A new report from Diligent Market Intelligence confirms that support for environmental and social proposals has dropped precipitously among the big three index funds. The report, which uses data beginning in 2020 and ends with voting records from the latest proxy season, suggests anti-ESG campaigns may have impacted how BlackRock, Vanguard and State Street wield their voting power, with support sliding double-digit percentages when it comes to the “E” and “S.” 

However, support for the “G” (Governance) in ESG remained strong across all three funds. “Say on pay” votes hovered over 90%, and companies that have increased initiatives around human rights issues and DEI have seen solid support from the big three. Yesterday, BlackRock published a study showing the correlation between gender parity and better corporate results and suggested the results will help strengthen their case that it is part of their fiduciary duty to consider gender representation and other social factors in the investment process.

This week, VF Corp delivered early Halloween treats to activist investors Engaged Capital and Legion Partners during the company’s quarterly call on Monday. The apparel powerhouse unveiled a transformation program, including a $300 million cost savings initiative and reduced its quarterly dividend by 70%. Although VF Corp withdrew its full year guidance due to slowing demand, the company seemed to address some of the key demands from Engaged and Legion, which made their positions public over the last few weeks. 

Dealmakers were also feeling a sugar high as Six Flags and Cedar Fair announced their $2 billion merger on Thursday, confirming Reuters’ reporting by Greg Roumeliotis and David French. Jonathan Litt’s Land & Buildings took a stake in Six Flags late last year and was pushing for a review of real estate assets. While the merger wasn’t exactly what Litt was seeking – he has said he will not support the tie-up with Cedar. Six Flags stock was up over 6% on the news as the deal would combine two of the largest regional theme-park chains in the U.S. under the Six Flags name. 



Have a great weekend,

GPP Team 

Diligent Market Intelligence: Investor Stewardship 2023

Josh Black and his team at Diligent Market Intelligence have released their Investor Stewardship report that combines their compensation and proxy voting reports from 2022 to provide a comprehensive view of proxy season. Read More

Fortune: CEO Daily: BlackRock, Vanguard, and State Street Turned Against Environmental and Social Proposals This Year, a Clear Sign of Backlash

Alan Murray and Nicholas Gordon reveal a significant retreat by BlackRock, Vanguard, and State Street from supporting environmental and social proposals, signaling backlash within the investment community despite sustained advocacy for 'say on pay' votes. Read More

BlackRock: Lifting Financial Performance by Investing in Women

In a new whitepaper, the asset manager suggests that investing in women can lead to greater corporate financial performance by tapping into underutilized talents and bringing difference experiences and perspectives to the table. Read More

CNBC: New VF Corp. CEO Talks Plans to Improve Business, Including Vans Turnaround

The CEO of VF Corp, the parent company of Vans, The North Face and Timberland, announced a strategic review that encompasses cost and debt reduction, and reinvestment in innovation and brand building. Read More

Reuters: Exclusive: US amusement park operators Cedar Fair, Six Flags in merger talks 

Greg Roumeliotis and David French report that Six Flags and Cedar Fair have agreed to merge in a roughly $2 billion, all-stock transaction that will help position the combined entity to better compete with its larger theme park rivals. Read More

ACTIVISM

Reuters: Activist Investor Politan Aims for Azenta's Board Seats

Svea Herbst-Bayliss and Pratik Jain report that following earlier proxy battles against Masimo and Centene, the activist investment firm Politan Capital Management is looking to gain board seats at the biotech company Azenta. Read More

Lex: Western Digital: With No Merger Miracle, Elliott Looks to Wall Street

Following Elliott Management's recommendations, Western Digital revealed it plans to spin off its hard disc and flash drive units into separate companies, leading to speculation about whether the company will pursue other potential deals, writes the FT's Lex column. Read More

The Deal: Trian’s Allstate Effort Could Lead to Divestitures

Ron Orol writes that Nelson Peltz's "insurgent" activist firm Trian Fund Management’s stake in Allstate could potentially lead to over $4bn in asset divestitures and spinoffs, although it remains unclear whether Peltz and Trian will launch a director campaign at the insurance company. Read More

CORPORATE GOVERNANCE

The Deal: Corporate Governance Problem With No Good Answer

David Marcus highlights ‘The Problem of 12’, a new book by Harvard Law School Corporate Law Professor John Coates, which examines the influence index funds and private equity firms have on U.S. public companies and suggests that in the near future, roughly a dozen individuals will have "practical power” over most companies. Read More

M&A

Bloomberg Opinion: The M&A Wave Coming to Family-Owned Oil in America

Opinion columnist Javier Blas argues that the ongoing wave of large-cap deal activity among oil companies, including Exxon Mobil/Pioneer and Chevron/Hess, means that many of the private or family-owned oil companies in America will likely become the next wave of M&A targets in the industry. Read More

The New York Times: Disney Says It Will Take Full Control of Hulu

Disney announced on Wednesday that it will buy the remaining one-third of Hulu it does not already own for at least $8.6 billion, setting the stage for appraisal negotiations between Disney and Comcast to determine the final purchase price, writes Brooks Barnes. Read More

IPOs

The Wall Street Journal: Waystar IPO Delayed Until December or 2024

Corrie Driebush and Laura Cooper report on the postponement of Waystar's IPO, initially scheduled for late 2023, to possibly December or 2024, attributing the delay to a brittle IPO market and economic factors including high interest rates and geopolitical tensions. Read More

Financial Times: CVC Capital Partners Postpones Plans for Amsterdam Listing

Will Louch and Kaye Wiggins report that CVC Capital Partners has deferred its Amsterdam IPO plans to next year due to market volatility, a decision underscored by poor earnings from peers and global economic uncertainties. Read More

Harvard Law School Forum on Corporate Governance: SPARCs: An Attractive Alternative to Traditional SPACs?

Goodrich & Rosati Partners Mike Nordtvedt and Rezwan Pavri analyze the so-called 'SPARC' (Special Purpose Acquisition Rights Company), a new investment vehicle spearheaded by Pershing Square's Bill Ackman in which a shell company seeks to combine with a private company without raising public capital. Read More

ANTITRUST

Axios: Pro Rata: JetBlue's Future is On the Line in Spirit Airlines Court Case

Dan Primack analyzed the opening arguments from the DOJ’s trial against the JetBlue-Spirit tie-up, noting that government officials aim to demonstrate how the merger will increase ticket prices, while JetBlue’s lawyers will argue the combination will increase competition on routes dominated by the Big Four airlines. Read More

Axios: Oil Mergers Enter Capitol Hill's Bloodstream

Following the recent upswing in M&A activity amongst oil companies, Ben Geman details that over 20 Senators sent a letter to the FTC this week urging officials to launch an antitrust review probe of the proposed Exxon/Pioneer and Chevron/Hess combinations. Read More

FROM OUR DESK TO YOURS

Despite an intense week of earnings for our clients, GPPers were out on the town this week to support Teens for Food Justice, a non-profit organization fighting food insecurity through school-based, youth-led hydroponic farming. This year’s gala was a special one as it marked the 10th anniversary of TFFJ’s efforts to help build mini-farms in public schools and provide local, sustainably grown produce to food desert communities in New York City. Celebrity chef Melba Wilson curated a delicious meal that featured perfectly prepared short ribs, salmon, mashed potatoes, and collard greens, among other dishes. At the same time, the wonderfully talented Academy Award winner and star of Steven Spielberg’s West Side Story remake, Ariana DeBose, entertained the crowd with musical performances and served as emcee. A great night for an even better cause. 

This weekend, New York City will host its annual marathon and we wish our very own Felipe Ucrós the best of luck as he hits the pavement with 50,000 others. If you have free time on Sunday, get out there and support the runners who travel far and wide to participate. There is a course preview here, so you can pick a good spot. Go Felipe! 

PEOPLE MOVES

• BlackBerry named board member Richard Lynch as interim CEO to replace John Chen after he retires on Nov. 4. Read More

• Kara Swisher has joined CNN as an on-air contributor. Swisher will be a regular panelist on CNN’s “The Chris Wallace Show” and will appear on the network in breaking news coverage of stories related to tech, culture, and media. Read More

• PwC named the head of its international advisory business, Mohamed Kande, to be its new Chair. Read More

• Francesca Veronesi has joined Bloomberg as Private Credit Reporter covering LBOs and M&A. Read More

• November 29: New York Times’ Dealbook Summit, New York, New York
• November 30: IR Magazine ESG Integration Forum, New York, New York