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How companies ward off activist investors


In the crosshairs: headquarters of the leasing provider Grenke
Image: dpa

Short sellers, M&A arbitrageurs, value-driven investors – they are all activist investors who put companies like Grenke recently under extreme pressure. But the victims can arm themselves.

S.e since September 15, the Grenke case has been followed by one announcement: the financial supervisory authority decides on a special audit, the company founder suspends his supervisory board mandate, the company itself has commissioned a special audit of its balance sheets and has published Bundesbank account statements of its cash balances. All of this in order to parry the attack launched by activist investor Fraser Perring on the leasing company Grenke in mid-September and to stabilize the share price. Perring, known as a short seller, accuses the M-Dax company of fraud, falsification of accounts and money laundering.

The attack apparently caught Grenke off guard. This is not an isolated incident, but a cautionary example. “It can happen to anyone,” says Tim Oliver Brandi, partner at the law firm Hogan Lovells. “Companies should take the scenario of an activist attack seriously and be prepared.” His colleague Urszula Nartowska, also a partner in the law firm of the same name, advises companies to take disciplined prevention work.

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