Forget the bears, it’s the wolves you need to be worried about
> how to prepare for shareholder activism this mid-year reporting season

By Ryan Wade
Managing Director Georgeson Australia

This mid-year reporting season will be the first time many companies expose the extent of their wounds from the current financial crisis. While there has been plenty of rhetoric about the crisis and subsequent global recession, the tangible effects on most companies are yet to be reported on.

The new calendar year has only just begun, but already the wolves have been knocking on the doors of several companies. Activist shareholders seeking conflict to create value will be closely scrutinising mid-year results and management's subsequent response. Profit downgrades and dividend cuts will be a common theme, providing the catalyst for activist shareholders to launch their campaigns. Whether they are corporate raiders and/or M&A sharks, they are out there lurking and companies need to be prepared.

Prevention is the key – be proactive, not reactive. You simply can’t ‘react’ as effectively from a hostile bid or shareholder activism if you are not prepared. Make sure you know your shareholders and ensure that you communicate with them effectively, regardless of where they are in the world. Activism knows no boundaries and in the past, activist shareholders such as Laxey Partners (UK), Arkmile Ltd (UK) and Elliot International (US) have attacked issuers within Australia and New Zealand. Establish an experienced ‘Fight Team’ ready to deal with an attack – key officers, lawyers, proxy solicitor, investment bankers, PR firm etc – as activist investors are always well prepared and usually launch aggressive media and shareholder communications campaigns. Be certain you know the 'do's and don'ts' in defending your company's position and if you don't know them, employ someone who does.

Georgeson is the world’s pre-eminent and most highly regarded global M&A proxy solicitor and has conducted numerous campaigns to combat shareholder activism and maximise participation in shareholder meetings, demergers, rights issues, share purchase plans and other restructurings requiring shareholder approval and support. Georgeson has the proxy fight record and global expertise to help you through troubled times.

For more information on effectively dealing with shareholder activism please contact:

Ryan Wade >
02 8216 5701
rwade@georgeson.com