It was a busy week for activists – and for Bloomberg’s Crystal Tse. As news broke of Gucci CEO Marco Bizzarri’s plans to step down, Tse and her colleagues Swetha Gopinath and Ruth David reported that Bluebell Capital Partners had built a stake in the luxury brand's parent company Kering and is aiming to give the Gucci brand a makeover, including a potential merger with Richemont. However, bringing change about at Kering will be difficult considering the Pinault family owns roughly 60% of the company’s voting rights. In another report, Tse also shared that the beverage maker Constellation Brands has brewed up a deal with Elliott Investment Management. The company will name two independent directors to its board in exchange for a standstill agreement blocking the activist from launching any additional campaigns against Constellation for a year. Elliott doesn’t normally stay quiet for long, and just a day later, WSJ’s Lauren Thomas broke the news that the activist built a "significant stake” in Catalent ahead of the drugmaker’s nomination window close on July 29th and plans to agitate the pharmaceutical company’s board.
Meanwhile, trustbusters went on the offensive this week after a series of losses, chief among them the approval by a federal judge for Microsoft to move forward with its acquisition of Activision Blizzard. The FTC and DOJ released proposed joint merger guidelines that law firm Cadwalader says lay out “a radically different conception of government enforcement.”
When CNBC’s Andrew Ross-Sorkin asked DOJ’s antitrust chief Jonathan Kanter about the guidelines' expanded aperture on how regulators look at mergers, Kanter answered: “merger enforcement is necessarily predictive, so [the guidelines are] ultimately a risk assessment. We’re trying to understand the extent to which the merger will threaten competition.” FTC Chair Lina Khan later joined Squawk on the Street to share her thoughts on the guidelines and the state of M&A as part of the media blitz.
Finally, BlackRock joined fellow financial behemoths Vanguard and State Street in announcing an expansion of its retail voting program this week. BlackRock will offer proxy voting choices to U.S. retail investors in its iShares Core S&P 500 ETF, its largest ETF by assets. While the fund’s investors will not be able to cast votes at individual companies, they will be able to choose from several different policies “ranging from voting generally with management to prioritizing Catholic values or environmental, social and governance factors,” writes Financial Times’ Brooke Masters.
Wachtell noted in a memo that the strategy responds “to criticism that the largest asset managers wield disproportionate influence over the public markets,” however the extent of that limit is “dependent on several factors, including the number of investors participating in voting choice and the range of voting options being offered.”
Have a great weekend,