Neither Bath & Body Works’ Pink Pineapple Sunrise Candle nor its Eucalyptus Spearmint Lotion appear to be relaxing Third Point’s Dan Loeb, who signaled his intent to launch a proxy fight with the retail chain. The retailer’s addition of two new board members in the last two weeks appears unsatisfactory to Loeb, who cites “corporate governance shortcomings” as his motivation behind the proxy fight. The company fired back, affirming its commitment to enhancing shareholder value and noted that 75% of the board is made up of members who joined since 2019.
In December, Third Point disclosed a 6% stake in the company and, according to Loeb, talks turned negative before his firm announced plans to nominate directors of its own. News of Third Point’s stake comes on the heels of its entry into Salesforce, adding to the swarm of activists launching recent campaigns against some household names. As 13D Monitor’s Ken Squire put it to CNBC’s Scott Wapner, the recent spike in activity is “incredible” and he hasn’t “seen activism like this for ten or fifteen years.” Insightia's latest Shareholder Activism Annual Review report confirms this, noting that the number of public companies targeted by activists globally increased 6% YoY to 929 last year.
Outside of activist aromas in the fragrance department, the Journal’s Corrie Driebusch and Laura Cooper shed light on the ongoing take-private trend, focusing on 10 companies that went public during the IPO boom in 2020 and 2021, such as Casper, McAfee and Weber. Now, private equity investors and buyout firms are sitting on cash and looking to put that money to work. Some of the companies, such as KnowBe4 Inc, which announced its intentions to go private in October, have higher valuations than at their IPOs. The FT’s Sujeet Indap suggests that the benefits of private ownership may also extend to management, especially in an environment in which activists are waiting in the wings. He cites a recent study and concludes that “some CEOs prefer answering to one private equity owner with a single vision for a company supported by an active board.”
Microsoft President Brad Smith shipped off to Brussels this week for a European Commission hearing, during which he defended the company’s proposed $69B deal to acquire video game developer Activision Blizzard. Smith battled back against rival Sony’s claims that Activision games, including the popular Call of Duty franchise, will be restricted to Microsoft’s Xbox consoles, writes BBC’s Zoe Kleinman. Microsoft followed the hearing by announcing it had signed agreements with Nintendo and Nvidia granting both access to Call of Duty games for a decade if the deal is approved.
Have a great weekend,