M&A lawyer Martin Lipton invented the poison pill and wrote one of the key books about takeover law. He is also a founding partner of the law firm of Wachtell, Lipton, Rosen & Katz the takeover specialists and so when he goes on the attack against an activist investor like Carl Icahn people tend to notice the scrap.
“[They are] looking to create immediate profit for themselves. Granted, it creates immediate profit for all shareholders but it does not benefit the shareholders of all companies,” Mr Lipton was reported in the Financial Times as saying while addressing a legal conference in New Orleans.
“Activism has a huge effect on the strategies companies follow in order to avoid being attacked by a Carl Icahn or a Bill Ackman. That’s what is not properly considered.”
Lipton also identified Paul Singer, founder of hedge fund Elliott, and Daniel Loeb, the activist embroiled in fights with Sony and Sotheby’s, as investors he did not like.
Singling out individuals marks the latest swipe in Mr Lipton’s protracted rhetorical battle with activists. An ardent defender of companies’ right to resist the attentions of activists and hostile suitors, Mr Lipton and his firm sued Mr Icahn and his publicly traded investment vehicle, Icahn Enterprise, last year.
Although Mr Lipton offered the names of some activists he does like, including Trian’s Nelson Peltz and Barry Rosenstein at Jana, he used his presentation at Tulane to criticise their tactic of lobbying companies to return money to investors through share buybacks – a cornerstone of many activist campaigns.
