Topic: Governance – proxy vote
We recently engaged with a telecommunications company's executive team to discuss its recent hostile bid for a competitor. We discussed board composition, its country of domicile (and its proposed re-domiciliation of the corporation), and changes to strategic customer relationships. Although we are somewhat concerned with the hostile bid, and lack of board engagement on the target's behalf, we are awaiting more information from the acquiror on changes to the deal structure and change of domicile. We also discussed how management and the board would approach global regulatory bodies, legal challenges, and strategic customer relationships, which have been major challenges for the target in the past. While the acquiror's approach could lead to a significant reduction in these risks, the acquisition may not be in the best interests of long term value creation.