Deutsche Bahn faces Corbyn haircut on UK rail exit 21 Jun 2019 The German train group is selling its Arriva unit for a mooted 3.5 bln euros. Its British buses and European networks justify the price, suggesting the UK rail franchise comes for free. It’s a fair call given opposition leader Jeremy Corbyn wants to end private ownership.
Big Tech risks crowding out other antitrust ills 20 Jun 2019 Google, Amazon and others deserve the scrutiny they’re getting from U.S. officials, but that leaves less room to probe concentration in other areas. Take a rash of mergers between hospitals, for example. Silicon Valley isn’t the only industry in need of a regulatory colonoscopy.
UK $2.4 bln car-sale LBO has a quiet engine rattle 20 Jun 2019 Private equity firm TDR may buy used-car auctioneer BCA. Its experience in the sector may give it an edge over Apax, which walked away from the group last year, and returns look decent if Europeans sell more motors online. The longer-term risk is that fewer punters own cars.
Rocket’s lower orbit still requires turbo-boosters 20 Jun 2019 Oliver Samwer, who runs the 3.6 bln euro internet investor, has belatedly realised venture funds don’t belong in public markets, Manager Magazin says. Buying back most shares to de-list Rocket makes sense. Yet minority investors deserve a fat premium for sticking by the founder.
Vision Fund may be Hotel California for investors 19 Jun 2019 SoftBank’s $100 bln vehicle is almost spent, and CEO Masayoshi Son’s Gulf sponsors are mulling whether to back a sequel. High returns help; toppy valuations don’t. The problem is that tightening Saudi and Emirati purse strings may dent confidence in current cash-burning startups.
Acacia and Barrick pay price for Newmont escapade 19 Jun 2019 Barrick CEO Mark Bristow won’t sweeten his offer to minority investors of the Tanzanian gold miner. A small raise could defuse the damaging stalemate. But after an expensive and failed tilt at Newmont, Bristow is under pressure to be seen to defend his shareholders’ interests.
Ontario gives succor to Hudson’s Bay activist 18 Jun 2019 The Canadian province’s pension plan has ended a deal to sell shares to the retailer’s chairman at the same price he is now bidding for the whole company. That suggests common ground with investor Jonathan Litt, who says the buyers can pay more than the $1.3 bln offered so far.
Wells Fargo needs more than a new CEO 18 Jun 2019 There are obstacles to getting an external replacement for interim chief Allen Parker. But getting Wells Fargo back on course is more than a one-person job. The answer might be to keep Parker on, sandwiched between an executive chair and a seasoned second-in-command.
Lowball Nordic IT sale gives Apax a better exit 18 Jun 2019 The buyout firm accepted a lowly 1.3 bln euro cash-and-shares offer for Norwegian computer services firm Evry from Finnish rival Tieto. The measly 15% premium is less than half the value created by cost savings. Still, a 20% stake in the combined group should be easier to sell.
U.S. bank shareholders are their own worst enemy 17 Jun 2019 Hopes of more M&A among the nation’s 5,000 lenders have put high valuations on even ho-hum targets. So buyers often can’t avoid the cardinal sin of diluting book value, even if cost cuts outweigh any premium. A Texas bank’s $2.1 bln takeover of a smaller rival is the latest case.
Sotheby’s bid a bad case of Pinault envy for Drahi 17 Jun 2019 Cable tycoon Patrick Drahi is buying the auction house for $3.7 bln at a 60% premium. Even with cost cuts, the financial prospects are humdrum. As with fellow French billionaire François-Henri Pinault’s purchase of Christie’s, the returns look more reputational than financial.
Skill, luck and law drive $11 bln biotech buyout 17 Jun 2019 Array BioPharma has developed several potential blockbusters for others. But it wouldn’t be selling to Pfizer at a 62% premium without an earlier gift from antitrust regulators. A pact between two rivals sent valuable drugs Array’s way, along with cash, making it a juicy target.
Now is the time to buy Deutsche Bank 17 Jun 2019 The German lender’s market value has shrunk to 13 bln euros, or about 20% of tangible book value. The retail lending and fund management units alone justify a higher price. If boss Christian Sewing can shrink the investment bank without major stumbles, the shares will rebound.
Babcock right to reject Serco’s cheeky merger plan 17 Jun 2019 The 2.5 bln pound UK defence contractor rebuffed the outsourcer in January. Serco is smaller, has lower margins and provides less-skilled services. The combination would also be over-reliant on British military. Though consolidation makes sense, the financial logic must stack up.
Viewsroom: When dealmaking gets difficult 13 Jun 2019 Raytheon and United Technologies’ planned $114 bln tie-up raises questions about strategy, cost cuts and executive overreach. It’s prompted their shares to tank and activist Bill Ackman to oppose it. And Fiat Chrysler and Renault’s mooted merger has crashed. Can they salvage it?
What’s under Renault’s hood? 13 Jun 2019 Appraise the French carmaker's parts to decide whether Fiat Chrysler's merger offer was stingy or fair.
Fiat’s Renault offer was fairer than it looked 13 Jun 2019 Some investors complained a 15 bln euro merger proposal from the Italian-American group put a negative value on the French carmaker’s core business. Use more realistic valuations for Renault’s parts, though, and the price looks better. Reviving the deal also unlocks huge savings.
Dassault’s drug data wager relies on heady growth 12 Jun 2019 The French software group is buying U.S. peer Medidata for $5.8 bln. The deal boosts Dassault’s exposure to the hot trend of using big data to develop and test drugs. But likely modest synergies and the rich price mean investors will have to wait years for the deal to pay off.
Apollo’s eye for composition finds value in photos 11 Jun 2019 The private equity firm is paying $2.7 bln for Shutterfly despite growing competition and fickle consumer taste. Demand for the firm’s photo-based albums and gifts is stronger than its tanking share price suggests. Teaming up with rival Snapfish can put extra gloss on the deal.
T-Mobile US backlash reveals M&A regulatory risk 11 Jun 2019 U.S. states are suing to block the firm from acquiring Sprint on antitrust grounds. The move defies telecom’s top watchdog but could stiffen opposition at the Department of Justice. Dealmakers who used to count on government agencies to coordinate may now face crossed lines.