Based on the latest information provided by Elliott’s settlement with Sensata, it is clear that the activist investor has successfully gained a foothold within the company. Elliott has secured a board seat for Phillip Eyler, the president and CEO of Gentherm, as well as the establishment of a CEO search committee. This indicates that Elliott is actively involved in the decision-making process at Sensata and has a say in the selection of a new CEO.
However, while Elliott’s appointment of Eyler to the board is a positive sign, it is also notable that the firm chose to settle for a non-Elliott board member. This suggests that Elliott may not necessarily want to take control of the company itself, but rather wants to work collaboratively with management to drive value creation.
Elliott’s primary focus appears to be addressing Sensata’s capital allocation missteps under the leadership of Jeff Cote. Cote resigned from all company positions on April 29, and Martha Sullivan, who previously served as Sensata’s CEO, has been appointed interim president and CEO. Sullivan has a track record of creating value through capital allocation, which suggests that she may be better equipped to lead the company than Cote.
In addition to addressing the issue of capital allocation, Elliott also sees potential for value creation through strategic transactions. Sensata has a number of good assets in its portfolio, including the Dynapower and aerospace businesses, which could be sold for $2 billion. The company may also be a target for acquisition, particularly given the high interest from potential buyers following recent developments.
Regardless of whether the company pursues strategic transactions or not, Sensata is likely to benefit from the current trend towards hybrid vehicles, which will increase demand for its sensors, both in combustion and electric vehicles. This presents a significant opportunity for value creation.
Overall, Elliott’s involvement in Sensata represents a positive development for the company. With Elliott’s expertise in strategic activism and value creation, it seems likely that Sensata will be able to address its capital allocation missteps and create value for shareholders going forward. However, it remains to be seen whether Elliott will seek to take a more active role in the company, or whether it will remain a collaborative partner.
Leave a Reply