Corporate America's biggest shareholders have traditionally been content wi...
- Corporate America’s biggest shareholders have traditionally been content with sharing their views on a company’s strategy privately with management.
Wellington Management Company LLP’s decision last month to speak out against drug maker Bristol-Myers Squibb Co’s proposed $74 billion acquisition of Celgene Corp, calling what would be the largest-ever pharmaceutical takeover too risky and expensive, sent ripples across the investment world. Wellington’s vocal opposition to the deal is the culmination of some mutual funds gradually feeling more emboldened to publicly challenge a company’s strategy, asset management executives and corporate governance experts say.
T. Rowe Price Group Inc, which manages close to $1 trillion in assets, has opposed several acquisitions, including Michael Dell’s offer to take his eponymous computer maker private, because it felt the proposed deal undervalued the company. “More funds are willing to agitate in search of returns,” Mark Shafir, Citigroup Inc’s co-head of global mergers and acquisitions, said on Thursday at the corporate law institute conference organized in New Orleans by the Tulane School of Law.Despite their deep pockets, taking a public stance on corporate strategy does not come easily to many of these funds, in part because they are unaccustomed to readying the kind of presentations aimed at swaying other shareholders.
To stay on good terms with corporate management, large mutual funds have often been happy letting activist hedge funds agitate over a company’s perceived problems.
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