The first rule of the proxy fight "club"? Rely on the Board

In 2017, nine Italian companies were targeted by activist funds, less than the 12 in 2016. For companies, probability to be targeted remain high though. According to a study carried out by Hannes Wagner, professor at the Finance department of Bocconi University, on 1,740 activist funds' engagement in listed companies in 16 countries between 2000 and 2010,  almost 13.3% of Italian companies has been dealing with shareholders' activism.

Andrea Di Segni, Managing Director at Morrow Sodali commented the Italian situation on MAG: "As the Italian slate voting system allows minority shareholders to choose a candidate for the board of directors, this makes it easier for activist funds to influence the board, quite the opposite of what happens in the USA."

"Compared to the past," Di Segni continued, "when - especially in the anglo-saxon world - most of the activism was linked to financial aspects, for example to an incredible high cash disposal, thus to a non efficient cash allocation, a non satisfactory share value or a non satisfied need of non core business dismantling, nowadays, activism goes through the board of directors, especially to obtain certain changes such as a business simplification with spin-offs and dismantling."

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