Sharks in the Water: Battling an Activist Investor for Corporate Control (A)

Posted: 23 Mar 2010

See all articles by David F. Larcker

David F. Larcker

Stanford University - Graduate School of Business

Brian Tayan

Stanford University - Graduate School of Business

Date Written: February 1, 2010

Abstract

In July 2006, Barracuda became the largest investor in Tarco International. In a meeting with management, Barracuda’s managing director advised that strong measures needed to be taken to improve operating performance. If management failed, Barracuda would force a sale of the company. In response, the board of Tarco hired FD, a leading financial communications consultancy specializing in strategic investor relations. The board asked FD to compile extensive research on the Tarco’s shareholder base, investor perception of the company and management performance, predictive voting on potential proxy proposals, and tactics used by Barracuda in previous activist engagements. Armed with this data, the board had to decide what steps to take, if any, to keep Barracuda at bay and ensure that Tarco retained the support of its investors.

Also see CG20B Sharks in the Water: Battling an Activist Investor for Corporate Control (B).

Keywords: activists, Board of Directors, Corporate Governance, shareholder relations

Suggested Citation

Larcker, David F. and Tayan, Brian, Sharks in the Water: Battling an Activist Investor for Corporate Control (A) (February 1, 2010). Rock Center for Corporate Governance at Stanford University Teaching Case No. CG-20A . Available at SSRN: https://ssrn.com/abstract=1577199 or http://dx.doi.org/10.2139/ssrn.1577199

David F. Larcker (Contact Author)

Stanford University - Graduate School of Business ( email )

Graduate School of Business
518 Memorial Way
Stanford, CA 94305-5015
United States
650-725-6159 (Phone)

Brian Tayan

Stanford University - Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Register to save articles to
your library

Register

Paper statistics

Abstract Views
1,062
PlumX Metrics