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Morgan Stanley, Goldman Sachs Top Advisors in Activist Situations in 2016

Companies and Markets

By Andrew Birstingl  |  February 8, 2017

Morgan Stanley was the top financial advisor for activist situations in 2016, ranked by the number of situations in which the firm advised either an activist investor or a targeted company. Morgan Stanley advised the target company of an activist for 18 campaigns during the year, which slightly beat out Goldman Sachs, the financial advisor for 17 activist campaigns. Goldman Sachs was the top advisor in 2015, with the firm assisting the target on 24 occasions.

  2016: Top Financial Advisors 
Financial Advisors Advised an Activist Advised a Company Total
Morgan Stanley 0 18 18
Goldman Sachs 0 17 17
Evercore Partners 0 9 9
J.P. Morgan Chase & Co. 0 7 7
Houlihan Lokey Howard & Zukin 1 4 5
   Source: FactSet SharkRepellent 

Both Morgan Stanley and Goldman Sachs were involved in highly publicized activist campaigns in 2016. Morgan Stanley advised specialty pharma company Depomed as activist investor Starboard Value attempted to gain control of the Board of Directors. The proxy fight was eventually settled with Depomed, granting three board seats to Starboard.

Goldman Sachs was the financial advisor to Chico’s FAS as the clothing retailer engaged in a proxy fight initiated by Barington Companies Investors, which ended up withdrawing its proxy fight for two board seats. Additionally, both Morgan Stanley and Goldman Sachs are advisors to Chipotle Mexican Grill in its ongoing campaign with Pershing Square. 

2015: Top Financial Advisors 
 Financial Advisors Advised an Activist Advised a Company Total
Goldman Sachs 0 24 24
J.P. Morgan Chase & Co. 0 14 14
Morgan Stanley 0 13 13
Houlihan Lokey Howard & Zukin 5 5 10
Credit Suisse 0 9 9
Source: FactSet SharkRepellent

As shown in the league tables above, these banks were financial advisors to the target company rather than the activist in almost every campaign in 2016. Typically, most banks have stayed away from working with the activist, as it could deter the target company from hiring the advisor for business in the future.

Legal Advisors

On the legal side, Olshan Frome Wolosky LLP was the top legal advisor in 2016, ranked by the number of situations in which the firm advised either an activist investor or a targeted company. The law firm advised the activist on 83 occasions during the year, compared to 91 in 2015. Schulte Roth & Zabel was second on the list, with the law firm advising the activist on 20 occasions in 2016. When it comes to advising the target of an activist, Vinson & Elkins LLP led the way, with the law firm working with the target in 19 situations during the year.

2016: Top Legal advisors 
Law Firms Advised an Activist Advised a Company Total
Olshan Frome Wolosky LLP 83 0 83
Schulte Roth & Zabel 20 0 20
Vinson & Elkins LLP 0 19 19
Kleinberg, Kaplan, Wolff & Cohen 14 0 14
Cadwalader Wickersham & Taft 7 6 13
Morgan Lewis & Bockius LLP 1 12 13
Source: FactSet SharkRepellent


Proxy Solicitors

OKAPI Partners was the top proxy solicitor in 2016, ranked by the number of disclosed activist situations in which the firm was hired by either the activist or the target company. OKAPI Partners was retained by company management on three occasions and retained by the activist on 23 occasions (26 in total). Innisfree M&A Incorporated was the top proxy solicitor ranked by the number of times the firm worked with the target of an activist. It also came in second overall with the firm being hired by management 16 times and the activist four times (20 in total). 

2016: Top Proxy Solicitors
  Proxy Solicitor (Company) Proxy Solicitor (Activist) Total
OKAPI Partners LLC 3 23 26
Innisfree M&A Incorporated 16 4 20
D.F. King & Co., Inc. 9 5 14
Morrow & Co., Inc. 7 7 14
MacKenzie Partners, Inc. 10 3 13
Georgeson Inc.  7 3 10
InvestorCom, Inc. 0 9 9
Source: FactSet SharkRepellent


Looking at proxy fights that had meeting dates in 2016, D.F. King & Co and Innisfree M&A Incorporated received the two largest disclosed proxy solicitor fees. Both of these were dissident fees. D.F. King & Co was retained by Canadian Pacific Railway as the firm made an unsolicited bid to acquire Norfolk Southern Corporation. The disclosed dissident fee paid for this proxy fight was $2 million. Innisfree M&A Incorporated was hired by Sanofi, as the company launched an unsolicited, non-binding proposal to acquire Medivation. The disclosed dissident fee paid was $1 million.

 2016: Largest Disclosed Proxy Solicitor Fees
Company  Dissident Proxy Solicitor Fee ('000) Proxy Fight Winner
Norfolk Sourthern Corporation Canadian Pacific Railway Limited D.F. King & Co., Inc. $2,000 Withdrawn
Medivation, Inc. Sanofi Innisfree M&A Incorporated $1,000 Settled/Concessions Made
Puma Biotechnology, Inc. Fredric N. Eshelman OKAPI Partners LLC $900 Management
Axiall Corporation Westlake Chemical Corporation MacKenzie Partnets, Inc. $725 Withdrawn
Chico's FAS, Inc. Barington Companies Investors LLC Innisfree M&A Incorporated $600 Withdrawn
 Source: FactSet SharkRepellent
 Dissident Proxy Solicitor        
 Company Proxy Solicitor        

 

Download the 2016 Shareholder Activism Review

Andrew Birstingl

Research Analyst

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