Navigating M&A and Shareholder Activism: Key Insights for 2025
Co-Editor Peder Hagberg interviews Bob Marese, President of MacKenzie Partners, on current trends in mergers and acquisitions, shareholder engagement, activism, and effective board governance heading into the 2025 Proxy Season.
Q: Bob, can you provide an overview of what’s happening at MacKenzie Partners and how recent changes in administration might influence M&A activity?
Bob: Certainly. At MacKenzie, we’re seeing a surge in M&A activity, and the shift in administration is only going to accelerate that trend. The appointment of Paul Atkins to the SEC under President Trump, who’s unlikely to curb activism, creates an environment ripe for “challengers” to the status quo to seek board representation and control. This dynamic is attracting significant capital, and with interest rates potentially softening, we could see a flurry of deals in 2025.
Q: What do you think will drive this increase in M&A activity?
Bob: A major factor will be capital deployment—there’s a tremendous amount of capital sitting on the sidelines, particularly from venture capital, just waiting for the right opportunities. Coupled with a rising wave of activism targeting underperforming companies, the stage is set for more proxy fights. We’re entering a period where the market will become more competitive, and companies that aren’t performing well will be prime targets for activist investors.
Q: How are companies preparing for potential activist engagements?
Bob: Companies are starting to embrace a “be your own activist” mentality. This means proactively assessing their boards—examining board tenure, diversity, and overall performance—before any activist steps in. Being prepared isn’t just about having a defensive strategy; it’s about making sure the board is in the best possible shape. I can’t emphasize enough that preparation is key, and it’s never too early to start working with your proxy solicitor and other key suppliers ahead of the next proxy season.
Q: How important is shareholder engagement in this process?
Bob: Shareholder engagement is non-negotiable. After their Annual Meetings, companies should immediately debrief to understand voting outcomes and shareholder sentiment. Engaging with top shareholders year-round—not just during proxy season—builds goodwill and provides invaluable insights. A proactive dialogue fosters trust. If shareholders feel their voices are heard, they’re far more likely to support the company when things get tough.
Q: Retail investors often feel their votes don’t matter. How can companies better engage this group?
Bob: Retail investors are a critical but often overlooked group. Companies need to use technology to bridge the gap. Streaming earnings calls, investor days, and offering more access to key events can make retail investors feel included and valued. It’s about creating a culture of engagement where all shareholders—big or small—feel like their opinions count throughout the year, not just around the Annual Meeting. Ignoring retail investors can cost companies dearly. They can swing voting outcomes, so neglecting them is a costly mistake.
We like the OPTIMIZER’s recommendations on better educating individual investors about the true value of their votes. The information in your easy-to-read Shareholder Votes Have Value primer is a great resource, and we think it would be valuable to enclose it with printed materials, as well as post it on the Investor Relations pages and company voting sites.
Q: What advice would you give to companies struggling to get a quorum at their meetings?
Bob: Start early, and work with a proxy solicitor well in advance. It’s a lot cheaper and less stressful than scrambling last-minute. Companies should plan their outreach strategy before proxy materials go out to ensure a smooth experience. Early communication with shareholders not only helps secure the quorum but also strengthens relationships.
Q: How can companies evaluate their Board Directors effectively?
Bob: Peer evaluations are one of the most effective ways to assess Board performance. Directors can give and receive feedback in a collaborative, non-confrontational environment. This process helps identify any areas of weakness and offers an opportunity for underperforming directors to step down gracefully if needed. Board evaluations should be an ongoing process, not just a once-a-year exercise.
Q: As we look ahead, what’s the key takeaway for companies navigating M&A and activism in the coming year?
Bob: The key takeaway is simple: be proactive. Companies need to regularly engage with their shareholders, critically evaluate their boards, and prepare for activism long before it knocks on the door. Taking ownership of governance means being ahead of the curve. It’s about making sure that you control the narrative and your future.
Ultimately, companies should not wait for activists to start the conversation. A proactive approach to governance will help them weather any storm, maintain strong shareholder support, and position themselves for success in what promises to be a dynamic and challenging year for M&A.
Companies need to engage with their shareholders regularly, assess their boards critically, and prepare for activism before it knocks on the door.
Activist Playbook: The M&A landscape in 2025 is set to become more competitive and activist-driven. Companies will need to be agile, assess their boards with a critical eye, and engage with shareholders regularly to stay ahead. With a well-prepared governance strategy and the right partners, companies can navigate the storm and emerge stronger in the evolving landscape of shareholder activism.
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