Going Beyond: Shareholder Meetings

Executive Guide to M&A Shareholder Votes: Do’s and Don’ts

Mergers and acquisitions (M&A) are among the most significant events in corporate strategy—impacting buyers, sellers, and executives navigating these high-stakes deals. In 2024 alone, M&A activity reached $3.5 trillion globally, and with a business-friendly administration, deal volumes may rise even further. However, successful M&As require meticulous planning and strategic shareholder engagement to overcome potential opposition and secure a smooth transaction.

From understanding shareholder dynamics to targeting key investors, executives must be proactive ahead of crucial proxy votes, as shareholder dissatisfaction can derail deals before they close. In an environment where activist investors and public scrutiny can quickly shift sentiment, securing shareholder approval demands a well-executed strategy.

Key Do’s and Don’ts for M&A Shareholder Votes

Don’t Assume You Have the Vote—Know Your Shareholders

An M&A deal’s success hinges on executives having a clear picture of their shareholder base, which evolves rapidly once a deal is announced. A 2019 study revealed hedge fund ownership in takeover targets increased by 7%, while mutual fund ownership declined by 3%. Stock surveillance, or Ownership Intelligence, is essential to track investor movements and sentiment in real time.

By leveraging advanced ownership intelligence tools, executives can:

Identify who is buying and selling shares post-announcement
Refine messaging to engage record-date shareholders effectively
Assess how investor sentiment shifts before and after the vote

Don’t Assume All Investors Support the Deal—Solicitation Strategies Matter

Even with a premium offer, not all investors will automatically back the transaction. Effective solicitation requires distinguishing between retail investors and institutional shareholders:

Retail investors prefer clear, simple messaging that highlights direct financial benefits
Institutional investors focus on long-term strategy, economies of scale, and margin improvements

Tailored messaging from CEO’s and investor perception studies help ensure that companies align communication strategies with shareholder expectations.

Don’t Overlook Sell-Side Analysts—They Shape Market Sentiment

Too often, companies overlook the role of sell-side analysts during an M&A transaction. But these individuals are regularly in front of your investors, and when properly briefed, they can be invaluable in helping shape market perception. If analysts misunderstand or misinterpret the transaction, that misunderstanding can trickle into the shareholder base – especially for institutional investors who lean on analyst notes for quick takes.

To prevent misinterpretation, companies should:

Hold dedicated analyst calls separate from general investor communications
Provide clear, detailed materials on deal rationale, synergies, and financials
Ensure analysts fully understand the strategic vision behind the merger.

Don’t believe your shareholder base has remained static. Once the deal has been announced the shareholder base will shift radically and rapidly. Do Pay Attention to Shareholder Base Shifts—Stock Loan Analysis is Critical

Every company that announces an M&A transaction, especially stock for stock deals or deals where there is significant arbitrage, must conduct a stock loan analysis to identify the top institutions lending out shares to short sellers and assess how this impacts the votable share positions.

This analysis helps ensure an accurate understanding of voting dynamics and highlights any potential reductions in voting power caused by this practice. Why is this important? Because a large institution like Vanguard or Blackrock might report a significant stake in your company’s stock. However, since they both actively engage in securities lending, a portion of those shares could be out on loan and are no longer eligible to vote. This effectively reduces the voting power of that institution on its reported record date position. This can negatively affect a proxy solicitation

Conduct a stock loan analysis early and ongoing to assess the impact on votable share positions.
Adjust solicitation strategies to compensate for potential reductions in voting power caused by large institutions lending shares to short sellers.
Record date institutional shareholdings can be deceiving with stock lending present. Avoid last-minute surprises by monitoring changes in institutional holdings throughout the process.

Do Take a Proactive Approach — This is Not a Routine Shareholder Meeting

M&A votes demand an all-hands-on-deck approach. Activist investors are a constant threat, and in H2 2024, over half of all activist campaigns included M&A demands. Public opposition can range from critical statements to full-scale proxy fights, as seen when Brookfield’s $10.6 billion takeover bid for Australia’s largest power retailer was rejected in 2023 due to activist pressure.

Engage proactively with all investors—activists often leverage undecided votes to disrupt deals.
Ensure proxy solicitation and investor relations teams are aligned well before the record date working together on coordinated shareholder outreach.
In all M&A transactions a company should have their regular proxy solicitor and IR firm on board. Don’t switch up your team, now is not the time to be holding the hand of a new firm.

Do Include Retail Shareholders in Your Strategy — They Can Make or Break the Vote

Retail shareholders, particularly NOBO (Non-Objecting Beneficial Owners), often determine the success or failure of a vote. Many companies that struggled to secure approval have relied on retail investors to push them over the necessary threshold.

Develop retail outreach campaigns early—these efforts require time to be effective.
Understand that, when engaged, retail investors tend to support management at high rates.
Allocate resources to a targeted retail solicitation strategy to maximize voter turnout.

Conclusion: Ensuring a Smooth M&A Vote

M&A shareholder votes should not fail—but they do. For executives, a failed vote can derail months of planning, strategic vision, and careers. The key to success lies in a comprehensive approach that integrates:

Best-in-class Ownership Intelligence to track investor sentiment.
End-to-end shareholder engagement tailored to diverse investor types.
Focused investor relations strategies to counter opposition and build support.

By embracing these best practices, companies can navigate M&A shareholder votes with confidence—ensuring successful, dispute-free transactions.

Article by

Sam Chandoha
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With Alliance Advisors Going Beyond research series, we bring to the forefront pivotal discussions and content that are shaping the world of Corporate Governance, Executive Compensation, ESG, Shareholder Activism, Retail Outreach and M&A.

Executive Guide to M&A Shareholder Votes: Do’s and Don’ts

Key Do’s and Don’ts for M&A Shareholder Votes

Don’t Assume You Have the Vote—Know Your Shareholders

Don’t Assume All Investors Support the Deal—Solicitation Strategies Matter

Don’t Overlook Sell-Side Analysts—They Shape Market Sentiment

Don’t believe your shareholder base has remained static. Once the deal has been announced the shareholder base will shift radically and rapidly. Do Pay Attention to Shareholder Base Shifts—Stock Loan Analysis is Critical

Do Take a Proactive Approach — This is Not a Routine Shareholder Meeting

Do Include Retail Shareholders in Your Strategy — They Can Make or Break the Vote

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