We have entered a new age of shareholder activism. The statistics on activism are daunting. Over the last five years, activists have prevailed in 45% of disputes with companies. In many of the recent proxy contests and activist campaigns, companies have found themselves caught off-guard and vulnerable to the latest tactics employed by hedge funds and other activist shareholders seeking to exert substantial pressure and influence over the company’s day-to-day operations, with the “stated” overall goal of enhancing shareholder value.
Preparation and Planning
One of the key determining factors of a successful defense in a threatened or contested solicitation is early planning and thorough preparation. The starting place is understanding what about a company might make it both vulnerable and attractive to an activist investor. We comprehensively examine your company’s vulnerabilities and develop recommendations that are practical and realistic.
As part of this review, we not only examine a company’s structural vulnerabilities which may exist in its bylaws and certificate of incorporation, but also nonstructural vulnerabilities that may result from its corporate governance practices or its investor relations and public relations programs. In the assessment, we work closely with management and, as appropriate, a company’s other external advisors, including its investment banking firm, public relations firm, and investor relations firm.
After we complete our assessment, we provide a detailed report of vulnerabilities and various options to eliminate or mitigate them. We then review the report with the company and assist in developing appropriate strategies.
The Right Team
The future of the company can be at stake in a contested solicitation. It is critical for the entire team to provide the company correct and coordinated real-time responsiveness. The right team would include not only sophisticated counsel and company representatives, but also investor relations, public relations, and proxy solicitation firms with experience in contested solicitations. Blank
We also develop litigation strategies to ensure that a company’s rights are aggressively pursued and protected. As many of these litigation battles are fought in the
In many cases, shareholder activist campaigns are waged on the basis of who has the better messaging to shareholders. In addition to Blank Rome’s very experienced in-house crisis-communications team, we have close working relationships with many leading crisis-communications firms to help your company win the “hearts and minds” of your shareholders.
Our attorneys have assisted companies with:
Experienced Attorneys, Recognized in Their Fields
Many Blank Rome lawyers have spent part of their careers working for such key regulatory agencies as the SEC and the National Association of Securities Dealers (NASD). In addition, Blank Rome’s shareholder activism group includes numerous former attorneys from the Department of Justice. Their in-depth knowledge of the regulatory agencies and the way these agencies operate gives companies confidence that their matters are in good hands. Our well rounded backgrounds enable our clients to follow the most appropriate courses of action, given their objectives. Prominent corporate partner Fred Lipman has taught in the Wharton MBA program and routinely is sought by the media to comment on shareholder activism and related issues. Our attorneys have authored and edited a number of popular books regarding public companies, including Corporate Governance Best Practices: Strategies for Public, Private, and Not-for-Profit Organizations and The Complete Guide to Employee Stock Options, and have written extensively on the topic of shareholder activism. Our attorneys are frequently called upon to comment on key issues and developments concerning shareholder activism and are quoted in the press.