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A new paper by a group of finance and law professors studied HSR filings and shareholder activists and concluded that the HSR filing requirements can act as a mini poison pill discouraging activists’ attacks.
Co-written by professors – including our friend Frank Partnoy – from UC Berkeley School of Law, Boston College Carroll School of Management, Duke Law and Emory University Goizueta Business School, the study posits that, until now, nobody has looked at the “intricate interaction between antitrust regulation and shareholder activism.” They looked at filings from 2000 to 2024.
The crux of their argument is that HSR thresholds deter activism. Explained simply, activists often like to buy a meaningful “starter” stake before going public. However, if building that “toehold” position triggers an HSR disclosure earlier than a typical Schedule 13D, it can tip off management (and their defense teams) sooner than planned – potentially changing the activist’s calculus and giving companies more time to prepare their defense. The authors find that, on average, activists are about 10% less likely to target companies where building an initial position would compel HSR disclosure prior to a 13D.
“Our results add a novel dimension by showing that the antitrust-driven HSR premerger notification regime can bind even before the traditional 5% 13D threshold, thereby constraining activists’ ability to establish effective toeholds in a manner analogous to how disclosure or ownership rules constrain bidders in takeovers,” the authors write.
⚜️ Speaking of M&A, activism and antitrust, these will all be hot topics for the Tulane Corporate Law Institute in mid-March. Once again, Gladstone is polling dealmakers and our readers about their expectations for M&A in 2026. Last year, you were largely correct, with 22% of respondents predicting dealmaking activity to be “up sharply” and 61% of respondents expected deals to be “up modestly.” Let us know what you think will happen this year.
📺 Lastly, we know our readers are preparing for the national holiday called The Super Bowl. To whet your appetite, we leave you with the new, remastered version of the “Acquired” episode about the NFL, arguably the biggest single media franchise in the U.S. Yes, it’s four hours long, but there’s plenty of time to listen to it ahead of Sunday night.
Have a great weekend and stay warm,
GPP Team
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