M&A transactions are undoubtedly the most important event that a company can undertake. From understanding shareholders to targeting truly important investors, executives must be proactive and proactive in preparing these very important corporate reform proxy votes. This is especially true when investor opposition and public casual corn can block trading before consumption.
To help executives assess the risk and opportunities of M&A shareholder votes, Alliance Advisors has developed a list of DOs and DOTSs, explaining how partnering with industry experts can help deal smoothly.
Don't
Do not assume there is a vote or be passive. For a shareholder vote to succeed, executives need to know the shareholder base.
Even in a premium price transaction, the transaction can only be successful if the company develops a detailed photograph of its shareholders.
Therefore, careful inventory monitoring or ownership information is important as it provides early indications of how transactions are being met by the market and investors. Ownership information is market surveillance that identifies and tracks true institutional shareholders who hold stock positions and hide behind the company's stock custodians.
Don't forget the sell-side analyst. They can become strong ally in clarifying terms of trade.
In many cases, companies overlook the role of sell-side analysts during M&A transactions. However, these individuals are regularly in front of your investors. If an analyst misunderstood or misunderstands a transaction, that misunderstanding could be reduced to a shareholder base, particularly for institutional investors who rely on analyst notes for quick take.
Spend time ensuring that the sellside understands the basis for the transaction. If you are not actively active in this field, you risk leaving a story to be interpreted or misunderstood by others. And once negative views take hold in the market, it's hard to relax.
Don't think your shareholder base will remain static. Be aware of the shareholders' foundation shift. Stock loan analysis is important.
Once the transaction is announced, the composition of the shareholder base changes radically and quickly. Equity loan analysis can help you identify the best institutions that lend stocks to short sellers and assess how this affects your voting-able stock position.
Why is this important? This is because large institutions like Vanguard and BlackRock may report significant record date interests in the company's stock. However, they are both actively engaged in securities lending, so some of those shares are loaned out and are not eligible to vote. This effectively reduces the institution's voting power in the reported recording date position.
Companies that did not do this early in the transaction may wonder where a particular institutional vote is at the last moment when votes from record-breaking date positions are low. By this time it may be too late to scramble to replace the lost votes.
do
Take a proactive approach. This is not a daily shareholder meeting.
The threat of activist investors who are seeking more is enough to know that companies must communicate with all investors, regardless of the premiums involved. The statistics are strict. M&A requests appeared in more than half of the H2 2024 campaign.
M&A voting calls for all approaches on decks. The company must have a regular proxy lawyer and an IR company. Don't switch teams. Now is not the time to hold hands with a new company.
Include retail shareholders in your strategy. They can vote or break.
Registered retail shareholders in particular can be the difference between successful votes and failures. Companies facing tough voting often rely on retail shareholders to drive their voting beyond the required threshold.
Retail engagement campaigns take time. Therefore, it is important to plan positively to include them in your overall strategy.
M&A shareholders' votes should not fail, but they do. If you are a C-Suite executive or a member of the board of directors, you certainly don't want it to happen in your deal. By employing a targeted strategy (end-to-end shareholder engagement with focused investor relationships by employing one of the best-in-class ownership intelligence), the company can ensure that M&A votes pass without any issues.
