SHAREHOLDER ACTIVISM IN CANADA
R&C: What do you consider to be some of the key trends defining shareholder activism in Canada over the last 12 months or so?
Feldman: The Canadian market has seen a bit of a decline in ‘all out proxy battles’ as compared to previous years. This trend can, at least in part, be attributed to the strong M&A market that we have experienced during this period. We have also seen rising activism in the M&A space, both in terms of instigating transactions and in the use of ‘bumpitrage’ strategies, most recently by Catalyst in connection with the Hudsons Bay go-private transaction. Another key trend is the growing movement among boards, including blue chip boards, to be ‘activist ready’. As a result, boards are assembling teams of experts in advance of any actual activist threat in order to ensure they are ready if and when an activist does show up. We have seen exponential growth in activist preparedness strategies over the last 12 months, which is a function of boards recognising the power and prevalence of these players in the Canadian market.
R&C: What factors are driving activist campaigns in Canada?
Feldman: There continues to be interest in the mining space generally, particularly the gold sector. Much of what drives this activity is the view of shareholders that these companies continue to underperform, in large part as a result of incompetent management and disengaged boards.
Apr-Jun 2020 Issue
Goodmans