Shareholder Activism Boom Yields Big Payday
For 3 Firms
Law360, New York (October 30,
2014, 12:19 PM ET) -- It's a good time to specialize in shareholder
activism. Just ask attorneys at
Olshan Frome Wolosky LLP,
Schulte Roth & Zabel and
Wachtell Lipton Rosen & Katz.
Each of the shops has built its reputation around successfully steering
activist situations. The firms have spent years cultivating dedicated
practice groups that have paid off in an especially big way in recent
years as shareholder activists tighten their grip on the U.S. marketplace
and eye plays abroad.
Bolder strategies, a friendlier marketplace and record inflows of investor
dollars have helped the activists stage a banner run in the first three
quarters to build on success in 2013, when activism officially went
Activists this year have dug into 29
S&P 500 companies, according to data released Monday by FactSet, more
than three times the figures from 2006, when the research firm began
tracking activity. Recent jostling at
Time Warner Inc. and several other big-name outfits shows
no one is off limits — an evolution that means bigger
campaigns, fiercer fights and huge paydays for the advisers behind the
Attorneys at each of the firms are tackling one of their busiest years
ever, particularly at Olshan, whose 42 activist situations so far this
year blow past its rivals. Next in line with 28 is fellow
activist-oriented firm SRZ, according to FactSet data.
One landmark victory stands out in Olshan's hefty workload. The firm
earlier this month helped
Starboard Value LP, one of the best known activists in the
seal a complete board ouster at
Darden Restaurants Inc., bringing a head-turning end to one of the
most vitriolic and closely watched proxy fights of the year.
rare wholesale victory — especially impressive,
considering Darden's multibillion-dollar market capitalization —
reinforced Olshan's place as a powerhouse in the field. The firm is
looking to replicate that success in the coming months with its work on
the next high-profile push from Elliott Management Corp., a seasoned
activist that recently
took a position in buyout target Family Dollar Inc.
It's been a year marked by success for SRZ, too. The firm helped
Casablanca Capital LP
topple the board at sputtering iron-ore producer
Cliffs Natural Resources Inc. The parties
danced around a settlement to end the much-publicized
contest but couldn't hammer out terms, leaving Casablanca the opening to
overhaul the board and appoint a fresh CEO.
Aside from the other proxy plays it finessed, SRZ made a move of its own
earlier this year when it brought its renowned shareholder activism
to the U.K. The firm's on-the-ground presence puts it
in position to capitalize on an anticipated influx of activism across the
On the other side, Wachtell has taken on 24 situations this year — double
the total for next-busiest corporate defense specialist
Skadden Arps Slate Meagher & Flom LLP — including several that pitted
it against Olshan or SRZ.
For decades, Wachtell has positioned itself as one of the central
opponents of shareholder activism. The firm has made a name for itself by
mowing down dissident investors, including by pioneering new strategies to
fend them off. This year, it's been at the center of some of the most
contentious fights, but
hasn't always outmuscled the investors.
In fact, in both the Darden and Cliffs situations, its corporate clients
faltered in significant ways. Critics blamed Wachtell, in part, for
Darden's unceremonious defeat. But it remains the go-to defense firm, with
plenty of successes to show for itself.
Still, deal watchers are tuned into the twists and turns of what has
swelled into one of Wachtell's biggest battles of the year. The firm is
Allergan Inc., the Botox maker at the center of
a $53 billion hostile bid that is also facing
a board shakeup that could pave the way for a
Shareholders are set to vote on the proposal, crafted by activist investor
Bill Ackman, on Dec. 18. Whichever way they go, the contest will be a
defining one for Wachtell — especially after Starboard's blowout win in
the Darden fight.
--Editing by Rebecca Flanagan.
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