Here’s Why Activist Investors Are Partly to Blame for the Failure of Big Mergers

Activist investors are too optimistic that big corporate mergers will pass review by government regulators, according to one expert. Lately, activist investors have pressured big companies to merge and profited-off of merger announcements, only to exit their stake in the companies during the time the deal was being evaluated by government regulators. 'It's not that activist investors are convinced that deals will fail, it's just that they have a different level of risk tolerance and may be a little bit overconfident as to whether or not a deal will survive antitrust scrutiny,' said Kai Liekefett, a partner at Vinson & Elkins. Recent deals that have fallen apart include Halliburton's (HAL) - Get Report acquisition of Baker Hughes (BHI) . TheStreet's Scott Gamm reports from Wall Street.