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

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

By
David Larcker, Brian Tayan
2010|Case No.CG20A

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.

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

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