– Defense contractors are seeking legal advice after President Donald Trump issued an executive order tying share buybacks, dividends and executive pay to weapons delivery schedules under the White House’s ‘Prioritizing the Warfighter in Defense Contracting’ order.
According to Reuters (paywall), firms fear penalties, including contract terminations, if they fall behind, even though some executives view the order as vague and difficult to enforce. Concern over administration influence is prompting companies to rethink financial strategies to avoid going against the policy.
Lockheed Martin publicly endorsed the focus on speed and accountability, and L3Harris said meeting requirements will take investment; other major contractors have not commented.
– A Delaware Chancery Court judge has denied Paramount Skydance’s request to expedite its lawsuit against Warner Bros. Discovery, which seeks detailed financial disclosures about Warner’s deal with Netflix.
As reported by Bloomberg (paywall), vice chancellor Morgan Zurn ruled Paramount failed to show it would suffer ‘irreparable harm’ without fast-tracked proceedings before its own hostile $30-per-share tender offer expires. Paramount argues shareholders need clear data, particularly on how Warner values its cable networks and the proposed Discovery Global spinoff, to compare its offer with Netflix’s roughly $83 bn merger proposal.
Warner has called the legal push premature and an effort to distract from its preferred deal, and the judge agreed there’s no immediate urgency requiring special treatment. Paramount says the ruling doesn’t address the merits and plans to continue pressing for transparency as the takeover battle and shareholder decisions unfold.
– A group of climate-focused investors led by the Dutch activist group Follow This has filed shareholder resolutions urging oil majors BP and Shell to explain how they will sustain business value if global demand for oil and gas declines.
As reported by Reuters, the initiative marks a strategic shift for Follow This, which paused its long-running campaign for emissions cuts last year due to weak investor support.
More than 20 institutional investors managing around €1.5 trn have co-filed the resolutions demanding that both companies publish 10-year plans outlining capital expenditure, production and free cash-flow forecasts under scenarios like those from the International Energy Agency.
The move comes as both BP and Shell have recently scaled back renewable energy commitments to focus more on traditional hydrocarbons.
– US activist investor Bradley Radoff is seeking to oust all five non-executive directors at Marston’s, accusing the UK pub operator’s board of failing to act in shareholders’ interests by refusing to launch share buybacks or resume dividends.
As reported by The Financial Times (paywall), Radoff, who holds about 3 percent of the company with affiliates, said he will vote against the directors’ re-election at the end-January AGM, targeting figures including chair Ken Lever, senior independent director Octavia Morley and former Merlin Entertainments chief Sir Nick Varney.
Although Marston’s shares have risen nearly 60 percent over the past year, Radoff argues the rebound follows a steep collapse and does not justify board complacency.
– Activist investor Engaged Capital is preparing a proxy fight to gain board seats at software company BlackLine arguing the current board hasn’t adequately pursued strategic alternatives, including a possible sale.
According to Reuters, Engaged, which owns over 1 million BlackLine shares and is among its top 20 investors, wants to install four new directors to push for change and hold management more accountable.
The group has criticized CEO Owen Ryan and the board for being slow to explore options that could boost shareholder value and sees BlackLine’s plan to reduce its board from 12 to 11 members as entrenchment. Other shareholders have also called for strategic review, raising pressure on the company ahead of its annual meeting.
– Pacific Gas and Electric’s (PG&E) parent agreed to a $100 mn settlement with shareholders who accused the utility of misleading them about its wildfire prevention and safety practices ahead of the 2017 and 2018 California wildfires, as reported by Bloomberg Law (paywall).
The preliminary agreement, filed with the US District Court in San Jose and awaiting judge approval, resolves claims that PG&E hid deficiencies in electrical equipment and vegetation management that contributed to massive fires, including the 2018 Camp Fire and the 2017 Northern California fires.
PG&E denied any wrongdoing, saying the deal ‘helps resolve claims’ as it continues work to reduce wildfire risk and improving infrastructure. The company also said customers won’t bear the cost of the settlement.
– Toyota Motor’s decision to sweeten its bid to take Toyota Industries private by raising the offer to ¥18,800 ($118.91) per share has not resolved a valuation dispute with investors, leaving the takeover fight unsettled, reports Bloomberg.
Activist investor Elliott Investment Management rejected the improved terms, saying the revised price still ‘very substantially’ undervalues Toyota Industries and pledging not to tender its stake while urging other shareholders to demand more, as reported by Reuters.
The company’s shares have traded above the revised offer, signaling continued resistance and investor expectations for a higher premium. Elliott and some other global investors argue Toyota Industries’ intrinsic value could exceed ¥25,000 ($158.14) per share, challenging Toyota’s valuation logic and heightening scrutiny of minority shareholder rights amid the tender offer’s run through February 12.