Sidley's Shareholder Activism Review – Tales From the Trenches –

Outlook: Hostile M&A and Activism to Surge in 2021
By Kai Liekefett and Derek Zaba

As 2020 has concluded and we begin 2021, the pipeline of contested mergers and acquisitions (M&A) and shareholder activism remains robust. In recent updates, we have spoken in detail about the elevated level of contested M&A activity. While 2020 as a whole had the same number of unsolicited and hostile approaches as the median of the past decade, according to Dealpoint, the quarter-by-quarter story unfolds quite differently. The second quarter of 2020 saw the lowest number of approaches in a second quarter in the past decade due to the onset of COVID-19. However, this was balanced out by an explosion of approaches in the fourth quarter of 2020, the highest of any fourth quarter, and the third highest of any quarter, in the past decade. This is consistent with Sidley’s experience in the second half of last year. We saw significant unsolicited activity behind the scenes in both quarters of the second half, some of which was revealed in the fourth quarter. There remains a healthy amount of unsolicited activity yet to be publicly revealed.

A similar theme emerges with respect to traditional shareholder activism, in which activists attempt to drive change at a public company but do not intend to acquire the target. According to Activist Insight, the number of public activism campaigns announced in either the second or third quarters was the fewest in the past five years. However, publicly disclosed campaigns in the fourth quarter returned to a more normalized pre-COVID-19 pace. In addition, windows for shareholders to nominate directors have begun to open for calendar-year-end issuers. Based on our early experience with director nominations, we expect an extremely busy proxy contest season for traditional shareholder activism.

Rankings and Achievements

Sidley Ranked No. 1 for Activism Defense by Bloomberg and Activist Insight for 2020
January 4, 2021

Sidley was ranked the No. 1 legal adviser by Bloomberg for 2020 for company-side activist engagements globally and in the U.S. Bloomberg also ranked Sidley as No. 1 legal defense adviser for Energy and Health Care. Moreover, Activist Insight ranked Sidley No. 1 for Total Issuer Representations in its 2020 Adviser Awards.

Kai Liekefett Named a Fellow of the American College of Governance Counsel
October 30, 2020

The American College of Governance Counsel has elected Kai Liekefett, co-chair of Sidley’s Shareholder Activism practice, as a new fellow. Membership in the college is by invitation only, and fellows are chosen from the ranks of lawyers who have displayed a high level of professionalism and commitment to the advancement of the governance practice through a combination of practice and thought leadership activities. 

Publications

The Comeback of Hostile Takeovers
Autumn 2020

Unsolicited takeover bids were rare during the past decade but are now experiencing a resurgence. Kai Liekefett co-authored this article discussing the resurgence of hostile takeovers and provides seven steps to be prepared for a hostile takeover bid.

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The Corporate Purpose Debate: Shareholder Value and Corporate Responsibility in an Era of COVID-19 and Social Unrest
October 23, 2020

In this article, Holly Gregory outlines the role of the corporation in returning value to its shareholders, as well as serving a broader purpose in response to the ever-growing concerns about racial inequality, social justice, and the COVID-19 pandemic.

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Events

Hostile Takeovers and Shareholder Activism in a COVID-19 World
January 14, 2021

The leaders of Sidley’s Shareholder Activism practice, Kai Liekefett and Derek Zaba, hosted a webinar covering the evolution of hostile M&A and shareholder activism in the COVID era, what to expect in the 2021 proxy season, and how to stay on the front foot in the current environment.

Public Company Issues in the COVID Era
December 16, 2020

Kai Liekefett was a panelist for the December 16 discussion around considerations for public companies navigating the COVID-19 crisis.

Governance Trends for 2021: Perspectives for Advising the Board of Directors
December 14, 2020

Holly Gregory discussed board strategies in an era of political uncertainty, social unrest, and the COVID-19 pandemic during this webinar.

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Activist Insight: Virtual Debate Between Richard Brand and Kai Liekefett
November 10, 2020

Kai Liekefett joined Activist Insight’s Josh Black and Richard Brand to discuss opportunistic activism during a pandemic, hostile M&A, private equity, and expectations for 2021.

NACD: Expert Insights: Shareholder Activism
November 4, 2020

Kai Liekefett was a speaker at the 2020 summit of the National Association of Corporate Directors (NACD). In his session, “Expert Insights: Shareholder Activism,” he discussed the board's role in preparing for and responding to a challenge and the trends in activist campaigns that have emerged over the past year, including volume, value, and sectors targeted, as well as the recent rise of hostile takeover activity.

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Password: NACDSummit