2013 was a flat year for M&A activity worldwide. Although deals with U.S. targets were up 11.3%, the quiet market meant that a small handful of deals received an outsized share of attention, especially ones that involved activist shareholders.
The trend of activist shareholders increasingly drawing companies into their crosshairs is expected to continue throughout this year. Not only are new activist funds and strategies emerging, but their assets under management are rising and an increasing number of mutual funds and institutional investors are siding with activists, therefore allowing activists to go after these larger companies with some success. As such, companies are considering their strategies should an activist approach.
Recent changes in Delaware law may also have the potential to impact M&A activity. As demonstrated last year in Paulson & Co. Inc.’s $512 million acquisition of Steinway Musical Instruments, Inc. (where an Akin Gump team represented Paulson & Co.), the first use of a newly implemented Delaware statute, Section 251(h), allowed the contested deal to close more quickly. In this case, the use of the statue was critical as there were three rival bidders for Steinway Musical Instruments.
2014 appears to be off to a strong start, but it is too soon to tell.