China’s EU-made EVs are in pole position – for now 19 Jul 2024 BYD and Chery are planning plants in the European Union; peers will follow. While factors like labour and energy add 25% to the cost of cars made in the bloc, tech and design mean the overall product is cheaper than Western rivals’. But Brussels could yet complicate matters.
EQT hit carries warning for buyout-firm investors 18 Jul 2024 The $40 bln private equity group’s shares sank after it missed analysts’ forecasts. The lesson is that predicting profits from selling companies is tough. It also suggests that a recent valuation run-up for listed managers is out of whack with tricky dealmaking conditions.
Northvolt flags European batteries’ growing pains 5 Jul 2024 The $12 bln Swedish maker of devices to power electric cars has lost a contract with BMW, one of its own backers. Brussels would love domestic players to cut European automakers’ reliance on China. Yet the EU’s conflicting strategies and foreign competition mean progress is slow.
Smith & Nephew faces long and painful activist fix 4 Jul 2024 Cevian has taken a 5% stake in the $11 bln underperforming London-listed medical equipment maker. Curing its depressed share price will require deep operational surgery. While that may take time, a breakup could be a second treatment further down the line.
EQT’s $3 bln gaming play hits the right buttons 3 Jul 2024 The Swedish buyout shop looks set to clinch video game services group Keywords. The target’s business of translating games like ‘Clash of Clans’ for a wide range of clients helps insulate it from an industry rut. The chunky 96% premium can also make it a high scorer.
Niel can be less stingy to fulfil his salsa dream 30 May 2024 The French Iliad owner may buy out Millicom, a $4 bln Latin American telco in which he owns a 29% stake. His potential $24-a-share bid implies a tiny 2% premium. Even with the stock up nearly 40% this year, he can offer more for a growing, profitable company.
AI will help treat Big Pharma’s looming illness 15 May 2024 Drug discovery is a long and costly process with success rates below 10%. Caps on prices and shorter patent periods in the US will also make life harder for the likes of Pfizer, AstraZeneca and rivals. Despite patchy results, betting on machines may be the best hope of a cure.
Swedes’ gaming split is far from a next-level fix 22 Apr 2024 Struggling $3 bln Embracer will divide itself into three discrete companies. Leveraging up the group’s board games arm and splitting out hit-and-miss blockbusters and steadier mobile games makes sense. But it’s unlikely to unlock value akin to the Swedish firm’s glory days.
Galderma IPO offers EQT a temporary facelift 6 Mar 2024 The Swiss skin care group is looking to raise $2 bln in a listing to cut debt. At $22 bln, in line with L’Oréal’s valuation, its private equity owners could get decent returns. But with the French beauty giant growing similar products faster, retaining margins may be challenging.
EU’s $2 bln Apple bite is still more of a bark 4 Mar 2024 Brussels is fining the US giant more than expected for hurting streaming competition. That leaves $2.7 trln Apple open to similar cases. But as with other EU bids to rein in Big Tech, it hikes the cost of doing business more than it shakes up the sector.
Klarna IPO now makes less sense than one later 28 Feb 2024 Decent growth and lower losses mean the Swedish buy now, pay later group can justify a $20 bln valuation. Given that’s three times the level of its last cash injection, there’s an argument for a speedy listing. Still, Klarna’s messy governance suggests a 2025 IPO is more logical.
Narrow exits will fatten fattest buyout fat cats 10 Jan 2024 Some private equity shops may be forced to start accepting discounted valuations on a record $2.8 trln of unsold investments. Others like KKR and EQT are best positioned to hold out. This disparity should help 25 firms, with 22% of the industry’s firepower, pad their dominance.
Profitable Klarna poses IPO valuation conundrum 9 Nov 2023 The pay-later group is making money. Ahead of a possible float, that makes it easier for CEO Sebastian Siemiatkowski to claim he has a viable business. Yet to get an uplift on his last $7 bln price tag, he’ll have to persuade investors to value Klarna like a fintech, not a bank.
‘Tomb Raider’ maker’s odyssey charts gaming pains 12 Oct 2023 Embracer’s share price is back at 2018 levels, when it stepped up an M&A spree that saw it become Europe’s largest video game group. The $2.5 bln Swedish firm has slipped on its own banana skins. But its decline also shines a light on the sector’s post-pandemic struggles.
Belated euro U-turn could be a winner for Sweden 6 Oct 2023 Top advocates of snubbing the single currency 20 years ago are now pushing for its adoption. The crown’s fall makes curbing inflation harder, and rate-setters are under the ECB’s spell. With low public deficit and debt levels, Stockholm may find joining late is better than never.
Central banks start game of chicken over rate cuts 21 Sep 2023 Officials in Sweden and Norway hiked borrowing costs, while their British peers didn’t. All hinted policy will stay tight, fearing that stoking expectations of an early start of the loosening cycle may fuel inflation. An economic slowdown may prompt rate-setters to be less tough.
Europe’s listless IPOs are red flag for big floats 31 Jul 2023 The region’s string of mostly mid-sized initial public offerings this year are now just 3% above their listing price on average. Such poor performance will make investors wary of backing new ones. That will give larger float candidates, like CVC and Galderma, pause for thought.
Embracer cash call undermines investors’ M&A play 6 Jul 2023 The Swedish gaming group raised $180 mln from various investors at a 9% discount to its closing price. Last summer, it raised $1.1 bln from Saudi Arabia at a 15% premium. The contrast suggests a lower chance of a takeover, meaning CEO Lars Wingefors faces a single-player slog.
Flailing property firms make for risky buyout prey 13 Jun 2023 Shares in Swedish landlord SBB crashed, while listed European peers also trade at heavily discounted valuations. It looks like a golden opportunity for private funds, with $700 bln of cash. The tough part will be securing debt financing and avoiding catching a falling knife.
Gaming transatlantic gap invites M&A shoot-’em-up 9 Jun 2023 Shares in European gaming groups like Ubisoft are off by a fifth over the past year, underperforming stateside peers. Self-inflicted slip-ups are partly to blame, but players’ love for US-owned blockbusters means the valuation divide will endure. Dealmaking is a likely endgame.