Buoyed by an improved economic climate and unprecedented success
in 2013, shareholder activists are expected to significantly
influence the 2014 M&A landscape. As shareholder activism
becomes more widespread, activists are becoming increasingly
ambitious and creative in their approach.
Last year saw a rise in the power and influence of activist
hedge funds. In 2013, activist hedge funds managed over $93
billion, a 42% increase from 2012. With more capital, activist
hedge funds have been able to target larger and more sophisticated
Shareholder activists are also looking to expand their
geographic reach. Despite confidence in the North American market,
in a survey undertaken by FTI Consulting, 40% of
activists admitted to shifting their focus to Europe and elsewhere.
Specifically, activists are getting more involved in the UK, where
corporate governance and legal frameworks are the most
As company awareness of shareholder activism has risen,
activists are turning to new and innovative strategies to impact
deal-making. An emerging trend sees activists use the threat of
appraisal rights to extract a greater buyout price from eager
targets. As an example, after threatening to pursue appraisal
rights litigation, Carl Icahn and other shareholders were able to
receive a higher buyout price in respect of Dell's February
2013 going-private transaction.
It is also becoming increasingly common for shareholder
activists to engage the acquirer-side of a transaction rather than
the traditional target-side of a transaction. In the aforementioned
FTI Consulting survey, 43% of activists surveyed acknowledged their
desire to seek opportunities to discourage potential acquisitions
and to pressure would-be acquirers to use their cash for share
buybacks and dividends.
Shareholder activists are learning of the effectiveness of
media, and in particular, social media, in their campaigns. Of
those surveyed by FTI Consulting, 69% of participants expected an
increase in the use of social media in 2014.
All of this is to say that no company is safe from activist
interference. Companies should prioritize strong communication with
shareholders and should implement takeover defences to maintain
control of any transaction they wish to pursue.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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