Hasbro Sends Alta Fox to the Dungeon,
Musk Reads Lots (or Bots) of Tweets,
Zelensky Joins Sonnenfeld's CEO Confab
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ESG-linked shareholder proposals have fueled record-breaking activity so far this proxy season. According to new data and analysis from Georgeson LLC published in Harvard Law’s Forum on Corporate Governance, 924 shareholder submissions have led to votes on topics ranging from greenhouse gas emissions to gender pay and racial equity. Of the nearly 46% of proposals that have gone to a vote, the highest percentage have fallen under governance issues, says Georgeson.
However, activists have been suffering losses as of late, with Carl Icahn bowing out of his fight with Kroger following his loss at McDonald’s, and Hasbro besting Alta Fox this week. Here’s a look at the top stories driving the activism and M&A news cycle this week:
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GI Joe Always Prevails: After last week’s recommendation from ISS and Glass Lewis that shareholders reject Alta Fox’s slate, Hasbro came out on top on Wednesday after its full slate was nominated by a wide margin. Axios reports that Alta Fox, a hitherto and perhaps future unknown hedge fund, had an “uphill climb” and is the latest in a handful of activist blows recently.
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Kohl’s Inches Closer to Sale: Franchise Group, the consumer conglomerate and owner of The Vitamin Shoppe, Sylvan Learning and Pet Supplies Plus, has entered into discussions to buy Kohl’s, which could lead to the largest retail deal this year.
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Spirit Punts Vote, Buys Time: Spirit’s annual meeting will now take place on June 30 pending continued discussions with JetBlue and Frontier. Hoping to sway Spirit, JetBlue increased its offer to $31.50 a share and the proposed breakup fee to $350 million.
Keeping companies further on their toes, Lina Khan’s FTC and Gary Gensler’s SEC continue to carry out ambitious agendas on regulation and policy changes, which we will continue to monitor.
Have a great weekend,
The GPP Team
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Axios: Alta Fox Doesn’t Pass Go In Hasbro Fight
Alta Fox’s campaign sputtered to defeat on Wednesday when Hasbro’s directors were all re-elected, ending a fight that began in February of this year. Read More
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Forbes: An Ambitious Retail Conglomerate Closes In On a Kohl’s Mega Deal
Following a proxy contest that concluded in May, Franchise Group has entered negotiations to purchase Kohl’s, paving the way for the biggest retail acquisition this year if announced, Kevin Dowd reports.
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CNBC: Spirit Airlines Postpones Shareholder Vote on Frontier Deal Days After JetBlue Sweetens Competing Offer
JetBlue upped the ante in an ongoing fight for Spirit Airlines, which decided to postpone its shareholder meeting scheduled for this week until the end of the month. Read More
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Financial Times: How ESG Investing Came to a Reckoning
Despite the growth and widespread use of the term ‘ESG’ within the investing community, critics argue that increasing ambiguity around the term is leading to increased scrutiny around greenwashing.
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The Hill: FTC Chair Khan Expecting ‘Very Active Year Ahead’
In an interview Wednesday, FTC chair Lina Khan shared with The Hill that the FTC is underway with “a whole set of major policy initiatives” and will be addressing the “root causes,” particularly with Big Tech. Read More
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WSJ: SEC’s Revamp of Stock-Trading Rules Faces Criticism From Wall Street
In an effort to increase competition and level the playing field between different investment communities, SEC Chair Gary Gensler is exploring changes to stock trading, but Robinhood’s chief legal officer said such changes could “muck” up the retail investor market. Read More
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THIS WEEK AT TWITTER: Musk Gets Around to Due Diligence By Reading Lots of Tweets
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Reuters: Exclusive: Musk’s Twitter Deal Threats Put New Financing on Ice – Sources
Fresh deal funding has been halted over doubt around whether the deal will move forward. Read More
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Bloomberg Opinion: Elon Has a New Bot Excuse
Opinion columnist Matt Levine discusses the merits of the merger agreement and argues that Musk cannot simply walk away from the deal if he isn’t provided information he requests. Read More
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The Washington Post: In Reversal, Twitter Plans to Comply With Musk's Demands for Data
Elon Musk will be provided with Twitter’s full firehose of data (500 million tweets, according to an anonymous source at Twitter), which has been the topic of Musk’s hesitation. Read More
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ADDITIONAL VIEWINGS AND READINGS (FROM YALE AND HARVARD)
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Yale School of Management: At CEO Summit, Zelensky Calls for Investment in Ukraine
Jeff Sonnenfeld’s CEO Caucus always convenes top CEOs and government leaders, but this week his confab included a live virtual Q&A with Ukrainian President Volodymyr Zelensky led by Sara Eisen of CNBC, with CEOs asking questions as well. Read More, Watch Here
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Harvard Law School Forum on Corporate Governance: An Early Look at the 2022 Proxy Season
Shareholder proposal submissions have skyrocketed so far this proxy season, with 924 proposals, many of which were focused on governance and social issues. Read More
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Yale Journal on Regulation: How SPACs Made Old Things Old Again
JREG hosts symposium of working papers on SPACs and SECs’ proposed rule changes, which its uses to look at the SPAC boom. Read More
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FROM OUR DESK TO YOURS
The Jokers on Us: This week, the GPP team was excited to attend and support the Teens for Food Justice Feast 2022, in support of food security and justice right here in NYC. NYC Mayor Eric Adams attended, and the Steve Miller Band—don’t call me a Space Cowboy—finished the evening with some of their greatest hits.
GPPers are collectively reading “The Man Who Broke Capitalism,” by New York Times reporter David Gelles, who recently spoke to NPR about the man behind the story, former chairman and CEO of GE, Jack Welch.
Also, in the comedic category of don’t send that email about your boss when you are upset, check out Season Two of Hacks.
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PEOPLE MOVES
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Longtime activist defense maven Jim Rossman is leaving Lazard (Reuters)
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Well-known Wall Street Journal chronicler Liz Hoffman will fly the coop to join startup Semafor, which seriously needs to rethink its name, as its new business and finance editor (Axios)
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Revolving Podcast: Kara Swisher will leave the NYT to re-join Vox Media with a focus on podcasting (Bloomberg)
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