SCHEDULE: MAK Capital Discloses 5.8% Stake in Heidrick & Struggles

MAK Capital Fund LP and affiliates have disclosed a 5.8% beneficial ownership in Heidrick & Struggles International Inc., agreeing to support a pending merger and abide by a standstill agreement.

Summary

• MAK Capital Fund LP, MAK Capital One L.L.C., and Michael A. Kaufman (Reporting Persons) have filed a Schedule 13D, disclosing beneficial ownership of 1,213,762 shares of Heidrick & Struggles International Inc. common stock.
• This represents 5.8% of the company's outstanding shares, based on 20,790,543 shares as of October 31, 2025.
• The shares were acquired for investment purposes at an aggregate cost of $40,699,129, using general working capital.
• The Reporting Persons entered into a Letter Agreement with the Issuer on October 27, 2025.
• Under this agreement, MAK Capital Fund LP committed to vote its shares in favor of the merger outlined in the Merger Agreement dated October 5, 2025, between the Issuer, Heron Merger Sub, Inc., and Heron Bidco, LLC.
• The agreement also includes confidentiality provisions and a standstill clause, preventing MAK Capital from acquiring more shares, soliciting proxies, or seeking to influence management, among other restrictions, until the merger's effective time or termination, or two years from the agreement date.

Sentiment

Score: 7

Explanation: The filing indicates a significant shareholder's commitment to support a pending merger, which is generally positive for deal certainty. The standstill agreement also provides stability. However, it's a procedural disclosure rather than a performance update, so the sentiment is moderately positive due to increased merger certainty.

Positives

• MAK Capital Fund LP's commitment to vote its 5.8% stake in favor of the proposed merger provides strong support for the transaction's completion.
• The standstill agreement reduces the likelihood of hostile takeover attempts or disruptive activist campaigns from this significant shareholder.

Negatives

• The standstill agreement limits MAK Capital's ability to actively engage with management or propose alternative strategies, potentially reducing shareholder advocacy for other value-enhancing initiatives outside the merger.

Risks

• The Reporting Persons are prohibited from trading on confidential information received from the Issuer.
• Breach of the confidentiality or standstill provisions of the Letter Agreement could lead to legal action and financial penalties.
• The voting commitment is tied to the Merger Agreement, and its termination would release MAK Capital from this obligation.

Future Outlook

The filing indicates a strong likelihood of the proposed merger between Heidrick & Struggles and Heron Bidco, LLC proceeding, given MAK Capital Fund LP's commitment to vote its significant stake in favor. The standstill agreement also suggests a period of stability regarding potential activist challenges from this shareholder.

Management Comments

• "We certify that the information set forth in this statement is true, complete and correct." (Michael A. Kaufman, Managing Member)
• "You have requested information concerning Heidrick & Struggles International, Inc. (the Company) in connection with the evaluation of your investment in the Company (the Purpose)." (Tracey Heaton, Chief Legal Officer & Corporate Secretary, in the Letter Agreement)

Industry Context

This filing reflects a significant institutional investor taking a substantial stake and aligning with a strategic corporate action (a merger). In the executive search and consulting industry, such mergers can be driven by consolidation, expansion of service offerings, or market positioning. A large shareholder's public commitment to a merger can signal confidence in the transaction's strategic rationale and valuation.

Comparison to Industry Standards

• The 5.8% stake is a notable position for an institutional investor, often sufficient to influence corporate governance or strategic decisions, especially when combined with a voting agreement.
• Standstill agreements are common in situations where an investor gains access to confidential information or takes a significant stake, aiming to prevent disruptive activism during a sensitive period like a merger. For example, similar agreements are often seen in activist investor settlements or pre-merger arrangements to ensure deal stability.
• The commitment to vote in favor of a merger is a standard mechanism used by companies to secure shareholder support for a transaction, particularly from large holders.

Corporate Governance

Stakeholder Impact

• Shareholders: Increased certainty regarding the approval of the proposed merger due to a significant shareholder's voting commitment. Potential for reduced volatility from activist campaigns during the merger process.
• Management/Board: Enhanced support for the proposed merger, simplifying the approval process. Reduced pressure from a large shareholder to pursue alternative strategies during the standstill period.
• Acquirer (Heron Bidco, LLC): Greater assurance that the merger will receive necessary shareholder approval from Heidrick & Struggles.

Next Steps

• The Issuer will proceed with the merger as outlined in the Merger Agreement dated October 5, 2025.
• MAK Capital Fund LP will vote its Subject Securities in favor of the merger and related actions at any stockholder meeting.
• The Company will publish and disclose MAK Capital's identity, ownership, and commitments in the proxy statement and other required 1934 Act filings related to the merger.

Key Dates

Recommendation

The filing primarily concerns a procedural disclosure of beneficial ownership and a voting agreement in support of a pending merger. While the voting commitment from a significant shareholder increases the certainty of the merger's approval, it doesn't provide new information about the company's operational performance or valuation that would warrant a change in investment thesis. Investors should hold their position pending further details on the merger and its terms, as the current filing reinforces the expected outcome of the transaction.

Keywords

Heidrick & Struggles, MAK Capital, Schedule 13D, Beneficial Ownership, Merger Agreement, Voting Agreement, Standstill Agreement, Corporate Governance, Investment, Shareholder Activism, Executive Search, Consulting