3 Big Companies Buckling to Activist Investors

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It seems as though activist investors still have a major role in the ups and downs of the stock market. Some activist efforts help companies through time, while others look more targeted toward short-term stock improvements. Tuesday, February 21, 2017, saw three large companies in the news after activist investors have targeted them. Investors have taken mixed reactions to each effort.

Bristol-Myers Squibb Co. (NYSE: BMY) is trying to appease the activist investor firm Jana Partners in what hopefully will be an effort to stave off further bleeding in its shares. The pharmaceutical giant has announced that it would name new members to its board of directors and that it would increase its ongoing stock buybacks.

The three industry insiders joining Bristol-Myers board are Robert Bertolini, Matthew Emmens and Theodore Samuels. The board of directors will be expanded to 14 members, but only 11 positions will be up for election at the board meeting in May. On the buyback front, Bristol-Myers Squibb is announcing $2 billion for accelerated share buybacks.

Bristol-Myers Squibb shares were last seen down 0.9% at $54.10. Its 52-week range is $46.01 to $77.12, and its market cap is $90 billion. Perhaps the buyback is not large enough to move the needle, or maybe investors are more fearful that even an activist investor cannot make for better drug pipeline news.

CSX Corp. (NYSE: CSX) has been in ongoing efforts from activist investor Hunter Harrison. The rail giant announced that Chairman and CEO Michael Ward will retire in May. Clarence Gooden, its president, will also retire.

The company said that Fredrik Eliasson has been appointed as president of CSX effective February 15, 2017. He is said to be a 22-year veteran of CSX and is the company’s current chief sales and marketing officer. Eliasson will maintain his current responsibilities in his new position.

CSX shares were up 0.7% at $48.90 on Tuesday morning, in a 52-week range of $23.58 to $49.13 and with a consensus analyst price target of $46.42. CSX has a market cap that is now $45 billion.

Tiffany & Co. (NYSE: TIF) announced that it has reached an agreement that will add new board members and to help assist in the jewelry leader’s executive search for a new chief executive officer.

JANA Partners has taken a stake along with Francesco Trapani of about 5.1%. Trapani, Roger Farah and James Lillie will be joining the board no later than March 6, 2017. That will take the board from 10 to 13 members, and one current director will not stand for reelection in 2017 and two will not stand for reelection in 2018.

Farah has ties back to Tory Burch and Ralph Lauren in current and past endeavors. Lillie was formerly the chief executive officer at Jarden.

Tiffany & Co. shares were up 2.1% at $88.03. The 52-week range is $56.99 to $89.40, but the consensus analyst price target was last seen down at $84.04.