In The Press September 22, 2022

Poorly Received Deals Draw Activists (The Deal)

A corporation can face opposition following an acquisition that was poorly received by the markets. Experts following M&A and activism agree that established, first-time and occasional activists are all targeting big and small deals, particularly as market conditions become more volatile. Sean Donahue, chair of the Public Company Advisory practice, said the current dislocation in the equity markets could make it even more likely that even a transaction that makes sense won’t be appreciated by the marketplace. He added that in a less volatile market, dealmakers might have more support from investors. “You run the risk that even if you have a good deal story you subject yourself to a stock price drop and an activist,” he said while speaking with The Deal. “If the acquisition is of a company that people are not as familiar with and analysts don’t understand, it could be tough even if you believe the deal is a good strategy. If you are the acquirer in today’s market, you might get criticized for paying too much.