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Have you heard the blessed news? There is peace in our time, between the activist hedge funds and their targets. Appeasement works, even on Paul Singer.

A new playbook is emerging in the world of shareholder activism, one that calls for quick peace treaties enabling investors and the companies they target to sidestep costly, protracted battles…. The new setups are more like nonbinding handshake agreements….

Elliott Management Corp…., one of the most prolific and aggressive activists, plans to use them as a template in future campaigns, according to a person familiar with the matter.

This is because activist campaigns are expensive and bruising and, oh yea, decreasingly remunerative.

Activists, for their part, are grappling with subpar returns and eager for the increased flexibility and opportunity to tout a quick victory that the new arrangements afford.

Now, however, this new Era of Good Feelings faces its sternest test. It’s one thing to get poor, downtrodden John Paulson to wave the white flag. It’s quite another to tell a tanned and rested Carl Icahn he can’t have what he wants. And Carl Icahn wants HP and Xerox to get together in some way, shape or form. HP—which has a market cap roughly four times that of Xerox—is ruling the most improbable of those forms, namely the smaller and shrinking company swallowing the larger. But, in a nod to these more collaborative times, says it remains “open to exploring” some way of these two becoming one. But it sure doesn’t sound as enthusiastic about it as Icahn.

There are “fundamental questions that need to be addressed,” Chief Executive Officer Enrique Lores and Chairman Chip Bergh wrote in a letter to Xerox CEO John Visentin. They cited Xerox’s revenue decline since June 2018, “which raises significant questions for us regarding the trajectory of your business and future prospects.”

HP Rejects Xerox Offer as Too Low While Staying Open to Deal [Bloomberg]
Peace Breaks Out Among Activists and Their Prey [WSJ]
Paulson gives up opposition to reduced Callon-Carrizo deal [Reuters]



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