Investor activism is a global story which shows no signs of slowing, as this article highlights. One aspect that remains core to the principle of activism investing is valuation - more specifically the disparity between the observed current valuation and the expected market value achievable through enhancements suggested by the activist.
Boards should be prepared for this event - if not, they are susceptible to an intervention which can be costly and time consuming. Ultimately, the action may only deliver short term gains, remembering the other consistent theme of activism - that the value generation is important to the activist, only while they remain invested.
To learn how A&M is advising corporate boards on what they can do to mitigate activism risks, visit our website here. https://www.alvarezandmarsal.com/outside-%E2%80%9D-perspective-get-%E2%80%9Coutside-%E2%80%9D-perspective-your-company%E2%80%99s-performance
Why corporate boards should not indulge activists’ sugar highs