Friday, July 24, 2009

Activist Investors Eye Smaller Prey

Activist investors eye smaller prey
By Sam Jones and Lina Saigol
July 23 2009

Activist investors may have waged more battles this year than ever before, but the size of the companies they are taking on is vastly smaller, according to new research.

So far this year, there has been a 27 per cent increase in proxy battles, according to RiskMetrics, a leading shareholder consultancy. The average market capitalisation of companies being targeted by activists, however, has fallen.

In the US, the median ­target company market ­capitalisation has fallen from a high of $275m in 2008 to just $75m in 2009. In Europe, the story is the same.

“The size of targets has decreased and even adjusted for the market decline, but the amount of activity in the US has been surprising,” said Chris Young, director of mergers and acquisitions research at RiskMetrics.

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