Activist Alert: In 2025, an increase in the likelihood of an activist campaign
At the beginning of 2025, the environment in which the boards of Dutch (publicly listed) companies operate remains turbulent. Geopolitical circumstances – ranging from the wars in Ukraine and the Middle East to U.S. sanctions against China – continue to leave their mark on the economy. European and British stock prices remain under pressure and undervalued. The exact global impact of Trump's re-election in the United States is uncertain, but it is clear that the accompanying unpredictability makes long-term decision-making more challenging. Deregulation and the anti-ESG movement in the U.S. are also likely to have global repercussions. What can be stated with certainty is that the growth of the U.S. economy (expected at 2.5% in 2025) will be significantly higher than that of Europe and the United Kingdom. In the U.S., as well as in Europe and the UK, the momentum for mergers and acquisitions is increasing.
Activist interest
It is not surprising, given these turbulent circumstances, to expect an increase in activist interest in European companies. Over the years, the Netherlands has seen several examples, with varying levels of accompanying dishevel. Some notable cases that come to mind include The Children’s Investment Fund stepping in during the acquisition of ABN AMRO, and Elliott attempting to intervene in the public bid by U.S. paint manufacturer PPG for AkzoNobel, trying to influence the strategy of insurance company NN and insisting with Ahold Delhaize to (partially) list its subsidiary Bol.com to achieve better stock valuation. A more recent example is Nelson Peltz’s Trian Fund, which acquired a stake in Unilever and actively engaged in shaping its strategy.
Unrest and discomfort
In addition to these investor activists, other forms of activism have emerged in recent years. Institutional investors increasingly take a (pro)active stance toward executive boards and supervisory boards, voicing their opinions on the strategic direction. Not least among these is ESG-driven activism, such as Follow This and Milieudefensie. They focus their efforts on companies like Shell, which according to them are taking insufficient action on ESG issues, also buying small numbers of shares to enable them to address the executive board and supervisory board during annual general meetings in a manner that attracts significant attention and (to say the least) causes considerable unrest and discomfort.
An escalator approach
The methods activist investors use to exert influence vary. Typically, they progress via an escalator, starting with a private approach in the form of a letter, often accompanied by acquiring a stake in the publicly listed company. Further steps may include making their approach public, setting up a website similar to that of the company to share their views on its strategy, or exercising shareholder rights, such as placing topics on the agenda of the general meeting of shareholders – an option available to those holding at least 3% of the outstanding shares.
It is not uncommon for activist investors to attempt to interfere when a company becomes the subject of a public bid or to seek a seat on the company’s board with the aim of influencing its strategy from within. The attitude of activist investors varies in terms of being (un)friendly and either constructive or otherwise.
Activist investors target a company’s strategy, aiming to create greater shareholder value through critical remarks and proposed changes. In the Dutch stakeholder model, strategy remains the responsibility of the executive board, under the supervision of the supervisory board. It is up to them to consider the perspectives provided by shareholders – activist or not – using the tools at their disposal.
The CEO and chairman are put to the test
Even though the playbooks of activist investors seem to follow certain patterns, each case will have its own dynamics and will require a tailored response. Maintaining a constructive dialogue appears to be a good guiding principle. In some instances, the ideas of the activist investor can even contribute positively. Unilever went so far as to give Nelson Peltz a seat at the table. Naturally, scant information about this was disclosed, but the new strategy designed and implemented by Hein Schumacher, with Peltz’s support, most definitely proved to be beneficial to shareholders.
Activist action puts a focus on the CEO and chairman. They are the ones at the forefront of the interaction. They are also the first to take the stage if an activist investor decides to make the approach public. This relationship, the unique combination of strong collaboration, sufficient critical distance, and mutual respect for each other’s roles – characteristic of this partnership – will be put to the test and closely scrutinized.
Anticipating an approach
Preventing of and responding to an activist approach is an art, not a science. With the expectation that activism will increase, the question arises as to how boards can best prepare themselves. A company can anticipate a potential approach by monitoring share trading (including share lending) and tracking whether there is an unusual amount of traffic to the company’s website. The board can anticipate critical remarks by maintaining close and regular contact with key (institutional) shareholders to understand their views on performance, management and board quality, capital allocation, and the composition of the business portfolio. It is advisable for the board to organize 360-degree workshops to identify potential vulnerabilities and learn how to address them, with the help of financial, strategic, and legal advisors. Crucially, the board must convey a clear and consistent narrative about its strategy and how it aims to create shareholder value in the medium term.
This essay by Charles Honée was published in Management Scope 02 2025.