Spirit(ed) Still Not Away and the Invasion of Activists at Toshiba
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Just like your recent flight plans, Spirit again delayed its shareholder meeting to decide the winner in the bidding war between JetBlue and Frontier. This means investors will have more time to evaluate the competing bids, despite a sweetened offer from Frontier. For JetBlue’s latest offer, Breakingviews’ Jonathan Guilford argues that the bid is “daring but increasingly costly for JetBlue’s own investors.” This development is seen as a win for Spirit investors like TIG Advisors, which opposes the Frontier deal and believes JetBlue’s all-cash bid “maximizes certainty of value.”
The ongoing fight for Spirit comes at a pivotal moment for the airline industry. Increased demand for travel, among other factors, has put a strain on the airline industry and its employees. The future of Spirit – and the fate of America’s budget airlines – will no doubt have a lasting impact on the state of the industry and current Big Four airlines.
Now, turning to a shareholder meeting that did take place, the nearly 150-year-old Japanese industrial icon, Toshiba, added two new directors from activist funds in a ‘historic’ move. Before the appointment of four activist-backed candidates in 2019, there had not been a foreign director in over 80 years. Tuesday’s approval of two more activist candidates has some stakeholders worried about the future of the company – including board member Mariko Watahiki, who resigned in protest that day.
Following the meeting, private equity firm KKR, which has identified Japan as its most important market outside the US, has apparently stepped back from a potential $22bn deal to take Toshiba private. The Japanese conglomerate has said it has multiple other potential suitors and the new directors may be the last push needed to deliver the “radical transformation required” according to board member Jerry Black.
Have a great July 4th weekend,
The GPP Team
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Breakingviews: JetBlue Has Its “Top Gun: Maverick” Moment
JetBlue lures Spirit shareholders in its acquisition of Spirit, offering a “ticking fee,” which will see it pay additional dividends to shareholders every month the deal is pending beyond 2023, an “innovation-borne desperation” that could lead to victory. Read More
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Nikkei Asia Review: Toshiba Board Member Quits In Protest as Hedge Fund Managers Join
Mariko Watahiki, outside director at Toshiba, resigned from the board after citing concerns about the growing influence of activist shareholders at the Japanese conglomerate. Read More
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Financial Times: KKR Takes Back Seat in Toshiba Bidding Process
US private equity firm KKR withdraws its $22bn bid for Toshiba amidst a tense reshuffling of the board following the company’s annual shareholder meeting. Read More
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In his comment letter to the SEC, Jeffrey Gordon of Columbia Law said he believes the SEC’s proposals are flawed because they risk suppressing proxy contests and include an ambiguous new definition of a “group.” Read More
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Leo Strine of Penn Law, along with five other academics and practitioners, argue in a comment letter to the SEC that the proposed climate disclosure rules would help investors inform decision making by providing more uniform and comprehensive data. Read More
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Wall Street Journal: Aerojet Rocketdyne CEO Wins Proxy Fight Against Executive Chairman
In the drama-packed proxy fight involving Aerojet Rocketdyne’s CEO against the company’s Executive Chairman, CEO Eileen Drake and her eight-person board slate appear to land on top. Read More
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Fortune: The Top Trends in ESG Disclosure from Fortune 100 Companies
An analysis by White & Case on the 10-K annual reports and proxy statements of 50 companies in the Fortune 100 reveal which ESG categories had the largest increase of disclosure. Read More
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Financial Times: ExxonMobil Chief Predicts Continuing Surge in Oil Markets
Speaking to the FT at a conference in Brussels, CEO of ExxonMobil says, “he expects the oil price to continue to climb until it spurs renewed investment in output.” Read More
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Wall Street Journal: Elon Musk Has Twitter’s Data, but Getting Answers on Spam Accounts May Be Tougher
After weeks of back-and-forth, Elon Musk now has the data from Twitter he requested to complete the deal. What remains to be seen is whether the fire hose of data will help clear up the issue of spam accounts. Read More
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Bloomberg: Where in the World Is Elon Musk?
After surpassing 100 million Twitter followers, Elon Musk has done the unthinkable – gone more than a week without tweeting. Read More
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FROM OUR DESK TO YOURS
This week, GPPers headed uptown to Jenny’s Community Garden in Harlem as part of a volunteer day with NYC Park’s GreenThumb. The team enjoyed learning about the importance of community gardens and revitalizing our outdoor city spaces.
If you’re looking to bulk up your summer reading list, or keep yourself busy during a flight delay, the Financial Times has compiled an ultimate beach read list – Summer books of 2022: Business.
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PEOPLE MOVES
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Larry Culp, CEO of General Electric, is taking over the company's aviation business as GE prepares for a breakup. Read More
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Mark Tritton, CEO of Bed Bath & Beyond, is exiting the company after another disappointing quarter. The company has been under pressure from activist investor Ryan Cohen, who has called for significant improvement in performance. Read More
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Brendan Vaughan, Deputy Editor at Insider, will be the new Editor-In-Chief at Fast Company starting July 18. Read More
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Michael Carr, co-chairman of global mergers and acquisitions at Goldman Sachs, is set to retire from the firm and will become an advisor to the company. Read More
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Nicole Brookshire, former partner at Cooley where she worked on high-profile IPOs including Warby Parker and Etsy, joined Davis Polk’s Capital Markets practice. Read More
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