"February 14 Is Valentine’s Day For Some, It’s 13F Day For Us" Featuring Bill Anderson, Evercore

For our COBT listeners and viewers, it's Maynard, Mike, and Jeff here with something super fun. It's an old friend to talk about uh the world's uh capital markets and MA markets. And activism markets and investor attitudes and what's going on in boardrooms around the world. I'm talking about Bill Anderson. Bill is uh an old friend from Goldman Sachs days. Uh more recently, uh much more recently, uh Bill has become Senior Managing Director at Evercore.

uh where he heads the firm's uh activism and raid defense practice as well as the strategic advisory practice around the world. Uh just to give you a feel for it, Bill, I was looking at your bio. This is a lot of flavors. But when uh as the audience thinks about what you get involved with MA, special committee situations, corporate governance issues, cross border transactions, contested shareholder situations, activism, raid defense, and the case.

and preparation for hostile situations. So I mean, uh Bill, this is uh if this had an SIC code, I mean this is a a lively a lively spot in the world. Well what's important, Maynard, is I bring a lot of experience'cause I was a banker both at Evercore and then fifteen years and was a partner at at Goldman, but I was a lawyer before that at Simpson Thatcher. accountant and because defensive clients needed, I was in the Army and Army Reserves for ten years. So we bring the full

The full skill set, I hope. Well, it's it's great. Uh we'll try not to make this uh old home week, but Bill, I remember uh in the early days of uh of activism and how it related to MA and how you were uh an early uh investor in in that space and and really help build the space. So we're delighted to have Well, yeah, I can tell you, I mean it, it's one of these things you kind of backed into, right? So Goldman, I was uh working on a lot of pooling of interest, if you remember those deals.

back in the day in the in the uh late nineties. And Goldman said, Come on over, this is a real specialty. And of course pooling of interest went away. And then we had a a tech bubble pop and they said, Well, you were a lawyer by background. You know, look at this defense stuff and special committees.

And I had a terrible summer associate job when I was at Simpson reviewing Payne Weber. Remember thank you, Payne Weber? They had these filings called thirteen F filings they messed up and I had to fix it. I'm like, oh my heaven. This is where Carl Icon and Peltz recorded the filing. So for years we tracked it and had 90% market share on that. And it they drive so much of MA. It's been a very interesting practice, we'll say the least.

Well, Mike, before we jump in with Bill, what would you tell us about what's going on in the markets today? Yeah, Maynard, uh things are n you know, we talked about it last week about volatility in the markets and I'd say this week so far it's not been that volatile to be quite honest with you. Now, we did have the 10-year bond yield today is down around 415, which is down 7, 8 basis points. So a bit of a plunge in the 10-year yields today. And that was because of lower December retail sales.

Now on this Friday we're gonna have a CPI number, so expect a lot of b a m a lot more bond volatility around that number on Friday. As far as WTI, we seem like we settled in a a range here between sixty three and sixty-five dollars a barrel. I think a lot of that is just because we just haven't had any flare-ups across the globe at this point in time. And so

There's no volatility really there over the last, you know, say week or two. As far as natural gas, natural gas has had a spike, you know, from three dollars to seven dollars an am and now we're back around three fifteen an am. So All that polar pig Arctic uh, you know, blast that we saw has essentially been taken out of the market. Yes, storage is back to normal levels. And so you know, determining how we set up for the summer, uh, you know, um

you know, cooling season, it's all gonna really be d depend on where we end you know, the basically withdrawal season. It looks like we're gonna end up probably in between one point six and one point seven TCF. So not a bad You know, but not an overly constructed vi environment, but not a bad environment for summer and into winter next year. So we're we're gonna keep an eye on natural gas.

As far as the equity markets, the thing I'd say is the equity markets have really been moving towards cycle rules. We've talked about this all year long. The Dow has really outperformed here. And last week the Dow was up two and a half, three percent. The S P was up a half a percent. So obviously the industrials, the energy, the cyclicals, that's where the m money's going near term.

And and on to basically, you know, the laggards tend to be the big tech, the telecom stuff of those names. We've talked about that for the last three or four weeks, so no real change on that front. You know, as far as the energy sector. Most of the oil majors, uh refiners, you know sort of uh Um, you know, big oil service companies, they've all reported and for the most part we're looking at Flatish's, you know, sort of down spending uh in twenty twenty six.

We're going to be getting a lot of EMPs here over the next, you know, one to two weeks. And my guess is you're going to hear the same message, meaning, you know, capex for the first half of 2026 is going to be flattish probably at best. We're probably going to see CapEx in 2026. also be around flatish, that is going to be expected. So, you know, I don't think you're going to have a whole heck of a lot of fireworks coming out of those companies.

You know, as far as, you know, um you know MA, we talked about the Dev and Kotera merger last week in the EMP space. And this week we have Transocean and and basically Valeris. and then all stock transaction as well in the offshore space. And so all we'd say is we've been talking about that, I don't know, for the last six months, that we expect MA in the energy space to increase.

We are starting to see that. We'll see how things develop here over the next uh couple weeks and months, but we fully expect that MA is going to continue in the energy space. And we think that's a good thing. So with Adminor, we'll hand it back to you. Okay, great. Jeff, anything you'd throw in?

Yeah, just just to piggyback on you know two things Mike was was saying that just you know caught my attention. You know you know we are through earnings season for you know a lot of the integrated and oil field services companies, but you kind of take a step back and look at you know, year to date inner you know stock price performance. You know, some of these integrates are up twenty, twenty-five percent. It's it's really big dollar move.

The second thing that's noticeable in that is just um the EMP companies lagging within the energy stack. You've got the the You can see the BitCap integrate is attracting, you know, meaningful dollars, but you also see some of the beta sectors like Willfield Services up, you know, some of them 30, 40 percent uh year to date.

The second thing, um, just on the Transocean Valeris transaction, you know, there's there's lots of reasons why, but what's it's interesting and notable that there was a big premium. in that and the stocks actually did, you know, r reasonably well. But I know we'll dive into no much more MA here with Bill Short.

All right, Bill, you know, as you and I were thinking about what we might talk about, uh, you were kind enough to provide your annual review, uh, the your annual letter you write uh every year to the CEOs and boards. Just thinking back on 2025, uh, thanks for sharing it with us. It's really got a lot of great information in there. As you think about Some of the highlights of that report and some of the big uh takeaways from 2025. What what are the couple of things that just jump out right away?

Look, it was a a very robust M and A year. And it took y the uh everyone expected it would be when Trump came in. Liberation Day put things on hold. But the second half was robust as heck. with um a lot of big deals happening. I think people are are very uh op you know optimistic about antitrust. A crow it it's funny, when you think about the flavor of deals, Maynard, I worked on an RMT deal.

One of the fruit power smaller struct trust deals, a twenty billion dollar deal with with Beckton Dickinson. Big cross border deals like in chemicals with the Exalted deal. And also, you know, t hostile deals like right now uh with the folks at the the Warner Brothers Peace Sky deal. So there's a lot of the flavors of of MA are out there. And when people ask what what's driving that? Uh well it's it's certainly antitrust financing is is pretty liquid right now.

But also buyer stocks have generally done well. I mean, even you look at this past week with the Devon and the transvers some of these deals, transactions, the stock price of buyers is going up and that encourages CEOs. You couple that with the fact that activism had an all time high number of campaigns last year.

If you're a public company, you're you know, you're very focused on what's going on from the outside. And I I'd say after Labor Day, the number of boards who asked us to come in to do reviews of where the market's going. You know, m maybe twenty years ago it it's it's pretty it's pretty severe. So a lot of change.

So one um there's a lot in there. We could go in a lot of directions here, Bill, but I was thinking uh you mentioned activism. And uh you know, a couple of the the fun facts in the in your materials, uh you know, second biggest MA year ever uh in twenty twenty five. Uh maybe the highest activism

uh you know, ever. And then you you you point to Elliot as like Really, um I guess way out in front or a significant part of all that activism, you know, twenty different companies I think the number was, but Yeah. Is that is there a reason in your mind that that activism is ticking up? Or what what would you say about that as a industry? Yeah.

You know, it's it's an amazing space. Maynard, you know, I've defended now fifty two situations against Carl Icon and close to that with Elliott. So there's a lot of the bigger players you see time and again. Um let me maybe outline three or four things that if I'm a public company director or or management team I'd be thinking about. One is that it has become risk management. When twenty percent of the S P five hundred have an activist in the stock, Honeywell, Pepsi, just go down the list.

This is going to happen from time to time. More and and and they're getting, and you've seen this in your sector, Mayor, there are more and more CEOs or ex-CEOs willing to be on activist slates. The banks are working for activists. We're def we were defending a company in Europe where they had two bulge brackets that were accumulating positions while they were defending the company. The CEO asked me, what is that? I said, I think they call that synergy.

So you've got more uh directors willing to work with activists, more banks, you better be prepared because it will uh you're not gonna get notice necessarily that an approach is gonna happen. You you make the point that um it's increasingly a tactic of uh of an activist to accumulate shares through a through a large firm, through a bulge bracket, whatever you call them, and then it it sort of beats so you don't see it coming. Do you want to comment on that trend?

Yeah, look, it's it's uh our our SEC rules are are not so great, right? The when you have to when you go over five percent, you're supposed to accumulate I'm sorry, you're supposed to file a thirteen D filing. But if you accumulate it through derivatives, you don't need to disclose that. You may not need to make a hard scot Rodino filing. So what's happening is that when the thirteen F's come out and

February fourteenth is Valentine's Day for some, it's thirteen F Day for us. Um, on that day you'll see broker dealer positions and now people are focused on that because they're the accumulation. You don't know which activists could be behind the positions.

But that's a key part of it. I mean, minor it it's amazing how much the shareholder bases have changed. in the last number of years. And like when we announced a big deal nowadays, we have about five levels of of PR with respect to it. We have a a group to go into the hedgies, another that talks to the index funds, research, whatever. So The the the the biggest change however though is the index. which are like forty percent of companies. And so when companies ask us

What do you do to engage with them? Is it still ESG? And I'll I say no. It's it's that's part of it, but it they they are like investors. They will take meetings and there's an IR around it. Like here's a couple of things, man, we suggest to clients. Every quarter you send them a short one page summary of earnings.

And some companies say they don't respond. Well, let me tell you, when you go on a defense of a Southwest or a Phillips 66 or something like that, the index funds have a sleeve with the correspondence. If you haven't corresponded, you're going to get hit. Another thing that we've done with companies, we did this with Silverbow.

We invited the shareholders to present to the board, and that was one of the reasons that ISS supported us. Now, inviting shareholders to present to the board is not riskless. 'Cause we had one client where the director fell asleep during a fidelity meeting. So you need to be careful if you're gonna invite someone to the board. But there's a whole IR around the index funds mayored, in MA deals, in activism situations, or just generally, that companies are catching up to, but not quite there yet.

So you you mentioned uh ISS, ISS, Glass Lewis, uh these these firms have always exerted a lot of control and and influence. What what would you say is the the trend there? We've seen a couple of these announcements about uh firms saying we're gonna vote our own shares now as opposed to What but what would you tell us there? Look, what what you read in the press has little to do with what's going on in the field, number one. ISS and Glass Lewis have tremendous influence on San Pei.

And some of the more m you know, they basically provide leverage to funds so they don't have to go through all these, you know, analyses. But on proxy fight and mergers, the index funds and others generally took that work in house and made their own judgments. So They they would definitely have like the quants, the small shirles would follow them, but it wasn't as profound their influence as others would say to think.

Now, as you probably have read, uh JP Morgan, Wells Fargo, and others are now saying we're taking it back, we're not deferring to ISS, because in fight They're hearing complaints from clients, like why are you deferring to ISS who supports activists the vast majority of the time? And so I think you're going to see um different organizations using ChatGPT and things like that to do the analysis. And maybe disintermediate ISS. The problem is is someone still needs to make a judgment.

One of the beautiful things for ISS for for uh funds was to say, oh, I didn't vote against you was ISS. I could blame it to ISS. If you're making the judgment, you may have some angry clients. If you make the all if you make the ultimate decision. W this this is a oddbog question, Bill, but do you think there's a a role for a a different

kind of like you made that comment about people might use Chat GPT and figure out which way they're voting. Do you think there's a role for a a new third party intermediary to comment on where they recommend people vote? Yeah. So a couple of things on that. I mean, look, ISS and Glesless have been doing this for years. They they aggregate this information very efficiently and they provide people a judgment. You don't need to follow it, right?

But Broadridge, for example, is is from what I understand developing their own, you know, chat GPT summary for companies. I think you're gonna see a few doing that. But ultimately someone needs to make a decision. And let's be clear, sometimes we get you know, I I've I had a pitch uh a couple of weeks ago where the junior team brought all this great cool analysis from JAT TPT. And me and one of my other senior partners looked at him like this is wrong.

It's like you better check on the aggregator and do some work around it. So the answer is made of people are starting development. Broadridge is one, there may be a few others. Um they gotta cost less than ISS, a little cost.

So one one other thing thinking about these uh proxy contests, you know, the the retail vote the retail vote is always a bit of a mystery and it's hard to get and there's this uh in your materials you talk about the um Exxon initiative. Uh, where the the retail might be otherwise aligned with management unless they vote. differently. You you want to talk about that? Are we going to see more of that?

Right now everyone watched it with interest, right? And the I guess the the summary of that meter is basically Exxon would ask some of the retail shareholders, look, g you know, would you provide an esa essence the proxy for us to vote your shares? uh sensibly pro management around that. And there was some, you know, gnashing of teeth around that. I haven't seen a widespread following on that. It's something that's new, different, worth watching, right? Um uh

The retail is very, very hard to get to because like most as you know, most people who get their my mailings in the proxy throw them out. Um but there are more and more because of the internet and whatnot, there are more and more ways to be able to get to votes. And those votes generally are pro management anyway. So it's an interesting idea. Always like ingenuity, but I don't think that's that's happening writ large.

But if a company just so we understand a company could just propose that and try it. There's no um It's up to the SEC SC's still SEC's still looking at some of it, Mayor, so I think there's still and and state state law may impact this too. So it's it's still an an idea that's being being refined. I was thinking you mentioned the SEC, but if we just said Washington D C

And SEC, FTC, uh, the Trump administration, like how do you think about getting deals approved right now? Like what what's your observation there? Yeah. So let's start with sort of the regulatory approval process for deals Maynard. The um Under the Biden administration, it seemed like every single deal got a second request. And to comply with that seven, eight, nine, ten million dollars, that's like a a cost on all deals and funded more aggressive

uh issues. So that is kind of evaporated. You're back to normal on the hard on the basically second requests. Um Generally you're seeing when I say back to normal, we're seeing most deals approved, but there haven't been many that test. The there's been one or two, but not many of the tests to say this is the the uh the rules have changed. I think tech is an area that people are focused on, whether things have changed on the antitrust.

The bottom line mean it's much, much better and that's emboldening people. The EU also has been more reasonable. I I'm not exactly sure why. There's a there's a comment there's a comment you don't hear every day. Yeah, no, it's it's it's

Look, tech is is the wild card in all of these. It's some sometimes they're pushing that. China is an is an area that I I see clients wanting to avoid the review of uh under almost all circumstances. So China if you have exposure and your deal has issues around that.

But by that build do you mean like a like a syphilis type situation like that? Sipious type, Siphius type thing,'cause that Mainer, that's the next piece of this. So that's the antitrust. Siphius is the wild card. You know, I I worked with US Steel when they were doing their deal. And Sipious came in and whatnot. Um, what I would say is uh there is some level of protectionism that's happening, that's uncertain, but also it hasn't been tested in the court.

When I when I was defending Qualcomm years ago, basically, you know, the the the the guy doing the hostel was very close publicly close to the Trump administration, Trump and then You know, seven months later the Trump administration came out against the deal as emphatically as you could imagine. The the there's less process around Cepheus, so that's a little bit of a wild card. I'll tell you one deal tip though. I think companies are being more careful about how they talk about synergy.

In other words, if you get the regulatory maybe if you're firing that many people, that could be part of the review process. And so that's nascent. We're watching that closely. Um, but high synergy deals I think are being announced a little more carefully.

But here here's here's one um so on the SEC front, we're not seeing initiatives to be more aggressive um against companies. I think the SEC is really trying to encourage more IPOs and figure out ways to do it. But here's a change that may not have been on your radar screen, but had a pretty big impact. A few years ago, the SEC changed

the proxy cards. Now in the good old days, you'd have the companies that would have their candidates on a white card and Carlycon, whoever would have theirs on a blue card, their their director candidates, you couldn't pick from both cards unless you showed up. So it's kind of a hometown advantage. You'd have to really say, I want to vote on the blue card and not vote for any white card.

SC made a rule change that said put everyone on one card. So it's like a Chinese menu. Makes it easier to pick people on and off. So I mean I'm gonna spend a minute if you don't mind about what what that impact has been. the focus on the the settlements that used to have with activists would happen in, you know, ten months, eleven months of negotiation, discussion. Now they happen in three or four weeks.

Because what happens is companies say they look at their board and realize they're very vulnerable and they're like, Let me just settle because I don't these guys are gonna get lose in a proxy fight. The problem is is the average tenure when you have an activist on the

uh on your board is is within a year sometimes for a CEO. So you may be not losing a proxy fight, but the CEO tends to come under pressure if you put an act of this on the board. Now every company's different in some companies maybe, you know, some shells would say deserve a kick.

But I will tell you this, the dynamic of having a dire uh an activist on the board does change in many circumstances. Now, when we say to clients, well, what do you do with that? You know, the that the fact that the boards are under attack more individually. Right? Well we say when you think about your board. You should think about three categories and three types of people. Three categories it are um diversity, that's still important to shareholders.

tenure, you're seeing more and more funds adopting policies that if you're on a board over 10 years. you you don't you you shouldn't be on the board. And that doesn't happen until you have a fight. And so these sheriff these directors are like, I'm I'm fine, you know, everything's good and I've been on the board a long time. And then when they come to a fight and the some of these ISSs and the index funds say, You've on too long and they're like, You never said anything to me.

And then they say also the the director will say, Hey, but I'm really good. I have all these things and and the index funds will say, if you're so good, you could you should have found your own success. So tenure is is become in fights more of an issue. And then a third issue is having people with expertise in the space.

So a recent Elliott fight, for example, they had a whole bunch of executives in the sector and the company had someone who was a good executive in another sector, head of the Boys and Girls Club, a lawyer, God help us. So having people in your boardroom who like investors would think about. So those are the three categories, three types of people, former CEO.

Former tough CFO, who's going to talk to capital allocation. And here's one that many companies don't think about, and you should, is having a former institutional investor. Like from a Blacklock or a Wellington. It it sort of says when you you don't have shareholder viewpoints.

And and you find out they do have shareholder view. It's a good thing. Too many companies spend tons of time, nine months going through these studies of all of the types of characteristics you have and like what are you looking for? a left-handed Bulgarian, you know, cyber expert. No. Jill is only one people in the sector who've made money. So this board focus has been it's it's accelerated the changes in boards.

and refreshment and whatnot. And and it's it's a vulnerability if you're not thinking about it to some level. But also when you see your index funds and other shareholes, you've got to sell that. You got a great board. Companies have to be a little more

uh proactive. So very complicated area, Mayor, I thought it was worth a little bit more discussion. Yeah. Awesome. Mike. Yeah, Bill and the lead in we talked about basically the Devin Kotera merger a week ago in the E and P space and and this week we have the Transocean Valeris merger in the offshore drilling space and

And what really kind of caught my eye in your 2025 year review report was the sort of acquire stock reaction to mega MA. And you sort of noted five factors. You saw talked about conservative math is rewarded, leverage still matters. Repeat acquirers get the benefit of the doubt. Complexity is penalized and preparation shows.

And and I think those are all gr great points, but maybe kind of focus on, you know, w which of those five points really if you kinda want to stack them and say what are the most important points when you start uh going at at the at these mergers. Is one or more important or how how do you think about this and where do you think we go in the next uh twelve, eighteen months uh on on MA?

Let me give you some specific comments a great question, right? So in a lot of situations, before we announce, we red team blue team the announcement. Like what are gonna be the toughest issues you gotta face? I don't think companies did that enough, right? To be honest and say, you know, we wanna get our deal done. We gotta say, here's the the vulnerability of

I I'll tell you the messaging on the outset. So if you're an investor, right, and you're you're looking at a deal, what are some of the things you're going to be looking at? How about cash flow? Right. And and is this better use of of capital than buying back share? And how resilient is the cash flow? So if you're you you want to tell everyone about scale and all how great your assets are, they want to build a model.

So much is so important at the outset to give the investors some sense of how the value will be created. There are some buzzwords I hate. Merges of equals? that's viewed as a social thing to enrich, you know, teams and not create value. See it's not to say there aren't mergers of equals, it's just calling'em that. You gotta be re ready, they're pushing on that. And this this point around

scale investors think COs love scale and scale is important, let's be clear, but value is equally important. So this And I I mean look, value is so important in in doing deals, but this communications there's so many deals that have a few of the ones on the list you looked at that they could have done much better on that. Another thing that's a soft issue too, which has been important in some of these deals.

Reminding the shareholders that they've done that you've done it before in other deals, gotten synergies in other deals, that you have a board who has that expertise. So look there were other some of the factors you mentioned they had are are important but But I I do think communicating value at the o uh outset, especially when s there are so many ARBs in the stock and and quants that kind of if there's an a reaction, it it gets exacerbated on day one.

Not to say you'll you lose it. And then look, that this is not a topic uh that that directly determined what you just brought up, but by the way, after you announced the deal You know, when I was a lawyer I used to be jealous'cause the bankers would announce the deal and go away and wait for the closing dinner and we'd be working on the filings and everything else. But now if you're a banker, if you want to get your deal done and and and and you know, get the success of that.

You you better focus on making sure the shareholders understand when things pivot in the environment, when other deals happen, and stay on that. I think that's change for the better too. And but Bill, maybe to stay on near that topic. Yeah, you talked about preparation, the the red team, you know, concept and act and and activity make sense to me. I in the text you mentioned, you know, well rehearsed, investor ready, but also activist stress tested.

you know, materials. What maybe just expand on what what you think you know, what you meant by that. Well, look, there's a bunch of things. I think this point around uh the you know houses compared to buybacks is one, right? Um, here's another one. You know, we had a a deal um a few years ago in in the healthcare sector where there was a company that was an obvious takeover target, right? And so they bought something really big. And the sheriff has said to them, Why

Did did you shop yourself, right? You know, now that you you did this acquisition, it's going to be too big to acquire. Did you check the market? And the lawyers said, Well, you know, you don't have a revelant duty. You're buying something. And investors are like, Well, no. I what we want to know is that if this is going to foreclose an option, you have a good answer for it. So when you think about

Um, because I I hate to put it as an it is activist. I I I use the word so it I have to live with an activist focus. But it's more of if you are sitting as a shareholder trying to make a judgment with limited information. What would be the types of things you'd be thinking about? This is this the right team to do the deal as they mentioned. How does this compare to alternatives? You better think about that before you announce. One of the things I was thinking about as well is just I know

when there's an activist campaign, you know, winning and losing, that's a that's a gray area. But I I I w wanted if you just maybe talk, you know, thematically you know, w when, you know, there's ch you know, tends to see change or or or or or or or not change, you know, at the board or strategy level. Is are there any, you know, underlying trends that you observe around either You know, the size of the stake in the company, the size of the company, the size of the AUM of the activist.

Maybe just, you know, outside the merits of what the arguments are, are there some underlying kind of just quantitative dynamics you you you observe in terms of when when the activist tends to have impact? Look, I think it's a matter of the activist's reputation and the ideas and so a couple of things. One is when companies get an activist in the stock and have a proposal.

You try to get a sense. If the thing makes sense, maybe you should be looking at it, right? So the whole thing about putting up a mode uh suboptimal. Second thing, you know, oh they own 0.01%. Well, how much did Exxon own, you know, uh I'm sorry, engine number one own of Exxon, like point oh oh one percent? And and they had severe impact and changed a lot of board members as a result of that. So this thing about how much they own

is faulty for two reasons. One, a small fund can have impact. And number two, it doesn't cover derivatives. which you may not see. So you gotta play it on the merit. Right on on that front. Um, as far as you know, as far as w this whole winning and losing. Thing. Again, if someone is a has an idea, you work with it, you know, the vet is there there's a lot of the best fights you never read about because

You you talk you gotta worry about Reg F D, you have a discussion, the Activis Fund may have done a lot of work. Problem is sometimes you're not ready to announce it because you have to get something in order so you have that down. But there's a category of stuff that I don't know if it's winning or losing. The companies do something that makes a lot of value creation. That's a great win generally, right? The problem uh fights tend to be when they want to force a sale.

at a you know, fire drill, like this this idea of like put the company up for sale publicly. And if no one shows up, you're long only shareholders have sold, you're owned by Arabs and you're negotiating in a fishbowl while that. This idea of like doing a public force sale of the company. which tends to be difficult from a dynamic of of of getting good results. That's often a fight that that there are winners and losers on. And the other one obviously is the the change of CEO.

There were tons of recent campaigns where the activist is trying to change the CO. That's a bit of a zero sum too. So look, I if it's about economics, whether and and you're seeing a lot of campaigns, I I think in Pepsi, Elliot had three different consultants. on there. So there's more operational things in front, but the ones that tend to be more Um or tougher to to get to a resolution that's constructive or force sales and and CEO change.

What what do you think, Bill? Um, because you obviously see so many boards, what have you observed? You mentioned the composition. you know, the the the three the three buckets that that you talked about. But what do you notice about, you know, the board? uh being on the same page, uh cohesiveness, um, having done a lot of work together around strategic issues. Like what what are your thoughts around a a board uh board alignment, I guess is the question.

So maybe a couple of I'll I'll I'll hit it in directly for us mayor. I think if there's any kind of issue that you're facing a challenge on, whether it could be activism or some other issue facing the company. The minute the board is not united, somehow the market senses that

So having unity and alignment to the extent that you can. I've walked into boardrooms where where there were eleven people and there were eleven different things said. And no matter what, I'd say it's good we're all aligned. 'Cause there's a you know, so much more light both. Um I think that the board uh discussions are more robust, maybe'cause people wanna feel that if they ever get a fight they show that they've been in uh and and really engaged. And it's it's generally been good.

It's been better because you have more independence and whatnot as had 10 years ago made it. I I'd say the one thing that that sometimes is missing is that everyone has been trying to construct boards that have cyber and all these expertise levels. A lot of them are short on sector.

Yeah. And I think I think when companies start constructing the board, having more people with real insight into the sector, it's great to have all these experts, but someone who's actually run businesses in the sector is important. D do you notice anything going on, Bill, with um with size of boards? Because you know, a a board of eight is easier to manage than a board of twelve. Uh but you know, twelve you can get more more flavors and more expertise. Like any trend there?

rule of thumb is it's moving more and more towards ten to eleven ish. Right. You have a board that's too small, you can't fill committees, right? And there's so much committee work. You have a board too big, it's unwieldy. And sometimes that happens in transitions and deals. But you're definitely seeing a reversion to, you know, that kind of board size, ten, eleven, twelve ish as as more of the mean. Uh Cindy then even even in the last few years it's moved in that direction, man.

One thing you referenced in the materials that was interesting is um increasingly uh uh or or last year saw a number of uh deals that were disrupted by uh

Yeah, a new player, somebody jumps in to top the deal. Is there is there some reason why that's happening? Is that just associated with good MA markets or is it more acceptable? Like what what do you make of that? Look, I think that's a sign of a healthy MA, Margaret Mayor, is that you know, at some level um it

It it's happened enough. So let's talk about a couple of of deal frameworks. I know we we we're short on time, but it is a sign of a healthy deal uh environment. That's number one. Number two is some of these deal jumps. An activist may take a stake and then have a another player, strategic or financial player, be the topping bidder and there's almost like a joint effort around it. So that there's been a few of those and probably noted in the materials.

You know, one one uh one thing I should before we wrap up, uh should also um focus a little bit on is how spin offs There's so many of them last year you saw in our materials. But they're more complicated to announce.

They're not giving you the initial stock price bump at the beginning all the time. Sometimes they do. But to get to the actual value, they usually wait for the spend to, you know, work its way through the SEC system and whatnot. And I think that announcement and the actual um spin allows people who are potential buyers to sort of take a look.

to come in and if they can handle the tax issues and I want to get into that, that's too much. We are seeing companies jump in right after spin codes. Uh and that's another theme on that front. So any

Well, Bill, this has been awesome. Uh we're we're gonna lose you shortly'cause you gotta uh jump into a run to another fire. Um I got one last question for you. This is some this is something we notice. Yep. Which is um You know, companies um often do a thorough examination of quote the macro and the long term forecast for the world that's most relevant to them.

Sometimes really big companies have huge publications in that area. Sometimes, you know, smaller companies can't afford to do that, so they'll cite other studies. But as you it seems like everybody wants long only, patient investors in their stock.

And those investors are all about the long term. Yeah. This is a long way of asking, do you have uh a good rule of thumb for attracting better, more patient capital to your shareholder base and is one way to do it through having a long-term vision that you are sharing with your shareholder. Yeah, it's a it's an outstanding question because every CO asks us this. How do we get more long-only investors? So a couple of things that we have seen work is that when the 13Fs come out,

Take a look at who's investing in your sector. The capitals, the fidelities, the Wellington, so the so someone who's making who's in others in your sector and and increasing their exposure. And then reaching out to those companies at the CFO or CEO level. Right. I'd like you send a note. I'd like you to be in our investor base and do that to about ten investors every quarter. Because you're not really getting as much harvest of new investors in the conference as you should do'em.

But just to be clear, getting uh those notes to those investors, hey, we like we think you should be in the company, we see you you're investing, things like that. May not that's been the most effective way. It may not happen right away, but here's one other thing a lot of companies aren't thinking about. There are more and more family offices.

That are now investing in public equities, Gates and Cascade, Michael Dell and all these that, you know, Agnelli, they're taking more, they're gonna see this. I I wouldn't be surprised in in the 13Fs you're gonna see about five percent family office money in public companies. The longest term cap. Companies need to put into their IR plan going after some family offices.

Fantastic. Well, that's a great tip to end on. Bill, we appreciate ya. Come see us in Houston. This has been really great. And Mike and Jeff, I'm sorry I I hogged all the bill time I owe you guys. But thank you, Bill. May it great to see an old friend. Mike and Jeff, thanks for hosting us. Great discussion. All right. Thanks, guys. See you soon.