Elliott Management and its Founder and Co-CEO, Paul Singer, made headlines this week for reasons ranging from a 2008 Alaskan fly-fishing trip to a settlement in South Korea stemming from a 2015 merger of two Samsung units. The most relevant story for this newsletter came from The Wall Street Journal’s Lauren Thomas who broke the news that Elliott is in talks with C-suite candidates to replace NRG Energy’s current CEO Mauricio Gutierrez and other top executives at the Houston-based company. 

The morning following the story, at its investor day, NRG promised to boost its stock-buyback program, cut costs and continue engagement with investors. That might not be enough for Elliott, which appears to want more substantial changes and could feel emboldened by its 2017 win against the company to appoint new directors and revise its business strategy. 

While Elliott was flying above radar this week, BlackRock’s sharp reversal on ESG flew very much below it. Research from Insightia found that, out of 1,068 corporate engagements in Q1, the world's largest money manager did not support a single environmental-related proposal. This bucks BlackRock CEO Larry Fink’s previous comments linking climate risk to investment risk and comes amid a drop off in support for ESG proposals more broadly. BlackRock did, however, support 34% and 11% of governance and social related proposals, respectively. 

On the M&A front, Bloomberg’s Dinesh Nair and Aaron Kirchfeld highlighted the spike in cross-border deal activity stemming from the Persian Gulf. Taking advantage of elevated oil prices, Saudia Arabia and Abu Dhabi in particular have been snapping up stakes in assets across “industrial and financial assets to natural resources and renewables to sports and entertainment,” in efforts to ironically diversify their economies away from oil. 

Have a great weekend,

GPP Team

The Wall Street Journal: Elliott Seeks Ouster of NRG Energy CEO

After filing a letter in May demanding board changes and a strategic review at NRG Energy, Elliott Management is now pushing the power company to replace its CEO and other top executives, writes Lauren Thomas. Read More

Reuters: South Korea ordered to pay Elliott about $109 million total over 2015 Samsung merger

In a rare twist, Joyce Lee reports that an international tribunal ordered South Korea to pay a $109 million fine to Elliott arising from government corruption charges from the 2015 merger between Samsung and Cheil Industries, which Elliott originally attempted to block. Read More

Insightia: BlackRock Opposes All Environmental Proposals in Q1 2023 

A recent filing shows that BlackRock, throughout nearly 1,100 corporate engagements during the first quarter of 2023, did not support a single proxy measure geared toward environmental sustainability. Read More

Bloomberg: Mideast Buyers in $20 Billion Deal Rush for Plastics, Metals 

Dinesh Nair and Aaron Kirchfeld examine how Middle Eastern-run state investment firms have launched a multi-industry "global acquisition spree" in an effort to diversify their economies away from oil. Read More

ACTIVISM

Harvard Law School Forum on Corporate Governance: Ten Questions for Board Chairs Preparing for Activism and Hostile Takeovers 

Partners from Kirland & Ellis share a list of key questions company boards should consider to adequately prepare for potential activist approaches including whether the company is effectively communicating its strategy and board expertise, what protocols the company has in place for engaging with activists and more. Read More

The Deal: Activists Get Crafty to Circumvent Candidate Crackdown 

Ron Orol analyzes the tactics activist firms including Starboard Value, Trian Fund Management and Jana Partners are using to increase their chances of winning board seats such as over-nominating candidates, using placeholder or replacement candidates and more. Read More

Bloomberg: Shareholder Proposals Hit Record in Japan in Quest for Returns 

Shareholder activism has reached Japan's corporate shores. Hideyuki Sano and Yasutaka Tamura write that a record 90 Japanese companies received shareholder proposals at their annual general meetings this month as investors are increasingly demanding stronger governance practices. Read More

Bloomberg: Goldman Says IPO Bust Looks Like It’s Ready to Boom Once Again 

Elena Popina reports that based on indicators including strong S&P 500 performance and increasing CEO confidence, strategists at Goldman Sachs are predicting an upswing in IPO activity in the second half of 2023 heading into 2024. Read More

The Wall Street Journal: Car-Insurance Firm Root Gets Takeover Bid 

Lauren Thomas breaks down Embedded Insurance's bid to acquire Root, a car-insurance startup, in what is one of the first hostile takeover bids of the year. Read More

Axios: Newsmakers at Cannes Talk M&A Strategy and IPO Plans 

Kerry Flynn shares takeaways from the Cannes Lions Festival, including comments from the CEOs of the New York Times, Vox Media and Yahoo on the state of dealmaking in the media industry. Read More

Fortune: Michael Jordan Remains the GOAT—of Athletes Turned Businessmen. He’s About to Turn a $275 Million Investment Into a $3 billion-Plus Sale by Cashing in on his NBA Franchise 

Michael Jordan is proving himself a winner on and off the court. Chloe Berger examines how the legendary basketball player-turned NBA owner is selling his majority stake in the Charlotte Hornets to an investor group led by Gabe Plotkin and Rick Schnall for $3bn, a roughly 10x return on investment from when he originally bought the team. Read More

The Wall Street Journal: Simon & Schuster Draws Bid from Investor Backed by Abu Dhabi-Based Sovereign Fund

After Paramount’s deal to sell the publisher to Penguin Random House was blocked last year on antitrust grounds, Simon & Schuster is back on the market, drawing bids from HarperCollins Publishers, private-equity firm KKR, and investor Richard Hurowitz with backing from UAE wealth manager Mubadala Investment Co, write Jeffrey A. Trachtenberg and Jessica Toonkel. Read More

CLS Blue Sky Blog: Skadden Discusses the FTC’s Plan to Limit Noncompetes 

Skadden's Anne Villanueva, Joseph Rancour and Luke Cole examine the FTC's proposed plan to ban noncompete agreements and suggest that no matter the outcome, employers must proactively prepare for new constraints against noncompetes or risk facing "allegations of unfair competition." Read More

The Wall Street Journal: AI Hype Lifts Adobe Above Deal Cloud

While Adobe's planned $20bn deal to acquire the software maker Figma is facing heightened regulatory scrutiny, Dan Gallagher writes that Adobe's share price is still surging thanks to increased investor excitement around the company’s plans with AI. Read More

Bloomberg: Scores of Men Retiring From Boards Open Record Seats to Women 

Despite historically slow progress on bridging the gender gap in corporate leadership, Jeff Green suggests that the departure of over 100 male directors allowed female directors to capture a third of available the board seats in May. Read More

HBR’s Cold Call: Elon Musk’s Twitter Takeover: Lessons in Strategic Change

Andy Wu and Goran Calic, professors at Harvard Business School and the DeGroote School of Business, respectively, join the HBR Cold Call podcast to share lessons from Elon Musk's acquisition of Twitter. Listen Here

ESG

Financial Times: Anti-ESG Funds Fail to Gain Traction in the US 

Though they experienced an initial burst of successful investment in 2022, “anti-ESG” funds have since dwindled in popularity, reports Joe Morris. Despite grabbing headlines, the “long-term viability” of such funds is far from certain. Read More

FROM OUR DESK TO YOURS

GPPers made the trip across to Paris this week though not, alas, for the Louis Vuitton menswear launch or Jon Batiste’s concert. We did, however, hit some of Paris’ wine bars and restaurants, starting with Frenchie Bar a Vins on Sunday night. Another fan favorite is Clamato, which we went for lunch (it is first come, first served and quite popular.) On Monday night we stopped by the ever-popular Septime La Cave for some natural wine and then dinner at the incomparable Vantre, which some aficionados say has the best wine list in Paris (we know, that is saying a lot). Next up is one of France’s greatest restaurants, Arpege, near the Musee Rodin for a fun afternoon two-fer.

Bringing it back to the Big Apple, if you’re not interested in checking out season six of Black Mirror on Netflix (which has prompted mixed reviews amongst GPPers), we recommend checking out the Queens Night Market, a family-friendly open-air night market located near the Queens Hall of Science in Corona and our beloved Mets. The market is open from 5pm to midnight on Saturdays and features over 100 independent vendors selling merchandise, art and food celebrating Queens and NYC’s cultural diversity and heritage. Finally, round out your weekend by attending the annual NYC Pride March that kicks off at noon on Sunday at 25th Street and 5th Avenue!

PEOPLE MOVES

• Alibaba announced its CEO and Chairman Daniel Zhang will step down. Eddie Yongming Wu and Joe Tsai will take over as CEO and Chairman, respectively. Read More

• Carlyle has named John Redett as their new CFO. Read More

• The SEC has appointed Tiffany Posil as Chief of the Office of Mergers and Acquisitions. Read More

• June 29: Latham & Watkins Webinar – 2023 Proxy Season Lessons Learned and Coming Attractions, Virtual 

• June 29: Skytop Strategies ESG – A Driver of Shareholder Value, New York