An Activist Approach: Confidential Role Assignment for Castle Rock Management

Guhan   Subramanian; Kait  Szydlowski

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Exercise | July 2015

An Activist Approach: Confidential Role Assignment for Castle Rock Management

by Guhan Subramanian and Kait Szydlowski

Abstract

A three party, multiple-issue negotiation exercise dealing with a potential merger between two leading department stores, called for by an activist investor hedge fund in a letter to both companies. Company management will now attempt to navigate next moves, which are complicated by weak takeover defenses of their corporate boards, hedge fund ownership stake within both companies, and potential anti-trust risk. Meanwhile, the third party, the activist hedge fund, is turning up the heat in planning their next move.

Keywords: negotiation; corporate governance; Activist Investors; takeover defense; Negotiation Types; Mergers and Acquisitions; Corporate Governance; Investment Activism; Retail Industry;