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.
Bristol-Myers $74 bln deal needs surgery 28 Feb 2019 Big shareholder Wellington Management and activist Starboard Value have both come out against the pharma firm’s deal for Celgene. The market also isn’t pricing in the acquisition happening as Bristol-Myers envisaged. It doesn’t help that the buyer was already overpaying.
Hard times favor skinny conglomerates 28 Feb 2019 Kraft Heinz’s stumble has dealt another blow to the notion of the diversified roll-up M&A machine. United Technologies, GE and Newell Brands had already got that message. Conglomerates can still work if they stay lean and keep cash on hand. Take Kraft investor Berkshire Hathaway.
John Malone wins most in Europe’s telco M&A whirl 28 Feb 2019 The cable cowboy’s Liberty Global is selling another business, this time to Swiss group Sunrise for $6.3 bln. As in Germany, Malone gets a premium for a sub-scale operation. The benefits for the buyer from bundling mobile, TV and internet services may be competed away.
Germany’s Merck chips into aggressive M&A game 27 Feb 2019 The drugs and chemicals supplier is making a hostile $5.2 bln offer for Versum, after Barrick’s $18 bln unsolicited tilt at Newmont. Both aim to nix earlier agreed deals, while Roche is injecting $4.3 bln into new tech. Recent market wobbles have not yet dulled merger mania.
Now AT&T has to make its business case 26 Feb 2019 The U.S. telco won its legal battle, with an appeals court upholding the legality of the firm’s $85 bln acquisition of Time Warner. Clearing that hurdle is a relief for boss Randall Stephenson. Next up is persuading investors the deal and the huge related debt load make sense.
GE-Danaher pharma deal is a win-win remedy 25 Feb 2019 CEO Larry Culp is unloading the conglomerate’s biologics unit to his old employer for $21 bln. It’s his boldest downsizing move yet and will help cut leverage. Danaher gains scale in its health business at a reasonable price while Culp needed a sale, not necessarily top dollar.
Hostile gold merger has only glimmer of appeal 25 Feb 2019 Barrick Gold's $18 bln all-share bid for U.S. rival Newmont has a shred of financial logic from putting together neighbouring mines in Nevada. That's buried, though, beneath opportunism and hubris. The slim uplift for Newmont shareholders further dulls the deal's prospects.
Walmart UK buyout would stretch even KKR 25 Feb 2019 The private equity group might bid for the U.S. giant’s Asda unit if a 7.3 bln pound sale to rival Sainsbury’s is blocked. To get a decent return, KKR would have to crank up sales and margins – and write a big equity cheque. It’s not impossible but UK retail woes make it unlikely.
Roche pays late entry fee to gene therapy party 25 Feb 2019 The Swiss group is buying Spark Therapeutics, which develops treatments that tinker with patients’ DNA, for $4.3 bln. The deal gives Roche a leg up in a hot sector. But it comes with a fat premium, risk and fierce competition. The rewards may take years to come through.
Barrick gamble is one part logic, two parts folly 22 Feb 2019 The gold giant is eyeing a hostile move for $19 bln rival Newmont, the Globe and Mail says. The merger has been mooted before and may yield synergies, but the buyer has just acquired Randgold and the target is buying Goldcorp. It sounds badly timed and poorly considered.
Dairy Crest takeover is far from a Brexit bargain 22 Feb 2019 Saputo is paying $1.3 bln for the maker of Cathedral City cheddar barely a month before Britain leaves the EU. Minimal cost savings and a healthy premium mean the Canadian buyer probably won’t earn its cost of capital by 2022. And that assumes the UK avoids an economic meltdown.
Nissan would be better off with its own chairman 21 Feb 2019 A panel enlisted by the Japanese carmaker opposes replicating the corporate governance model used under Carlos Ghosn. Uniting with Renault makes sense in the long run, but for now two separate board chiefs will be more effective at cleaning house and rebalancing the relationship.
Man City’s long game in China can yield a win 21 Feb 2019 A consortium including the Manchester soccer club’s owner has acquired third-tier Sichuan Jiuniu FC. It's a modest punt, and the first by a Premier League heavyweight in the mainland game. Local allies and experience in multiple countries set the buyer up for financial success.
Walmart is smallest loser in UK supermarket salvo 20 Feb 2019 British regulators released a damning view on the 7.3 bln pound tie-up of Sainsbury’s and Asda, owned by the U.S. group. The pair need a plan to fend off German discounters. But the verdict limits M&A options. Asda’s global clout helps. Sainsbury’s looks set for further decline.
BHP sets judicious pace for big diggers 19 Feb 2019 Two fires and a runaway train smudged first-half profit at the world's largest miner. BHP cut debt to below its target and said it is eyeing $9 bln in free cash in the year to June, at current commodity prices. But CEO Andrew Mackenzie kept the tone cautious and spending flat.
German $6 bln non-LBO is sign of lean buyout times 15 Feb 2019 Hellman & Friedman and Blackstone are buying classifieds group Scout24. They can’t pile much debt on it, and the return looks way off the level investors usually expect. With buckets of cash, private equity needs to do deals. Buying fast-growing targets offer a little security.
Ant steps around China tech backlash into Europe 15 Feb 2019 Jack Ma's $150 bln fintech group has snapped up UK payments outfit WorldFirst. The mooted $700 mln deal, coming a year after a failed bid for U.S.-based MoneyGram, revives Ant’s overseas push. But heightened European anxiety about China suggests future buys may not be so easy.
Elliott kicks China’s EDP bid when it’s down 14 Feb 2019 The activist investor objected to China Three Gorges’ offer for the Portuguese utility. The deal was struggling, and Elliott’s plan, to invest in renewables, isn’t controversial. But the Chinese group’s large shareholding could still be a problem for Paul Singer’s fund.
New Vivendi band member requires artistic vision 14 Feb 2019 Vincent Bolloré’s group may sell half of music label Universal. The returns are low at a mooted $40 bln price tag. That favours buyers with a strategic interest in controlling music rights over financial investors. Tencent, Apple and Liberty Media are the most likely auditionees.