Activist investors are gearing up for what promises to be a busy year in the middle market. More than ever, small-stake sales are sparking big discussions inside boardrooms, making hedge funds such as Starboard Value and Elliott Management notable names, especially within the middle market. That means “mid caps are still the sweet spot of activism,” says Bob Profusek, head of M&A at Jones Day.
In February Starboard successfully influenced Staples Inc. (Nasdaq: SPLS) to take over retail rival Office Depot (Nasdaq: ODP). Had Staples not agree to the deal, Starboard promised a proxy battle for representation on the board. “This merger makes too much sense to ignore,” a shareholder letter states.