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ANALYSIS: Q4 Activism Boosts 2022 Activity to Five-Year High

Jan. 11, 2023, 10:00 AM

Geopolitical tensions and legal developments in the US motivated investors last year to try to modify company behavior. In 2022, activists launched the most investor activism campaigns (632) since Bloomberg began tracking global investor activism in January 2017.

This five-year high is largely thanks to Q4’s 178 new campaigns—the highest for Q4s that Bloomberg has on record, and the second highest across all quarters since 2017 (behind Q2 2018’s 194 campaigns).

Q4’s Numbers, Explained

Last year’s busy tech sector and high-profile M&A activity help explain Q4’s numbers.

Tech Sector’s Busy Year

The technology sector led all sectors in the number of campaigns in Q4, with 32. This development aligns with the fact that engagements involving tech companies saw a 74% increase in 2022 as a whole. Software companies were the most common type of activist target for the tech industry in Q4, with 20 campaigns launched against them.

The consumer discretionary sector took second place, with 21 campaigns launched against companies in this sector in Q4. Leisure companies were the most common type of consumer discretionary company subject to activist threats in Q4, with 6 campaigns launched against them.

Activists Challenge M&A

But sector-specific activism may not be the only factor contributing to Q4’s high activism count. Coinciding with the low Q4 M&A activity examined by Legal Analyst Emily Rouleau, investors took issue with the M&A events this quarter.

Nine campaigns included objectives opposing mergers in Q4, but one merger in particular seems to have stood out to activists: News Corp’s merger with Fox Corp. For that merger, Irenic Capital Management LP, Independent Franchise Partners LLP, and T Rowe Price Group Inc all launched objectives opposing the union, and all three objectives remain pending. In Q4, activists launched seven objectives in total opposing acquisitions.

While high-profile M&A activity isn’t the sole cause of the busy last quarter for activists, multiple investors challenging M&A activity likely played a role in Q4’s high activism counts.

Bloomberg Law subscribers can find related content on our ESG Practice page, as well as our Practical Guidance: Shareholders page. Data accessible at BI ACT <GO>.

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