Tea Leave Reading with Elliott and Paypal; Will Jet Blue and Spirit Take Off?
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Elliott Management, the busiest activist of 2022, is at it again building up a stake in PayPal. This is an interesting one as it comes just two weeks after the Journal revealed that Elliott was the largest investor in Pinterest. Readers will remember that in October PayPal reportedly explored buying Pinterest. So speculation quickly followed: coincidence or red herring?
Like other activists, Elliott often pushes for companies to pursue M&A as a part of its campaigns, leading some to speculate that the stakes in PayPal and Pinterest aren’t just coincidence. Details on either campaign are scant, but less than 24 hours after the original leak, Bloomberg reported Paypal and Elliott had entered “amicable” talks around a board seat and cost cuts, pouring water on a potential M&A angle. The Journal’s Heard On the Street sees things as purely operational, detailing that Paypal is already restructuring its operations and that Elliott’s involvement, as it is sometimes the case, might be a “catalyst of a transition that is already underway.”
Meanwhile, Spirit and JetBlue get ready for the long-haul. After months of back-and-forth, JetBlue finally got Spirit (via its shareholders) to agree to its proposed $3.8 billion combination. Shortly after the announcement, Robin Hayes and Ted Christie, CEOs of Spirit and JetBlue, former jousting partners, joined CNBC’s Squawk Box to answer some tough questions, to put the past behind them, and make the case that the deal reached was the best path forward.
The deal’s next chapter will take place in the corridors of the DOJ, which is already suing JetBlue over its partnership with American Airlines. As Spirit itself said just a few weeks ago, there is a considerable antitrust risk to this one. JetBlue is willing to pay dearly and creatively—including via a ‘ticking-fee’—for the option that the deal gets done. Spirit shareholders know they have a seat on the ride, they just don’t know whether the flight will take off.
Have a great weekend,
GPP Team
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Wall Street Journal: Activist Elliott Management Holds Stake in PayPal
Tuesday night, the Wall Street Journal reported that Elliott Management built a stake in PayPal. Elliott also recently disclosed a stake in Pinterest, which PayPal had explored buying. Read More
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Bloomberg: Activist Elliott Investment Holding Truce Talks With PayPal
Shortly after building a stake in PayPal, it appears that talks between the company and Elliott could result in representation on the board. Read More
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Axios Pro: Elliott’s Reported Stake in PayPal Looks (P)interesting
Axios Pro editor Mike Flaherty speculates that the timing of Elliott’s stake is tied to dealmaking ambitions. Read More
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Heard on the Street: PayPal Should Be Friendly With Elliott
Telis Demos argues that Elliott’s arrival could hint at an ongoing effort to turn the company around. Read More
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Breakingviews: JetBlue Buckles Up for Long, Turbulent M&A Flight
A lot hangs up in the air for Spirit, as the merger with JetBlue will receive regulatory scrutiny but reap big rewards for JetBlue if it goes through. Read More
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Reuters: Glass Lewis Supports Removing Chair of Trian UK Investment Trust
Proxy advisor Glass Lewis has sided with shareholders of Trian Investors 1 to remove Chair Chris Sherwell due to governance concerns. Read More
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Bloomberg Wealth: Nelson Peltz
Nelson Peltz, CEO of Trian Partners, sits down with David Rubenstein for a wide-ranging interview that covers his days as a “ski bum” and how he characterizes his brand of activism. Watch Here
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The Deal: Lobbying Blitz Heats Up Over Merger Guidelines
David Hatch shares that prominent industry groups are stepping up outreach on controversial plans by the Biden administration to revamp federal guidance on transactions.” Read More
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Leadership Next: Empathetic Leadership
Fortune’s Alan Murray sits down with Arianna Huffington, CEO of Thrive Global, and Tony Bates, co-author of “Empathy in Action” to discuss why empathy-driven leadership is an essential business practice. Listen Here
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Columbia Law School Blog on Corporations and the Capital Markets: Twitter v. Musk: Where Are the Arbs?
Columbia Law Professor John Coffee is wondering, “why aren’t the arbs buying Twitter stock?” New information on the case including the judge who will preside hasn’t moved the market significantly – Coffee gives his theories as to why. Read More
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The Lawfare Podcast: The Corporate Law Behind Musk v. Twitter
Adriana Robertson, Professor of Business Law at the University of Chicago Law School, discusses the legal issues behind the headlines of Musk v. Twitter and why at its core it’s a “regular old corporate law dispute.” Listen Here
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CNBC: Twitter to Hold Vote on Musk Merger on Sept. 13
Twitter’s latest filing has set the date to vote on Elon Musk’s $44 billion acquisition of the company. As you might expect, the Board of Directors has previously urged shareholders to vote for the acquisition. Read More
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New York Post: Elon Musk, Twitter in Fresh Squabble Over Timing of October Court Trial
Lawyers for Elon Musk need an extra week. According to a letter sent to Delaware Chancery Court chief judge Kathaleen McCormick, Musk’s legal team wants the trial to take place the week of Oct. 17 rather than the scheduled Oct. 10 start date. Read More
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World Economic Forum: The Bright Spots in a Complicated ESG Framework
Despite being far from perfect, Humzah Yazdani makes the case for creating recognized standards in ESG investment and why penalties may be necessary to prevent greenwashing. Read More
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Wall Street Journal Opinion: ESG Is Far More Than a Marketing Gimmick
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The Economist: ESG: Three Letters That Won’t Save the Planet
A special report from Henry Tricks at The Economist goes in-depth on the reasons ESG may be well-meaning but also deeply flawed. For example, he argues Elon Musk may be a “corporate governance nightmare” but has also helped tackle climate change through popularizing electric cars. Read More
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Financial Times: BlackRock Pulls Back Support for Climate and Social Resolutions
BlackRock, the world’s largest asset manager and a prominent voice on ESG-centered initiatives, has made good on a promise from May to vote for less climate resolutions this year. Read More
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FROM OUR DESK TO YOURS
On Wednesday night, the GPP team traded our blazers and laptops for baseball hats and Shake Shack and enjoyed New York’s Subway Series. At a buzzing Citifield, we (or at least some of us) enjoyed a dramatic walk-off win by the New York Mets, an exciting home stadium moment for Mets fans and a disappointment for gravely outnumbered Yankees fans. New Yorkers dream of a Subway World Series, which would be the first since 2000.
In more hard-hitting news: As Axios points out, all the chatter around a recession has led us to a bull market…for people talking about a recession. Former Fed chair Ben Bernanke's recent book may help clear some confusion.
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PEOPLE MOVES
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Grill Maker Weber Inc. has replaced CEO Chris Scherzinger and appointed Alan Matula, current CTO, as interim CEO as the company searches for permanent replacement. Read More
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Jordyn Holman, former retail reporter at Bloomberg News, is joining the New York Times Business desk to cover consumers and retailers. Read More
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Graham Starr will join Bloomberg News as Global Business Editor. He was previously a Senior Tech Editor at Business Insider. Read More
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