Buyout barons reach deep into their bags of tricks 15 Feb 2023 Creativity abounds with leveraged loan markets frozen. KKR leaned into KnowBe4 instead of a full takeover. BDT went back to the Weber well. Thoma Bravo bought ForgeRock without debt. These kinds of thorny tactics should keep working just well enough until the thaw.
Barclays CEO faces a long road to higher valuation 15 Feb 2023 The UK lender pays a share-price penalty because investors dislike its volatile investment bank. Shrinking it is off the table, so boss C. S. Venkat’s best bet is to boost steadier bits like transaction banking and securities lending. Over time, that may earn a higher multiple.
Capital Calls: Rothschilds in charge 14 Feb 2023 Concise views on global finance: The storied banking dynasty wants to buy out minority investors on the cheap, and they’ll probably get away with it.
Credit Suisse CEO tries to bail out a leaky ship 9 Feb 2023 Boss Ulrich Körner is cutting the Swiss lender’s costs and starting to hive off its superfluous bits. But clients have fled the core wealth business and traders seem to have stopped trading. Unless the business stabilises, he will have to pivot to a more radical breakup.
BNP investors deserve bigger slice of M&A windfall 7 Feb 2023 CEO Jean-Laurent Bonnafé is sitting on a 12 bln euro jackpot after selling the French bank’s U.S. business. He’s earmarked most of that for new lending and investment. But BNP’s low valuation implies shareholders think it would be better off buying back more stock.
Credit Suisse overcooks First Boston sales pitch 6 Feb 2023 The Swiss bank wants to sell $500 mln of debt, with a twist: it will be repaid with shares in its dealmaking business when that gets spun off, Reuters reported. It’s potentially a cheap way of raising funds. But it assumes investors will want those shares when the time comes.
Rothschild buyout is right idea, but on the cheap 6 Feb 2023 The family vehicle that controls the 3 bln euro investment bank wants to take it private. That’s sensible: it gets short shrift from public markets and doesn’t need access to capital. Yet strip out a chunky dividend and the price is low, which may set up a battle with minorities.
Deutsche Bank turnaround victory is really a loss 2 Feb 2023 Technically, CEO Christian Sewing beat an 8% return target that was the centrepiece of his plan to revive the former basket case. Strip out a tax gain, though, and he came up short. It leaves Sewing with a depressingly familiar job: cut costs and hope traders keep raking in cash.
UniCredit’s share-price surge has further to run 31 Jan 2023 Boss Andrea Orcel wants to hand more than 5 bln euros to investors through dividends and buybacks, after reporting stellar 2022 earnings. Further Russia writedowns are a risk, but the bank’s bottom line looks solid. A valuation of just over half tangible book value looks too low.
UBS boss Ralph Hamers has a growth problem 31 Jan 2023 Revenue in the Swiss bank’s wealth-management core slid 2% in 2022, as markets fell. Higher interest rates and China’s re-opening will ease the pain, but not for long. Hamers is running short on credible ways to get the top line moving, undermining his hunt for a valuation boost.
Jeff Smith makes for a substitute Warren Buffett 30 Jan 2023 The activist’s $500 mln investment backing a deal by equipment auctioneer Ritchie Bros has come under fire. His support echoes Buffett’s moves at Occidental and elsewhere. Though the Starboard boss lacks folksy shine, he might be up to playing the role in all the ways that count.
Why retail bankers are beating dealmakers 26 Jan 2023 JPMorgan, Citigroup and Goldman Sachs’ earnings revealed that the basic business of lending money is thriving, while investment banking is not. In this Viewsroom podcast, Breakingviews columnists debate what this says about the U.S. economy and what to expect from the Europeans.
IPO bankers may as well hit the beach until autumn 26 Jan 2023 A handful of mid-sized European companies are working on stock market debuts. But the upcoming share offerings are too small to reopen Europe’s drowsy equity capital markets. Regional ECM bankers may as well take to their sun loungers until things pick up in the third quarter.
Euro-banks have done their time in valuation jail 26 Jan 2023 Deutsche Bank, BNP Paribas and peers are valued by investors as if they are headed for a bruising slump. Yet the region’s lenders have been treading more cautiously than they did before the 2008 crisis, and have pared back risky trades. Their rehabilitation deserves more credit.
Valuing Michael Klein is a fascinating sideshow 13 Jan 2023 Credit Suisse may buy the rainmaker’s boutique and merge it with a soon-to-be-spun-off investment bank. That means putting a price on M. Klein & Co and First Boston, neither of which is easy. But for CEO Ulrich Körner, up to $4 bln of possible upside justifies being generous.
Banks’ profit picnic will attract ant invasion 12 Jan 2023 Rising rates create a feast for large lenders like JPMorgan and Bank of America, even as investment banking fees wither. But customers, employees and regulators are all vying for a slice. The risk for investors isn’t that recession bites in 2023, but that expenses gnaw.
At Walt Disney, the G in ESG stands for goofy 11 Jan 2023 Nike Chairman Mark Parker will run the media giant’s board and a search for boss Bob Iger’s successor. It’s odd considering Parker was part of previous ill-fated CEO decisions. He also looks stretched as Disney squares off with pushy investor Nelson Peltz. The drama never ends.
StanChart suitors track banking’s flighty fortunes 6 Jan 2023 The emerging market lender has been the subject of takeover chat for four decades. First Abu Dhabi Bank is the latest to consider an offer, following British, American, Chinese and Australian rivals. It’s as much an indicator of Middle Eastern optimism as of StanChart’s appeal.
Sumitomo Jefferies would be neat but no cigar 5 Jan 2023 Boss Jun Ohta wants to expand the Japanese bank’s pact with the Wall Street firm and boost its stake. That would add investment banking without much expense. Unlike the 37% of earnings MUFG logs from owning a fifth of Morgan Stanley, Jefferies is unlikely to make the same mark.
Blackstone’s clever REIT deal punts big question 4 Jan 2023 A $4 bln investment in its real-estate fund shows Blackstone can pull in big-name money on good terms for itself. It doesn’t, though, prove the fund’s assets are worth what they claim to be. Steve Schwarzman’s firm has firepower aplenty, but hasn’t answered valuation qualms.