Shareholder Activism

Shareholder activism in one form or another has always been around. Although it has usually been practised in private by exerting pressure behind closed doors. In the current climate, not only are shareholders less passive, but they are now much more willing to adopt deliberately high profile tactics in seeking to determine a company’s course of action.

This proactivity is a result of the prevailing environment where it is no longer seen as unduly aggressive to exercise your shareholder rights. Regulators, corporate governance codes and non-executive directors are all perceived to have failed to cure poor performance and curb corporate excesses. Activism is seen as a legitimate form of self-regulation.

Shareholder activists range from pension funds demanding executive pay schemes that reward value creation, to ethical investors demanding that management pay greater attention to their particular concerns, to hedge funds seeking to turn around under-performing companies and improve returns.

Social media tools allow shareholder activists to frame debate and discussion and to be more willing to find their voice and stand up to management. An individual or a company’s reputation can be destroyed by just one tweet. Activist campaigns are increasingly as much about publicity as about corporate law.

Very few firms with our corporate law capabilities are also capable of advising clients on how to make public statements without falling foul of defamation laws. Most lawyers will always tell you to make no comment. Working with our colleagues in Reputation Protection, we can advise shareholder activists exactly on what they can and cannot say, whilst at the same time advising on the impact of Company Law, Insider Trading and Market Abuse Legislation and the Takeover Code on what they would like to achieve. Our highly skilled and tenacious team of lawyers combines corporate, reputation management and litigation expertise.

Experience

  • Acting for the largest shareholder of a listed company whose strategy was to stop and pre-empt a takeover.
  • Acting for a 50% shareholders and directors of a large private company in a multi-million pound section 994 dispute on unfair prejudice.
  • Acting for a number of large shareholders of an AIM listed mining company in connection with a proposed change of the entire board and subsequent takeover by a major mining company.
  • Acting for a 29.5% shareholder in a company admitted to the Main Market of the LSE, in connection with a dispute with management over the future direction of the company and the constitution of its board.
  • Acting for an individual with a beneficial interest in the shares of a well-known family business in connection with a dispute as to the future direction of the business.
  • Acting for a consortium, including a 17% shareholder, on a strategy to engineer a sale and lease-back of the target’s assets in the context of a takeover approach.
  • Advising the board of an AIM listed football company on the defence of a shareholder requisition to remove the board.
  • Acting for the controlling shareholders of Deure Trust on the acquisition of the Barclays offshore trust and fiduciary services business (CHN).
  • Acting for the shareholders of Stride Gaming Plc in connection with admission of the company to AIM.

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