Law360 Quotes Andrew Freedman on Activists’ M&A Opposition in Q1 of 2019

Firm News

Co-Head of Olshan’s Shareholder Activism Practice Andrew Freedman was quoted recently in a Law360 article (subscription required) on activist investors’ tendency to oppose announced M&A transactions publicly either to achieve more auspicious deal terms or to abandon a deal entirely, a sharply rising trend during the first quarter of 2019. According to data compiled by Activist Insight, eleven companies faced activist opposition to their announced M&A transaction in Q1 of 2019, compared to 6 companies in Q1 of 2018 and 3 in Q1 of 2017. Bumpitrage largely accounts for this trend, a strategy whereby funds will challenge a deal’s terms in hopes of getting a buyer to pay more for a target company’s shares. Mr. Freedman explains the widespread practice, commenting, “Companies will look at what level of opposition there might be and rather than facing the prospect of a challenged deal at the special meeting vote, they will just bump up the price to appease the target’s holders.” This tactic, he asserts, will only grow more prevalent going forward: “As long as there is M&A activity, there is going to be bumpitrage. It’s just a fact of life. That’s not subsiding in any way, shape or form.” More rare, he says, are transactions that activists oppose regardless of the deal’s terms: “The fewer and further between type of scenario is when a shareholder actively solicits votes to oppose or block a deal ... where a deal is so fundamentally flawed that there’s not really any room to improve the deal terms to get support. That just doesn’t happen that frequently.”

Media Contact

Marketing Contact
Mizi Mehaj
Marketing & Administrative Manager

Jump to Page

Necessary Cookies

Necessary cookies enable core functionality such as security, network management, and accessibility. You may disable these by changing your browser settings, but this may affect how the website functions.

Analytical Cookies

Analytical cookies help us improve our website by collecting and reporting information on its usage. We access and process information from these cookies at an aggregate level.