Activist Investor Cases Like ABB and DSM to Double in Europe

Activist shareholders may double the number of European companies they’re targeting in 2016, and some businesses in the region are ill-prepared for the onslaught, according to Capital Axis.

“Based upon the work that we do with companies, including both their management teams and investor relations departments, we believe that this is a wave that could catch many European corporates by surprise,” said Jonathan Tyler, managing director of the firm, which advises companies on relations with investors.

Shareholder activist funds could be managing more than $1 trillion in 10 years’ time, Capital Axis said in a report, published on Friday. This year is expected to see well above 100 cases of European companies being targeted. About two-thirds of activist cases aren’t announced publicly, so assessing the genuine level of activity is difficult, the firm said.

ABB Ltd., in which activist investor Cevian Capital AB has been building a stake, plans to group its portfolio of power-distribution assets in a possible prelude to a sale. Analysts including RBC Capital’s Andrew Carter said the move was influenced by Cevian. Royal DSM NV, a nutrition and ingredients company, has attracted the attention of Third Point LLC, an activist fund set up by Daniel Loeb.

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