Key observations from the report include:
The activism slowdown continues
- March’s decline in new campaign activity continued in April, with only 8 campaigns initiated and $1.9bn of aggregate capital deployed
- April's activity was 54% lower than the prior six-month average while capital deployed was 45% lower
- Drop off in activity especially apparent on a weekly basis with the 4-week rolling average falling from ~7 campaigns in February and ~4 in March to ~2 in April
- April's muted activity was most profound in the US and Europe, where 3 and 1 campaign were initiated in each jurisdiction, respectively, relative to past six-month averages of ~8 and ~5; by contrast, the 4 new campaigns in APAC in April were in-line with the prior six-month average
Elliott and Starboard have been the most active players in 2020
- Despite a relatively quiet April, Elliott and Starboard have remained the most active activists in 2020 YTD, with 7 and 3 campaigns initiated this year, respectively
- Elliott has deployed $5.6bn into new campaigns this year, the most of any activist
Despite a slowing of new campaigns in April, existing campaigns continued to develop as activists seek to realize their value creation thesis
Settlements and Board seats marginally lower compared to recent months
- April saw 7 campaigns settle (resulting in 11 dissident Board seats) relative to 10 settlements (for 19 Board seats) in March
- In 2020 YTD, 28 settlements have resulted in 54 Board seats versus 31 and 57 in the prior-year period, respectively
- As proxy season continues, 50 Board seats at 11 different companies remain “in play”
Activism-driven M&A will likely remain uncertain in the near-term
- The evolving situation at L Brands, in which the Company is suing Sycamore Partners for backing out of the Barington-driven deal, underscores the near-term challenge activists will face in catalyzing M&A in the current environment
- With additional deal cancellations likely, it remains to be seen if activists will continue to pursue their original transaction theses, pivot campaign objectives or suspend campaigns altogether
