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While New York’s MLB and NFL teams all won on the same day and even Mets fans are watching Yankee Aaron Judge’s race to 61, Washington’s antitrust enforcers’ record this year is about the same as the Red Sox. On Monday, a federal judge ruled that UnitedHealth, the nation’s largest health insurer, can proceed with its $13 billion acquisition of Change Healthcare. This comes one week after the FTC’s chief administrative judge ruled in favor of the Illumina-Grail deal. In the Illumina case, the judge noted that the FTC fell far short of proving its assertations that the deal would stifle competition.
Back-to-back loses have experts and commentators questioning the effectiveness of the FTC and DOJ, especially given all the tough talk on enforcement. Axios’ Dan Primack writes major companies like Amazon and Adobe are moving forward with deals, viewing antitrust issues as relatively minimal.
Antitrust leadership, Jonathan Kanter and Lina Khan, still aren’t backing down. On Tuesday, Kanter told the Senate Judiciary Antitrust Subcommittee that the Justice Department would litigate more mergers this year than any other. And for the FTC, Khan says the agency has had “significant wins” but needs more resources to battle the legal teams of major corporations.
Meanwhile, activist investors are adapting to an evolving landscape as recent regulatory changes made shareholder campaigns cheaper and easier to launch. To account for this, a number of activists have employed a more toned-down approach as Jennifer Saba wrote in Reuters Breakingviews when seeking changes at companies where they have a stake. Pershing Square’s Bill Ackman earlier this year swore off “noisy forms” of activism.
This doesn’t mean all activists are staying quiet. On Wednesday, as reported by The Deal, the SEC sparred with a number of activist investors over disclosures, misleading mutual fund names and corporate financial reports. Richard Zabel of Elliott Management outlined what he viewed as an “existential threat” if activists were forced to do “next day” disclosure of security-based swaps. David Katz at Wachtell was less sympathetic to the supposed existential threats facing activist investors and argued a shortened disclosure period creates a more equitable market.
On Twitter vs. Musk, expect more Twitter content next week as the company gets the chance to depose Elon Musk for at least two days over his attempts to walk away from his agreement to buy Twitter. Fly on the wall anyone?
Meanwhile, Delaware Chancery Court Chief Justice Judge Kathaleen McCormick is granting a Twitter request for discovery focusing on any communications linking Musk to Twitter whistleblower Peiter “Mudge” Zatko. Exactly which documents will be turned over will decided in a hearing next week by Judge McCormick.
Finally, some news on the SPAC market, or at least what’s left of it. Tuesday brought both a symbolic and literal blow to SPACs when Chamath Palihapitiya, “The SPAC King”, closed two SPACs and returned $1.6 billion to investors after failing to find a company to acquire. In 2020, Chamath became the face of the SPAC market after calling it “IPOs 2.0.” and took public Virgin Galactic and SoFi. Since then, the companies he took public have fallen on average 60% leaving Chamath and investors wondering blank check companies should have been left behind in 2020.
Have a great weekend,
GPP Team
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