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Activist Investing Today: White & Case’s Matthews, Tolani on Insurgents, Deals

Published: January 26th, 2023
The U.K.-based attorneys, who advise both activists and companies, explain why they are seeing a trend of insurgent managers partnering with PE to try to buy companies they previously targeted with agitation campaigns.

Activist investors are increasingly seeking to partner with private equity firms or family offices to acquire companies they previously targeted with insurgency campaigns, according to White & Case LLP partner Tom Matthews.

Matthews spoke to the Activist Investing Today podcast, together with partner Sonica Tolani, about the trend and their views about the intersection of fund campaigns and M&A.

“This has been a trend we’ve been seeing for a little while, and we only saw it emerge properly in the U.K. recently,” Matthews said. “We’re now up to our fifth situation in the last 12 months, where we are advising an activist investor in a situation that starts as an activist campaign and then morphs into a take-private scenario. Sometimes it happens quickly, and sometimes it happens after a couple years.”

Matthews, who advises both companies and activists, including U.S. funds, said the deteriorating share price of companies targeted by activists may be driving the trend.

“The share price of a number of companies continues to deteriorate post-pandemic, and you have an activist who invested pre-pandemic and they are underwater, and there is a real threat that someone could emerge with a 50% premium that could be attractive to a wide spread of investors, but it could still crystalize a significant loss to the activist.”

He added that the solution would be to take the company private, with the activist asserting, “We’re continuing with our conviction, and we can continue to benefit from the company as it improves.”

Matthews noted that the trend hadn’t emerged until recently in the U.K., in part, because most traditional activist fund documents don’t allow them to have the flexibility to pursue a takeover.

“They are mandated to hold listed equity not private equity,” he said. “Where we’re seeing this emerge is either with alternative managers that have less restrictive funding mandates or traditional activists raising money for special situations opportunities funds.”

The activist, he added, typically will team up with a buyout shop or family office to make the acquisition, a partnership that “adds credibility” and helps share the cost of the bid.

Check out the podcast with Tom Matthews and Sonica Tolani here:

More podcasts from The Deal are available on iTunesSpotify and on

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