Key facts
- The Works has secured the support of two shareholder proxy advisory firms.
- Activist investors purchase minority stakes to drive strategic changes.
- 2023 has seen a significant increase in activist investor campaigns globally.
- Europe is currently the primary focus for new activist campaigns.
The discount retailer The Works has secured the backing of two major shareholder proxy advisory firms in its ongoing boardroom dispute. This development occurs amid a broader surge in activist investor activity worldwide.
Activist investing, characterized by investors acquiring minority stakes to influence corporate strategy, has seen a significant rise since approximately 2017. The year 2023 has been marked by numerous high-profile campaigns, following a record-breaking 2022. Notable instances include Hindenburg Research's accusations against India's Adani Group, which led to a substantial market value decline, and activist pressure on companies like HSBC and Bayer.
While the United States has historically been a hub for such activities, Europe is now experiencing the largest share of new activist campaigns. In the first quarter of 2023, Europe accounted for 30 percent of global activity, with a notable concentration in the UK and Germany. This trend is partly driven by a tactic known as 'swarming,' where companies already targeted by activists become subject to new campaigns. Despite a decline in US campaign activity in early 2023, the overall global landscape remains robust, with activists leveraging market conditions to push for improved company margins.