MADRID, 5 (EUROPA PRESS)

Only three Spanish companies are at risk of being attacked by activist investors in the next 18 months, according to the ‘A&M Activist Alert’ report released today and prepared by Alvarez & Marsal.

In particular, the analysis forecasts a ‘surge’ of activist investors in Europe over the next year, as the economic outlook continues to turn positive, and identifies 144 companies at risk of activist attacks in the next 18 months, only three of which are Spanish companies. and five Italian. In contrast, the UK, Germany and France lead the list, with 52, 29 and 23 target companies, respectively.

For this difference, A&M explained that Spanish and Italian companies generally have lower capitalization rates, making it difficult for activists to reach a consensus with other investors for their campaigns to be successful, while giving them an ESG rating. –namely, environmental, social, and good governance criteria– were highest in the analysis.

Throughout 2022, the firm notes that there has been a steady increase in the number of funds using activist strategies in Europe. In this case, A&M monitored the activity of 96 activist funds, compared to 89 in 2020, a sign that activists and their tactics are more accepted in Europe.

Many of these new players are from Europe, particularly the UK, deviating from the usual US activist fund. Many of them invest in funds with strategies dedicated to environmental and social issues.

According to A&M, in 2022 there has been a 22% increase in activist campaigns focused on the environment and 14% in campaigns aimed at improving society, compared to the previous year. Despite this trend, the company has not detected any campaigns relevant to this characteristic in either Spain or Italy in the last two years, which also explains the low penetration of activism in both countries.

The head of Alvarez & Marsal Spain and Portugal, Fernando de la Mora, highlighted that in recent months, activists have focused on “raising capital, strategizing and identifying goals for 2023”, according to which the company “must act in a timely manner” and address their most vulnerable areas “before the tide of activism rose and threatened to overwhelm them”.

On the other hand, the report notes that lower valuation multiples for European companies will lead to increased mergers and acquisitions during 2023, creating more targets for activists to intervene. As such, these funds would participate in the debate between buying or selling, as well as engaging in ‘bumpitrage’, a practice consisting of pressuring potential buyers for better conditions of operation.