In relation to corporate takeovers, it is a tactic that a group of shareholders of a corporate entity (a public company/ publicly held company) resorts to in a battle against incumbent management for control over it. This involves joining forces and momentum in an attempt to gather sufficient proxy votes to win a corporate vote.
This collective action takes place when a corporation’s stockholders are discontent with certain aspects of the corporate management and governance, particularly in relation to directorial and management positions. By virtue of a proxy contest, opposing representatives of shareholders (a certain percentage or in whole) aim to gain a voice in the corporation by securing certain number of seats on its board of directors (BOD).
A proxy contest can be launched in support of, or in opposition to, a takeover bid.
It is also known as a a proxy battle or a proxy fight.
