As private-equity firms and activists compete in an increasingly crowded investing world, where more money chases fewer opportunities, their approaches are growing closer, according to a Wall Street Journal analysis today. Activists, who traditionally buy up minority stakes then agitate for change, are increasingly attempting total takeovers or acquiring stakes at the requests of management teams looking for guidance. Private-equity firms, which typically do friendly buyouts, are increasingly buying noncontrolling stakes in public companies — and they aren’t always letting management in on their plans ahead of time. Both camps target underperforming companies with the goal of improving them and outperforming the market. However, a rising stock market and intense competition for deals have made bargains harder to find. Competition from corporate buyers and a regulatory effort to slash the amount of debt used to fund buyouts have sent private-equity firms searching for new ways to deploy cash. Meanwhile, activists are looking for larger targets to absorb the billions of dollars they have raised in recent years.
