Not for a lack of activistsThe rarity of shareholders campaigns in the UK may not be for a lack of activists. Many activist situations are settled privately to avoid expensive campaigns and reputational damage – witness the lengthy negotiations between Rolls-Royce and US hedge fund ValueAct over a board seat the latter eventually claimed in March. Activism is not as common in the UK as in North America, where 262 companies have already been targeted this year, according to Activist Insight. Yet it is growing quickly: The number of UK and Channel Islands companies targeted in 2016 has increased by 46 per cent compared to the same period last year, whereas for North America the increase was just eight per cent.
It is therefore no surprise that most investment banks in the US routinely offer activist scenario planning exercises for their corporate clients, aiming to pre-empt the issues that each company may be vulnerable on and create a defence plan should an activist make contact. Read more: Investors win as activism invades the boardroom In recent years, UK banks have been offering similar services. The fact that activism is on the rise in the UK is therefore not in doubt. The question is whether the majority will continue to be settled behind closed doors or fought on the battlefield of a proxy contest.