Last week was big for activist investors, with Barington Capital Group and NuOrion Partners toppling Avon Products,
Inc. (NYSE: AVP)’s CEO, Nelson Peltz and Bill Ackman
forcing out
Mondelez International Inc (NASDAQ: MDLZ)’s
CEO, and Ackman’s Pershing Square inciting
a drop in Automatic Data Processing (NASDAQ: ADP).
But, continuing an unusually busy year
for activists, it seems things were just heating up.
Two more campaigns launched Monday, with Scopia Capital Management taking on Acorda Therapeutics Inc (NASDAQ:
ACOR) and Land and Buildings going after Taubman
Centers, Inc. (NYSE: TCO).
Related Link: What
Happens To A Stock When An Activist Liquidates A Position?
Scopia’s Gentle Request
As a long-term, 17-percent owner of Acorda, Scopia wrote to the board expressing admiration but urging review of strategic
alternatives, including a sale.
“In 2018, the business will revert to burning cash with a levered balance sheet and no clear timeline to return to
profitability,” Scopia wrote, bemoaning the pharmaceutical’s loss in Ampyra litigation and current dependence on Inbrija’s 2018
launch. “These are treacherous waters.”
Acorda is poised to secure a strong selling price, Scopia supposed, as its assets were more valuable than those of the recently
acquired Cynapsus and Neuroderm.
Land And Buildings’ Beef
With sharper language and a more direct tone, Land and Buildings accused Taubman CEO and Chairman Bobby Taubman of “bullying”
and misleading the board and shareholders.
“At this point the only thing worth hearing would be a mea culpa from management — but after 25 years we are not holding our
breath that one might be uttered,” the firm wrote in a letter. “It is time for accountability at Taubman. It is time for
change.”
Specifically, Land and Buildings demanded the removal of ineffective management, outlined criteria for the appointment of three
new directors and threatened democratic deposition of Taubman family members from the board provided demands go unmet. Co-founder
Jonathan Litt has campaigned
against Taubman leadership since October.
A Precedent Of Success
Activist investors seeking to redirect targeted firms and unlock shareholder value occasionally launch their campaigns through
such letters to management. The public correspondences outline problems and propose solutions, generally in the form of leadership
changes or asset sales.
Recently, some efforts have proven effective.
What began with a letter from Marcato Capital
resulted in the eventual retirement of
Buffalo Wild Wings (NASDAQ: BWLD)’s CEO
Sally Smith. Earlier in the year, Bob Evans Farms Inc (NASDAQ: BOBE) caved to Sandell Asset Management
demands to sell its chain restaurant, and Whole Foods Market, Inc. (NASDAQ: WFM) sold itself to Amazon.com, Inc. (NASDAQ: AMZN) on pressure
from Jana Partners.
Activist investments don’t
always go so well, though, with many intransigent boards successfully warding off pressure and prompting shareholders to
abandon their strategic stakes.
As yet, a number of firms are still holding off the advances of activist investors, with:
-
Deckers Outdoor Corp (NYSE: DECK)
resisting
Marcato;
-
Procter & Gamble Co (NYSE: PG) resisting
Nelson Peltz;
-
Barnes & Noble, Inc. (NYSE: BKS)
resisting Sandell Asset Management;
-
Hain Celestial Group Inc (NASDAQ: HAIN)
resisting Engaged Capital;
- and Dillard’s, Inc. (NYSE: DDS)
resisting
by Marcato, Greenlight Capital and Snow Park Capital Partners.
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