Reuters – Companies under attack by activist hedge funds should step up their defenses or face debilitating proxy and public relations losses, a leading corporate lawyer said this week.
Marty Lipton, the Wachtell, Lipton, Rosen & Katz partner who is credited with inventing the “poison pill” anti-takeover provision during the 1980s, said many companies aren’t aggressive enough in dealing with dissident shareholder campaigns led by hedge funds.
Rather than ignoring activists and the issues they raise, a target company should fight back by, for example, investigating whether these adversaries have violated U.S. securities laws, Lipton said in an interview. In particular, some activists may have failed to disclose that they are working with other funds that don’t want to be publicly identified, said Lipton.
