Ray-Ban mogul’s late financial quest is baffling 19 Jun 2020 Leonardo Del Vecchio is building his shareholding in Mediobanca. The investment bank’s stake in insurer Generali puts it at the heart of Italian corporate power. The 85-year-old may be motivated by financial gains or prestige. Equally unclear is who inherits his expanded empire.
Crisis patience will reward buyout barons in Asia 19 Jun 2020 Private equity dealmaking in the region is up, defying a global slump, thanks to big purchases by Bain, KKR and others. Funds are hunting for bargains, but some of the worst deals were done during the last crisis. Sitting it out and delaying exits may help to avoid past mistakes.
SoftBank Sprint win is mostly currency and debt 18 Jun 2020 Masayoshi Son's group may sell up to two-thirds of its now $31 bln stake in T-Mobile US. After a long wait for Sprint to merge with its rival, the risky bet made just a 5% annualized return in dollars. The rest, a 25% IRR according to Son, is down to luck and leverage.
Silicon Valley VCs perform balancing act in China 18 Jun 2020 Covid-19 has boosted delivery, robotics and e-commerce technology. U.S. investors want to back Chinese startups capitalizing on those trends. But firms investing in the People’s Republic risk Washington's ire. The trick is to pair high potential ROIs with a low profile.
Hertz shares may yet be roadworthy 18 Jun 2020 The bankrupt car-rental firm halted plans to sell stock after the SEC raised concerns. Equity is usually wiped out in Chapter 11. But if a re-emergent Hertz could rev its EBITDA up to, say, 60% of pre-pandemic levels, shareholders could stay along for the ride.
Old is new in frothy U.S. IPO market 18 Jun 2020 Dun & Bradstreet, the 179-year-old data firm that plans to raise up to $1 bln, is a stark contrast to new-fangled tech hopefuls like Lemonade. Yet its private equity owners may make a handy return using an old-fashioned playbook: cutting staff, and surfing a rising market tide.
Lloyd’s makes apt Black Lives Matter target 18 Jun 2020 The 334-year-old insurance market has pledged an undisclosed sum to atone for its role in the Atlantic slave trade. Amid global protests, it has little choice but to rethink its past. But there’s also a need to change its approach to diversity in the present.
Wirecard scandal turns into an existential crisis 18 Jun 2020 Markus Braun’s payments group lost over half of its market value after EY found indications that 1.9 bln euros of cash balances might be “spurious”. Loan covenants may be triggered, threatening its access to finance. Regulators, lenders and auditors have lots of explaining to do.
BP’s funky debt charts end of credit’s lockdown 18 Jun 2020 The oil major issued $12 bln of bonds that count as equity, its first such deal. Investors’ hunger for esoteric securities from a tricky sector illustrates their enduring need for yield, thanks to central bank largesse. A weak economy and risk-hungry markets are a dangerous mix.
Corona Capital: Carnival, Cheap funds, Salmon 18 Jun 2020 Concise views on the pandemic’s corporate and financial fallout: What lies on the horizon for the cruise operator; locking in cheap financing; and a fishy tale of coronavirus-related swings in demand.
Segway bravely scoots onto Shanghai’s new IPO path 18 Jun 2020 The owner of the storied two-wheeler is set to blaze a trail for Chinese depositary receipts with a $300 mln deal. Xiaomi-backed Ninebot brings with it sticky corporate features that Beijing has previously shunned. A smooth debut would help set the tone for future sales.
E-commerce boost is about more than Amazon 17 Jun 2020 Lockdowns have trained people to shop online, including for formerly lagging goods like groceries. That has helped Jeff Bezos but even more so digital sales at Walmart and other retailers like Target and Home Depot. The future may be a lot to do with balancing clicks and bricks.
ESG takes on new meaning with U.S. private prisons 17 Jun 2020 CoreCivic is halting dividends and may ditch its REIT structure. That comes as social risks prompted most banks to stop lending to the incarceration business. An LBO is one option. But with leverage hard to come by, CoreCivic would need investors for whom the E means equity.
Italy’s soccer woes give buyout firms an open goal 17 Jun 2020 CVC and Bain Capital are vying to take a stake in the country’s top Serie A league. Empty stadiums will strain clubs’ finances, while broadcasters have dragged their feet on handing over 1.3 bln euros of annual TV money. It offers a rare opportunity for a cut-price cash transfer.
Caesars makes best of weakening hand 17 Jun 2020 The casino company agreed to be bought by Eldorado last year. Now its acquirer is issuing stock, which means Caesars will own less of the company than it otherwise would. That makes the deal a little less appealing. With some other deals crumbling, it’s a small price to pay.
China-UK stock link’s glitches go beyond politics 17 Jun 2020 China Pacific Insurance is just the second Shanghai-listed company to offer shares in London, raising $2 bln. Political tension between Britain and the People’s Republic may be a factor. But lack of liquidity and trouble hanging onto foreign investors are the bigger impediment.
HSBC CEO requires a sharper cost-cutting axe 17 Jun 2020 Noel Quinn is resuming plans to slash expenses - a programme that he had put on hold amid global lockdowns. With bad debt rising, he’ll need even deeper cuts than before to hit an 11% return on tangible equity target. The original plan for 35,000 job losses may not be enough.
Elliott tests activist limits with insurance foray 17 Jun 2020 Paul Singer’s fund is calling for change at $11 bln Dutch life group NN. Some of its demands, such as selling non-core assets, make sense. Others, like cutting costs and piling into riskier debt will be a harder sell. The Covid-19 crisis makes insurers an even trickier target.
Tesla kills three birds with one Congolese stone 17 Jun 2020 The electric car giant is buying 6,000 tonnes of cobalt a year from Glencore’s mines in the chaotic African state. With China corralling 69% of the metal’s production, Elon Musk gets to guarantee supplies while minimising child labour worries. It may even squeeze Western rivals.
Aramco’s SABIC saga ends in unhappy compromise 17 Jun 2020 The $69 bln that the oil giant has ended up paying for a 70% stake in the chemicals firm is a lot more than its current value. Aramco’s consolation is that it can pay SABIC’s owner, a Saudi wealth fund, over a longer period. But neither buyer nor seller is getting what they want.