Weekend Feature: The DuPont Proxy Tear Down
As part of Activist Strategy, we send out a weekly email on Saturday related to a hot topic in activism - we also recap the new activist campaign of the week and the most viewed posts on the site.
This week’s feature was on DuPont and Nelson Peltz, here’s an excerpt...
Peltz could have won. The issue is that passive investors and index funds (like Blackrock and Vanguard) are all for a good corporate governance change story, but what they’ve been shown to not like (i.e. vote against) is restructurings
Being on the topic of activism and the implications going forward, is there any way to convince “indexers” of the activism benefit? There are plenty of studies out there that show there’s a near-term, 21 day up to 2-year, outperformance by activist targeted stocks. But longer-term? Well, that’s where trying to convince the index funds gets tricky. You really have to dive into the outcome; takeovers and restructurings lead to the most outsized returns, but just a dividend boost or a stock buyback leads to nothing more than in-line market performance.
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