AUSTRALIA Law and Practice Contributed by: Alberto Colla, Keith Tan, Hugh McDonald and Dean Zinn, MinterEllison
11.3 Interference With Completion Shareholder activists are increasingly interfering with the completion of announced transactions in Australia. This activism typically arises from: • a long-standing institutional shareholder of the target who has a fundamentally different view on value to a bidder or the target board; • a dedicated activist fund that takes a posi - tion in the target shortly after the public announcement of a proposed deal to improve the price and make money on its investment (known as “deal arbitrage” ); • an industry competitor who acquires (further) shares in the target on-market shortly after the public announcement of a proposed deal to build a sufficient stake to either block an announced deal to protect its market position or to provide “seat at the table” in extracting a side deal with the acquirer; • environmental and socially conscious activ - ists who attempt to exert pressure on either the bidder or the target company to provide assurances with respect to environmental issues; and • environmental and socially conscious activ - ists who acquire shares on the market after a corporate control transaction is publicly announced, to build a sufficient stake to block an announced deal that they consider to be environmentally and/or socially detri - mental.
altering course (see 11.2 Aims of Activists ); and • influencing the outcome of announced transactions by leveraging their voting rights, publicly expressing their views on proposed transactions, and mobilising other sharehold - ers to either block or support deals based on an assessment of value creation and align - ment with broader ESG objectives (see 11.3 Interference With Completion ). 11.2 Aims of Activists Shareholder activists regularly campaign for companies to initiate some form of M&A activity, for example, to de-merge or to spin off or divest non-core assets, to merge or acquire assets, or more fundamentally, to sell themselves or make themselves a more attractive target for potential bidders.
112 CHAMBERS.COM
Powered by FlippingBook