Activism in Europe Fell by a Third Despite U.S. Boom, Study Says

The number of new investments by activist investors in Europe fell by a third last year, illustrating how European companies remain more difficult targets than American firms, according to a study.

Activists made 49 new investments in Europe last year, compared with 73 in 2013, while in the U.K. such deals fell 45 percent to 32, the lowest in three years, a report from law firm Freshfields Bruckhaus Deringer LLP shows. In the U.S., the number of new activist investments in listed companies increased 61 percent to 624 in the same period.

“Many expected Europe to see a significant increase in public activist activity in 2014 and for this increase to be greater than in the U.S.,” Piers Prichard Jones, a corporate partner at Freshfields, said in a statement. “That wasn’t the case.”

The failure of some high-profile activist campaigns in Europe in 2013, as well as companies warding off activist pressure with preemptive strategies including spinoffs and recapitalizations may have contributed to the decline, he said.

“Perhaps 2014 is an anomaly or perhaps there is a growing perception among activist investors that the European market and legal environment does not lend itself as readily to U.S.-style activism,” said Peter Lyons, a Freshfields M&A partner based in New York. “For example, ISS and the other US proxy advisers are far less influential in Europe.”

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