Shareholder activism sees uptick in Asia

Asian companies have seen the most shareholder activism campaigns so far this year, outside of the US, according to new data from Activist Insight.

The research provider’s numbers for August show a notable uptick in public campaigns across Asia, with 90 so far this year, compared with 60 over the same period in 2017.

While this is way off the numbers for the US – which has also seen a rise from 387 in the first eight months of 2017 to 403 so far this year – the rise across Asia makes it the second-most targeted region. At an increase of 30 campaigns, this is also the highest in real terms across any region.

‘The growth of activism in Asia is likely a continuation of developments in corporate governance that have taken place in several markets, notably Japan and South Korea, as well as the high valuations we are seeing in the US,’ Josh Black, editor of Activist Insight, tells IR Magazine.

‘Although activity by domestic activists has risen sharply in Japan, Elliott Management has also taken on a greater role in the region, investing across the Hyundai restructuring and initiating a first activist investment in Japan. ValueAct Capital Partners has also made a large investment in Olympus, so there has been plenty of activity to fill the void left by Third Point Partners’ apparent preference for situations closer to home.’ 

In third place for public campaigns is Europe (excluding the UK) at 69, though this is the only region to actually see a drop in the number of campaigns year to date.

Last year continental European companies faced 95 public activism campaigns up to the end of August; that has dropped to 69 over the same period this year.

Black explains that this is likely down to a ‘wait and see’ approach on Brexit. ‘As far as Europe is concerned, a lot of activists based there have told me they are waiting for a shift in valuations given that March [2019] might see a lot of turmoil depending on which course Brexit takes,’ he says. ‘There’s been a fair bit of activity in large caps, however, and US activists are [also] likely to be attracted [to the UK] by the weak pound.’

Companies in the UK have faced 33 campaigns so far this year, up from 30 in the same period in 2017, while Australian campaigns are up from 41 to 48 and those in Canada have jumped from 42 to 66, according to Activist Insight.