Proxy Fight

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Proxy fight

Often used in risk arbitrage. Technique used by an acquiring company to attempt to gain control of a takeover target. The acquirer tries to persuade the shareholders of the target company that the present management of the firm should be ousted n favor of a slate of directors favorable to the acquirer, thus enabling the acquiring company to gain control of the company without paying a premium price.

Proxy Fight

Competition of outside group with management for stockholders' proxies in order to accumulate votes to elect a new board of directors.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Proxy Fight

A situation in which two investors (usually two companies) compete with one another in the attempt to gain the proxy votes of shareholders in a third company. The two investors engage in the proxy fight because both wish to have enough proxy to elect a new board of directors that will effectively do whatever the investor wants. The winner of a proxy fight, if any, is able to control the third company through the board of directors and does not need to directly acquire it, though many often do anyway.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

proxy fight

A contest among two or more opposing forces to solicit stockholders' proxies and, in effect, to gain control of the firm through the election of directors. It is usually quite difficult to wrest control from the existing management through a proxy fight, but the tactic has been used, for example, by some suitors in takeover attempts.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Outside of that, and particularly when you have a proxy contest, you'll want to do a paper mailing.
Another way to anticipate potential issues is to perform self-analyses to understand factors that may make the company the target of a proxy contest or an attractive takeover candidate.
The third method was limited in that a study of self-financed proxy contests does not show that contests taking place on the issuer's proxy would function similarly or attract use by the same types of shareholders with the same focus that an entirely self-financed contest would attract.
Even in the absence of a rule mandating proxy access, shareholders may launch their own proxy contests. The Commission estimates a proxy election costs the proponent shareholders $368,000, on average.
This upsurge in the number of activist investors and in their financial firepower has led to a significant increase in the number of proxy contests, (57) as well as in their competitiveness.
We have been engaged on many of the highest profile proxy contests and largest M&A transactions in North America.
(finding that in a sample of 70 proxy contests, 60 were about board
But Frankle says the rules actually inject a tremendous amount of uncertainty into the election process, possibly increasing the likelihood of a proxy contest as investors seek additional access beyond that which is stipulated in the rules.
The first section presents a discussion of proxy contests as a mechanism for initiating corporate reform.
FURTHER READING: Bob Evans CEO resigns following pressure from activist shareholders The Luxembourg Loophole Proxy contests continue at large companies
His practice includes representing and advising clients in complex corporate matters, including IPOs, PIPEs, proxy contests, tender offers, going-private transactions, mergers and acquisitions, and corporate partner and license transactions.