Dayforce Shareholder Dissent and the Future of the Thoma Bravo Buyout

The proposed $12.3 billion buyout of Dayforce by Thoma Bravo has ignited a firestorm of shareholder dissent, corporate governance debates, and activist investor scrutiny. While the transaction-offering $70 per share, a 32% premium over Dayforce's unaffected share price on August 15, 2025-has been endorsed by the board and framed as a catalyst for AI-driven growth, according to a Dayforce press release, dissenting voices are challenging its fairness and governance integrity. This case study reveals how private equity strategies, institutional investor power, and legal challenges are reshaping the landscape of corporate takeovers.

Corporate Governance Under Scrutiny

Dayforce's board has positioned the Thoma Bravo deal as a "substantial value creation" opportunity, citing the firm's expertise in scaling software platforms and its $184 billion asset base, according to a CNBC report. However, the transaction has drawn sharp criticism from legal firms and institutional investors. Kaskela Law LLC and Halper Sadeh LLC are investigating whether the board breached fiduciary duties by accepting a price that undervalues Dayforce, particularly as some analysts had projected price targets above $80 per share, according to a Kaskela Law alert. These inquiries highlight a recurring tension in corporate governance: the balance between board discretion and shareholder rights.

The governance concerns are compounded by Dayforce's decision to go private, which removes the oversight mechanisms of public markets. While Thoma Bravo argues the move will free Dayforce to prioritize long-term innovation over quarterly earnings, critics question whether the private equity firm's focus on returns will align with the company's strategic vision. As stated by a Reuters report, T. Rowe Price Associates-the firm's largest shareholder with a 15.7% stake-has explicitly opposed the deal, citing "misplaced short-term pessimism" and a failure to reflect Dayforce's "underlying business strength."

Activist Investors and Proxy Contest Dynamics

The 2025 proxy season has underscored the growing influence of activist investors in shaping corporate outcomes. T. Rowe Price's opposition to the Thoma Bravo buyout is emblematic of a broader trend: large institutional investors leveraging their voting power to challenge management decisions. This aligns with 2024's proxy contest trends, where the "Big Three" (Vanguard, BlackRock, and State Street) increasingly supported management nominees, leading to "clean sweeps" at firms like Disney and Crown Castle, as noted in a Harvard Law Forum post. However, Dayforce's case diverges, as T. Rowe Price's stance could galvanize other shareholders to question the deal's terms.

That post also noted the SEC's new Compliance and Disclosure Interpretations (C&DIs), which have constrained institutional engagement strategies and could limit the ability of dissenting shareholders to push for governance reforms. Meanwhile, Dayforce's filing of a definitive proxy statement (Form DEF 14A) signals that the board is preparing for a contentious vote, with governance proposals likely to dominate the agenda.

Legal Challenges and Market Implications

The legal scrutiny of the Thoma Bravo buyout reflects a broader pattern in major M&A transactions. Shareholder law firms are increasingly deploying "fairness" investigations to pressure boards into revisiting deal terms. In Dayforce's case, the focus is on whether the $70-per-share offer adequately captures the company's value, particularly given its high gross revenue retention and AI-driven platform, according to a TheUSA Leaders piece. These legal actions, while common, serve as a check on private equity's growing dominance in the software sector.

Market reactions have been mixed. Despite T. Rowe Price's opposition, Dayforce's stock has traded near $68.99-just below the acquisition price-suggesting investor confidence in the deal's likelihood of closing, according to the Kaskela Law alert. However, the gap between the offer price and analyst price targets raises questions about whether the market is underestimating Dayforce's long-term potential. If the buyout proceeds, it could set a precedent for how private equity firms navigate shareholder dissent in high-stakes takeovers.

The Future of Corporate Governance and Activism

The Dayforce-Thoma Bravo saga underscores a pivotal shift in corporate governance: the increasing role of institutional investors in challenging private equity strategies. As activist campaigns evolve-from multi-activist contests to CEO-focused campaigns-the pressure on boards to justify strategic decisions will intensify, as discussed in a shareholder activism review. For Dayforce, the outcome of this proxy contest could redefine the boundaries of board authority and shareholder influence.

Moreover, the deal highlights the tension between private equity's growth-at-all-costs model and the need for sustainable innovation. Thoma Bravo's emphasis on AI-driven HCM aligns with industry trends, but the success of the buyout will depend on whether the firm can balance short-term returns with Dayforce's long-term vision.

Conclusion

The Thoma Bravo buyout of Dayforce is more than a corporate transaction-it is a microcosm of the broader battles shaping modern corporate governance. From legal challenges to activist investor campaigns, the case illustrates the complexities of aligning private equity strategies with shareholder interests. As the proxy vote approaches in early 2026, the outcome will offer critical insights into the future of corporate governance in an era of consolidation and technological disruption.