Activists step up demands on companies globally in Q1, focus on US corporations

By Svea Herbst-Bayliss

NEW YORK (Reuters) -Corporate agitators increased pressure on companies globally to perform better by targeting more of them worldwide during the first quarter, with most demands for change directed at U.S. corporations, according to new data from Barclays.

Companies including oil major BP and ride-share company Lyft were pushed to make changes by activist investors such as Elliott Investment Management, Mantle Ridge and Starboard Value in the first quarter when the number of global campaigns increased by 17% to 70. U.S. campaigns jumped by 46% to 41, the data showed.

"We are in a phase where activists continue to take advantage of all the uncertainties," said Jim Rossman, global head of shareholder advisory at Barclays. "In early 2025 we have seen more fights, more settlements and more board seats won by the activists than we did this time a year ago."

This year's new campaigns come after a record number of activist shareholders targeted companies globally in 2024, and as President Donald Trump's tariffs and mass job cuts at U.S. government agencies, coupled with fears of recession, are creating market volatility.

Investors continue to push management to run their businesses better, with roughly one quarter of all campaign demands centered on strategy and operations, about the same as last year.

Demands for M&A moves like divesting business units or selling a company are still taking a back seat with only about a quarter of all campaigns including them. M&A demands are down by about half from when global deal volume hit a record high in 2021.

But activists are also seeing campaigns pay off, Rossman said, noting the number of board seats won, often a measure of success, jumped during the first quarter. Fifty-one seats were obtained both in settlements and fights, marking a nearly 34% increase from last year.

NEWCOMERS ACTIVE

Emboldened by others' success and eager to make a return in uncertain times, activism is also becoming a popular tool for newcomers, both newly established funds and funds that have never mounted a campaign before.

Eleven so-called first-timers mounted campaigns during the quarter, the data show. There was no comparative data for the first quarter of 2024. For all of 2024 Barclays data counted 47 newcomers.

In January, newly launched Garden Investments, run by Ed Garden who previously co-founded Trian Fund Management, pushed Middleby, which designs and makes equipment for foodservice and residential kitchens, to focus on its core business. In February, Garden was added to the company's board.

Looking ahead to the rest of 2025, Barclays bankers believe more companies will face shareholder demands and expect most of the activity to remain focused on U.S. companies.

Two prominent campaigns have been resolved through a vote, with Mantle Ridge ousting Air Products and Chemicals' CEO and Matthews International defeating Barington Capital Group even through all three proxy advisory firms supported the hedge fund's candidates. Barclays data counted 13 proxy fights in the first quarter, compared with 10 a year ago.

Activity has also picked up in Japan, marking a 45% increase from a year ago and a total of 16 campaigns, the data found. But Europe has not seen much action with only 9 activist campaigns, down 18% from a year ago.

(Reporting by Svea Herbst-Bayliss; Editing by Muralikumar Anantharaman)