Bosses who fail to navigate coronavirus crisis face onslaught by activist investors
Bosses who have failed to navigate the coronavirus crisis face an onslaught by activist investors, experts warn.
Consultants at Alvarez & Marsal are predicting a ‘tidal wave’ of attacks from powerful shareholders who take stakes and force change at companies – often by ousting directors.
So far activists have been quiet during the pandemic with only one major campaign launched – at education giant Pearson.
On the offensive: So far activists have been quiet during the pandemic with only one major campaign launched
And while A&M said activity had dropped during the outbreak, it predicts a surge as investors begin to identify targets to pursue once the fallout from the crisis becomes clear.
Paul Kinrade, senior adviser at A&M, said: ‘All the indicators we are seeing are that there’s this great tidal wave of activism waiting to happen.
‘They’re not here yet, but they’re looking to come. And when they come, they’ll come big.’
Managing director Malcolm McKenzie said the coronavirus disruption would ‘separate the wheat from the chaff’ with directors at under-performing companies at risk of an activist assault.
‘We think it’s going to be quite interesting when the half-year results start to come out [in the coming weeks],’ he said. ‘We think there will be quite a pick-up.’
In June, Europe’s biggest activist investor, Cevian Capital, took a stake in British education company Pearson. The Sweden-based firm has already warned that the successor to chief executive John Fallon must realise the firm’s ‘full potential’.