Activist investor interest in UK firms rises after pandemic

UK firms have seen interest from activist investors tick higher after coronavirus disruption, according to new research.

The latest activist report from Alvarez & Marsal also revealed that European corporates are more likely to be targeted by “wolfpacks” of more than one investor at a time amid a rise in aggressive investment tactics.

It highlighted that 59 UK corporate firms have been identified as likely to face a campaign from activist investors in the near future.

It also showed that ESG (environmental, social and corporate governance) concerns have become a particular focus of campaigns from investors.

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GlaxoSmithKline has come under pressure from activist Elliott Management (Andy Buchanan/PA)

Malcolm McKenzie, managing director and head of European corporate transformation services at A&M, said: “More boards in Europe will be coming up against campaigns from multiple activists, creating a Gordian knot of strategic, operational, financial, environmental, societal and governance challenges.

“While activist wolfpacks are nothing new, they are now increasingly being joined by a broader set of stakeholders, who might not look like your ‘typical activist’, calling for change, particularly around ESG.

“Companies must have a strategy in place to balance this wider range of demands, which are often competing, or face being cornered on all fronts.”

The analysis predicted that consumer sectors will see a particularly increase in activist activity, with healthcare and technology firms also increasingly finding themselves as targets.

Pharmaceuticals giant GlaxoSmithKline is among firms to come under significant investor pressure in recent weeks, with Elliott Management warning that it could challenge the future of boss Emma Walmsley.

Mr McKenzie added: “There is no doubt that the pandemic has laid bare some of the underlying weaknesses and opportunities in European companies, even those in sectors seen to prosper during the pandemic.

“While healthcare and tech are increasingly in the activists’ sights, the SPAC boom has further raised the stakes, opening up another lucrative avenue for activists to explore.”