Sometimes referred to as a "proxy battle,” this action is mainly used in corporate takeovers. In the process of a corporate takeover–particularly a hostile takeover –outside acquirers may attempt to convince existing shareholders to vote out some (or all) of a company’s senior management to make it easier to seize control over the organization.
What is a proxy fight?
A proxy fight refers to the act of a group of shareholders joining forces and attempting to gather enough shareholder proxy votes to win a corporate vote. Sometimes referred to as a "proxy battle,” this action is mainly used in corporate takeovers.
What happens during a proxy vote?
The voting bids in a proxy vote could include replacing corporate management or the board of directors. Proxy fights also emerge over corporate takeovers and mergers, most notably with hostile takeovers.
What is a proxy server?
A proxy server provides a gateway between users and the internet. It is a server, referred to as an “intermediary” because it goes between end-users and the web pages they visit online. When a computer connects to the internet, it uses an IP address.
What is a hostile takeover in M&A?
Hostile Takeover A hostile takeover, in mergers and acquisitions (M&A), is the acquisition of a target company by another company (referred to as the acquirer) by going directly to the target company’s shareholders, either by making a tender offer or through a proxy vote. The difference between a hostile and a friendly .
How does a proxy contest work?
A proxy fight occurs when a group of shareholders in a particular company attempts to join together to effect change in a particular area of corporate governance within that company. Each individual proxy fight has the potential to be unique, but most proxy fights follow a common thread.
What is proxy acquisition?
A proxy is an SEC filing (called the 14A) that is required when a public company does something that its shareholders have to vote on, such as getting acquired. For a vote on a proposed merger, the proxy is called a merger proxy (or a merger prospectus if the proceeds include acquirer stock) and is filed as a DEFM14A.
What is the proxy in succession?
Proxy voting allows shareholders like you to influence decisions; it's the primary way to have a say in how the company is governed. Most voters don't attend the actual shareholder meeting anymore, so they vote by mail or online: That's where the word “proxy” comes in.
How do I stop a proxy fight?
How to Avoid a Proxy Fight?#1 – Staggered Board – This prevents the shareholders from changing the entire board at a time in case of a proxy fight. Say that the board consists of 9 members, and in the staggered board. ... #2 – Golden Parachute.
Is a proxy fight a hostile takeover?
In a proxy fight, opposing groups of stockholders persuade other stockholders to allow them to use their shares' proxy votes. If a company that makes a hostile takeover bid acquires enough proxies, it can use them to vote to accept the offer.
Why is it called a proxy fight?
Key Takeaways. A proxy fight refers to the act of a group of shareholders joining forces and attempting to gather enough shareholder proxy votes to win a corporate vote.
Can a director give a proxy to another director?
Under the Code, each nonprofit corporation shall have a board of directors and each director shall have one vote on each matter presented to the board of directors for action. However, a director shall not vote by proxy.
What level of ownership is required to initiate a proxy fight?
Most jurisdictions require that the activist stockholder own shares of stock in the company in order to launch a proxy contest but do not require a minimum level of stock ownership—although the amount of the company's stock owned by an activist stockholder may affect its ability to influence both the company and other ...
What is the purpose of proxy form?
A proxy form allows owners to appoint someone else to speak and act as their proxy holder and to vote on their behalf at general meetings. Proxy forms are sent out with each notice of meeting and can also be found below. A proxy form must be filled out correctly to be considered valid.
How do you wage a proxy battle?
How Does a Proxy Fight Work? Proxy fights are commonly initiated by dissatisfied shareholders of a company. In a proxy battle, shareholders convene with other shareholders to use their votes to pressure management and the board of directors to make changes within the company.
Why proxy voting is required?
The Purpose of Proxy Voting Shareholder voting is the primary means by which shareholders can influence the company's or mutual fund's operations, its corporate governance, and even activities of social responsibility that may fall outside of financial considerations.
Is greenmail legal?
Greenmail is a corporate business tactic used by those that are financially savvy. Many countertactics have been applied to defend against and to financially engineer the reception of a greenmail. There is a legal requirement in some jurisdictions for companies to impose limits for launching formal bids.
What does proxy mean in stocks?
Key Takeaways. A proxy is an agent legally authorized to act on behalf of another party. The proxy may also allow an investor to vote without being physically present at the annual shareholder's meeting.
What is a proxy for a public company?
A proxy statement is a document containing information that the Securities and Exchange Commission requires public companies to disclose to shareholders when requesting votes ahead of an annual meeting.
What is a proxy business?
A proxy is a person who represents a member in the shareholders' meeting of a company, with a legal document that could prove their authority.
1. Proxy Contests
Shareholders elect the board of directors to keep watch on management and replace unsatisfactory managers. If the board is lax, shareholders are free to elect a different board.
2. Takeovers
The alternative to a proxy fight is for the would-be acquirer to make a tender offer directly to the shareholders. If the offer is successful, the new owner is free to make any management changes.
3. Valeant Bids for Allergan
Allergan is a U.S. specialty pharmaceutical company, best known as the maker of Botox. In 2014, its independence was threatened by the Canadian firm, Valeant, which, in an unusual move, teamed up with the hedge fund, Pershing Square, to acquire Allergan.
4. Takeover Defenses
What are the lessons from the battle for Allergan? First, the example illustrates some of the strategies of modern merger warfare. Firms such as Allergan that are worried about being taken over usually prepare their defenses in advance. Often they persuade shareholders to agree to shark-repellent changes to the corporate charter.
5. Who Gains Most in Mergers?
As our brief history illustrates, in mergers sellers generally do better than buyers. Why do sellers earn higher returns? There are two reasons. First, buying firms are typically larger than selling firms. In many mergers, the buyer is so much larger that even substantial net benefits would not show up clearly in the buyer’s share price.
How does proxy fight work?
The typical way that a proxy fight works is that shareholder activists are dissatisfied with a particular aspect of the company and seek change in that area; however, they often run into resistance from the company's current board members.
What is proxy fight?
A proxy fight occurs when a group of shareholders in a particular company attempts to join together to effect change in a particular area of corporate governance within that company. Each individual proxy fight has the potential to be unique, but most proxy fights follow a common thread. The typical way that a proxy fight works is ...
What is proxy battle?
Proxy fights are commonly initiated by dissatisfied shareholders of a company. In a proxy battle, shareholders convene with other shareholders to use their votes to pressure management and the board of directors. Board of Directors A board of directors is a panel of people elected to represent shareholders. Every public company is required ...
What is proxy fight?
In other words, a proxy fight is a battle between shareholders and senior management for control of the company. It is also a strategy commonly employed in hostile takeovers.
Is a proxy revocable?
Typically, most proxies are revocable, but some agreements may include specific clauses that require the proxy to be irrevocable for a specified period. Pre-Offer Defense Mechanism. Pre-Offer Defense Mechanism Pre-offer defense mechanism is a general term for a broad group of defensive strategies in M&A transactions.
What is proxy war?
A proxy fight (also known as a "proxy contest", "proxy battle", or "proxy war") is an effort by the shareholder or group of shareholders of a corporation to convince other shareholders to cast their corporate votes ( by granting a representative or proxy the authority to vote those shares) the way the urging shareholders prefer. The objective of the shareholders initiating the proxy contest is to secure the number of shareholder votes required to achieve the desired result (such as electing specific directors or approving a specific corporate action).
What is proxy contest?
Proxy contests are often employed as part of a hostile takeover attempt. In such situations, another company seeks to purchase a target company. If the board of directors of the company is resistant to being taken over (as these directors will likely lose their positions after the acquisition), they reject the takeover proposal. The acquiring company then sends an offer for acquisition (along with relevant company financial and operational documents) on Schedule 14A to the shareholders of the target company. The acquiring company will generally employ the services of a proxy advisory firm to assist in the process of compiling the list of shareholders, contacting them, and presenting the acquiring firms proposal. As part of the proposal, the acquiring firm requests the right to vote as a proxy for the shareholders of the company. If the proxy contest is successful, the acquiring firm will be able to elect a majority of the company's directors. Once elected, these directors will approve the acquiring company's offer to acquire the target company.
What is a proxy server?
Broadly speaking, a web proxy, also referred to as a proxy or proxy server, is a way to filter the connection between your computer and the internet. Let’s break it down. Say you want to check your Facebook profile to see how many likes that picture of your dog received. You open up a web browser and type in “www.facebook.com”.
How does a proxy improve network performance?
Depending on the type of proxy you use and how it is set up, it is possible that using a proxy can improve performance by caching web pages . For example, let’s say you recently visited airtame.com. The proxy can save a temporary copy of the webpage which it stores locally so that when your colleague visits airtame.com ...
What is a web proxy?
A web proxy can help keep your network safe from external threats. Here’s what you need to know. Let’s talk about the least sexy but most vital part of your workplace: network security. At a school or large office, there is usually an intricate system of security measures keeping private data safe. Many are familiar with firewalls ...
Why do we need proxy?
The top reason why a web proxy is needed on a network is that it protects a company’s data assets by limiting websites that potentially contain malicious code. And not just data assets, but physical assets too when you consider the possible costs of replacing an organization’s hardware when a virus renders it unusable.
What is a proxy without a web server?
Without a web proxy, your computer would simply connect directly to the internet to access the website and display it for you . With a proxy, your computer will connect to a separate server, the proxy, that sits between the computer and the internet. The web proxy acts like airport security and is in charge of screening what websites are allowed ...
Do companies use proxy?
Proxy in action. Not every company makes use of web proxies. The majority of web proxy users are enterprise-level companies or educational institutions that need a manageable way of monitoring the large volume of internet users on their network.
Can a proxy save a webpage?
The proxy can save a temporary copy of the webpage which it stores locally so that when your colleague visits airtame.com later that day, the proxy can serve up that copy instead of having to retrieve the original from the internet.
How does a reverse proxy work?
It works by intercepting requests from the user at the network edge of the web server. It then sends the requests to and receives replies from the origin server.
How does a proxy work?
How a Proxy Works. Because a proxy server has its own IP address, it acts as a go-between for a computer and the internet. Your computer knows this address , and when you send a request on the internet, it is routed to the proxy, which then gets the response from the web server and forwards the data from the page to your computer’s browser, ...
Why are proxy servers and VPNs interchangeable?
On the surface, proxy servers and virtual private networks (VPNs) may seem interchangeable because they both route requests and responses through an external server. Both also allow you to access websites that would otherwise block the country you’re physically located in. However, VPNs provide better protection against hackers because they encrypt all traffic.
What are the benefits of a proxy server?
Proxies come with several benefits that can give your business an advantage: Enhanced security: Can act like a firewall between your system and the internet. Without them, hackers have easy access to your IP address , which they can use to infiltrate your computer or network .
Why are reverse proxy servers important?
Reverse proxies are a strong option for popular websites that need to balance the load of many incoming requests. They can help an organization reduce bandwidth load because they act like another web server managing incoming requests.
Why use an SSL proxy?
Because Google prefers servers that use SSL, an SSL proxy, when used in connection with a website, may help its search engine ranking. On the downside, content encrypted on an SSL proxy cannot be cached, so when visiting websites multiple times, you may experience slower performance than you would otherwise.
How does a public proxy work?
It works by giving users access to its IP address, hiding their identity as they visit sites. Public proxies are best suited for users for whom cost is a major concern and security and speed are not. Although they are free and easily accessible, they are often slow because they get bogged down with free users.
Proxy Contests
Takeovers
- The alternative to a proxy fight is for the would-be acquirer to make a tender offer directly to the shareholders. If the offer is successful, the new owner is free to make any management changes. The management of the target firm may advise its shareholders to accept the offer, or it may fight the bid in the hope that the acquirer will either rais...
Valeant Bids For Allergan
- Allergan is a U.S. specialty pharmaceutical company, best known as the maker of Botox. In 2014, its independence was threatened by the Canadian firm, Valeant, which, in an unusual move, teamed up with the hedge fund, Pershing Square, to acquire Allergan. Between February and April 2014, Bill Ackman, the manager of Pershing, built up a holding of 9.7% of Allergan’s shares. The…
Takeover Defenses
- What are the lessons from the battle for Allergan? First, the example illustrates some of the strategies of modern merger warfare. Firms such as Allergan that are worried about being taken over usually prepare their defenses in advance. Often they persuade shareholders to agree to shark-repellent changes to the corporate charter. For example, the charter may be amended to r…
Who Gains Most in Mergers?
- As our brief history illustrates, in mergers sellers generally do better than buyers. Why do sellers earn higher returns? There are two reasons. First, buying firms are typically larger than selling firms. In many mergers, the buyer is so much larger that even substantial net benefits would not show up clearly in the buyer’s share price. Suppose, for example, that company A buys company …