Glenn Curtis from Thomson Finacial's Strategic Research group reviews shareholder activism in 2007Transcript:Good afternoon everyone -- my name is Glenn Curtis -- and I am a director in the Strategic Research Group at Thomson Financial in New York. For those unaware of my group -- STRATEGIC RESEARCH -we focus on and study a variety of corporate governance issues ranging from executive compensation, director liability, crisis communications, and a variety of other subjects that traditionally appeal to IROs and the C-Suite. SOME OF MY RECENT REPORT TOPICS INCLUDE: CEO SUCCESSION PLANNING, BOARD EVALUATIONS, DIRECTOR LIABILITY, AND THE EVER POPULAR "WHAT TO DO WHEN YOUR STOCK BLOWS UP"Today however, I am here to talk to you about shareholder activism -- and more specifically instances of activism that occurred in 2007. Recently I completed a report detailing activism activity between the first and the third quarter. The report details activist situations that took place specifically from January through September 2007. The source for this data was Thomson's SDC Platinum™ data- base, the SEC, and various press releases. And Here are some highlights: Between January and September 2007 activists attempted to exert their influence at 53 public companies. While some situations have not been resolved to date, 39.6% of instances have been resolved in the activist's favor, while just 20.8% have been resolved in the target company's favor. This is essentially consistent with a study that we completed in the 2001 to 2006 time frame.Some other interesting data from the Q1 to Q3 study:The most common demand made by activist firms was for board seats. • The average target size in terms of market capitalization was $8.49 billion. • Also - Companies engaged in the manufacturing and distribution of electronics and software were among the most popular targets. In fact 34% of all targets encompassed this group. • Companies within the financial industry were also large targets. One of the reasons for this might be that these types of companies continue to have valuable assets on their balance sheets in spite of the looming credit crunch. The recent decline in share prices of the major banks and lending institutions may also be behind the recent interest in the group. • While several well-known activist firms have engaged in some sort of activism over the last nine months, Carl Icahn and entities controlled by Icahn appeared to be the most active. Other well known activists that made headlines during this time were:Pershing Square: Two activist situations. One ongoing and one successful. •Riley Investment Management LLC: Two activist situa- tions. One successful. One ongoing. •Harbinger Capital Partners: Two activist situations. One success. One failure. •Oliver Press Partners: Two activist situations. Both ongo- ing. •Ramius Capital Group: Two activist situations. One suc- cess. One ongoing. • While private equity firms and hedge funds have tended to be the most common activists, mutual funds and individual investors are starting to get in on the action. In fact, T. Rowe Price : The well known mutual fund made a stand earlier in the year opposing a deal to take Laureate Education private. It failed. Also - Erik Jackson -- and individual investor made headlines: Jackson owned less than 100 shares of Yahoo, yet he led a push to oust Yahoo's chief executive, Terry Semel. Now Semel eventually stepped down. And while there are a number of reasons behind his departure (above and beyond the activist movement), Jackson is credited with stirring up a grass roots movement for his ouster. • Finally Perhaps not surprisingly, cash-strapped construction companies and builders were targeted the least by activist shareholders so far during 2007. For more information about this report please feel free to contact me directly at glenn.curtis@thomson.com. You can also check out an executive summary of this report and other reports by going to :the TFCS Intranet -- under internal links -- and then special reports....Finally, please be on the lookout for a report which details Q4 2007 activist activity in February.Thank you -- again this is Glenn Curtis with the Strategic Research group in New York.