“Activist shareholders are destroying companies and causing widespread job losses even at firms that aren’t directly targeted, according to leading U.S. corporate lawyer Martin Lipton,” Janet Mcfarland reports for The Globe and Mail.
“Mr. Lipton told an Ontario Securities Commission conference Tuesday that shareholders are becoming too powerful a force in the corporate world, especially some of the most prominent hedge fund activist investors like Carl Icahn and Bill Ackman,” Mcfarland reports. “Even worse, he said the far larger majority of companies that are not directly targeted by activists are now adopting policies to deter takeovers by cutting costs, reducing spending on research and development and laying off employees to improve short-term profitability.”
Mcfarland reports, “But OSC vice-chairman Jim Turner told the panel there is also evidence activist hedge funds have also created value, saying shares of Canadian Pacific has soared since Mr. Ackman’s Pershing Square bought a stake in the company and replaced the CEO.”
Read more in the full article here.
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