The GPP newsletter is back and hopes everyone enjoyed the holiday weekend. Elliott Management was eager to get back to work, as Reuters reported on Monday the activist now holds 10% of Southwest stock after converting some of its derivatives into common stock. The increase in ownership gives Elliott the ability to call a special meeting as it pushes for a change in leadership and replacement of two-thirds of the Board. Last week, Southwest CEO Robert Jordan rallied employees and reiterated his focus on the company’s future. The two sides are set to meet on Monday to discuss “a collaborative path forward.”

Also on Monday, a hearing between health technology company Masimo and activist fund Politan will take place in a California courtroom. Masimo claims Politan violated 13D disclosure rules by failing to meet a bylaw requiring disclosure of the activist's alleged efforts to "sabotage" a spinoff deal and to interfere in a joint venture for its consumer business. In a letter to stockholders, Masimo wrote that Politan’s Quentin Koffey is executing a multi-year plan to take control of the company, has intimidated non-Politan directors and gone to extreme lengths to hide the identity of its investors.

Meanwhile in Japan, the Financial Times is describing the unsolicited takeover bid from Canadian-based Alimentation Couche-Tard for 7-Eleven’s parent Seven & i as the “most important and transformative M&A deal Japan has ever seen.” The bid follows a series of shareholder-friendly corporate governance reforms in Japan as well as increased pressure from activist investors targeting iconic Japanese companies. On Friday, Seven & i told the Canadian convenience store giant the $38.5 billion offer was not in the best interest of the shareholders and that a deal would likely face antitrust scrutiny in the U.S. 

Have a great weekend,

GPP team 

Harvard Law School Forum on Corporate Governance: Dealing with Activist Hedge Funds and Other Activist Investors

Marty Lipton, founding partner at Wachtell, shares his latest strategies for avoiding, defusing, resolving and prevailing in contested situations and proxy fights. Lipton says regular vulnerability assessments with advisors and a strong pipeline of director candidates help defend or preempt activist attacks. Read More

Sullivan & Cromwell Publication: 2024 Proxy Season Review – Part 2

Sullivan & Cromwell is out with its latest proxy season review, which looks at compensation-related issues from this year’s proxy season. The law firm looks at data that shows say-on-pay proposals remained high in part because of ISS recommendations influencing shareholder voting on the matter. Read More

M&A

The Wall Street Journal: Verizon Strikes $9.6 Billion Deal for Frontier

Lauren Thomas, Jessica Toonkel and Drew FitzGerald followed up on their scoop to report that Verizon reached an all-cash deal to acquire Frontier Communications. The Journal noted telecom dealmaking could heat up as wireless providers expand into communities lacking high-speed broadband and diversify from cable-internet providers. Read More

The Wall Street Journal: Nordstrom Family Bids Again to Take Retailer Private

The founding family of Nordstrom made a bid to take the namesake retailer private for $23 per share. The $3.8 billion offer is the family’s latest attempt to regain control of the department store out of public view. Read More

Bloomberg: Josh Harris’ 26North to Buy ArchKey in First Private Equity Deal

Apollo co-founder Josh Harris’ new firm struck its first private equity deal, acquiring electrical systems provider ArchKey Solutions for just north of $1 billion, notes Gillian Tan. ArchKey recently completed projects at The Sphere in Las Vegas and the Smithsonian’s African American History Museum in D.C. Read More

CORPORATE GOVERNANCE

Paul Graham: Founder Mode

Silicon Valley’s newest debate stems from Y Combinator co-founder Paul Graham’s latest piece – inspired by a recent talk by Airbnb co-founder and CEO Brian Chesky – designating the two primary styles for building a company in: ‘Founder Mode’ v. ‘Manager Mode,’ and how one can organically evolve into the other as companies experience growth. Read More

Skadden: AI Safety: The Role of the Board in Assessing and Managing AI Risk

As AI increasingly enters the list of 10-K risk factors, Skadden has put forth its guiding principles for AI corporate governance. With various AI rules (or lack thereof) across regions, Boards are advised to deeply understand how AI is built, deployed, and tested at their companies, ensure an AI risk management process in place and to conduct regular reviews. Read More

Bloomberg: GOP State Treasurers Urge Business Group to Put Shareholders First

A group of Republican state treasurers examine the Business Roundtable’s 2019 letter on ‘redefining corporate purpose’ stating that major corporations should prioritize all stakeholders from shareholders to employees to the communities in which they operate. Read More

FROM OUR DESK TO YOURS

You know we at GPP have a soft spot for wine and food and all the great stories that go along with that, so we caught the new film about one of the unsung entrepreneurs of the 19^th century, Veuve Clicquot, or “The Widow Clicquot.” After seeing the movie, we bought the book it was based on by Tilar Mazzeo, cozied up with some bubbly and dove in.

You may know the ubiquitous brand and label of the Veuve. But before Christian Dior or Louis Vuitton, before Tiffany, before Estée Lauder or Bernard Arnault, there was “the widow” Barbe-Nicole Clicquot Ponsardin. Widowed at 27 with no MBA, she proceeded to build with the zeal of any modern business leader (see Founder Mode, Paul Graham) a global champagne business and one of the first recognizable luxury brands amid the Napoleonic wars, blockades, trade embargoes and revolutions.

She built a brand so visible in the bars in London and salons in St. Petersburg that all was said was, “Get me the Widow!” and out came her rosé colored elixir. She innovated the production of champagne. Go into any champagne house’s caves, and the reason they are stored with the nose down—so-called riddling—is her innovation. She was one of the first to put labels on her bottles. She was one of the wealthiest business leaders in all of Europe, raking in annual sales of $30 million in the 1800s.

Her brand now sits under the same LVMH roof as her competitor Jean-Rémy Moët (now Moët Chandon), whom she competed with for Napolean’s tastes. We are not sure how the widow would feel about that. But le grand dame of Reims helped make champagne the most famous wine of all, and for that, we can toast the Widow. 

PEOPLE MOVES

• Alan Murray, former CEO of Fortune Media, is rejoining The Wall Street Journal to lead the newly created Dow Jones Leadership Institute. The venture is designed to build on The Journal’s CEO Council to provide peer-to-peer learning and executive education. Read More
• Rite Aid has promoted its CFO Matt Schroeder to CEO as the company emerges from bankruptcy protection and begins operation as a private company. Read More
• David Hunker has been named managing director and global head of activist defense and shareholder engagement of Piper Sandler. Read More
• JPMorgan has promoted Cassander Verwey to co-head its M&A business in EMEA. He will co-head alongside Dwayne Lysaght. Read More

• September 8: Wine on Wheels Annual Grand Tasting, City Winery NYC
• September 9-11: Council of Institutional Investors 2024 Fall Conference, Brooklyn   
• October 8: Due Diligence Live, London
• October 22: 13D Monitor Active-Passive Investor Summit, Manhattan 
• November 12-13: 2024 Berkeley Fall Forum on Corporate Governance, San Francisco