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Breakingviews: The 1 pct activists

Tuesday, September 09, 2014 - 03:23

Jeffrey Goldfarb talks with Kevin Allison about Jana's new influence at Walgreen and the potential hazards of ceding too much to aggressive investors.

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Suffered -- golden age of activist investing and nor was -- -- parent then yesterday. When Barry -- things Jana partners took. Up to three board seats at Walgreen. Where he holds less than 1% stake Kevin Allison fresh in from our Chicago bureau you to -- -- the situation yesterday. That's a little bit curious that the wheels so much clout or is -- -- the power to given the situation there. Yeah it's another case of activists on the march we've seen this in a few other instances recently. Ralph Whitworth relational investors had less than 1% of Hewlett-Packard when he took reports in 2011 he eventually became chairman. Time Microsoft yeah Microsoft as well when value act had about a difference between the HP and Microsoft and -- that's right those are two companies in crisis Walgreen. There's arguably not that many big strategic decisions for activists sitting on -- -- to -- a party Donahue and call it bought -- that's right the company is already agreed to buy out its its European partner alliance boots and fifteen billion dollar deal. Is decided not to move its tax Thomas I'll overseas just something -- was pushing forward the got involved the company back in April. Seems to be one another kind of touched on sort of for fur activists is the matter but they've got to pop scene there who writes it's -- You know people seem to really like it's going to be harder for Janet coming -- saying by being on the sport we're gonna really help -- doctor operational game because they've already got one of the best operators in the industry. Coming over from boots to become executive vice chairman of the new walker there has been this increasing push for activists. From it and sort of more traditional mutual fund. Investors have been calling the guys like terrorists and -- Can you please get involved visited the must've at some ideas to preventive wanna. It's a play nice with the right I don't think Walgreens -- agreed to give them up to three seats if they didn't think his bringing something to the table he's got. Got balance should acknowledge she can help them figure out how to maximize what they're giving back to shareholders -- reinvesting in the company. But of course there is there is the sort of a little bit of a worry that that you are talking about yesterday is this. This question about we've seen this at the top of the market before -- where you know used to be that activists needed you know you're usually going about 5% you know pretty significant state. As we've targeted bigger companies they've gone with smaller stakes out and and we've seen some really sort of touchy yeah. That's that doesn't necessarily they're going with smaller stakes because how can take on it 380 billion dollar -- Microsoft with much more than 1% right. You got to be the biggest act as a -- in the world by a five mile. But I think it again we have seen this before we saw in Europe we saw. Had done activist funds with tiny stakes going after Gaza HSBC and Vodafone and really not getting anywhere I was at the top of the marketing through thousands of which is kind of where we're thinking we are again just -- -- today activists like to think that they've gone through kind of re branding exercise and have him in the corporate raiders in the eighties to being -- -- it is. Champions of shareholder value and and away there's a little bit of truth to that they're getting some traction from. For more passive investors like big mutual funds that might not have spoken up in the past but now are quietly backing -- this pushes these companies. I think that's partly explains them. -- we will keep an island out of shall see more of these smallish activists. So to speak and we'll be back with more refused.

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Breakingviews: The 1 pct activists

Tuesday, September 09, 2014 - 03:23