October 6, 2022 | Editor: Martin Wennerström
Credit Suisse share price plunges amid concerns of collapse
Credit Suisse saw its share price drop 11.5% to an all-time low on October 3 amid concerns surrounding the bank’s financial stability and ability to restructure its business. Spreads on the bank’s credit default swaps, which provide investors with protection against financial risks, rose sharply last week following media reports that the bank was seeking to raise capital. Moreover, an attempt by the CEO to reassure employees of the bank’s “strong capital base and liquidity position” instead exacerbated concerns over its financial health. In recent years, the bank had suffered significant losses from the collapse of hedge fund Archegos Capital Management and supply chain finance company Greensill Capital. In July, it announced a strategy review and the replacement of its CEO. The Zurich-based bank is expected to unveil a restructuring plan on October 27.
CNBC | Guardian | Swissinfo | Yahoo (1) | Yahoo (2) | Reuters | Euronews | BBC | Fortune | Aljazeera |
Elliott reportedly to seek seat on Swedish Match’s board
Elliott Management is reportedly considering taking a seat on Swedish Match’s board after having increased its stake in the smokeless tobacco producer to 7.5% and thereby becoming its largest shareholder. Elliott’s stake entitles it to a representative on the nominating committee, which will submit director nominations to the 2023 AGM. Additionally, Elliott’s accumulation may force Philip Morris to sweeten its USD 16 billion takeover offer for Swedish Match, given that consummation is contingent on the US tobacco producer attaining the 90% stake needed to force a squeeze-out. Elliott reportedly opposes the deal under its current terms.
Seeking Alpha | Reuters | Swedish Match|
Disney reaches deal with activist investor, appoints new director
Disney has reached a truce with activist investor Third Point, which includes the addition of a new director to its board in November. In August, Third Point disclosed an additional stake in Disney and called for changes at the company, including cost cutting, a spin-off of its sports network and a shake-up of its board. As part of the deal, Third Point has agreed not to take a stake in Disney exceeding 2% and not to solicit proxies or propose any nominees for election to the board or seek the removal of any director until the 2024 AGM. Additionally, the activist investor has agreed to vote in line with board recommendations.
UK to scrap cap on bankers’ bonuses
The UK is to scrap its cap on banker bonuses, in a move meant to increase the City of London‘s attractiveness to investors. The cap, which limits bankers’ bonuses to 100% of their fixed annual pay (or 200% subject to shareholder approval), was introduced by the European Union in 2014 in response to the 2008 financial crisis. The Bank of England and Financial Conduct Authority will reportedly hold a public consultation on the planned scrapping of the cap. The cap removal is part of UK’s deregulation campaign following the country’s exit from the EU. The UK had opposed the EU bonus cap since its introduction.
Reuters | Financial News | Le Monde|
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.
Governance in Brief – May 19, 2023
EU court sides with Ryanair on Lufthansa’s 2020 bailout. The EU General Court, the second-highest court in the EU, has annulled the European Commission’s decision on the approval of state bailout for Deutsche Lufthansa prompted by the 2020 pandemic. The judgment found the EC erroneously considered that Lufthansa could not obtain financing on the markets and failed to ask for the implementation of an incentive mechanism for the airline to buy back the German Government’s stake.
Governance in Brief – May 11, 2023
JPMorgan Chase takes over failed First Republic Bank JPMorgan Chase has acquired the assets and deposits of First Republic Bank after California authorities seized and auctioned the troubled lender. The Federal Deposit Insurance Corporation (“FDIC”), an independent governmental agency established to maintain financial stability through the insurance of banks’ deposits, took possession of First Republic Bank after the lender suffered a severe liquidity crisis following the failure of SVB and Signature Bank earlier in March.