Study pinpoints U.S. companies susceptible to takeovers
By Svea Herbst-Bayliss
(Reuters) - Corporate raiders take note: new research finds that financial services company Morgan Stanley and retailer J C Penney Co Inc are among the most vulnerable to hostile takeovers.
The two rank among the top 10 U.S. corporations where control is concentrated within a small group of large shareholders, putting the companies at greater risk of losing a potential hostile takeover bid, according to a report released on Wednesday.
Rotary Gallop, a Houston-based research and consulting firm, measured controlling influence rather than ownership stakes at 495 of the companies in the Standard & Poor's 500 index.
Morgan Stanley and J C Penney were not immediately available for comment.
"What matters is how much control shareholders have in a company, not ownership - the traditional yardstick in contested situations," said Travis Dirks, a trained physicist who is now Rotary Gallop's chief executive.
"Until now it was more of a gut feeling," he said, referring to the traditional method used by pundits of handicapping proxy contest outcomes.
Companies with a high "RG Whale Score" would be in danger of losing in a hostile bid because outsiders would have fewer owners to convince to vote with them and accept a deal, he said.
Separately, "RG Shark Scores" show a company's potential vulnerability to activists winning a proxy contest over corporate governance or other matters. The report lists Wisconsin Energy Corp and Fifth Third Bancorp as vulnerable to "sharks." Continued...