– CNBC reported that Macy’s said its board had unanimously decided to end negotiations with the activist group that had been looking to take the company private for roughly $6.9 bn. ‘We have concluded that Arkhouse and Brigade Capital Management’s proposal lacks certainty of financing and does not deliver compelling value,’ Macy’s lead independent director Paul Varga said in a press release.
Macy’s said the company had gone ‘well beyond what is customarily required’ in a due diligence period, offering the bidder group store-by-store profit and loss information and leases for each location. The company also said Arkhouse and Brigade had been allowed to share that confidential information with more than a dozen ‘credible financing sources.’
Arkhouse did not immediately return a CNBC request for comment
– Reuters (paywall) reported that OpenAI whistleblowers have filed a complaint with the SEC, calling for an investigation over the company's allegedly restrictive non-disclosure agreements (NDAs). ‘Given the well-documented potential risks posed by the irresponsible deployment of AI, we urge the commissioners to immediately approve an investigation into OpenAI’s prior NDAs, and to review current efforts apparently being undertaken by the company to ensure full compliance with SEC rules,’ according to a letter sent to the agency.
The AI company allegedly made employees sign agreements that required them to waive their federal rights to whistleblower compensation, according to the letter.
An SEC spokesperson said in an emailed statement that it does not comment on the existence or non-existence of a possible whistleblower submission.
OpenAI did not immediately respond to Reuters’ requests for comment on the letter.
– According to The Wall Street Journal (paywall), planned changes to Delaware corporate law could give more power to influential shareholders, letting them make more deals on behalf of companies without board oversight. The bill expands the breadth and authority of stockholder agreements, which are often used by activist investors to gain board seats and by founders to co-ordinate control.
It was adopted in the legislature in the wake of recent decisions by the state’s specialized business court and has drawn criticism from that court’s chief judge. Governor John Carney plans to sign the bill into law, a spokeswoman said, and it would take effect on August 1.
Stockholder agreements between boards and activist investors, private-equity firms and others are often used to give the investors a say in hiring and firing executives or merger approvals. They can also give founders veto power over debt levels, board committee membership or executive appointments.
– CNBC reported that Starboard Value is pushing dating company Match Group to either make changes that would improve margins or go private. Starboard’s Jeff Smith wrote in a letter to Match CEO Bernard Kim and its board that cost cuts and product innovation could drive revenue growth.
In the letter, Smith wrote that Tinder enjoyed strong growth for years but has suffered of late from sluggish innovation. The activist isn’t pushing for a management shakeup and indicated that Kim, who previously ran Tinder and before that was president of Zynga, is capable of leading innovation at the company. But Starboard says any turnaround would require margin improvements.
A Match spokesperson said the company is in communication with Starboard and other investors. ‘We are relentlessly focused on executing our key initiatives, which include: driving growth at Tinder, continuing Hinge’s impressive expansion, maintaining appropriate financial discipline and returning capital to our shareholders,’ the spokesperson said.
– According to the WSJ, a New York City pension fund has adopted standards aimed at encouraging the landlords it invests in to limit rent increases and provide 30 days’ notice for eviction filings. The city’s four other pension funds may do the same. New York City comptroller Brad Lander said he began hearing from tenants a few years ago in his previous role as a city council member as people faced steep rent increases after their buildings were acquired by an investor.
The Responsible Property Management Standards, a collaboration between the comptroller’s office and a non-profit focused on responsible investing, were recently adopted by the $85 bn New York City Employees’ Retirement System.
This is the first time a public pension fund in the US has adopted rules that require private-equity or private real-estate portfolio companies to honor tenant protections. Lander hopes more pension funds will adopt them and eventually establish a national standard.
– Elon Musk announced that he will move the headquarters of his companies X (formerly Twitter) and SpaceX from California to Texas, The Guardian reported. In a post on X, Musk cited California’s new law banning school transgender notification requirements as one of the reasons for the move. ‘This is the final straw. Because of this law and the many others that preceded it, attacking both families and companies, SpaceX will now move its HQ from Hawthorne, California, to Starbase, Texas,’ Musk wrote. He added later: ‘And X HQ will move to Austin… Many will follow.’
Signed into law by California governor Gavin Newsom on Monday, the bill will prohibit school policies that require parents to be alerted if their child wishes to change pronouns or identifies as transgender. The legislation comes after several school districts in the state put such rules in place.
Previous reporting indicated Musk may have already been considering moving the headquarters of X before the bill was signed. Newsom did not comment directly on Musk’s move from California but took aim at the CEO’s recent support of Donald Trump.
Musk in February said he moved SpaceX’s incorporation from Delaware to Texas after a Delaware judge invalidated his $56 bn pay package from Tesla. Shareholders voted to uphold the pay package in late June.
– Glass Lewis recommended that Enhabit shareholders elect three AREX Capital Management director candidates to the nine-member board, Reuters reported. It advised choosing AREX nominees Maxine Hochhauser, Mark Ohlendorf and Gregory Sheff.
‘There is a valid case to be made for supporting at least incremental change to the company’s board, given the company’s financial underperformance relative to its closest peers, the company’s missteps in the strategic review process and the relevant experience and expertise of the dissident nominees,’ Glass Lewis said in a report. ISS had previously said that shareholders should elect three AREX director candidates.
Shareholders will vote on July 25 unless the two sides reach an agreement beforehand.
AREX has been asking investors to replace seven directors and has also been pushing the home health and hospice provider to put itself up for sale. The company, which is urging shareholders to elect all nine of its directors, decided earlier this year to remain an independent company.
– According to CNBC, the SEC has sued the former CEO of the blank-check company that merged with Trump Media, accusing him of lying about his firm’s plans to combine with Donald Trump’s social media startup. Patrick Orlando allegedly lied in public filings when he said his company, Digital World Acquisition Corp, had not contacted any possible merger targets and had no specific merger plans, the SEC said in a lawsuit.
‘Orlando knew these statements were false,’ the SEC’s civil complaint alleged. ‘He had personally engaged in numerous lengthy discussions’ with Trump Media’s representatives and had targeted the company ‘for months,’ the agency alleged.
Orlando and Trump Media did not immediately respond to CNBC’s requests for comment.
– Former Pimco CEO Mohamed El-Erian will step down from the board of Barclays following his appointment as chair of sportswear company Under Armour, Reuters reported. El-Erian had a successful stint at Pimco in the early 2000s managing emerging market bond investments. After a stint at Harvard, he returned to Pimco in 2007 as CEO and co-chief investment officer alongside Bill Gross. In 2012 President Barack Obama appointed him as chair of the President's Global Development Council.
Barclays said it has also appointed Brian Shea, former CEO of investment services for BNY Mellon from 2014 until his retirement in 2017, as a non-executive director.
Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
