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What’s Happening

So get this: Here are the 10 tactics that unnecessarily frustrate activists and impact your negotiating use.

Boards and management all have the same fear – the ominous news story, 13D filing, or even the first phone call when an activist investor introduces themselves as one of their largest holders. What happens next is swift and often sets the tone for the engagement. (it feels like chaos)

The Board is notified, advisors are summoned, and a defense plan is assembled.

The Details

Directors are flooded with counsel from advisors who claim they know the activist best and have seen this situation many times before. Recommended Video In these moments, it’s easy for Boards to slip into self-preservation mode and engage in standard defensive tactics.

But, many of these well-advised tactics may jeopardize trust with the activist and ultimately reduce the company’s negotiating use. Rather than establishing the basis for a thoughtful exchange of ideas, some standard defense tactics can inadvertently signal resistance and rough intentions, making it more difficult to maintain a constructive dialogue that could lead to a mutually beneficial outcome.

Why This Matters

Here we examine Ten Tactics that Unnecessarily Frustrate Activists and their influence on the negotiating process to better inform companies and boards about how their actions may be perceived side and may have unintended consequences. Approaching meetings strictly as “listen only” sessions, there intelligent exchange of ideas. Advisors may recommend that their clients engage in this approach to mitigate risk and better understand the activist’s objectives to get ahead of their demands.

Market watchers are paying close attention to developments like this.

Key Takeaways

• Slow-rolling discussions to delay meaningful engagement until after a key calendar event or the nomination or record dates.
• Activists recognize these delay tactics ASAP, viewing them as an attempt to run out the clock and avoid accountability.

The Bottom Line

Slow-rolling discussions to delay meaningful engagement until after a key calendar event or the nomination or record dates. Activists recognize these delay tactics ASAP, viewing them as an attempt to run out the clock and avoid accountability.

Are you here for this or nah?