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US investor Guy Wyser-Pratte tells it straight: "wake up and smell the napalm." Source: Bloomberg

The email from the shareholder based in New York came out of the blue. It demanded that OHB, a Hamburg-based satellite manufacturer, should make more acquisitions, get a more professional supervisory board, and expand into military technology. And do it quickly.

It was the sender’s name that really got the management worried: Guy Wyser-Pratte, a corporate raider renowned for forcing radical reforms on companies and who once told change-resistant managers to “wake up and smell the napalm.” Seven years ago, Mr. Wyser-Pratte was the first US activist investor to turn his attention to Germany. By forcing toolmaker IWKA to sell off its robotics arm, Kuka, he increased his own investment tenfold.

OHB, his new target, is puzzled. “I have no idea what he’s up to,” said Chief Executive Marco Fuchs. OHB is making solid profits, its share price is healthy, and its family owners have no intention of selling their 70 percent controlling stake. Mr. Wyser-Pratte owns 2 percent of the company, a trivial investment by his standards. Even if he manages to drive up the share price by 50 percent, he will only earn €6 million ($7 million) — peanuts, surely, to an investor of Mr. Wyser-Pratte’s caliber.

Activist shareholders, once an American phenomenon, are on the rise in Germany, and the question “we’re doing fine so what do they want from us” is likely to become an increasingly common one in German boardrooms. The investors buy a small stake in a company, then start loudly campaigning for the firm to cut costs, sell off divisions or replace senior executives. That alone often succeeds in driving up the share price as other investors pile in behind them. In the past, activist investors have been criticized as opportunistic, bullying and destructive, but they claim they promote good governance and efficient investment.

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