While a board recommendation can carry some weight, regardless of the takeover premium offered, there are no guarantees that target shareholders will support a transaction by tendering shares or voting in favour at a shareholders’ meeting. Similarly, when acquirer shareholders are asked to vote on a combination, they will also scrutinise a deal on merits of price, synergies, and rationale.
Shareholder pushback is a prominent deal risk in public M&A, and investors and proxy advisers are often willing to take an aggressive stance against deals based on their assessment of fair price and the feasibility of another third party approach. In analysing deal dynamics, the composition of the shareholder register and likely voting intentions, we help our clients understand whether shareholder opposition to any given M&A transaction will be enough for the transaction to lapse.
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