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.
Alitalia’s bidders are cruising for a bruising 14 Feb 2019 It’s like the start of a bad joke: Delta, easyJet and Italy’s railways walk into a bar and buy the national carrier. But there’s nothing funny about Alitalia’s serial cash incineration. Even if their goal is to thwart Lufthansa, the pain they’ll suffer isn’t worth the effort.
EU risks picking wrong fight with foreign giants 13 Feb 2019 France and Germany want to help companies fend off Chinese and U.S. behemoths by merging. Yet Europe’s fragmented markets and limited state subsidies mean it will never win the size game. Better to double down on strict antitrust rules while blocking unfair foreign buyers.
Thoma Bravo finds mortgage cloud’s silver lining 12 Feb 2019 The buyout firm is paying $3.7 bln for Ellie Mae, a cloud-based U.S. mortgage processing software outfit. Rising interest rates and slipping prices have overshadowed the housing market, but that makes automation more attractive to lenders. A debt-free balance sheet adds allure.
China may help T-Mobile and Sprint win over D.C. 11 Feb 2019 The proposed $26 billion merger of the U.S. telecom firms is rooted in the promise of a 5G buildout. The deal will reduce competition. Yet America’s race with the PRC to take the lead in the next generation of mobile technology could overcome any domestic competition concerns.
Smith & Nephew $3 bln spinal deal is a backbreaker 11 Feb 2019 The medical services group’s shares fell on a report that it may buy U.S. surgery specialist NuVasive. A takeover would take the company into a market it doesn’t know, and need years to pay off. New CEO Namal Nawana would do better to focus on smaller, less risky M&A.
Just Eat could prove a tasty M&A morsel 11 Feb 2019 The 4.9 bln pound UK food-delivery group is leaderless and faces an activist investor. It could keep investing in its delivery services to fend off Uber, but peers like Takeaway.com and Delivery Hero are doing the same. Just Eat’s cut-price valuation could force the board’s hand.
Norwegian investors only winners in bourse battle 11 Feb 2019 Euronext has hiked its bid for Norway’s stock exchange to $785 million. The hefty premium may no longer cover expected cost savings, and does not guarantee a victory against rival bidder Nasdaq. Shareholders in the Oslo exchange are beneficiaries of the larger groups’ largesse.
Big U.S. lenders school industry on M&A 7 Feb 2019 BB&T’s $28 bln offer for SunTrust is the largest bank deal in a decade and the first to create a new lender regulators regard as systemically important. It should please investors on both sides - so long as the banks don’t take their eye off the digital-banking ball.
Spotify hitches its wagon to a mule 6 Feb 2019 The Swedish music service is buying two podcast companies and warned it will crank up spending - including up to $500 mln scooping up other similar talk radio-esqe firms, in the name of growth. Yet sales are slowing and the market for non-music audio is small and speculative.
Irish cement maker needs repairs over demolition 6 Feb 2019 Activist Cevian has taken a stake in $25 bln building-products group CRH. A spinoff of the undervalued U.S. business might unlock value but would leave an awkward European rump. Its best hope for appeasing shareholders is to spruce up margins, and improve its governance.
EQT fight shows never too late to fix a bad deal 5 Feb 2019 A merger with rival natural gas producer Rice always looked overambitious. It has turned out to be a total dud. Now Rice’s founders want control. Their plan looks like it could have saved EQT before the merger. Listening to them now isn’t ideal, but it’s better late than never.
Siemens-Alstom is poor advert for EU champions 5 Feb 2019 German and French politicians are annoyed because the rail merger may be blocked. But their argument that the deal is needed to shield Europe from Chinese competition is flawed. The duo’s workers may also suffer. This is the wrong regional standard-bearer to promote.
All sides Scor poorly in French takeover debacle 5 Feb 2019 Covea’s $9.5 bln bid for a rival insurer collapsed amid a flurry of recriminations. Scor’s got no good plan and its stock has wilted. Covea’s boss is enmeshed in breach-of-trust allegations. Advisers are tarnished, too. Activists may be the only hope to right what’s wrong.
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.
Software M&A makes LBO shops click on club deals 4 Feb 2019 A group led by Hellman & Friedman is paying more than 30 times EBITDA for its $11 bln buyout of Ultimate Software. Private equity is targeting the tech cloud. But such lofty valuations require big equity checks few can or want to write. That means teaming up, despite the risks.
Germany chooses familiar sin in $4 bln bank rescue 4 Feb 2019 Regional governments and other lenders are bailing out NordLB. The salvage keeps the sickly bank in public hands, but is costlier for taxpayers than other options, like hitting bondholders. The old-school bailout reinforces the case for consolidation in Germany’s banking system.
M&A conflict case is advert for independent advice 31 Jan 2019 United Natural Foods is suing Goldman Sachs, saying the firm put its own interests first when it advised on and financed an acquisition. Goldman disagrees. Whatever the reality, having one adviser in multiple roles may be efficient, but it carries some risk of bad blood later.
UK plastics challenge could crumple 31 Jan 2019 Berry Global may trump former owner Apollo’s 3.3 billion pound offer for British packaging firm RPC. But a bid would stretch the U.S. group’s balance sheet while finding cost savings won’t be easy. RPC investors hoping for a bidding war may be disappointed.