Preparedness Offerings


FTI Consulting provides a comprehensive approach for its clients. In the early stages of activism, it is vital to have the right processes in place to monitor and control any activism that may take place amongst shareholders. FTI Consulting’s preparedness offerings are a complete and multi-faceted package of services that create preventative measures to help stop any unwanted activism from occurring.

How do Activists identify target companies?

Understanding how different activists think is the first step to identifying areas of vulnerability within a company. In surveying over 100 institutional investors, representing almost $1.7 trillion in assets, FTI Consulting found that the top three reasons for a company to become an activist target are poor stock performance, inefficient capital deployment and poor corporate governance. FTI Consulting’s Preparedness Offerings provide customized packages to meet unique needs.

    Activists typically perform extensive research, with the assistance of proxy advisory firms, on the target company before taking a stake. Activists look at a company’s:
  • Short-term performance
  • Governance policies
  • Compensation packages
  • Compliance issues
    Activists undergo this review to (1) evaluate whether the target company can provide a high return on the investment and (2) use this information to obtain support from other investors for any activists’ proposals.

    Typical characteristics of companies that attract investors include:
  • Underperformance in total shareholder returns in comparison to its peers
  • Company scandals caused by management missteps
  • Corporate governance polices that are not aligned with “best practices”
  • Perceived unlock value (leverage potential, strong balance sheet, excess cash reserves)
What do Activists Want?

Activists all have one goal: to increase the value of their investment in the company. After conducting extensive research, the activist will then obtain a stake in the target company. Traditionally, the market and the SEC have viewed a 5% stake in a company as a threshold of influence in a company. Through the use of media, activists have obtained enough influence to pressure boards to acquiesce to their demands.

    Typical activist demands:
  • Capital Structure changes (increases in leverage, share buybacks, special dividends)
  • Strategic Changes (company sale, sale of non-core operations, operational)
  • Leadership changes (changes in board seats/controls, adjustments to management)
  • Governance Changes (dismantling structural defenses, increasing shareholders rights, proxy access)
How FTI Consulting Prepares You

FTI Consulting’s Activism and M&A Defense practice harnesses the advisory services needed to assess a company before an activist arrives in order to eliminate potential areas of improvement that an activist might target.

  • Comprehensive Database
  • Due Diligence
  • Structural Activist and Hostile M&A Defense Review
  • Shareholder Analysis
    • Construct Shareholder Profiles
    • Analyze Voting Data
  • Market Comparison
  • Investor Relations Strategy
    • Press
    • Message boards, blogs, and other real time sources
    • Employees and Unions
    • Institutional investors and analysts
    • Public Officials and Government Contacts
  • Regulatory Risk
Contact Us

Fields marked with an * are required