‘Wolf pack’-style activist campaigns are becoming more prominent, leaving boards asking how to engage. While the concept has existed for a long time, it's gaining traction as bigger and better-known activists exploit the strategy. But smaller and newer activists are also piling on. Activists cannot officially collaborate without tripping security laws that require them to file and report as a collective, single shareholder. If they were to file as such, their collective stock holdings might make them subject to certain trading rules that could prohibit them from trading as nimbly, said Leonard Wood to Agenda, partner at Goodwin and chair of its activism and takeover defense practice. That's why activists usually avoid working collaboratively in an official capacity. While this is still the routine when a smaller or newer activist pops up, the reality is that heavyweight activists will meet with the CEO or board chair almost first thing, Wood said.
"Any astute advisor from the legal side or the financial side, we're always going to advise companies to do something, and to be prepared in advance," noted Wood.
Read the full article in Agenda: Agenda - The Wolves Are Howling: Activist Packs Are Complicating Engagement (subscription required)