Dealing With Activist Hedge Funds — The Harvard Law School Forum on Corporate Governance

Small business need-to-know and of-interest.   I think we should also consider the statistics a heads-up, regardless of where your interest lies in these challenges.

Excerpt: Among the attack devices being used by activists are: (a) proposing a proxy resolution for creation of a special committee of independent directors to undertake a strategic review for the purpose of “maximizing shareholder value”; (b) conducting a proxy fight to get board representation (note solicitation for a short slate is very often supported by ISS and when it is, is usually successful); (c) orchestrating a withhold the vote campaign; (d) convincing institutional investors to support the activist’s program; (e) stock loans, options, derivatives and other devices to increase voting power beyond the activist’s economic equity investment; and (f) using sophisticated public relations campaigns to advance the activist’s arguments.

Prevention of, or response to, an activist attack is an art, not a science. It is essential to be able to mount a defense quickly and to be flexible in responding to changing tactics

Read full article via Dealing With Activist Hedge Funds — The Harvard Law School Forum on Corporate Governance and Financial Regulation.

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