We’re back! As we head into what is shaping up to be a busy fall, the Diligent Market Intelligence team is out with their latest report on what activist investors focused on in Q2. Healthcare proved irresistible to certain activists, with more than $700 million in new investments. U.S. contract drugmaker Catalent faced pressure from Corvex, Sachem Head, Wynnefield Capital and just for good measure, Elliott Management. Last week, Catalent agreed to add four new members to its board and undertake a strategic review following a deal with Elliott. This follows the trend we’ve been following of companies and activists opting to settle quickly rather pursue a proxy fight.
Dan Loeb’s Third Point, which takes the crown as most active buyer in Q2, stated in its letter to shareholders that the company would be focused on tech and other growth stocks instead of value investing. Loeb backed that up with the largest new investment of the quarter after building a $535-million stake in Amazon. Loeb also added stakes in Activision Blizzard, NVIDIA and Uber.
Meanwhile, dealmakers usually spend their summer days in the Hamptons or Cape Cod, sipping fine wines and digging into the catch of the day. But this year was different, writes Axios’ Michael Flaherty and Claire Rychlewski. According to data from LSEG, U.S. M&A deal value was down 26.7% through August 31…though that’s an improvement over the first half of the year alone, which saw a 40% decline in value. Lazard CEO-elect Peter Orszag told CNBC’s Sara Eisen that dealmaking has bottomed out and is now at a “turning point.” But he says that while there has been an increase in overall activity and discussions, those chats may take time to materialize in actual deals closing.
There were signs of an uptick this week as WestRock revealed it was nearing a deal to merge with Smurfit Kappa Group, as reported by The Wall Street Journal’s Lauren Thomas, Laura Cooper and Ben Dummett, that would create a $20 billion paper and packaging behemoth. Additionally, the Financial Times' Myles McCormick and James Fontanella-Khan reported that Enbridge agreed to acquire the natural gas distribution business from Dominion Gas Utilities for $14 billion.
Have a great weekend,