Week in investor relations: Buyout firms target the UK, Engine No 1 raises $100 mn for ETF and Toshiba shareholders vote out chairman
– UK companies are receiving more buyout offers than at any time in the last 20 years, sparking complaints from some fund managers that, amid the Covid-19 pandemic, businesses are not being adequately valued, reported the Financial Times (paywall). Last weekend, British supermarket Morrison’s rejected a £5.5 bn ($7.7 bn) offer from private equity firm Clayton Dubilier & Rice. Buyout firms have put 13 UK companies ‘into play’ so far this year, the largest number since 1999.
– Engine No 1, the activist fund that won three board seats on Exxon, plans to launch an ETF to press the largest US companies over ESG issues, noted CNBC. The Engine No 1 Transform 500 ETF has already received commitments of $100 mn, the firm said in a statement. ‘Because of this fund, we will now be long-term, nearly permanent owners of the 500 largest companies in America,’ said the firm’s managing director Michael O’Leary.
– Shareholders voted out Toshiba’s chairman Osamu Nagayama in a rare corporate governance win for investors at a Japanese company, noted Nikkei Asia. A member of the company’s audit committee was also removed. The vote followed an investigation that found ‘Toshiba executives colluded with Japan’s trade ministry to pressure shareholders over their votes at last year’s general meeting,’ according to the article. In a statement following the meeting, Toshiba said it ‘recognizes the seriousness of the rejection of some candidates for directors.’
– The Wall Street Journal noted that the SEC is planning to require public companies to disclose more information about how they respond to threats linked to climate change, and that companies are preparing for a fight. SEC chair Gary Gensler has said climate-related disclosure is a top priority. The SEC has already sought industry input, much of which arrived last week, for a rule proposal that could be issued by October.
– CNBC reported that French media group Vivendi secured the backing of shareholders for its proposed spin-off of Universal Music Group (UMG). During a shareholder meeting, investors overwhelmingly backed the proposal, which would lead to the world’s largest music label completing its listing on Euronext Amsterdam in late September. The proposal involves distribution of 60 percent of UMG’s share capital to shareholders through the public listing in Amsterdam.
– The Financial Conduct Authority (FCA), the UK’s financial reporting regulator, plans ‘to extend climate reporting requirements to most UK listed companies as well as domestic asset managers,’ reported the FT. ‘Climate-related disclosures do not yet meet investors’ and market participants’ needs,’ said Sheldon Mills, the FCA’s executive director of consumer and competition, when launching the proposals on Tuesday. The regulator has already asked all premium-listed UK companies to align their climate reporting with the TCFD recommendations.