Capital Markets & Investor Relations Australia

Welcome to the latest edition of Global IR Insights, where FTI Consulting's Australian Strategic Communications team shares intel from our global network in capital markets communication and what it might mean for Australia.

Q3 M&A Recap and Market Trends

As we head into the final stretch of 2024, mergers and acquisitions seem to be everywhere, with international deal activity on the rise. Recently,?Blackstone and Vista edged closer on an $8 billion dollar deal to purchase Smartsheet and BP put its $2bn U.S. onshore wind business for sale.

The U.S. M&A activism scene is also heating up, with our FTI Consulting September 2024 Activism Vulnerability Report noting a 60% increase in activist M&A demands from March through to late August 2024, compared to the same period in 2023. With interest rates likely to fall in the coming months, activists are pursuing more take-private campaigns.?

So, what can we learn from recent trends?

With notable activity in the junior to mid-cap space and significant deals like Boral’s $1.9 billion acquisition by Seven Group Holdings, The Australian Financial Review?emphasises time, value and regulatory risk as the significant factors in Australian M&A.?

Effective communication strategies are essential to articulate the merits of transactions and responding throughout the deal process.?

Proxy Battleground Set for This AGM Season

The 2024 proxy season saw shareholder rights and corporate governance standards being tested. The U.S. saw shareholder sentiment on board elections move to fewer directors failing to receive majority support, while in Australia’s most recent proxy season, Glass Lewis reports a significant rise in shareholder dissent, with an unprecedented 41 remuneration strikes among S&P/ASX300 companies.

While independence and over commitment concerns remain drivers of protest votes, the increase was largely fuelled by poor company performance, problematic capital allocation decisions, questionable remuneration practices and concerns over gender diversity on boards.

?With higher strikes on the rise, non-financial remuneration measures, such as long-term ESG transformation and operational performance, also come into play.?Enhanced transparency is vital, as is holding board members accountable for a growing list of intractable social and environmental issues whilst maintaining open communication channels with investors.?

The Biggest Mistakes IR Teams Can Make in a Crisis?

During a crisis, an effective Investor Relations (IR) team is crucial, as communication missteps can worsen the situation. IR Magazine outlines common pitfalls and how to avoid them. This also applies to Australia, with heightened effort from companies to be well-prepared to respond to a crisis following high-case profiles.

IR professionals, investors & analysts all emphasise that being well-informed is key to avoiding vulnerabilities. Transparent, timely communication fosters public trust, and utilising a company’s channels is also a must.?

Communicating regularly with investors is essential, and crisis preparedness is crucial. In fact, crisis simulations are important tools for assessing, testing, and improving an organisation's plans and readiness. Your crisis plan should be developed and rehearsed well before a real situation arises.

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