A corollary to the trend of
rising shareholder activism is the increasing frequency with
which target companies are facing
multiple activist campaigns. Companies
that have successfully defended activist campaigns in the past are
not free to rest on their laurels – if the same issues
persist, future attacks may be on the horizon.
The Wall Street Journal reports that 39 companies
have dealt with more than one shareholder activist over the past
year – a 95% increase since 2011. Companies that are
underperforming seem to be a breeding ground for multiple
shareholder activist activity, but there do not seem to be enough
of them to keep pace with the sharp rise in activist investors. In
2014, Reuters noted that as stock markets
strengthen, it becomes tougher to find suitable targets, so
activist investors end up "chasing the same 'low-hanging
fruit' – companies that have poor corporate governance or
performance and are vulnerable to calls for change."
Not only are multiple campaigns costly and time-invasive, but
also entering into a settlement with one activist does not guarantee that other activists will
be satisfied. This certainly played out this month when activist firm Pershing Square
Capital Management LP acquired $5.5 billion in Mondelez
International Inc. – the company that makes Oreo cookies
– following the settlement of an activist campaign launched
by Trian Fund Management LP 20 months earlier. North of the border,
companies are not immune to multiple activist campaigns and those
in Canada's energy sector seem to be the most vulnerable. Take
Bellatrix Exploration Ltd., for example. Reuters reports that two separate U.S.
activist firms recently targeted the Calgary-based natural gas
One of the reasons for multiple campaigns could be that each
activist may have a different motivation for targeting a particular
company. As noted by the Wall Street Journal, activists with competing
agendas may become more compelled to launch a campaign if a
particular activist's changes are adopted over theirs. This has
certainly played out in Canada, where, as reported in the Financial Post, Agrium, Inc. faced a 10-month
shareholder activist campaign by Jana Partners LLC in 2013, that
demanded Agrium Inc. split its wholesale and retail businesses.
Although Agrium, Inc. won that battle (having been represented by
Norton Rose Fulbright Canada LLP), a mere 18 months later, ValueAct
Capital Management LP launched an activist campaign, striving for
growth and board representation.
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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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