IDEAS home Printed from
   My bibliography  Save this article

Hedge fund activism: insights from a French clinical study


  • Veronique Bessiere
  • Michael Kaestner
  • Anne-Laurence Lafont


Over the period from October 2006 to May 2008, Atos Origin, a French information technology company, was the target of two activist hedge funds, Centaurus and Pardus. This article investigates in detail how the activists initiated their actions, how the management organized its defence and how both were received by the market. The analysis reveals that, although Atos seemed to be an attractive opportunity, the funds failed in their primary objective, the sale of the target. In fact, the chairmen of Atos succeeded in discrediting the two hedge funds by getting support in the French context, not particularly prone to and sometimes even hostile towards shareholder's interests. Our findings show that the success/failure classification used in large-sample studies, and based very often on officially stated goals, bears a considerable risk of misinterpretation. The Atos case shows that empirical studies should more heavily rely on what really matters for hedge fund activism, i.e. the sale of the target, spin-offs or cash-outs. While governance related motives are often mentioned and easily enforced, they do not make activism profitable and cannot, by themselves, be considered as primary motives for hedge fund activism. As a consequence, the success of hedge fund activism should be assessed considering primary motives only.

Suggested Citation

  • Veronique Bessiere & Michael Kaestner & Anne-Laurence Lafont, 2011. "Hedge fund activism: insights from a French clinical study," Applied Financial Economics, Taylor & Francis Journals, vol. 21(16), pages 1225-1234.
  • Handle: RePEc:taf:apfiec:v:21:y:2011:i:16:p:1225-1234
    DOI: 10.1080/09603107.2011.568393

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. David Sraer & David Thesmar, 2007. "Performance and Behavior of Family Firms: Evidence from the French Stock Market," Journal of the European Economic Association, MIT Press, vol. 5(4), pages 709-751, June.
    2. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 2000. "Investor protection and corporate governance," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 3-27.
    3. Luigi Guiso & Michael Haliassos & Tullio Jappelli, 2003. "Household stockholding in Europe: where do we stand and where do we go?," Economic Policy, CEPR;CES;MSH, vol. 18(36), pages 123-170, April.
    4. Renneboog, Luc, 2000. "Ownership, managerial control and the governance of companies listed on the Brussels stock exchange," Journal of Banking & Finance, Elsevier, vol. 24(12), pages 1959-1995, December.
    5. Marc Goergen & Miguel Manjon & Luc Renneboog, 2008. "Is the German system of corporate governance converging towards the Anglo-American model?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 12(1), pages 37-71, March.
    6. Augustin Landier & David Thesmar & Mathias Thoenig, 2008. "Investigating capitalism aversion," Economic Policy, CEPR;CES;MSH, vol. 23, pages 465-497, July.
    7. April Klein & Emanuel Zur, 2009. "Entrepreneurial Shareholder Activism: Hedge Funds and Other Private Investors," Journal of Finance, American Finance Association, vol. 64(1), pages 187-229, February.
    8. Hall, Michael G., 2006. "Coalition Formation and Models of Capitalism," Business and Politics, Cambridge University Press, vol. 8(03), pages 1-37, December.
    9. Carine Girard, 2009. "Comparative study of successful French and Anglo-Saxon shareholder activism," Post-Print hal-00760812, HAL.
    10. Hall Michael G., 2006. "Coalition Formation and Models of Capitalism," Business and Politics, De Gruyter, vol. 8(3), pages 1-39, December.
    11. Alon Brav & Wei Jiang & Frank Partnoy & Randall Thomas, 2008. "Hedge Fund Activism, Corporate Governance, and Firm Performance," Journal of Finance, American Finance Association, vol. 63(4), pages 1729-1775, August.
    12. Luca Enriques & Paolo Volpin, 2007. "Corporate Governance Reforms in Continental Europe," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 117-140, Winter.
    13. Aigbe Akhigbe & Jeff Madura & Alan Tucker, 1997. "Long-term valuation effects of shareholder activism," Applied Financial Economics, Taylor & Francis Journals, vol. 7(5), pages 567-573.
    14. Faccio, Mara & Lang, Larry H. P., 2002. "The ultimate ownership of Western European corporations," Journal of Financial Economics, Elsevier, vol. 65(3), pages 365-395, September.
    15. Ingolf Dittmann & Ernst Maug & Christoph Schneider, 2008. "How Preussag Became TUI: A Clinical Study of Institutional Blockholders and Restructuring in Europe," Financial Management, Financial Management Association International, vol. 37(3), pages 571-598, September.
    16. Rajeeva Sinha, 2004. "The role of hostile takeovers in corporate governance," Applied Financial Economics, Taylor & Francis Journals, vol. 14(18), pages 1291-1305.
    17. Clifford, Christopher P., 2008. "Value creation or destruction? Hedge funds as shareholder activists," Journal of Corporate Finance, Elsevier, vol. 14(4), pages 323-336, September.
    18. Marco Becht & Fabrizio Barca, 2001. "The control of corporate Europe," ULB Institutional Repository 2013/13302, ULB -- Universite Libre de Bruxelles.
    19. Carine Girard, 2009. "Comparative study of successful French and Anglo-Saxon shareholder activism," Post-Print hal-00760813, HAL.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. repec:oup:rfinst:v:30:y:2017:i:9:p:2933-2971. is not listed on IDEAS
    2. Marco Becht & Julian Franks & Jeremy Grant & Hannes F. Wagner, 2017. "Returns to Hedge Fund Activism: An International Study," Review of Financial Studies, Society for Financial Studies, vol. 30(9), pages 2933-2971.
    3. repec:eee:riibaf:v:42:y:2017:i:c:p:1315-1326 is not listed on IDEAS
    4. Quôc Thai Huynh, 2019. "Determinants of hedge fund activism: development of a model of ex-ante decision-making for corporate stake
      [Les déterminants de l'activisme des hedge funds : élaboration d'un modèle de décision ex-
      ," Working Papers hal-02145379, HAL.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:apfiec:v:21:y:2011:i:16:p:1225-1234. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.