized public nature of shareholder opposition to announced transactions has caught many public companies by surprise.
In the past, institutional shareholders unhappy with a deal might have just sold their shares or privately communicated their displeasure with a transaction, they have become increasingly comfortable in publicly voicing their opposition – with some initiating full-blown proxy contests to defeat a transaction.
Another critical difference is investor opposition does not hinge on an incremental improvement in economics, a practice we call “bumpitrage”, but rather outright opposition to the transaction proceeding.
