It was prime time for whale watching this week when notable activists revealed mostly exits – instead of new stakes – this past quarter. Salesforce, which earlier this year was looking like an activist cage match, saw profit-taking from multiple activists following a 60% jump in CRM shares YTD. Svea Herbst-Bayliss reported that Starboard decreased its stake by 20%, while Third Point exited the stock completely, selling off its 800,000 shares. This comes after Inclusive, Elliott and ValueAct Capital all exited the stock earlier in the year. Salesforce wasn’t Starboard’s only sell – according to Insightia, the activist fund exited 60 companies. Insightia also noted that former Hasbro activist Alta Fox was a rare buyer among many sellers this past quarter. Tech, AI and home building – which saw a boost from Buffet’s Berkshire Hathaway – were trending portfolio buys at hedge funds. Carl Icahn, whose financial woes have been making headlines recently, sold two positions and added none.

Meanwhile, a bidding war has erupted over U.S. Steel (X) – the iconic American company that was formed by J. P. Morgan, Andrew Carnegie and Charles Schwab and at one point the world’s largest corporation. On Sunday, rival Cleveland-Cliffs (CLF) went public with a cash and stock deal after U.S. Steel rejected earlier offers and announced a review of strategic alternatives for the company. The following day, Esmark, the privately held industrial conglomerate, threw its hat into the ring to match CLF’s $35 per share but sweetened the deal with an all-cash offer. James Bouchard, CEO of Esmark, appeared on CNBC to refute allegations of insufficient funding and claimed to have $10bn of cash in his bank account. U.S. Steel has been mostly silent as more bids appear to be on the horizon for famed steel producer and its coveted ticker symbol X – so far, no offer from Elon to claim “X” for $420 per share.

Our newsletter will be paused over the next two weeks and will return after Labor Day.

Have a great weekend,

GPP Team

Reuters: Activists Back Off Salesforce After Share Price Recovery

Svea Herbst-Bayliss points out that based on recent 13F filings, it appears the "wolfpack" of activists previously targeting Salesforce, including Third Point, Elliott and ValueAct, have backed off following better-than-expected earnings results, although Starboard Value still owns roughly 2 million shares in the software giant. Read More

CNBC: Esmark CEO: Cleveland-Cliffs is Offering Stock for U.S. Steel Because They Don’t Have Cash, We Do

James Bouchard, Esmark CEO, joined ‘Closing Bell Overtime’ to discuss the company’s bid for U.S. Steel and to refute allegations of insufficient funds to close the deal. Read More

The Wall Street Journal: Esmark Bids for U.S. Steel, Setting Up Potential Battle for Steelmaker

After previously rejecting a bid from Cleveland-Cliffs, U.S. Steel has also received another improved takeover offer from Esmark, setting up what Bob Tita writes could be a fierce, drawn-out bidding war between rival steelmakers. Read More

Reuters: ArcelorMittal Weighs Possible Bid for US Steel

Greg Roumeliotis and Emma-Victoria Farr report that ArcelorMittal SA, the world’s second-largest steelmaker, is the latest company to consider acquiring U.S. Steel. Read More

ACTIVISM

The Wall Street Journal: Carl Icahn Should Be Sailing into the Sunset. Instead, He’s Scrambling to Save His Empire

Cara Lombardo examines how Carl Icahn’s efforts to protect his investment firm IEP after a recent short-seller attack cut the octogenarian corporate raider's fortune in half, raising questions amongst Wall Street about whether IEP has enough cash to launch additional activist campaign. Read More

The Information: PayPal and the Activist Campaigns That Didn’t Work

Martin Peers looks at shareholder activist campaigns that "didn't work," citing Elliott vs. Paypal and Carl Icahn vs. Hindenburg Research as reminders that activists "aren't exactly infallible." Read More

Beyond the Boardroom: Ten Years On: Icahn at Apple

In the latest episode of Diligent's Beyond the Boardroom Podcast, Steve Balet (Strategic Governance Advisors) joins host Kieran Poole to look back at Carl Icahn's activist campaign against Apple a decade ago, the impact it had on activist communications and whether Icahn has since changed his approach. Listen Here

Columbia Law School Blue Sky Blog: The Role of Controlling Shareholders Is Missing from the Debate Over Short-Termism

Tom Vos (University of Antwerp Professor) discusses how controlling shareholders can potentially discourage company managers from pursuing "investor short-termism" through control mechanisms such as loyalty voting. Read More

Bloomberg: Activist Investor Legion Partners Pushes OneSpan to Explore Sale

Two years after it won seats on OneSpan Inc.'s board, activist investor Legion Partners Asset Management is once again advocating for changes at the cybersecurity company, including positioning OneSpan as a takeover target. Read More

M&A & IPOs

Reuters: Exclusive: SoftBank in Talks to Buy Vision Fund's 25% Stake in Arm

Echo Wang and Anirban Sen report that SoftBank is negotiating to buy an additional 25% stake in Arm as the chip manufacturer looks ahead to a potential future IPO. Read More

Financial Times: Private Equity Group CVC Capital Partners Revives Listing Plans

The private equity firm CVC Capital Partners has resumed plans to pursue a potential public listing in Amsterdam, a significant turning point in the firm's long-held strategy to prioritize secrecy, write Kaye Wiggins, Will Louch, Arash Massoudi and Ivan Levingston. Read More

Reuters: Bain Capital Buys Brazilian Steakhouse Chain Fogo de Chão in $1.1 bln Deal

Abigail Summerville reports that Bain Capital has cooked up a deal to acquire the all-you-can-eat Brazilian steakhouse chain Fogo de Chão from the private equity firm Rhone Capital in a $1.1 billion deal. Read More

The Deal: ‘Dominant Firm’ Threshold Faces Dealmaker Backlash

The FTC and DOJ's recently updated merger guidelines, particularly their proposed “two-pronged test” to determine the dominant merging party in a deal, are facing backlash. David Hatch interviews various antitrust attorneys and enforcers to discuss the potential impact these guidelines could have on dealmaking. Read More

Institutional Investor: Private Equity Firms’ Return Expectations Remain High Despite M&A Slow Down

A recent survey by Churchill Asset Management revealed that even though dealmaking activity has slowed down, over 80% of executives at private equity firm indicated they expect the same returns as last year. Read More

The Wall Street Journal: 5-Hour Energy Founder to Buy Majority Stake in Sports Illustrated Publisher

Simplify Inventions, the investment company owned by the founder of 5-Hour Energy, Manoj Bhargava, reached a deal to buy a majority stake in the publisher Arena Group, which owns Sports Illustrated and Men's Journal, writes Alexandra Bruell. Read More

Financial Times: BAE to Buy Ball’s Aerospace Business for $5.6bn

Peggy Hollinger and Maxine Kelly report that the UK defense company BAE Systems will buy Ball Aerospace in a $5.6 billion takeover in what will potentially be BAE's largest deal ever. Read More

ESG & LEADERSHIP

Financial Times: SEC Lawyers Subpoena Fund Managers Over ESG Disclosures

Patrick Temple-West and Madison Darbyshire suggest the SEC is potentially cracking down on ESG commitments and marketing after subpoenaing several asset managers. Read More

Harvard Business Review: What Does “Stakeholder Capitalism” Mean to You?

In a new Harvard Business Review article, Lynn Paine breaks down the four different types of stakeholder capitalism: instrumental; classic; beneficial, and structural, and how each form prioritizes the interests of different stakeholder groups. Read More

Reuters Breakingviews: CFOs Are Stepping into a Rapidly Revolving Door

Jennifer Saba discusses the increasing number of high-profile CFO departures and how macro-economic conditions and internal succession planning procedures are impacting CFO turnover. Read More

FROM OUR DESK TO YOURS

The latest edition of GPPer travel chronicles features a trip down to Argentina. Buenos Ares was the first stop where the current winter weather offers a nice reprieve from the NYC heat and the allure of an asado, mate and good wine is omnipresent. We recommend a visit to Don Julio for a steak comparable in size to something you might see in “The Flintstones” and a 60,000-strong cellar of some of the country’s best wines. If you’re like us and need to work off the meal at Don Julio, take the short flight to Bariloche in northern Patagonia home of Catedral – the largest ski resort in South America. Afterwards, stop by BLEND PATAGONIA owned and operated by Chef Pedro Perizzolo. The menu has a unique mix of Argentine favorites influenced by recipes Chef Pedro used during his years as private chef in Philadelphia. We are still dreaming about the French toast sandwich with melted cheese and ham.  

On the long flight back from Argentina, GPPers indulged in a few reads from the Financial Times’ Business Books of 2023. Among the fascinating reads featured on the list was Unscripted from James Stewart & Rachel Abrams (a GPP book club favorite) and Power and Progress by economists Daron Acemoglu and Simon Johnson that outlines how innovation can benefit all of society. Check out the full list here. 

PEOPLE MOVES

• CNBC has appointed Semafor Business and Finance Editor Liz Hoffman as a new on-air correspondent. Congrats Liz! Read More

• PayPal announced Alex Chriss, Intuit Senior Executive, will replace Dan Schulman as CEO effective September 27th. Read More

• Paul Weiss has recruited at least half-a-dozen top lawyers and partners from Kirkland to join the firm’s London and Los Angeles offices. Read More

• Neeraj Khemlani will step down from his role as CBS News President. Read More

• Kraft Heinz has selected Carlos Abrams-Rivera to become its next CEO. Current CEO and Board Chairman Miguel Patricio will continue to serve as nonexecutive chairman. Read More



• Discover Financial Services announced that Roger Hochschild will step down as CEO and President. Board member John Owen has been appointed Interim CEO and President. Read More

• September 11-13: CII Fall 2023 Conference: Next Frontiers in Governance, Long Beach, California 

• September 28: Delivering Alpha Investor Summit, New York, New York  

• October 10-11: Berkeley Forum on Corporate Governance, San Francisco

• November 29: New York Times’ Dealbook Summit, New York, New York

• November 30: IR Magazine ESG Integration Forum, New York City