Andrew Freedman Quoted in Law360 on Expected Trends in Shareholder Activism in 2020

Co-Head of Olshan's Shareholder Activism Practice Andrew Freedman was quoted in Law360 (subscription required) on the major trends predicted to shape activist investing in 2020. One anticipated trend is the rise in informally settled campaigns rather than formal settlement agreements between company and activist investor. While settlement agreements are not expected to become obsolete in the near future, informal agreements will be struck for unique campaigns, as Mr. Freedman explains, “It’s for certain types of arrangements, typically at extremely large market cap companies, and only really where a direct board candidate of the activist isn’t being appointed to the board.” He continues, “It doesn’t mean in any way, shape or form that settlement agreements are falling by the wayside. What it means is that there are certain limited circumstances where an activist and company find alignment around certain issues that can be worked out perhaps better from a [public relations] standpoint than by having a long, drawn out agreement between one another.” Another trend marks the increase in private equity investments, owing largely to controversies at a company’s management level. “You have all of these situations now where the CEO’s personal behavior is wreaking havoc on a company,” Mr. Freedman said, “and it leaves the board in a pinch and the company’s share price will typically be in a state of decline because there is instability. It’s a ripe opportunity for the activist to come to the plate and play a helpful and involved role in setting things back on the right track.” Managerial scandals, like the one at Papa John’s International Inc. in 2017, provide investors with a means of generating turnaround for an underperforming company: “It’s taking a company that is in a state of crisis, in a way that is unrelated to the day to day operations, and offering to come in and be helpful in a mutually beneficial way.”