As the COVID-19 pandemic slowly recedes, a significant surge in shareholder activism has been observed within the Canadian market in 2023. The latest insight report from Davies Ward Phillips & Vineberg LLP points to this upward trend, highlighting the emerging patterns that characterise this resurgence.
One of these patterns is identified as the “activist swarm”, where multiple activists, though not coordinated, converge on a single target with various, often competing, demands. This seemingly chaotic practice seems to have gained traction in the recent times and is worth close attention as it could largely redefine interactions between shareholders and companies.
Besides, the resurgence of activism is reportedly tied to an increase in Mergers and Acquisitions (M&A) transactions. Some of these have even attracted swarms of their own, indicating that the phenomenon is becoming a popular form of engagement amongst investors.
Another interesting trend to note is the apparent disproportionate targeting of larger cap companies by activists. This may suggest that these activists see greater opportunity for returns or influence within these larger firms. It raises questions on whether these firms are adequately prepared for such activism.
In conclusion, as we move further away from the pandemic, a new landscape for shareholder activism is seemingly unfolding in Canada. The rise in activist swarms, increased activism in response to M&A transactions and the targeting of larger cap companies are trends that corporations, investors, and legal professionals alike need to keep on their radar.