WALL STREET JOURNAL.
Goldman Sachs Recaptures Mojo With DuPont Win
fortunes changed for the better last week when Goldman Sachs
helped DuPont prevail in a high-profile feud with an activist
Goldman Sachs headquarters in New York. A recent victory enabled
the bank to regain some bragging rights.
Photo: SPENCER PLATT/GETTY IMAGES
Updated May 21, 2015 11:17 p.m. ET
Goldman Sachs Group Inc.’s
activism-defense business has been the butt of competitors’ jokes.
“If you want to lose, hire
Goldman Sachs,” quipped Rob Kindler, the head of mergers and
acquisitions at the firm’s arch rival
at a conference in March.
Goldman Sachs, long
considered to be the firm to beat on Wall Street, endured a pair of
stinging defeats lately in its efforts to help clients ward off
activist investors. In May, auction house Sotheby’s opted to settle a
bitter quarrel with
Daniel Loeb, giving the activist
three seats on its board and paying him some $10 million for expenses.
Darden Restaurants Inc.,
another client, lost all 12 of
its board seats to Starboard Value LP in October.
But the tables turned last
week when Goldman—led by the firm’s head of defense William
fend off activist firm Trian
Fund Management LP in a high-stakes, high-profile battle.
The win has allowed
Goldman to regain some bragging rights in what is becoming one of Wall
Street’s most competitive arenas. As activists become increasingly
aggressive, advising companies on how to defend themselves has become
a niche, if not always lucrative, business for many banks.
Banks that help companies
defend against activists can win an inside track for the clients’
future deals later, where there is real money to be made. For
instance, Goldman Sachs last year advised
eBay Inc. in its fight with
Carl Icahn and then won a mandate
to help eBay separate its PayPal unit.
William Anderson Photo: GOLDMAN SACHS
And despite its public
ribbing by Mr. Kindler, Goldman is still the No. 1 firm in terms of
being hired to help a company defend itself against activists,
according to FactSet, acting for eight companies this year, including
, retailer Children’s Place Inc.,
and retirement-home operator
Brookdale Senior Living Inc.
In 2014, Goldman was also the most active, advising on
23 public campaigns. Among its historic wins were
Still, the advisers on
many campaigns never come to light, making it hard to measure one
bank’s performance against another.
At Goldman, the job of
leading the defense for DuPont and the firm’s other clients has fallen
to 49-year-old Mr. Anderson since 2003. Mr. Anderson and his team
report to the bank’s heads of global mergers and acquisitions.
When Mr. Anderson took the
job, the business of advising on activist-defense barely existed and
hostile deals were slow. Other bankers were reluctant to take such a
job, afraid it wouldn’t generate much revenue, or yield them bonuses,
people familiar with the matter say.
But by tapping his legal
background—he had previously been a lawyer at Simpson Thacher &
Bartlett LLP—Mr. Anderson began monitoring regulatory filings that
disclose when an investment firm buys into a company.
Mr. Anderson studied
previous campaigns to learn the tendencies of activists, and he got to
know them. He compiled detailed dossiers on the leading activist
investors, such as Mr. Icahn and
William Ackman, centralizing
information that could be used by fellow Goldman bankers.
A key to Mr. Anderson’s
approach, the people say, has been his ability to help clients
understand and better cope with activists, who can wield tremendous
power—even simply by doing a television interview—and swallow
“As an activist, when Bill
Anderson is on the other side, you have to be on your toes,” said
Steve Wolosky, a lawyer for activists at Olshan Frome Wolosky LLP.
In the case of DuPont,
John Vaske, who has a long relationship with DuPont as co-chairman of
the firm’s global natural-resources group, worked closely with Mr.
Anderson. DuPont was also advised by bankers at
Evercore Partners Inc.
Roger Altman, the advisory firm’s
founder and a former deputy Treasury Secretary.
After Trian, led by
Nelson Peltz, began its DuPont
campaign roughly two years ago, Messrs. Anderson and Vaske helped
review Trian’s suggestions to break up the company and slash costs,
according to people familiar with the matter—moves that the board
Mr. Peltz campaigned for a
board seat and while some investors questioned the danger of adding a
single director from Trian, the Goldman bankers helped to argue the
case that as a director, Mr. Peltz would be overly focused on a
breakup to the detriment of the company.
firms Institutional Shareholder Services Inc. and Glass Lewis & Co.
had recommended shareholders elect Mr. Peltz to the board. DuPont was
caught off guard by the Glass Lewis decision and the Goldman bankers
helped prepare DuPont’s management as it rushed to persuade large
investors who tend to agree with such recommendations.
“Goldman Sachs has been a
longtime valued adviser,” a DuPont spokeswoman said. “We have
benefited greatly from their ongoing engagement as we have continued
to build and position the next-generation DuPont over the last several
While DuPont ended as a
win for Goldman Sachs, many bankers say that such victories may become
increasingly rare across Wall Street. Activists are becoming more
sophisticated as they agitate for change, making it harder for
companies to swat them away.
“DuPont’s victory is a
notable exception to the growing trend of activist victories,” lawyers
at Wachtell, Lipton, Rosen, & Katz, long a Goldman ally, wrote to
clients this week, adding the campaign itself “underscores the
challenges faced by all companies dealing with activists in the
David Benoit at
email@example.com and Justin