Activist Antagonist Gives Respect

Apr 1 2014 | 10:38am ET

Prominent corporate lawyer Martin Lipton has spent a career battling activist investors. But don’t let it be said of the Wachtell Lipton Rosen & Katz partner that he paints all of them with the same broad brush.

Lipton said he respects—“I wouldn’t say ‘like’”—some hedge fund activists. Those winning that plaudit include Trian Fund Management’s Nelson Peltz and Peter May, Jana Partners’ Barry Rosenstein, and Relational Investors’ David Batchelder and Ralph Whitworth.

Speaking at Tulane University’s annual mergers-and-acquisitions conference, Lipton also enumerated his least favorite hedge fund activists: Carl Icahn, Pershing Square Capital Management’s William Ackman, Third Point’s Daniel Loeb and Elliott Management’s Paul Singer.

Lipton has represented several of those hedge fund managers’ targets.

Lipton also moderated—slightly—his usually total opposition to activism, saying that some should even be “encouraged.” But he reiterated that boards of directors should be left more or less free to run things as they see fit.

Short-term activism, like pushing companies to return capital to shareholders, “results in illegality or immorality,” Lipton said. “It shouldn’t be allowed.”

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