February 10, 2014
Activist shareholders are everywhere these days. Or so it seems.
No week passes without news of a fresh attack or a continued assault on a public company from which an activist shareholder believes it can extract more shareholder value.
There is a reason for all this coverage – it is driven by the activist shareholders themselves.
Activists are among the most masterly users of media that I have ever witnessed. These guys are good.
Where will activists strike next? If you’re a public company, you might be wondering if it is you.
So here are some insights – from having served in the activist wars – that might be helpful in preparing now to mitigate the possibility of an attack or respond to an actual attack.
- Activist shareholders employ sophisticated and aggressive media relations programs throughout the life of their involvement with a target company – more so than any of these targets.
- These communications programs feature proactive media relations tactics to force their targets to respond but also retaliatory media relations tactics whenever their targets do communicate.
- Activist shareholder conferences on “best practices” actually include sessions with boutique PR agencies teaching activists how to use media relations in support of their campaigns.
- Activist shareholders have changed communications strategies as their goals have changed, with more vitriolic attacks through the media against boards and executives of target companies.
- Activists count more heavily than in the past on the use of the news media to affect decisions by other shareholders and to pressure boards and executives.
- Activist attacks through the media utilize emotional appeals as well as intellectual arguments, but always feature predetermined and pithy quotes about the target and its leadership.
- Activist attacks through the media follow predictable patterns – activist playbooks are simple if sophisticated – hammering again and again on a specific theme such as “unlocking value.”
- Activist shareholders talk and meet often with reporters who cover their campaigns while most target companies respond only with written statements and cede control of coverage.
- Financial media escalate coverage of activist shareholder campaigns because “power players” throughout the investment and corporate communities closely follow attacks on companies.
- “Superstar” journalists join and sometimes eclipse beat reporters in covering activist shareholder campaigns, largely to elevate “clicks” on their stories.
- Although activists court media with tremendous success, media run on a two-way street and when target companies respond – positively or negatively – then it is also a major story.
- Perhaps owing to their months of preparations before going public in targeting a company, activists invariably are surprised when a target deftly uses the news media in its own campaign. The reason activists are surprised, is that this does not often happen.
Activists have a communications playbook. Do you?