Generating shareholder support for an acquisition
Client company decided to pursue a merger of equals that was met with resistance by a dissident group of activists. Outreach and shareholder education on the merits of the transaction resulted in the merger receiving shareholder approval and the dissidents being defeated.
Overcome an activist group fighting to prevent a planned merger of equals
In order to succeed in its field, the client company’s management decided that their organization needed critical mass and economies of scale. They settled on an equal sized company that was in financial distress, with complementary products. A dissident shareholder was skeptical of the transaction and enlisted some serial activists who mounted a spirited campaign to derail the deal, which required shareholder approval. Management believed the company would suffer a slow competitive death without the deal. The activists countered that it was too risky to bet on a distressed company. Shareholder approval of the deal would ultimately decide the fate of the company along with its management team whose reputation was now on the line for this deal.
Sharon Merrill Approach
Adopted aggressive shareholder education/proxy solicitation approach
Sharon Merrill executed a comprehensive communications plan aimed at educating the company’s shareholders about the merits of the transaction. Through an array of investor materials including presentations, fact sheets, FAQs, proxy fight letters, news releases and conference calls, we assisted management in detailing the benefits of the combined entities, along with emphasizing the perils of the client company as a standalone. Sharon Merrill directly participated in the solicitation of shareholders to not only win their support but to ensure that enough shares were voted to achieve a quorum.
The acquisition gained shareholder approval and proved to be successful
The acquisition gained shareholder approval and proved to be successful. The education approach taken in promoting the merger overcame the fierce opposition of the dissident/activist group. The aggressive proxy solicitation efforts also generated a high voter turnout and consequently more visibility for management and its strategy. As management delivered on its planned strategy for the combined company, Wall Street responded favorably—the price of the company’s stock rose more than 25% within a year of the merger closing.
Our expertise in working with critical audiences drives proactive communication plans to achieve desired results. Call us at 617-542-5300 or email us at info@InvestorRelations.com.