Extra! Newspaper bidder flubs credit test 25 Mar 2019 MNG, owner of the Denver Post, is waving a “highly confident” financing letter from Oaktree to advance its hostile bid for publisher Gannett. Yet MNG isn’t clear if the debt specialist will even bother to lend it $1.7 bln. The tactic is as unconvincing as it is unconventional.
Peltz is triple threat of cannabis endorsements 13 Mar 2019 Aurora Cannabis gets three things from hiring activist Nelson Peltz as an adviser: financial credibility, consumer expertise and contacts at companies like P&G. Other investors can ride on his coattails. The catch is that VIP patrons like Peltz get terms mere mortals can’t touch.
Blank-check firms need more than a marquee name 28 Feb 2019 Media mogul Haim Saban is folding his acquisition vehicle after failing to close a deal. He blamed market conditions. But a convoluted transaction on top of an already complicated structure didn’t help. It’s a warning to other prominent investors with deals in the hopper.
Activists turn guinea pigs in drug M&A trials 21 Feb 2019 Starboard is targeting Bristol-Myers’ board after its $74 bln Celgene deal. Appaloosa is pushing $46 bln Allergan to fix its problems or sell. They’re using standard activist tactics. But Big Pharma’s size and complexity have long provided some immunity to such attacks.
Starboard gets generous slice of Papa John’s 4 Feb 2019 The hedge fund is investing $200 mln and taking two board seats in the struggling pizza chain. The price is unambitious and it could ink a return of 6 percent annually. Turnarounds aren’t easy, and Papa John’s needs help. But Starboard is being well paid for its expertise.
Hedge funds’ outperformance is small consolation 28 Jan 2019 The industry lost less money for investors last year than a bet on the S&P 500. But more than half the top players’ gains came from just two firms, Bridgewater and Renaissance. With fees already under pressure it’s no wonder the number of funds is shrinking after years of growth.
Jack Bogle defined value in more ways than one 17 Jan 2019 The Vanguard founder turned the once-heretical idea of indexing the broad stock market into the dominant form of investing. Instead of pursuing riches, he spread the low-cost ethos, saving investors untold billions and building a $5 trln juggernaut. Talk about wealth creation.
Gannett’s dilemma is picking lesser of two evils 14 Jan 2019 A rival publisher wants to buy the USA Today owner for $1.6 bln. Gannett has repeatedly sliced costs and staff, to the detriment of news. MNG’s script is more of the same – and cuts are likely to be deep to justify a 23 pct premium. The public interest probably loses either way.
Welcome the new AI investment overlords 27 Dec 2018 Man vs. machine will replace active vs. passive as the dominant battle in the $80 trln money-management war. Pressure to cut costs keeps mounting while artificial intelligence gets better at systematic trading, crunching data and identifying trends. Logic favors the computers.
Ethical investing is cherry on private equity cake 18 Dec 2018 Bridgepoint is bidding $1 billion for Swedish gaming firm Cherry. The buyout group’s scope to pay a big premium and still get a good deal is due to public markets’ aversion to “sin stocks”. Ethical investing is supposed to improve behaviour, not private equity coffers.
UniCredit’s next obstacles mostly out of its hands 18 Dec 2018 CEO Jean Pierre Mustier successfully defused a dispute on capital by fund Caius. Addressing other challenges will be harder. Politics is chiefly responsible for threats in Italy and Turkey to the bank’s capital base. Trying to boost revenues in Germany could be a clearer focus.
The Exchange: Gary Shteyngart 17 Dec 2018 To create the hedge fund manager character Barry Cohen – the protagonist in his latest novel “Lake Success” – Shteyngart spent lots of time with real-life financiers, from quants to activists. He discusses what he learned about Wall Street and the money business with Rob Cox.
Och-Ziff truce and rejig are small mercies 6 Dec 2018 Daniel Och is finally giving up his pioneering listed hedge-fund creation. After massive value destruction and a power struggle, he is ceding control and a big ownership stake. The firm will also be taxed as a corporation, not a partnership. For investors, the road back is long.
Elliott’s latest Arconic activism is to save face 29 Nov 2018 Paul Singer’s hedge fund may revive private-equity interest in bidding for the $10 bln parts maker by ring-fencing its liability for a deadly 2017 London fire. But a sale is unlikely to produce much profit on a three-year investment. Even activists have to cut and run sometimes.
Toys R Us buyout firms offer crumbs for holidays 20 Nov 2018 KKR and Bain are giving $20 mln to employees who lost jobs in the retailer’s bankruptcy. That’s better than nothing, and an intriguing precedent. But it won’t go far among tens of thousands of people. It’s also a pittance compared with the fees the firms took over the years.
Elliott’s Athenahealth deal leaves sickly odor 12 Nov 2018 The activist is helping take private the healthcare firm it started agitating against 18 months ago. But at $5.7 bln the deal is some 16 pct below its May offer – and Elliott is relying on a partner to buy the lion’s share. Such tactics may not play well against future targets.
Democratic donors claim tarnished returns crown 7 Nov 2018 Casino magnate Sheldon Adelson has little to show for the $113 mln he gave the GOP in the midterms. Financier Tom Steyer donated less than half as much to Democrats and saw them win the House. But with fundraising hitting a record $5.2 bln, divided government is a meager result.
Dan Loeb wins if he loses at Campbell Soup 1 Nov 2018 The activist rightly blames bad dealmaking for the near-halving of the foodmaker’s share price, and wants shareholders to replace the whole board. Yet cost cuts from those bad deals should raise Campbell’s valuation whatever happens. A mass ousting is neither likely nor helpful.
Is Howard Schultz a Starbucks asset or liability? 9 Oct 2018 Bill Ackman, whose Pershing Square unveiled a $870 mln stake, thinks a presidential run by its retired founder might protect the coffee chain’s China business. Yet a liberal campaign could stymie expansion in America’s red states. Schultz’s days as a stock booster may be over.
Peltz pizza tie-up is missing one ingredient 9 Oct 2018 Papa John’s is an ideal target for activist Nelson Peltz, who has a big stake in Wendy’s and experience fixing struggling consumer companies. Getting founder John Schnatter on board is essential, though, and that’s a challenge even for an investor used to boardroom conflict.