“The activity and influence of shareholder activists in Germany has reached a new high. Recent success cases resulted in a situation in which a company’s size and good market position no longer protect it from becoming an activism target. With activists’ increasing boldness to also approach large and well-known companies, we see a new urge at German board levels to prepare for a potential defense scenario or to rethink their corporate strategy to prevent an attack before it occurs.”
Michael Reinert, Chairman
Country:
Germany
Average % of insider ownership:
Activism
Threat Level
To learn more about this country, please click on the tabs below
Following steady historical growth, 2017 marked a new record of shareholder activism campaigns in Germany. The focus thereby moved from mainly small- and mid-cap targets to an increasing number of companies in the German MDax and Dax/large-cap space. The success of recent campaigns has built confidence and a sound basis for established and new activists alike to target German companies with various attack points – be it a wide free float, a strong cash position, a complex conglomerate structure, corporate governance issues or a lucrative “squeeze-out” M&A situation.
Shareholders reaching, exceeding, or dropping below a three percent threshold must disclose their voting interests within four business days.
Disclosure of information on aims, origin of funds, and planned influence on the management of the company is required if the voting interests reach or exceed ten percent.
Management is generally ring-fenced by the two-tier management board/supervisory board structure, hence nominations for the management board cannot be proposed by shareholders (they are appointed by the supervisory board). But recent cases demonstrate that this is not a guarantee.
Preventive structural defenses include preference shares (non-voting shares), restricted transferability of registered shares, supervisory board protection via 75 percent threshold for deselection on annual meetings or staggered terms of members of the supervisory board, but both are under scrutiny from institutional investors.
Companies have other strategic options such as share buybacks, divestment of non-core assets, growth via acquisition of a compatible asset, an increase of authorized capital, or winning an anchor shareholder.
Top Campaigns by Type
1. Removal of CEO or Other Board Member
2. Gain Board Representation
3. Remuneration
Campaigns By Year
Total
Campaigns
Notable Invested Activists
• Knight Vinke Asset Management
• Wyser-Pratte Management Co
• Elliott Management
Recent activism campaigns
| Uniper SE | VS. |
Knight Vinke Asset Management |
| Commerzbank | VS. |
Petrus Advisers |
| OHB SE | VS. |
Wyser-Pratte Management Co |
Total Active
Campaigns
Contact FTI Consulting
Chairman
+49 69 920 37 100
Michael.Reinert@fticonsulting.com
Senior Managing Director
+49 69 920 37 110
Lutz.Golsch@fticonsulting.com