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In Q1, activists increase demands for companies worldwide, with a focus on US corporations

In Q1, activists increase demands for companies worldwide, with a focus on US corporations

Barclays data shows that corporate agitators targeted more companies worldwide in the first quarter to increase pressure on them to improve their performance. The majority of these demands were directed towards U.S.-based corporations.

Activist investors, such as Elliott Investment Management and Mantle Ridge, pushed companies like oil giant BP and rideshare company Lyft to make changes in the first quarter. The number of global campaigns grew by 17% and reached 70. The data revealed that the number of U.S. campaigns increased by 46%, to 41.

Jim Rossman is the global head of shareholder advice at Barclays. He said: "Activists continue to exploit all of the uncertainty." "We have seen activists win more board seats, more battles and more settlements in early 2025 than we had a year earlier."

The new campaigns this year come as a result of a record number activist shareholders targeting companies worldwide in 2024. Also, President Donald Trump’s tariffs, mass job cuts within U.S. government departments, along with fears of recession, have created market volatility.

Investors are still pushing management to improve their business operations. About one-quarter of the campaign requests this year were centered around strategy and operational issues, which is about the same percentage as last year.

Only about a quarter (25%) of campaigns include M&A demands such as divesting business or selling an entire company. M&A demand is down about half compared to when global deal volumes reached a record in 2021.

Rossman noted that activists were also seeing their campaigns pay off. The number of board positions won, which is often used as a gauge of success, increased during the first three months. 51 seats were won in both settlements and battles, a 34% increase over last year.

NEWCOMERS ACTIVE

Activism is becoming popular among newcomers who are inspired by the success of others and want to return to a time when things are uncertain. This includes newly formed funds as well as funds that have not run a campaign in the past.

The data shows that eleven so-called newbies ran campaigns in the first quarter. No comparative data was available for the first quarter 2024. Barclays' data for 2024 counted 47 newcomers.

Ed Garden, who co-founded Trian Fund Management and now runs Garden Investments, encouraged Middleby, which designs equipment for residential and foodservice kitchens and previously founded Trian Fund Management to concentrate on its core business in January. Garden joined the board of Middleby in February.

Barclays bankers expect that more companies will be facing shareholder demands in the remainder of 2025. They also believe the majority of activity will remain centered on U.S.-based companies.

Matthews International defeated Barington Capital Group despite the fact that all three proxy advisory firms backed the hedge fund candidates. Barclays' data shows that there were 13 proxy battles in the first three months of this year, up from 10 a few years ago.

The data also showed that activity has increased in Japan. This represents a 45% rise from the previous year and 16 campaigns. Europe, however, has seen little action. There have only been 9 activist campaigns in Europe - down 18% on a year earlier. (Reporting and editing by Svea HerbstBayliss, Muralikumar Aantharaman).

(source: Reuters)