Activists Expect To Disrupt M&A Activity This Year

Activist funds normally get involved in mergers and acquisition (M&A) activity by disrupting the target of a deal, buying a stake and then persuading other voters to hold out for better terms, but according to a recent survey from FTI Consulting they intend to get involved in the acquiring side this year as well.

“An acquirer will often use more aggressive balance sheet structures to execute M&A,” said FTI Consulting analyst Steven Balet. “An M&A activist may well look at this structure and the risk profile of the transaction and decide that he or she likes the board’s more aggressive balance sheet approach, but would like the cash returned rather than used for M&A. This type of activism will...