Hi there, welcome back to DEF14's Monthly Knowledge+! Ready for a quick catch-up on the US activism scene from last month? September was a bit chill, hosting only 27 active campaigns. That’s 23% less than what we saw in August. Plus, we only noticed 2 new campaigns popping up – marking a 33% drop from the previous month.
As always, DEF14 is on standby to unpack all of this for you. We're geared up with insights for both companies and investors. Without further ado, let’s dive in and explore the developments.
DEF14's Activist Alpha® provides real-time updates on the performance and positions of active campaigns filed by renowned activist groups.
September 14th: Politan Capital v. Azenta
Activist investor Politan Capital Management, led by renowned fund manager Quentin Koffey, has disclosed a 7.5% economic exposure in Azenta Inc., a cutting-edge biotech firm dedicated to advancing healthcare through innovative solutions and groundbreaking research in the field of biotechnology. The stake, comprising over 4 million common shares (6.87%) and additional notional shares, has been amplified since June.
With Azenta’s stock viewed as undervalued, Politan plans to engage the company’s board and management in discussions. The focus will be on Azenta’s financial health, operations, strategic plans, governance, and other pivotal matters.
September 8th: Gamco v. MachTen
Gamco Investors, a renowned entity in the financial sector with a significant focus on the securities industry, along with affiliated parties, have reported a collective ownership exceeding 5% of MachTen’s equity. MachTen is a company that provide high-speed broadband services. Their holdings in MachTen, as documented in the latest filing, are tied to approximately 49.47% of the outstanding 3,167,222 shares.
The involvement of Gamco Investors in MachTen is driven by investment objectives. The firm is committed to an ongoing evaluative process, engaging in meticulous analyses and dialogues aimed at augmenting the value for MachTen's shareholders. Though they proactively propose enhancements in both operational and structural domains to escalate shareholder value, Gamco Investors maintains a strategic distance, refraining from seeking authoritative control or active management of MachTen.
Other Activism Highlights
Illumina’s New Appointment Amidst Challenges
In early September, Illumina appointed Jacob Thaysen, formerly of Agilent Technologies, as its new CEO following the resignation of its previous leader amid a proxy fight with the activist investor Carl Icahn. The conflict with Icahn stemmed from Illumina’s controversial decision to repurchase cancer test maker Grail in 2021, a move opposed by both U.S. and European antitrust regulators and which Icahn argued cost investors billions. Thaysen’s appointment is seen as positive due to his industry expertise, but he takes the helm during a challenging period for Illumina, marked by ongoing regulatory pressures and a recent cut to its full-year forecast attributed to a sluggish recovery in China.
Investors Pressure on Nike (September 12th):
Over a dozen investors, including Dutch bank Triodos and pension fund PGGM, were urging Nike to pay $2.2 million in alleged unpaid wages to over 4,000 workers in Cambodia and Thailand, following COVID-19 factory closures. These allegations, backed by a report from the Workers Rights Consortium, came ahead of Nike’s annual shareholder meeting, amplifying scrutiny on its supply chain. Nike refuted the claims, stating adherence to local laws and its Code of Conduct, and denied sourcing products from the accused Cambodian factory since 2006. The investors' call amplified ongoing concerns around labor practices within the sportswear giant's supply chain.
Xerox's Share Repurchase (September 28th):
Xerox confirmed it would acquire all its shares held by activist investor Carl Icahn for $15.84 each. Following this announcement, Xerox Holdings Corp. (XRX) experienced a decline in its stock value. The repurchase is an indication of the company's confidence in its business model and profitability potential, asserted Chief Executive Steve Bandrowczak. He expressed gratitude to Icahn, acknowledging the significant role he and his affiliates played over nearly ten years, contributing to Xerox’s transformation and growth in the workplace technology sector.
September Activism: Key Takeaways
In the dynamic world of activist investing, various strategies are employed by investors, as seen in Politan Capital’s assertive stance with Azenta and Gamco’s more balanced approach with MachTen.
The appointment of Illumina’s new CEO amidst a proxy battle and regulatory challenges exemplifies the complex intersections between corporate governance and activist pressures. Nike's confrontation with investors over labor practices illustrates the growing focus on ethical considerations within activist campaigns. Xerox’s share repurchase from Carl Icahn is a testament to the intricate relationships between corporations and activists, showcasing a multifaceted environment where financial interests, ethical considerations, and strategic initiatives converge.
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Thanks for joining us today; we appreciate your attention and participation. We're excited to present you with another insightful recap in the upcoming edition of our Monthly Knowledge+. Until then, stay informed and engaged. See you next month!