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DEF14 Monthly Knowledge+: January 24 Activism Highlights (New 13D campaigns)

Discover the latest developments in shareholder activism with DEF14's Activist Alpha®.

🟩 Discover the latest developments in shareholder activism with DEF14's Activist Alpha®.

Greetings! We trust you've had a wonderful beginning to the year. It's amazing how quickly time passes, as February has now arrived! Are you prepared to discover the latest developments in the realm of shareholder activism for the month of January? Well, last month, we witnessed a remarkable total of 55 active campaigns, which included the launch of 9 fresh 13D campaigns. What's even more impressive is that a whopping 89% of these new initiatives were led by Seba Capital Management. Now, let's examine the new campaigns more closely.

DEF14's Activist Alpha® provides real-time updates on the performance and positions of active campaigns filed by renowned activist groups.

🟩We provides real-time updates on the performance and positions of active campaigns filed by renowned activist groups.

Saba Capital Management’s January 13D Campaign 

Saba Capital Management has acquired the shares from following targets for investment purposes due to their belief in the undervaluation of the shares. The purpose of these ownerships are to engage in discussions with the trust's management, board, and shareholders regarding various aspects of its business and governance. 

(I): Nuveen Massachusetts Quality Municipal Income Fund

  • On January 4, 2024, Saba Capital Management and its affiliates filed a Schedule 13D, disclosing their ownership of Common Shares in the Nuveen Massachusetts Quality Municipal Income Fund. As of January 29, 2024, they collectively own 581,724 Common Shares, representing 6.24% of the class, with the amendment updating source of funds information

  • Saba Capital Management has a longstanding relationship with Nuveen Massachusetts Quality Municipal. In 2021, Saba Capital Management initiated a lawsuit against Nuveen, citing violations of the Investment Company Act, particularly related to vote stripping. The United States District Court for the Southern District of New York ruled in favor of Saba Capital Management in this matter. Subsequently, on November 30, 2023, the United States Court of Appeals for the Second Circuit upheld the decision, underscoring the significance of safeguarding shareholders' rights.

(II): Nuveen Variable Rate Preferred & Income Fund

  • On January 5, 2024, Saba Capital Management, L.P., Saba Capital Management GP, LLC, and Boaz R. Weinstein collectively submitted a Schedule 13D report pertaining to Nuveen Variable Rate Preferred & Income Fund. According to the filing, they possess a combined total of 1,357,900 shares, which constitutes a 5.62% ownership stake in the respective securities class.

(III): Neuberger Berman Next Generation Connectivity Fund Inc.

  • As of January 5, 2024, Saba Capital Management disclosed ownership of 4,143,339 shares, representing a 5.26% stake in Neuberger Berman Next Generation Connectivity Fund Inc.

(IV): Pioneer Municipal High Income Opportunities Fund, Inc

  • Per the filing on January 5th,, Saba Capital Management and its affiliated entities hold a combined ownership of 1,614,522 Common Shares of Pioneer Municipal High Income Opportunities Fund, Inc., constituting roughly 9.56% of the class of securities.

(V): Pioneer Municipal High Income Fund, Inc.

  • Saba Capital Management, L.P., along with its affiliated entities, collectively owned 3,210,307 Common Shares, a 14.1% stake, of Pioneer Municipal High Income Opportunities Fund, Inc. as of January 5, 2024.

(VI): Abrdn Infrastructure Income Fund

  • On January 16, 2024, Saba Capital Management, acquired a total of 2,313,191 common shares,  representing 9.18%, of ABRDN Global Infrastructure Income Fund.

(VII): GAMCO Natural Resources, Gold & Income Trust

  • On January 16, Saba Capital Management, L.P., Saba Capital Management GP, LLC, and Boaz R. Weinstein disclosed their joint ownership of 1,527,219 common shares in GAMCO Natural Resources, Gold & Income Trust. This holding accounts for approximately 8.90% of the securities class.

(VIII): Invesco Municipal Opportunity Trust

  • On January 18, 2024, Saba Capital Management, L.P., along with its affiliated entities, submitted a Schedule 13D disclosing their stake in Common Shares of Invesco Municipal Opportunity Trust. Their combined ownership amounted to 6,225,848 Common Shares, constituting 9.23% of the total class.

Bulldog Investors' January 13D Campaign

(I):  Texas Pacific Land Corporation

On January 22, 2024, Bulldog Investors, LLP disclosed their ownership of 4.5K Common Shares, which constitutes approximately 0.06% of the total class of Texas Pacific Land Corporation. Alongside this announcement, Bulldog put forth a proposal that recommends the company's Board to actively pursue stockholder approval for transactions where Texas Pacific Land Corporation's stock is part of the consideration. This proposal encompasses various transaction types, including tender offers, exchange offers, mergers, acquisitions, and others. The primary objective is to ensure that stockholders' votes are sought, especially in cases where there might be concerns about their support for the transaction.

Other Activism Highlights worldwide

Exxon Mobil's Legal Action Against Climate Proposal: 

Exxon Mobil Corp took legal action to prevent a climate proposal by activist investors from being voted on during its shareholder meeting. This proposal, driven by investors including U.S. activist investment firm Arjuna Capital and shareholder activist group Follow This, aimed to push Exxon to adopt tighter climate targets. Exxon's response highlights the contentious nature of environmental and climate change-related shareholder activism​.

According to Reuters, Investors employing shareholder resolutions to advocate for environmental and social concerns express concerns that a lawsuit filed by Exxon Mobil, which bypasses the U.S. securities regulator, may erode their impact. The Securities and Exchange Commission (SEC), under the leadership of appointees by President Joe Biden, has heightened the challenge for companies seeking to block these resolutions and prevent them from reaching a shareholder vote through regulatory appeals.

Carl Icahn Seeks Reconsideration in Bid to Use Confidential Info in Illumina Lawsuit:

Carl Icahn has requested a Delaware judge to reconsider a recent decision barring him from utilizing confidential information in a breach of duty lawsuit against Illumina's directors. Icahn wants to leverage privileged information obtained from Illumina board member Andrew Teno, who is also an Icahn portfolio manager. The lawsuit revolves around the $7.1 billion Grail acquisition by Illumina, which faced opposition from regulators. Illumina argued that Teno had no right to share confidential material with Icahn, while Icahn's lawyers contended it was justified under Delaware precedent. The judge initially ruled in favor of Illumina, ordering the privileged information to be removed from the complaint. Icahn's motion for reconsideration argues that key facts were misunderstood, emphasizing Icahn's voting power and Teno's fiduciary duties to Icahn plaintiffs. It remains to be seen whether the judge will change the decision.

Elliott Investment Management Acquires $1 Billion Stake in Match Group, Pushes for Performance Improvements:

Activist investor Elliott Investment Management has invested approximately $1 billion in Match Group and plans to urge the Tinder dating app owner to enhance its performance and boost its struggling stock price. The specific demands from Elliott are yet to be disclosed. Match Group, which includes dating apps like Hinge, OKCupid, and Plenty of Fish, has faced challenges as U.S. consumers have been cautious about discretionary spending on dating app subscriptions due to economic uncertainties. The company has introduced new features to revitalize its growth, but its stock price has declined by approximately 80% from its COVID-19 pandemic peak.

Parkland Corp.'s Largest Shareholder Relinquishes Board Nomination Rights, Amid Engine's Earlier Suggestions:

Simpson Oil, the largest shareholder of Parkland Corp., has relinquished its previously held rights to nominate two members to the fuel retailer's board of directors. This decision follows the recent resignations of Simpson Oil's nominees, Michael Christiansen and Marc Halley, from Parkland's board. While the reasons for their resignations remain undisclosed, Parkland expressed confidence in its strategy and management team. Simpson Oil, based in the Cayman Islands, has been a Parkland shareholder for over six years and owns around 20% of the company's shares since Parkland acquired Sol, a Caribbean fuel retailer formerly owned by Simpson Oil, in 2022. Parkland is now in discussions with Simpson Oil about its shareholding in the company, with analysts suggesting a potential sale of shares by the Simpson family in the future.

This development comes after the U.S.-based activist investor Engine Capital LP urged Parkland to divest "non-core assets" and focus on its core business as a fuel and convenience retailer, a suggestion Parkland rejected but has since made changes to its board and business strategy. 

Hedge Fund Bluebell Capital Challenges BP's Shift Towards Clean Energy:

Bluebell Capital Partners, an activist investor known for taking on companies like Danone and Glencore, has urged BP,  a British multinational oil and gas company, to reconsider its commitment to reduce oil and gas production and shift towards clean energy. In a letter to BP's chairman, Bluebell criticized the company's strategy, claiming it was destroying shareholder value by rapidly moving away from hydrocarbons. The hedge fund also questioned BP's investments in biofuels, hydrogen, and renewables, calling for a significant reduction in funding for these areas. Despite BP's push towards cleaner energy sources, Bluebell argues that it should focus on more profitable oil and gas projects to maximize earnings. BP has defended its strategy, emphasizing constructive engagement with its investors.

Disney Rejects Activist Shareholders' Nominees Amid Transformation:

Walt Disney firmly rejects activist shareholders' proposed nominees, backing its own 12 candidates, amid its ongoing transformation efforts. CEO Bob Iger emphasizes cost reduction, streaming profitability, and other strategic priorities while dismissing candidates from investor groups Trian and Blackwells. Disney faces challenges in streaming, traditional TV, legal disputes, and CEO succession. Trian's nominees lacked strategic ideas and relevant experience, with concerns over their relationship with Disney. Disney also reports CEO Bob Iger's 2023 compensation at nearly $31.6 million.

Browning West Seeks Board Replacement at Gildan Amid CEO Dispute:

U.S. activist fund Browning West is intensifying its battle with Canadian apparel maker Gildan Activewear by aiming to replace a majority of the board, following the firing of CEO Glenn Chamandy. Browning West, which owns 5% of Gildan's shares, has expanded its list of board candidates to eight from five and called for a prompt special meeting to overhaul the board. The activist investor, joined by other significant shareholders representing around 35% of Gildan's shares, is demanding the reinstatement of Chamandy and the removal of new CEO Vince Tyra. Gildan is under scrutiny, with the board investigating Chamandy's departure and his interactions with certain shareholders.

Vision Capital Accuses Ires Reit Board of Misleading Shareholders Ahead of Crucial Shareholder Meeting:

Vision Capital, a Canadian investment fund holding a 5% stake in Ires Reit, a real estate company, has accused the board of the Irish property company of misleading shareholders and using a "flawed comparable" data set to misrepresent operational performance. The latest accusations come as tensions rise ahead of a crucial shareholder meeting next month where investors will vote on whether to replace five Ires Reit directors with Vision Capital's nominees and whether to take Ires private, break it up, or sell it entirely. Vision Capital initiated an assault against the company's board and management in April last year, claiming it had been misled and calling for change. Ires Reit has countered these claims, stating that its current board is highly qualified and that it has generated solid shareholder returns. A near-20% stakeholder in Ires Reit, Capreit, has voiced support for Vision Capital's proposals, and the upcoming EGM will be closely watched as the dispute escalates.

January Activism: Key Takeaways 

In January, shareholder activism remained robust across industries such as finance, energy, technology, and real estate, compelling companies to reassess strategies, governance, and financial choices. This surge in activism reflects investors' determination to safeguard their interests and bolster shareholder value. Legal battles, board conflicts, and strategic dilemmas persist as defining factors in the activist landscape, where the outcomes often hinge on pivotal shareholder meetings and resolutions. Activist agendas are increasingly centered on climate change, governance enhancements, and operational advancements as top priorities.

Until Next Month:

And that concludes our blog post for today. We truly appreciate your active participation in this ongoing dialogue about shareholder activism. As we remain vigilant in monitoring its ever-evolving landscape, we encourage you to stay informed and engaged in these critical discussions. We eagerly anticipate reconnecting with you next time! And if you're eager to access timely and insightful information, don't hesitate to explore what our Activist Alpha has to offer. 🙂

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