Monday, September 28, 2015

Carl Icahn Launches Personal Website

Carl Icahn's new personal website can be found here:

Friday, August 7, 2015

The Activist Floodgates Are Open, J.P. Morgan Says

WSJ article:

The evolving response to shareholder activism

An article written by Sidley Austin LLP, posted on covering the evolving response to shareholder activism was an interesting read.

Here is a snippet with the full article link here:

Shareholder activism with respect to public companies continued to grow last year, and there are few indications of this trend abating in the near future. Activists targeted more than 200 companies in 2014, compared to about 120 in 2010. Activist funds now have over $200 billion in assets under management, and as a class, they outperformed all other hedge fund strategies in 2014. Accompanying this strong financial performance has been a remarkable record of success in achieving their governance objectives. For example, activists last year enjoyed a 73% success rate in placing their director nominees on targeted company boards, either through full blown proxy contests or negotiated settlements. In total, activists won 197 board seats and were instrumental in replacing 19 CEOs in 2014. So far in 2015, the number of actual or threatened proxy contests is on track to exceed last year’s pace, and with a 67% success rate, activists have continued to enjoy strong results.

Thursday, July 16, 2015

Upcoming Webinar: Shareholder Activism: Investing in a Stronger Corporate America

July 2015
Shareholder Activism: Investing in a Stronger Corporate America

On Wednesday, July 29, 2015, 12:30-1:30pm EDT, Olshan will present the webinar Shareholder Activism: Investing in a Stronger Corporate America. CLE credit will be available for this complimentary program which will offer an inside look behind the scenes of the continued upsurge in shareholder activism. Headlines have been filled with stories about activist investors pressing companies for changes. Shareholder activism is arguably the greatest preoccupation of America's boardrooms. Olshan's Activist & Equity Investment practice group has been on the frontline of this wave with the largest number of activist campaigns and shareholder engagements in the space invariably over the past few years. In this webinar we will share some of our unique insights from the trenches of recent activist campaigns.

Subjects to be discussed include:
 Bolder activist campaigns target larger, sometimes well-performing companies in which activists hold smaller percentage stakes, yet continue to generate successful results 
 Changing campaign strategies, structures and mechanics have a profound impact on corporate governance and company responses to a shareholder activist campaign 
 How to effectively navigate the new context of Board/Shareholder engagement 

The presentation will end with a brief Q&A session. Feel free to email questions in advance to and

Who should be listening?
 Investors in public companies interested in activist strategies 
 Service providers, experts and observers of shareholder activism 

Olshan speakers will be Steve Wolosky and Aneliya Crawford, from Olshan's Activist & Equity Investment practice, which was recently named by the Wall Street Journal, in conjunction with FactSet SharkRepellent, the No. 1 legal advisor to activist investors in 2014. Reuters also named Olshan as one of the two top firms that "have come to dominate the activism market." 

Bruce Goldfarb of Okapi Partners, a proxy solicitation, information agent and specialty advisory firm, will join Steve and Aneliya to provide a proxy solicitor's perspective.

Steve Wolosky is a pioneer in shareholder activism and spearheaded Olshan's Activist & Equity Investment Practice more than 20 years ago. Today, he is one of the leading lawyers in the country advising hedge funds and investment partnerships on activist situations in the United States and worldwide. Steve has led over 400 proxy contests for board representation in his career, and most notably, Steve led the preeminent proxy contest of 2014 representing Starboard Value's unprecedented, "extraordinary" victory in its election contest against Darden Restaurants, Inc. The Deal Pipeline recognized Steve as one of the "best-known names" in shareholder activism, and Reuters highlighted him as a "go-to" lawyer for activist investors. The Activist Report, a monthly newsletter by 13D Monitor, describes Steve as "...a top choice of many hedge funds and activists..." noting his unparalleled experience in counseling clients on a wide variety of activist strategies. Steve also advises clients in negotiating mergers and acquisitions and hostile takeovers of public companies; represents public and private issuers of debt and equity securities, purchasers and sellers in mergers, stock and asset transactions, and investment funds in their formation, capital raising and investment transactions; and counsels corporate clients in corporate planning and structuring activities, corporate governance matters, dealings with stock exchanges, and public company compliance matters.

Aneliya Crawford advises hedge funds and other large investors in connection with shareholder activism, mergers & acquisitions and hostile takeovers. Aneliya has experience providing strategic guidance to investors on activist strategies, including proxy contests, settlement negotiations, consent solicitations, letter-writing campaigns and hostile takeovers. Aneliya has represented activist investors in connection with over a hundred major shareholder activism campaigns. Aneliya provides counsel to clients on their equity investments in public companies and represents public and private companies in mergers and acquisitions and asset purchase and stock purchase transactions.

Bruce Goldfarb is Founder, President and Chief Executive Officer of Okapi Partners. He works closely with a wide range of clients including corporations, mutual funds, activist investors and shareholder groups as well as private equity sponsors and hedge funds, in solicitation and investor response campaigns. He focuses on proxy solicitation strategy, execution for mergers and acquisitions, proxy fights and other extraordinary transactions. Prior to establishing Okapi Partners, Bruce was the Senior Managing Director and General Counsel of Georgeson Inc. (now a subsidiary of Computershare Limited), where he headed the Global M&A Advisory Group. Before entering the proxy solicitation business, Bruce was a Senior Vice President of the investment management firm, Scudder, Stevens & Clark, now a part of Deutsche Bank's Asset Management unit. He joined Scudder as a member of the Legal Department where he concentrated on transactions, including those involving mergers and acquisitions, international matters, alternative investment vehicles, off-shore funds and closed-end funds. Bruce also served as an executive officer of various closed-end funds advised by Scudder. He was the Chairman of Scudder's Proxy Review Committee and served as the point person for the Scudder Funds proxy solicitation effort relating to the acquisition of Scudder by Zurich Financial Services Group.

Click here to register for this event.

In order to receive CLE credit for the webinar you are required to click all of the participation pop-ups that will appear throughout the program. You must also be registered and view the webinar from your own computer.

This seminar has been approved in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of 1 credit hour in the area of Professional Practice/Practice Management and is appropriate for experienced attorneys only.
Olshan Frome Wolosky LLP
July 2015
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New York, NY 10022
TEL: 212.451.2300
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About Olshan
Olshan, a law firm based in New York, represents major businesses and entrepreneurs for their most significant transactions, problems and opportunities. Olshan's clients range from public companies, hedge, venture capital, private equity and other investment funds to entrepreneurs and private companies worldwide. Clients choose Olshan for innovative strategies and sophisticated, game-changing advice in corporate, securities law and shareholder activism, complex commercial, corporate and securities litigation, real estate, bankruptcy & financial restructuring, intellectual property and advertising. Since its founding, Olshan has offered an alternative to the AmLaw 50 law firm business model with responsive, independent and client-focused legal counsel provided by the firm's lawyers.Follow the firm on Twitter @OlshanLaw.

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Friday, June 19, 2015

Wolf Pack Activism: A Quick Look at Hedge Fund Activism

The National Law Review wrote a recent article on the highly debated topic of wolf pack activism.

Here are the charts from the article and a link below to read the article in its entirety.

Wolfpack Activism: A Quick Look - chart 1
Chart 1 shows that there were more than 100 13-D filings by activist hedge funds in each of the past 5 years. In this period, activist influence appears to have been on the rise. Not only has the success rate for proxy fights launched by activist hedge funds increased, but activists have also been targeting larger companies.

Wolfpack Activism: A Quick Look - chart 2
Chart 2 shows that, typically, activists take around 10 days after crossing the 5% threshold to file Form 13-D with the SEC. This has remained relatively stable, despite a small dip in 2012. This chart also illustrates that, as of the date of the 13-D filing, the median shareholding by activists has remained relatively constant at approximately 6%.

Wolfpack Activism: A Quick Look - chart 3
Chart 3 sheds some light on activist strategies. In order to gain some insight with respect to wolf packs, we first isolate instances where the abnormal trading volume during the waiting period was more than 10% of the target firm’s shares outstanding. We then distribute 13-D filings across three buckets -- filings that were made within 3 days of crossing the 5% threshold, filings where the waiting period was between 4 and 7 days, and filings that were made 8 or more days after crossing the 5% threshold. The chart shows that there were 8 instances between 2010 and 2014 where the abnormal volume during the waiting period was at least 10% of the target’s shares outstanding and the 13-D filing was made within 3 days of crossing the 5% threshold. As expected, the number of instances where the abnormal trading volume during the waiting period exceeds 10% is greater when one focuses on 13-D filings made 8 or more days after crossing the threshold.

Click here to read the entire article:

The Secret To Jeffrey Smith's Success At Starboard? His Father's Juice Company

A recent Forbes article chronicles activist investor Jeff Smith, of Starboard Value.


You don’t need a Wharton education to be a good investor

Starboard, which also counts Mark Mitchell and Peter Feld as co-founders, prioritizes passion and competitiveness when it hires new employees. “We look for passion, you need to love what you do,” says Smith. He adds, “you need competitiveness, some people miss that.”

“We want people who are really excited about winning; winning meaning that we make money, the stock gooes up and companies perform better. And we want people that are upset if things don’t go as well as it should. If it doesn’t bother you when an investment goes against you then there is a problem,” he says.
Full article found here:

Tuesday, June 9, 2015

Winds of Change - Activism in Japan Article from the Economist Magazine

A recent article on activism in Japan from The Economist magazine was an interesting read.

Quick Excerpt here and link to the full article below:

"Such signals from the apex of the establishment, in a place where business heeds the government more than in perhaps any other big democracy, have not gone unnoticed among corporate leaders. And the government is offering more than gestures. On June 1st its new corporate-governance code came into effect, with the aim of shaking up companies’ slothful boards by, for instance, calling on them to appoint outsiders (many have none at present). This is the first time a Japanese government has laid down detailed rules on how firms should conduct their affairs.
Mr Abe’s attempts to make companies change their ways are one element of Abenomics, his grand plan to restore vim to the Japanese economy. The corporate reforms, along with monetary easing by the Bank of Japan, are the most tangible elements so far of the prime minister’s programme. His government has stood up to pressure from the Keidanren, Japan’s biggest business lobby, which tried its best to get the code watered down."

Tuesday, May 26, 2015

Warren Buffett: Activist Investor?

The CFA institute put up an article on Warren Buffett and is activist ways when he was running his Limited Partnership.

Read the full article here:

Donald Ingham writes:
But in Buffett’s early days, he actually engaged in numerous activist investments, including his takeover of Berkshire Hathaway. Much like today’s most notorious activist investors (Carl C. Icahn, Bill Ackman), Buffett made a name for himself by identifying market inefficiencies that could be exploited for the benefit of his investors and public shareholders. But unlike the corporate raiders of the 1980s, Buffett wasn’t out to tear companies down. In fact, he wanted to help build them up.

Tuesday, May 12, 2015

Academic Research Uses Hedge Fund Solutions Data to Find Activist Funds Outperform

Top Hedge Funds and Shareholder Activism


Using a large dataset of hand-collected information [captured from Hedge Fund Solutions' research on activist investments] on recent hedge fund activist interventions through mid-2014, we find that both the number of hedge fund activists and their interventions have increased recently, and that, contrary to suggestions in the literature, the average announcement period abnormal stock returns continue to be positive. We also find that the returns to hedge fund activism vary in surprising ways. Strikingly, the frequency of interventions is not significantly associated with higher returns, but returns are significantly higher for hedge fund activists that make larger investments. These results hold even after controlling for selection bias. Based on these findings, we develop a hedge fund reputation measure for the “top hedge funds” derived from the size of a fund’s investments in the recent past. This reputation measure is superior to the alternative ones we examine. Top hedge funds differ from other hedge funds in important ways: they tend to have significantly higher assets under management, they are invested in more portfolio companies, they have a longer track record, and they have a history of holding board seats in target firms. The market appears to anticipate the superior performance of these top hedge funds even before announcement of intervention. Moreover, post-intervention target-firm operating performance associated with these top hedge funds is significantly superior to that of other hedge fund activists.

To download and read the rest of their research using our data click here.

To subscribe to Hedge Fund Solutions' FREE weekly activist research click here.

For additional information about HFS activist research products contact Troy Marchand.

Monday, May 11, 2015

Interview With Damien Park, Activist Thought Leader

Damien Park, Activist Thought Leader, Gives The Blueprint For an Effective Activist Campaign

The Bulldog Investor did an interview with Damien Park of Hedge Fund Solutions. Park is a thought leader in the activist space. He is frequently retained by CEOs and Boards for his expertise. He is also regularly featured in leading news publications, now including the Micro Cap Investing Podcast. In this interview, Park lists the ingredients for a great activist campaign.

 Podcast: Download

Thursday, May 7, 2015

Land & Buildings Publishes "Restore MGM" Video

This video can be found at

Background to the activism:

3/17 Land and Buildings (L&B) proposed MGM convert to a REIT to unlock value and nominated four to the board; L&B issued a presentation indicating a 70% upside in stock value

3/30 L&B filed preliminary proxy materials nominating four people to the board 

4/1 L&B sent a letter to MGM calling on the board to form a committee and engage an independent financial advisor to evaluate options to create long term valu

4/20 L&B sent a letter to shareholders highlighting the reasosn to vote for its four board candidates

4/27 L&B joined Pontiac General Employees Retirement System in calling for MGM to eliminate its Dead Hand Proxy Put provision in the company's debt agreemen

4/29 MGM issued a shareholder presentation titled, "Improved Stewardship for Improved Returns" 
On the same day Paulson & Co (a 1.42% shareholder) announced its support for MGM's nominees, saying the company should continue its strategy to build another resort in Macau and invest in non-gaming attractions in Nevada.

Monday, May 4, 2015

Carl Icahn Explains Activist Investing

Catch Carl Icahn's interview on the latest Wall Street Week, as he explains Activist Investing.

Thursday, April 30, 2015

Nick Graziano Launching New Activist Fund

According to a Wall Street Journal report, Nick Graziano is planning to launch an activist hedge fund next year.

He left Corvex earlier this year and also had stints at Omega, Sandell, and Icahn. Interestingly, Corvex was backed by George Soros, and Keith Meister who founded Corvex, also worked at Omega Advisors under Soros.

Dimensional Fund Advisors Sends Warning to Directors Who Support Poison Pills

Big fund firm blacklists directors who support poison pills

13 hours ago
By Jessica Toonkel
NEW YORK, April 29 (Reuters) - A major funds company is putting directors on notice: if you adopt poison pill anti-takeover measures without shareholder approval, you will be blacklisted.
Since October, Dimensional Fund Advisors, the eighth largest U.S. mutual fund firm with $398 billion in assets, has been sending warning letters to companies whose stock it owns and who have adopted the measures without shareholder approval.
In the letters, the Austin, Texas-based money manager warns that it will vote against directors who approved those measures - not just at the company with the poison pills, but at every company they serve - unless they remove those pills or put them up for shareholder vote. The campaign, which hasn't been previously reported, will eventually target 250 companies.
DFA is worried that companies too often use the measures to deter acquirers and shareholder activists who could benefit shareholders, said Joseph Chi, the firm's co-head of portfolio management.
DFA appears to be the first major fund group to blacklist individual directors across its portfolios for such conduct. That may be a sign parts of the funds industry are taking a tougher line against boards who don't do what the funds want. Some of the largest U.S. fund managers have also recently been pressuring companies to make it easier for shareholders to nominate board candidates.
The measures DFA opposes can include pills which allow other shareholders the right to buy shares at a discount if one investor buys more than a certain amount of the company. Another example would be a pill that gives shareholders of a company being acquired the right to buy shares in the combined company after a takeover, again at a discount. These kinds of measures act as a disincentive to anyone seeking to buy a company by making it more difficult and by raising the costs of any deal.
While DFA has had the policy as part of its corporate governance stance since 2012, until now the firm has allowed exceptions primarily because companies said they were not aware of it, Chi said. After sending the letters it is pursuing the policy more aggressively with individual directors, he said.
Chi declined to say how many directors DFA has voted against so far. He said 10 companies have agreed to remove their pills or let them expire since they received the letters, though he declined to identify them.
"It is a very strong stance by DFA," said Aeisha Mastagni, investment officer at the California State Teachers' Retirement System (CalSTRS), the second largest U.S. pension fund, which has also opposed poison pills but hasn't put such a target on individuals.

DFA is taking aim at companies with any type of poison pill that was brought in without shareholder approval. The one exception is if a measure is designed as a tax maneuver to protect tax benefits generated by net operating losses.

The firm's tactic could impact scores of small and mid-sized firms in Dimensional portfolios that have poison pills in place, said Brandon Rees, deputy director of the Office of Investment of the labor union umbrella group AFL-CIO.
DFA owns shares in 170 of the 185 Russell 3000 companies with poison pills that DFA objects to, according to an analysis conducted by Lipper of ISS Quickscore data.
In the past year, at least one company, communications products company Sonus Networks, has removed its poison pill after DFA targeted one of its directors at another company where she served on the board. DFA had a 3 percent Sonus stake as of December 31, according to Thomson Reuters data.
In February 2014, DFA voted against Beatriz Infante on the board of Emulex Corp, a Costa Mesa, California-based network connectivity provider, where DFA is the third biggest shareholder. That was eight months after Sonus extended a poison pill that had been set to expire.
In September 2014, Sonus announced it was removing its poison pill a year ahead of schedule. There is no evidence that DFA's stance resulted in Sonus' decision to get rid of the pill early.
Chi declined to comment on specific companies it has targeted. A Sonus spokeswoman declined to comment. Infante did not return calls.
Companies that could be affected by DFA's stronger stance include Spartan Motors, a builder of specialty vehicles, where DFA is the third largest shareholder, and managed care provider Health Net Inc, where it is fifth biggest, according to Thomson Reuters data.
Both firms have active poison pills adopted without shareholder approval and directors that serve on multiple boards. For example, Hugh Sloan is chairman of Spartan and is on the board of Manulife Financial. Health Net director Mary Anne Citrino is on the board of retailer Dollar Tree Inc. Spokesmen for Health Net and Spartan said their directors were not available for comment.
Health Net's board will discuss DFA's letter at its next meeting, a spokesman said. The company's poison pill is set to expire in July 2016.
A spokesman for Spartan Motors said the company had not received the letter yet and declined to comment further.
Not everyone thinks DFA's personal arm twisting will intimidate directors.
"I can't imagine other investors will say 'I am going to vote against this director even though I like what they are doing at this company,'" said Jack Schuler, who is on the board of a number of publicly traded healthcare companies, none of which are being targeted by DFA.
Investors on occasion target individual directors - sometimes referring to them as "no fly" directors - but it is unusual to see a company do it so systematically, said Patrick McGurn, special counsel for proxy adviser Institutional Shareholder Services.
At CalSTRS, Mastagni said she thinks DFA's tactic could backfire by inadvertently targeting those who are privately fighting against poor corporate governance measures like the poison pills. "They could be the ones in there asking the tough questions," she said.
(Reporting By Jessica Toonkel; additional reporting by Ross Kerber in Boston and Nadia Damouni in New York; Editing by Linda Stern and Martin Howell)

Wednesday, April 29, 2015

Wachtell Lipton: Some Lessons from DuPont-Trian

Some Lessons from DuPont-Trian
                        The ISS Report on the DuPont-Trian proxy contest calls attention to a number of important insights into ISS policies and practices and those of many of its institutional investor clients.  Concomitantly, these policies illustrate the realities of the sharp increase in activist activity and the steps corporations can, and should, take to deal with the activist phenomena. 
                        ISS and major institutional investors will be responsive to and support well-presented attacks on business strategy and operations by activist hedge funds on generally well managed major corporations, even those with an outstanding CEO and board of directors. 
                        Trian Fund Management and its founder, Nelson Peltz, have clearly established credibility and acceptability.  So too other well regarded funds like ValueAct.  They have become respected members of the financial community. 
                        An activist who attempts to work behind the scenes with a corporation to advise and achieve changes will have more credibility than one who surfaces with an attack. 
                        In most cases a corporation will be well advised to meet with the activist and discuss the activist’s criticisms and proposals, which are frequently presented in the form of a well-researched whitepaper.  If the activist’s recommendations are not unreasonable, careful consideration should be given to adopting some or all, thereby avoiding a public dispute.  In situations where the activist seeks board representation to pursue its objectives, depending on the circumstances it may be the best course of action to consider agreeing to board representation on condition of an appropriate standstill agreement.
                        Major institutional investors like BlackRock and Vanguard want direct contact with the independent directors of corporations.  Waiting to establish investor-director contact until under an activist attack is too late.  Meaningful director evaluation has also become a key objective of institutional investors and a corporation is well advised to have it and talk to its investors about it.  Regular board renewal and refreshment can be important evidence that meaningful director evaluation is occurring.  In the DuPont situation, ISS did not accept DuPont’s argument that the addition of two “super star” directors to its board, after the attack started, obviated any reason to add Mr. Peltz and one of his nominees. 
                        If a corporation disputes an activist’s counter whitepaper it needs to make a compelling case; failure to do so will result in ISS following its policy of generally supporting a dissident short slate.  ISS’s question, “Have the dissidents made a compelling case that change is warranted?” becomes “Has the corporation made a compelling case that change is not warranted?”  Note the not so subtle shift of the burden.
                        Finally, in some cases even winning a drawn out proxy battle can be more damaging to a corporation than a reasonable settlement with acceptable board representation. 

Martin Lipton