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With the Phillips 66 annual meeting nearly a week away, the betting odds increased that Elliott will gain board seats at the Houston oil refiner after winning approvals from proxy advisors ISS and Glass Lewis. In a column for the FT’s Lex, Sujeet Indap writes that this “battle is the bloodiest corporate America has seen in some time,” while Bloomberg’s Crystal Tse, in reporting on the final rounds of this fight, notes that “while the game is afoot, it could also come to an abrupt end if Phillips 66 decides to wave the white flag and negotiate a settlement with Elliott before the meeting.” That’s what happened with Arconic, Elliott’s last major knock-down, drag-out contest.
Elliott’s main thesis calls for a breakup of the energy giant, and in its quarterly report on M&A, Activism and Corporate Governance, Cravath exemplifies the Paul Singer-led firm’s penchant for bust-ups, finding that the first quarter of the year saw an “uptick in M&A-oriented campaigns pushing for either sales or breakups of target companies,” and advising that “amid increased scrutiny of conglomerate structures, Boards should continue to proactively assess their portfolio.”
Our friends at Kirkland and Ellis echo that sentiment in a note titled “Five Ways Public Companies Can Prepare for Shareholder Activism in Times of Turbulence,” recommending that companies routinely conduct vulnerability assessments and continually engage with shareholders to solicit feedback, among other things.
While M&A is generally somnolent, there’s no slowdown in the footwear aisle of the deal world. First was 3G Capital’s planned $10 billion acquisition of Skechers, and Wednesday night the Wall Street Journal’s Lauren Thomas went shopping for scoops and broke the news that Dick’s Sporting Goods is buying Foot Locker for $2.4 billion
Go Knicks and have a great weekend,
Have a great weekend,
GPP Team
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