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/ Pixabay Table of Contents What's New In Activism – ISS Backs Pzena Takeover
Institutional Shareholder Services (ISS) suggested , Inc. (NYSE:PZN) shareholders accept the management-backed $9.60-per-share takeover offer, dealing a blow to dissident Punch & Associates.
ISS called the proposal's 49.1% premium“substantial” and warned that a rejection of the offer could lead to a plunge in Pzena's share price, according to excerpts offered by the company in a press release last week.
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Old West Sees Commodity Supercycle Continuing [Exclusive]Old West Investment Management struggled to keep its head above water in the third quarter. According to a copy of its investor letter for the three months to the end of September, its performance was“in line with benchmarks.” The S&P 500 has returned -22.8% for the year to date. Investing in the commodity cycle
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The buyout, which assigns Pzena an enterprise value of $795 million, is slated for a shareholder vote on October 27. Currently overseeing $42 billion in assets, Pzena went public in October 2007 in an offering priced at $18 per share.
Punch, a Pzena investor since 2009 now holding a 12% stake, recently called the bid opportunistic and said the $9.60-per-share price tag is 'well below recent share repurchases during five consecutive quarters, below the 52-week high stock price, and below our calculation of both peer and comparable acquisition multiples.'
Activism chart of the week
So far this year (as of October 13, 2022), 9% of Australia-based companies publicly subjected to activist demands were in the consumer defensive sector. That is compared to 4% in the same period last year.
Source: Insightia | Activism
What's New In Proxy Voting - P&G Directors Retain Seats
Shareholders voted to reelect all of the incumbent (NYSE:PG) directors, as well as a new director put forward by management, despite pressure from environmental activists to withhold their votes at the U.S.-based consumer goods giant's October 11 annual meeting.
P&G CEO and Chairman Jon Moeller and directors Angela Braly and Patricia Woertz all faced opposition to their reelection by climate activist Friends of the Earth with an argument that under the trio's leadership.
P&G had 'failed to take substantive action to evaluate and adopt time-bound commitments to address the company's role in driving primary forest degradation, and to adequately enforce its deforestation and human rights policies, leaving it exposed to significant material reputational, market, and regulatory risks.'
According to preliminary results, Moeller, Braly, and Woertz all received over 90% support from the company's shareholders at the annual meeting.
Voting chart of the week
Support from the big five investors for social and environmental shareholder proposals dropped by an average of 13.5pp and 15.1pp, respectively, between 20/21 and 21/22 proxy seasons. This comes from our .
Source: Insightia | Voting
What's New In Activist Shorts - Blue Orca Capital v Enviva
Enviva shares fell hard last Wednesday after Blue Orca Capital published a short report accusing the wood pellet manufacturer of inflating profits and 'flagrantly greenwashing' its wood procurement. Enviva Inc (NYSE:EVA) counts activist investor Jeff Ubben as a leading holder.
In the , Blue Orca argued that Enviva's stated strong cash flow generation is untrue, alleging the company is 'a dangerously levered serial capital raiser whose deteriorating cash conversion and unprofitability will drain it of cash next year.'
'Contrary to Enviva's claims, it generates nowhere near the cash from operations to support its dividend, let alone future capital expenditures to drive growth,' said the short seller.
Reacting to the short report, Enviva it 'contains numerous errors, repeats previous unsupported speculation and gross mischaracterizations, and draws specious, misleading conclusions.'
Shorts chart of the week
So far this year (as of October 14, 2022), three Sweden based companies have been publicly subjected to an activist short campaign. That is up from one in the whole of 2021.
Source: Insightia | Activist Shorts
Quote Of The Week
This week's quote comes from Spruce Point Capital Management in a short on U.S. liquor company MGP Ingredients. Read our coverage .
“With the deal having closed on April 1, 2022, and now with the benefit of five subsequent reporting quarters, Spruce Point believes the Luxco merger has been an abysmal failure.” – Spruce Point Capital Management