November 04, 2021 | Editor: Henry Hofman
Volvo Cars stock soars in Stockholm debut
Volvo Cars shares jumped as much as 22% in the first day of their trading on Nasdaq Stockholm as the company raised SEK 20 billion (USD 2.3 billion) in an IPO which valued the company at SEK 158 billion. The successful debut came after Volvo Cars cut the size of the offering by a fifth and priced it at the bottom of the initial range, in response to investors’ concerns over how much control China’s Zhejiang Geely Holding Group Co (“Geely”) would retain. Moreover, Geely agreed to convert its common shares of class A, carrying 10 votes per share, into a corresponding number of common class B shares, which are entitled to one vote per share. Prior to agreeing to convert the shares the enhanced voting rights would have given Geely 98% voting power despite its stake in the company dropping to around 84%. Additionally, Geely decided not to exercise an upsize option that would have allowed it to increase the offering by 20%. The amended offering could result in a free float of 16% to 17.9% depending on whether an overallotment option is exercised. Volvo Cars shares closed at SEK 57.99 on November 2, up from the SEK 53 listing price.
Citigroup to conduct racial equity audit
Citigroup announced it will conduct an independent racial equity audit to evaluate the bank’s efforts towards helping to close the racial wealth gap in the United States, an initiative for which it had committed, in September 2020, to dedicate USD 1 billion. The audit will include input from a range of stakeholders, including employees and civil rights organizations. The announcement comes six months after a shareholder proposal requesting a racial equity audit analyzing the company’s adverse impacts on nonwhite stakeholders and communities of color was backed by nearly 40% of the votes cast at the 2021 AGM. At that time, Citigroup had recommended a vote against the resolution.
Kuaishou Technology announces leadership reshuffle
Activist investor pressures Shell
to split its businesses
New York-based hedge fund Third Point LLC announced that it has engaged with Royal Dutch Shell regarding a possible separation of the company’s legacy fossil fuel and energy transition (liquified natural gas, renewables, marketing) businesses. In a quarterly letter addressed to investors, Third Point CEO, Daniel Loeb, argued that Shell’s competing shareholders and the management’s “do it all” attitude resulted in an incoherent strategy and unhappy shareholders. According to Loeb, the spin- off of the energy transition business would likely lead to reduced CO2 emissions and increased returns for shareholders. Shell’s CEO, Ben van Beurden, pushed back against Loeb and said that Shell needs the legacy business to finance investments in renewables.
Governance in Brief – June 8, 2023
European Parliament approves CSDDD The European Parliament has approved the “Corporate Sustainability Due Diligence Directive.” Under the new rules, companies will be required to identify and address the negative impact of their activities and value chains on human rights and the environment. Additionally, companies will need to implement climate transition plans, and, in the case of companies with more than 1,000 employees, tie directors' variable compensation to target achievement.
Governance in Brief – June 1, 2023
Citigroup to IPO Banamex after Mexican gov’t interventions hamper sales deal Citigroup has announced a plan to spin off its Mexican business, Banamex, after a failure to sell the unit to conglomerate Grupo Mexico. Citigroup had been in talks with German Larrea, CEO and Chairman of Grupo Mexico, for over a year in an attempt to orchestrate the sale of the bank, which was first announced at the start of 2022.
Governance in Brief – May 25, 2023
Activist investor pushes for leadership and strategy changes at NRG Energy Activist investor Elliott Investment Management has disclosed a 13% stake in the US-based NRG Energy and called for leadership and operational changes at the company to remedy its “meaningful underperformance.” The investor urged NRG to add independent directors with experience in the power and energy sector to its board, noting that it has already identified five executives to guide the operational and strategic changes.