By the start of 2020, shareholder activism had become a fixture in Canadian capital markets. Although activism levels had been declining to some degree in recent years, most public companies are now conditioned to the reality that an activist could emerge at any time; the breadth of activism has widened and an increasing number of shareholders, including institutional shareholders, have been willing to speak out. When the COVID-19 pandemic took hold in North America in the heart of the 2020 proxy season, activism activity declined. Macro concerns appeared to cause activists to take a more cautious approach despite the many potential opportunities that emerged. We expect this slowdown to be fleeting. The pandemic has left a number of issuers weakened in its wake, while public M&A activity has maintained a steady pace. These conditions will provide enticing opportunities to even the most conservative activist. In this chapter, we summarize trends in activist demands throughout 2020 and share insights for both issuers and shareholders navigating the current climate. We round out our discussion with some practical guidance on settlements and their varied terms.

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This chapter appears in the 2020 edition of Davies Governance Insights, our comprehensive annual report on the trends and issues most important to Canadian public companies.

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