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Value Creation Strategy and Shareholder Activism Defense

A sharp value creation strategy not only ensures that a great business is a great stock—but it also helps deter activist shareholder attacks.

A linear approach to strategy—first defining a business strategy, then developing a supporting financial strategy, and finally selling that package to investors—may seem logical, but it’s often not optimal.

The approach falls short because of the many interdependencies among business, financial, and investor strategies. Only by developing all three iteratively and in parallel—exploring multiple scenarios—can an organization maximize its total shareholder return (TSR).

How We Help Clients with Value Creation in Business and Activism Defense

Whether an organization is focused on creating value in business, justifying a high multiple, guarding against an activist shareholder attack, or overcoming a new activist campaign, our value creation consulting team has the relevant experience. In our value creation strategy work with clients, we:

  • Consider how to maximize shareholder value of current corporate and business strategies. What is the future cash flow from each of the corporation’s businesses likely to be—and how does it ladder up to an estimate of the company’s future multiple and TSR? What strategic options exist to enhance performance?
  • Determine the optimal capital structure and best use for excess cash. When it comes to funding investments, what is the right mix of free cash flow, equity, and debt? And since most financially healthy companies generate cash well in excess of their reinvestment needs, how much of that cash should remain on the balance sheet versus being returned to investors via dividends and buybacks? Finally, how does the capital structure change under different strategic assumptions?
  • Evaluate and optimize the match between the value creation strategy and the investor base. Do investors see the strategy as credible and consistent with their investment priorities? If not, what needs to change: the strategy, the shareholders, or both?

Our Client Work in Activism Defense and Creating Value in Business

Whether your organization is seeking to ignite a new wave of value creation, justify a high multiple, guard against an activist attack, or overcome a new activist campaign, BCG has the relevant experience. For example, we helped:

Spotlight: Defending Against Shareholder Activism

Shareholder activism is on the rise.

Defending against an activist attack is costly.

BCG is the industry leader.

Our Insights on Value Creation in Business and Activism Defense

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Industrial Distributors Value Creators 2023

Two decades of data show how leading distributors deliver strong shareholder returns. Distributors must generate local and national scale and fight to defend and grow their market share.

Value Creation in a Decarbonizing Economy

Value Creation in a Decarbonizing Economy

Exactly how the world will reach net zero is unknown, but at a macro level the science and economics define a pretty clear path. Given the magnitude of value at stake during the transition, many leaders are concluding that inaction may be the riskiest strategy of all.


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Meet Our Value Creation Consulting Leaders

Perspectives on Strategy and Value: Insights on creating sustainable value in an uncertain world.