IR Monitor – 5th April 2023

This week’s news

FTI publishes its US Activism Vulnerability Report for Q4 2022

Last week FTI published our quarterly US Activism Vulnerability Report, which provides a snapshot of the findings of the Activism Screener for 4Q22 – highlighting the key themes emerging within the realm of shareholder activism. The report explores how, while 2022 was plagued by market volatility and increasingly pessimistic investors, shareholder activists became more prominent than ever as demands were up 18.1% compared to the prior year. The primary focus of these activists was within the Telecom, Media & Technology (“TMT”), Financial, and Healthcare & Life Sciences sectors. The Aerospace and Defence industry, on the other hand, was the biggest mover – decreasing by 17 spots in vulnerability compared to other industries.

The benefits of listing on multiple markets with depository receipts

Hethen Hira, Head of Investor Relations at Pan African Resources, recently spoke to MZ Group – sharing how his company has benefited from using a depository receipt program to list on multiple markets. Already dual-listed across the LSE and JSE, Pan African created an ADR programme which allowed them to trade over the counter at the New York Stock Exchange – facilitating access to US investors. As a smaller company, this allowed Pan African access to a vast pool of capital, while they didn’t feel quite ready or big enough to fully list in the US. Hira also stressed the benefits of using the OTC QX platform, as a means of gaining further credibility and offering reassurance to investors. These changes facilitated huge success, seeing Pan African Resources’ shares held by US investors rocket up from under 1% to over 6% of the shareholder register.

M&S chairman calls on Business Secretary to amend company law and boost shareholder democracy

Marks & Spencer chairman Archie Norman has co-signed a letter to Kemi Badenoch, the UK Business Secretary, as part of his “Share Your Voice” campaign. Norman, who is looking to boost shareholder democracy and access, has called for several amendments to be made to company law. The most drastic of these recommendations is for digital AGMs’ validity to be recognised whereas, currently, companies must use a physical building for their AGM with at least two shareholders present. Norman argues that current regulation is outdated and results in a nonsensical policy where a meeting that consists of ‘a pair of men in a shed in the Outer Hebrides is valid’, whilst one with ‘over 200 investors convened via secure online technology is not’. His ‘Share Your Voice’ campaign is backed by the Quoted Companies Alliance, which represents 1,000 mid-sized and small publicly listed businesses.

New disclosure requirements under fire from several multinational companies

In a letter sent to the EC, several multinational companies have expressed concern over the newly announced foreign-subsidies rules, according to The Wall Street Journal. The rules, which are due to take effect later on this year, are said to have the potential to disrupt M&A as well as impede public tendering, as they will enable EU authorities to prevent certain deals from taking place if either of the companies have benefitted from government aid. This means that companies will have to provide a full history of its interactions with foreign governments if completing certain M&As. Those supporting the new regulation, however, suggest that such changes are a positive force, supporting the creation of a more equal playing field between European companies and their global competitors. And whilst a number of groups have warned about administrative risk, the EU executive VP Margrethe Vestager also assured that the Commission would aim to keep red tape to a minimum by focusing on the largest deals.

Two Liontrust directors quit following a row over corporate governance 

The Financial Times reports that two non-executive directors have quit the board of listed asset manager Liontrust, with those close to the situation suggesting the departures were due to disagreements over the chair’s length of tenure. The UK’s corporate governance code recommends that chairs stay on a board for no longer than nine years, with most agreeing that any longer would not be in the company’s interest. Shareholders of the FTSE250 company, however, seemed to disagree when they re-elected non-executive chair Alastair Barbour to the role, taking his tenure to 12 years. The situation has since divided the opinion of investors, with some expressing deep concerns over the departures, whilst others have suggested that Barbour’s extended tenure was necessary in order to support the company through a period of discontinuity.

And finally … Alphaville thanks Saudi National Bank chair Ammar Alkhudairy for providing a host of juicy quotes

We continue our occasional series on the bad boys of IR with Alphaville’s look at some of the poorly phrased quotes from former Saudi National Bank chair Ammar Alkhudairy. Whilst Alkhidairy’s recent resignation was attributed to “personal reasons”, it’s hard to overlook the fact that he inadvertently started a global bank run on Credit Suisse with his comments that SNB would “absolutely not” increase its stake in the bank. These comments took the market by surprise given his previously relaxed attitude to the CS investment; indeed, only a few months earlier, he also described the $1.5bn investment into CS as just another cheque: “we write cheques of that size frequently, I can assure you. This is just another cheque of that size.” It was, he said, barely worthy of a press release…

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