UK shareholder activism saw a sharp increase last year as investors launched campaigns at 25 companies, spending $7.35 bn on stocks, according to research by the investment bank Lazard.
Just 11 UK companies faced activist campaigns in 2017, less than half of last year’s number, with the growth in activism in 2018 raising the prospect of further disruption for management of UK companies this year.
Looked at within a global context, investors in UK companies accounted for more than 10 percent of activist campaigns in 2018.
‘Shareholder activism in the UK is at a record level and is continuing a trend that began to play out in 2017,’ says Richard Thomas, head of the European shareholder advisory practice at Lazard, in a statement.
More recently and continuing this trend, Edward Bramson’s Sherborne activist investment group last week stepped up its campaign at Barclays. The investor said he would seek shareholder approval for a bid to make changes to the board of Britain’s third-biggest bank.
Elliott Advisors was the most involved activist investor last year, launching 22 new campaigns worldwide, according to the research. Elliott led a campaign that prompted UK retailer Whitbread to offload Costa Coffee to Coca-Cola in a £3.9 bn ($5 bn) deal announced in August last year. It also threw its weight behind Melrose’s hard-fought £8 bn hostile takeover of engineering firm GKN.
For Thomas, this represents an interesting trend in activism. ‘In 2018, activism has increasingly been used as a tactic to reshape business strategies and drive M&A activity across sectors, particularly those most affected by tech disruption and market dislocation,’ he says.
Globally, one third of campaigns related to mergers and acquisitions while activist investors also secured 161 board appointments – a new record.
All this points to a further fillip in UK shareholder activism in 2019. ‘If we look at the US, there was an uptick in activist campaigns in 2015 followed by an increase in aggressiveness and public pressure the following year,’ notes Thomas. ‘We could see a similar trend in the UK this year.’
