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Elliott Management and Bluebell Capital Partners are the latest activists making a CEO’s job more difficult. On Tuesday, Elliott released a letter calling for the removal of NRG Energy’s President and CEO Mauricio Gutierrez. This comes less than a week after NRG’s Investor Day where Gutierrez laid out the company’s strategy and defended the acquisition of home security company Vivint. On Wednesday, a letter from Bluebell went public that called for the replacement of Glencore CEO Gary Nagle. A shareholder since 2021, Bluebell cited recent M&A activity among its chief concerns.
Both activists are honing in on M&A strategy as cause for removing the CEO. The Deal’s Ron Orol recently noted that deals, especially ones perceived as “overly complex” or one’s with high regulatory risk, have been “catnip” for activists. Speaking to The Deal, Jim Rossman, Global Head of Shareholder Advisory at Barclays, cites criticism of M&A as a major activism vector. Rossman suggests companies proactively communicate about the kinds of deals they may pursue and specify how much capital they expect to allocate towards acquisitions during investor days and other key events to help thwart activist attacks.
Meanwhile, the FTC and DOJ is proposing new rules they say will make the merger review process more effective and efficient. Dealmakers might disagree. The new rules would require details about acquisitions during the previous 10 years, information on company officers, directors and board observers, in addition to data on the firms’ workforce. Bloomberg’s Leah Nylen reports, if put into place, the potential changes could add 2-3 months to deal review timelines due to the additional paperwork that would be required by regulators.
Finally, in a field mired by lack of disclosure guidelines, ESG reporting made progress this week when the International Sustainability Standards Board (ISSB) published disclosure standards designed to fight greenwashing and enhance voluntary disclosures from the G20’s Task Force on Climate-Related Financial Disclosures. A new memo from Wachtell notes that the new standards “mark another key step toward uniform global disclosure” and “may provide a solution to overlapping reporting requirements.”
Have a great weekend,
GPP Team
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