“Global activism has more than arrived in Australia, as evidenced by Elliott Management’s behemoth of a campaign against BHP. This has encouraged a number of follow-on campaigns, both against BHP but also other targets in the market. In Australia we have seen activists from the US, UK, and Europe, but the largest growing group of activist have been homegrown.”
Shane Murphy, Senior Director
Country:
Australia
Average % of insider ownership:
Activism
Threat Level
To learn more about this country, please click on the tabs below
Australia ranks second in FTI activism risk level after the U.S. and before Canada. The Australian legal framework is considered to be fairly favorable to activists and provides for similar activist strategies as those seen in the U.S. Additionally, the consistent growth and low-risk environment create an ideal space for activists.
Shareholders reaching or exceeding a five percent threshold and each whole percentage point after that must disclose their voting interests.
While shareholders have rights to propose resolutions, the board does not need to put resolutions forward that concern management matters, unless specifically allowed for in the company’s constitution. Activists, therefore, need to frame a resolution as an amendment to the company's constitution to enable a binding vote on a management matter.
The Corporations Act states that certain kinds of collective action by shareholders, such as formulating joint proposals or agreeing to vote in a certain way, may be deemed to be “associated” by acting in concert. If more than 20 percent of the shares on issue are deemed to be associated, it may violate the 20 percent rule, which forbids outright voting power greater than 20 percent except via a specified exception.
Although poison pills are not permitted, a change of control provision in an appropriately drafted loan agreement (poison pill loan), key supply or customer contract or other business critical agreement can have a similar effect of discouraging hostile takeovers or shareholder activism. Company directors would need to mindful of their duties to shareholders in formulating these agreements. This was seen in a recent activism campaign involving Bellamy’s – a key supplier contract contained a change of control provision.
Top Campaigns by Type
1. Removal Of CEO Or Other Board Member
2. Gain Board Representation
3. Recapitalization
Campaigns By Year
Total
Campaigns
Notable Invested Activists
• Sandon Capital
• Lakewood Capital Management
• Elliott Management
Recent activism campaigns
| BHP Billiton PLC (BHP Billiton Limited) | VS. |
Elliott Management |
| Bellamy's Australia Limited | VS. |
Delta Partners LP |
| Fleetwood Corporation | VS. |
Sandon Capital |
Total Active
Campaigns
Contact FTI Consulting
Capital Markets Research and Activist Engagement
Managing Director
+1 312 861 4721
Geoff.Serednesky@FTIConsulting.com
Senior Director
+61 8 9485 8804
Shane.Murphy@FTIConsulting.com
Senior Director
+61 2 8298 6111
Jon.Snowball@fticonsulting.com