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7/1/2025

Barington Asks Casket Maker Matthews for Board Seats, Warns of Second Battle

Reuters (07/01/25) Herbst-Bayliss, Svea

Barington Capital Group on Tuesday urged casket maker Matthews International (MATW) to fix its business and immediately invite the activist investor onto its board, or possibly face another clash with the group next year. Barington criticized Matthews' business portfolio, capital allocation, lagging stock price, and long-serving CEO in a letter seen by Reuters. The investor heaped fresh pressure on Matthews by underscoring the same issues that formed the backbone of its high-profile fight for three seats, which it lost, earlier this year. Barington wants the company, a conglomerate which has technology-focused businesses plus products for burying the dead, to add its director candidates to the board now and not "wait for the 2026 annual meeting." Matthews stock price dropped 12% in the first six months of the year, the letter says, when the broader S&P 500 index gained 4.4% and Matthews' peers gained 3.3% on average. Barington chief executive James Mitarotonda blamed Matthews CEO Joe Bartolacci "for this persistent pattern of underperformance" and wrote that he and other Barington board candidates could help fix the company now. "Our participation is essential to execute the fundamental changes necessary to create long-term value," the letter said, warning if no board seats are offered "we remain prepared to pursue all available alternatives to protect our investment." This suggests Barington may launch a second campaign for change at Matthews next year after shareholders in February blocked the activist by re-electing all company directors. Barington, which had support from three proxy advisory firms that guide how shareholders vote, bought more Matthews stock after its defeat, raising its stake in the company to roughly 3% from 2%.

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7/1/2025

Korean Stocks Gain on Renewed Optimism Over Corporate Reforms

Bloomberg (07/01/25) Cheng, John

South Korean stocks advanced Tuesday, as shares of holding companies rallied on hopes that revisions to the Commercial Act will be approved by the parliament this week. The benchmark Kospi rose as much as 2% before it trimmed gains to close 0.6% higher. Bullish sentiment grew after reports that the main opposition shifted its stance to consider supporting revisions sought by the ruling party that will alter corporate-governance policy in the country. That decision reflects changes in market conditions and recent cases of shareholder-rights violations by some companies, floor leader Song Eon-seog said on Monday. Quarter-end selling pressure that weighed on the Kospi in the past few days cleared up, with expectations that passage of the revisions to the Commercial Act will drive renewed buying momentum, said Shawn Oh, an equities trader at NH Investment & Securities Co. in Seoul. That “will be key for enforcing corporate governance and shareholder returns.” The ruling Democratic Party of Korea, under President Lee Jae Myung’s leadership, has been seeking to amend the Commercial Act to expand the fiduciary duty of board members to all shareholders. Lee has also vowed to lift corporate governance standards and improve stock-market returns. That’s fueled optimism among global investors that the so-called “Korea discount” will start to narrow. The government is also considering including separate taxation on dividend income in annual tax revision proposal which will be announced at the end of July, the Korea Economic Daily reported, citing unidentified sources. The Kospi is up 29% year to date on optimism about corporate-governance reforms, compared with a gain of about 12% for MSCI’s Asia-Pacific index.

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6/30/2025

Elliott’s Banca CF+ Launches Takeover Bid for Banca Sistema

Bloomberg (06/30/25) Sirletti, Sonia; Vanuzzo, Antonio

Banca CF+, an Italian financial services firm controlled by Elliott Management Corp., is seeking to buy Banca Sistema SpA (BSTA), according to a statement on Monday. The firm is offering a combination of cash and shares worth €1.80 ($2.11) for each Banca Sistema share, a discount of around 8% compared to Banca Sistema’s Friday close. The offer currently values the bank at around €145 million, according to Bloomberg calculations. The deal represents the latest in a series of potential M&A transactions that have turned the Italian financial services sector into a hotbed of activity in recent months. Bloomberg reported on Sunday that Banca CF+ was planning to make a bid for Banca Sistema. Banca Sistema shares fell as much as 8.6% in Milan trading on Monday. The offer includes €1.382 in cash and €0.42 through the allocation of 21 shares of Banca Sistema unit Kruso Kapital SpA (KK), subject to a split of Kruso Kapital’s shares on the basis of a 1:98 ratio for each share tendered. Banca Sistema focuses on financing and managing trade receivables owed by Italian local governments, mainly through factoring and credit management services. It also offers salary and pension backed loans, as well as pawnbroking. Shareholders Gianluca Garbi, SGBS S.r.l. and Garbifin S.r.l. agreed on June 29 to tender a 24.86% stake to Banca CF+ in the offer, the same statement said. “Banca CF+ will benefit from the full financial support of funds advised by Elliott Investment Management LP as major shareholder, to support growth and development plans resulting from the completion of the offer,” it said in the statement. UniCredit is acting as financial adviser to Banca Sistema, while law firm Chiomenti as legal adviser. CF+, controlled by Elliott investment management’s funds, specializes in financing solutions for companies and offers factoring services, tax-credit purchases and short- and medium-term financing.

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6/30/2025

U.S. Supreme Court to Decide on Controlling-Investor Challenges

Bloomberg (06/30/25) Feeley, Jef; Stohr, Greg

The U.S. Supreme Court will consider whether activist investors can use an 85-year-old law to challenge corporate moves bolstering controlling shareholders, in a case being closely watched by some of Wall Street’s biggest investment funds. In a setback to hedge fund manager Boaz Weinstein, the court agreed to review a decision allowing a lawsuit against closed-end fund provider FS Credit Opportunities Corp. (FSCO) and others, including BlackRock Inc., (BLK) the world’s largest asset manager. The case comes to the justices after Weinstein’s Saba Capital Master Fund successfully argued that the Investment Company Act of 1940 allowed it to sue the big funds to defeat shareholder rights plans, known as poison pills, that stave off activist investors like Saba. Saba’s win was upheld by an appeals court, whose ruling will now face the high court’s scrutiny. Activist investors typically accumulate stakes in companies and then push for change by trying to gain seats on the board, often clashing with controlling shareholders like BlackRock and FS. The Investment Company Act, which Congress adopted to promote transparency in the securities market, includes protections for investors against the power of controlling shareholders. Saba said the big funds had improperly used a Maryland law to thwart a provision of the 1940 act that gives investors a right to sue, and made it harder to gain more control of a company. FS argued in its Supreme Court appeal that the 2024 trial court decision favoring Saba wrongly allows activist investors to base lawsuits over shareholder rights on the Investment Company Act. BlackRock didn’t join the appeal but reserved its right to participate in the case at the high court. The Supreme Court agreed to take the case after the Trump administration argued that leaving the lower-court rulings intact would interfere with government regulators’ enforcement powers and unfairly inject unpredictability into the funds’ operations and contract rights. The justices had asked the administration, which isn’t a party to the case, to weigh in on it. The government contended that investors have no right to challenge contracts that allegedly violate the 1940 statute. The case is FS Credit Opportunities Corp. v. Saba Capital Master Fund, 24-345.

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6/30/2025

Lantronix Enters Into Cooperation Agreement With Investor Group Led by Chain of Lakes Investment Fund LLC

Globe Newswire (06/30/25)

Lantronix Inc. (LTRX), a global leader in compute and connectivity IoT solutions enabling Edge AI intelligence, today announced that it has entered into a cooperation agreement with Lantronix stockholders Chain of Lakes Investment Fund LLC, Haluk L. Bayraktar, and Emre Aciksoz. Under the terms of the agreement, James (Jim) C. Auker will be appointed to the Lantronix Board of Directors and will be nominated for election at the Company’s 2025 Annual Meeting of Stockholders. The date of the Annual Meeting has not yet been announced. “Lantronix is committed to maximizing value for all Lantronix shareholders,” said Saleel Awsare, CEO and president of Lantronix. “We appreciate the constructive discussions with Chain of Lakes and are pleased to welcome Jim Auker to our Board. His perspective and experience will be valuable as we continue to execute on our strategic priorities.” “We value the collaborative approach taken by Saleel and the Lantronix Board to reach a positive outcome for the benefit of all Lantronix shareholders,” said Tim O’Connell, chief investment officer of Chain of Lakes. “We believe Jim Auker will be a strong addition to the Board and are confident his contributions will help guide Lantronix in its efforts to explore opportunities to enhance shareholder value.” Pursuant to their agreement with the Company, Chain of Lakes, Mr. Bayraktar and Mr. Aciksoz have agreed to customary standstill and voting commitments, among other provisions. The full agreement and required information in connection with the election of Mr. Auker to the Board will be filed with the SEC.

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6/30/2025

Avadel Shareholder Seeks Ousting Drugmaker’s Entire Board

Wall Street Journal (06/30/25) Glickman, Ben

An investor in the narcolepsy drugmaker Avadel Pharmaceuticals (AVDL) plans to call for shareholders to vote out the company’s entire board of directors, ratcheting up pressure on management in a tough environment for biopharmaceutical companies. ASL Strategic Value Fund plans to publish an open letter arguing that Avadel has mismanaged the launch of its main treatment, causing the company to miss out on hundreds of millions of dollars in revenue, according to a copy of the letter. Avadel makes a treatment for people with narcolepsy called Lumryz. The company has a market cap of around $900 million. The stock has fallen about 35% in the past year. ASL is calling for votes against all of Avadel’s director nominees at its annual meeting, which is scheduled for late July, according to the letter. The investment firm plans to vote its roughly $15 million of shares against Avadel’s directors. Avadel has for years been locked in litigation with its biggest competitor for narcolepsy treatments, Jazz Pharmaceuticals, over patent concerns. ASL is calling for Avadel to issue contingent-value rights to shareholders, or the rights to additional future payments, for possible proceeds from damages or settlements. (Avadel in one case is seeking damages in excess of $1 billion.) ASL also plans to reiterate a call for Avadel to hire an investment bank to explore alternatives, including selling the company, according to the letter. ASL made the same request in February, sending shares higher. A spokesman for Avadel said the company's board proactively engages with its shareholders, and directors have made personal investments in the company. He said the company was focused on unlocking the full value of its drug Lumryz. Shareholder activists have engaged with a number of biopharmaceutical companies, prompted by lackluster returns following economic and regulatory uncertainty. The S&P biotech ETF is down about 10% in the past year, compared with a 13% increase in the S&P 500 over the same period. In October, Starboard Value took a $1 billion stake in Pfizer (PFE), criticizing the drugmaker's performance and research spending. More common are situations in which investors agitate for smaller companies that have faced setbacks in research and development to shut themselves down and return cash to shareholders. Avadel's medication was approved by drug regulators in 2023. It now faces the challenge of increasing the number of patients using Lumryz. The company in May lifted its full-year revenue guidance after reporting improving demand metrics for Lumryz and better-than-expected sales in the first quarter.

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6/30/2025

Lamb Weston Settles with Jana, Giving Activist Big Voice on Board

Reuters (06/30/25) Herbst-Bayliss, Svea

Lamb Weston (LW) reached a settlement with Jana Partners which gives the activist investor a big presence on the french-fry maker's board and averts a bruising board fight. The agreement, announced on Monday, will add four of Jana's proposed director candidates to the board and two other mutually agreed-upon directors, expanding the board from 11 to 13 members. The Jana candidates are Bradley Alford, a former Nestle USA CEO who will become chairman; Timothy McLevish, a former Lamb Weston executive chairman; food industry executive and Continental Grain adviser Ruth Kimmelshue; and Jana's portfolio manager Scott Ostfeld. The two new mutually agreed on directors are Lawrence Kurzius and Paul Maass, who both have food industry experience as top executives. The truce marks one of the biggest settlements in terms of directors changing over this year and comes after Jana spent more than seven months pushing management for operational and capital improvement and possibly even a sale. Lamb Weston, based in Eagle, Idaho, with a market value of roughly $7.6 billion, supplies frozen potato products, including tater puffs and hash brown patties, to companies like McDonald's (MCD) and restaurant company Yum Brands (YUM). The company's stock price has dropped more than 35% in the last 12 months and slipped modestly to trade at $53.33 early on Monday. Lamb Weston CEO Mike Smith, who moved into the top job late last year after a poor earnings announcement amid shrinking demand for its products, welcomed the settlement. "We are confident this outcome is in the best interests of the company and all of our shareholders," he said. Jana had been laying the path to a bruising board fight and faced a deadline of Monday to nominate director candidates and officially launch a fight. In a survey, commissioned by Jana, roughly half of Lamb Weston's top 50 shareholders said they wanted the entire board thrown out, giving Jana ammunition to press its points. The hedge fund, which owns roughly 7% of Lamb Weston, teamed up with Continental Grain, a privately held company that owns and operates companies in food and agribusiness, on the investment. Jana has history with Lamb Weston. A decade ago, it pushed packaged food company Conagra Brands (CAG) to divest Lamb Weston, which had been a unit since it bought the french fry maker in 1988. In 2016, Lamb Weston began trading as a public company.

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6/30/2025

Elliott Wants Changes at Sumitomo Realty & Development

Wall Street Journal (06/30/25) Hamilton, Katherine

Elliott Investment Management and Elliott Advisors wants Sumitomo Realty & Development (SURDF) to work with them on improving the shareholder returns. The activist investors, which hold a more than 3% stake in Sumitomo, said in a letter to the Tokyo real-estate company Monday that there is dissatisfaction among investors about its current course. “Despite Sumitomo Realty’s high-quality portfolio, the Company remains Japan’s most undervalued real estate developer,” the investors said. The performance of Sumitomo’s management has led to poor shareholders returns, Elliott said. The company also has excessive cross-shareholdings, a lack of focus on capital efficiency and subpar corporate governance, they said. Elliott said they have discussed these issues with Sumitomo. “We value our dialogue with Sumitomo Realty’s management and look forward to continuing our engagement to support clear, near-term steps that resolve the Company’s self-imposed challenges. and want to continue engaging with the company to help resolve some of the issues,” Elliott said.

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6/30/2025

Findell Capital Reiterates Desire for Compromise at Oportun Financial and Issues Statement on Behalf of Scott Parker

Stock Titan (06/30/25)

Findell Capital Partners, a major stockholder of Oportun Financial Corporation (OPRT), has issued a statement reiterating its desire for a compromise with the company. Findell advocates for the addition of Warren Wilcox to Oportun's Board of Directors and supports the continued service of Scott Parker, a former independent director with public company CFO and consumer lending executive experience. Findell expressed concern over the company spending millions in stockholder capital to oppose one of its largest owners and emphasized its willingness to engage in discussions that would benefit all stockholders. Scott Parker separately stated his willingness to continue serving as a board member, citing his experience and industry knowledge as valuable assets for enhancing shareholder value through board oversight.

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