Corporate activist investors eye Europe, Japan more in first half: Lazard

By Svea Herbst-Bayliss

BOSTON (Reuters) – Activist investors demanded more change at European and Japanese companies in the first half of 2020 while giving U.S. companies a pass, for now, new data from investment bank Lazard show.

While U.S. companies have long been activists’ favorite targets, they made up only 42% of all campaigns launched in the first six months of the year.

Starboard Value’s demands at GCP Applied Technologies and Elliott Management’s push for changes at Evergy ranked as major U.S. campaigns in the first half. In total investors launched 42 campaigns and put $9 billon to work. A year earlier, Lazard counted 71 campaigns at U.S. companies where investors put $15 billion to work in the first half.

Europe and Asia, especially Japan, saw more activity, Lazard said, reporting that Europe’s share of global campaign activity rose to 28% in the first half.

“U.S. campaigns declined notably in the first half of 2020, driven by ongoing uncertainty about the impact of COVID on corporate balance sheets, operations and performance, and the depth and length of a U.S. recession and recovery,” said Jim Rossman, who heads shareholder advisory at Lazard.

“Unlike the U.S., campaigns surged in Japan, driven by a growing set of local activists and large U.S. activists who see over-looked opportunities for change, and increased in Europe, particularly in Germany,” he added.

In Japan, 19 campaigns were launched in the first half, matching the record 19 campaigns seen in all of 2019. U.S. investment firm ValueAct Capital asked that Nintendo transform itself into a broader entertainment company, was a notable campaign.

Activists also appeared to have backed off calls for companies to sell themselves as the coronavirus outbreak made for uncertain times. Lazard reported that only 34% of all campaigns included calls for M&A, down from 47% a year earlier.

(Reporting by Svea Herbst-Bayliss; Ediitng by Steve Orlofsky)