Tribune gets better M&A script in second season 3 Dec 2018 Nexstar is buying the U.S. media group for $4.1 bln. Tribune recently pulled out of an earlier deal after suitor Sinclair irked U.S. regulators. This go-around looks like a stronger plot. The price is higher, the buyer’s record is strong and there’s a clean sheet with watchdogs.
Aussie grain bid offers shelter in climate storm 3 Dec 2018 A fund run by infrastructure veterans has bid $1.8 bln for GrainCorp, once courted by U.S. giant ADM. The 43 pct premium isn’t too generous given drought-hit shares. But extreme weather is here to stay; that’s a powerful argument for long-term, private ownership.
GSK looks like a better seller than buyer 3 Dec 2018 The UK drug giant is acquiring cancer specialist Tesaro for $5.1 bln and offloading its Horlicks unit to Unilever for about the same amount. It’s a neat way for CEO Emma Walmsley to reshape GSK. But the purchase will take years to pay off – and is much riskier than hot drinks.
Fraud case reminds that bad M&A is a team effort 30 Nov 2018 U.S. prosecutors are trying to prove Autonomy CEO Mike Lynch deceived buyer HP in an $11 bln deal gone wrong. Such things tend to be a team effort. While fuzzy accounting rules that fostered this dispute are less of an issue now, the forces behind disastrous deals are evergreen.
Allianz’s 2021 vision opens door to big M&A 30 Nov 2018 The German insurer promised more of the same with a set of modest goals for the next three years. Yet CEO Oliver Baete’s tweaked capital target suggests he is leaving room for a hefty deal. Rival AXA’s derided purchase of reinsurer XL, however, should serve as a cautionary tale.
Altice wins most from $2 bln fibre sale 30 Nov 2018 Patrick Drahi’s debt-ridden telco needs cash to keep building fast broadband in quiet bits of France. Investors like Allianz will pay up for infrastructure-like assets. Selling a minority stake lets Altice lock in high valuations, while offloading some of the risk if fibre flops.
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.
Altria could polish cut-price Juul 29 Nov 2018 The $100 billion Marlboro maker may be eyeing a stake in the vaping unicorn as e-cigarettes cut into its growth. Buying upstarts can be expensive for mature companies threatened with disruption. But Juul now has regulators on its back. That could help Altria strike a bargain.
Jilted Intu flags more pain for UK landlords 29 Nov 2018 A group of investors led by the shopping centre operator’s deputy chairman abandoned a 3 bln pound takeover. It leaves Intu floundering with too much debt amid a bleak retail market. The fiasco suggests healthier peers may struggle to sell assets, and face further writedowns.
Horlicks buyer may face big fat problem in India 29 Nov 2018 Unilever is a leading suitor for GlaxoSmithKline’s local $3 bln “nutrition” business, which includes the 145-year-old malted milk drink. As obesity and malnourishment climb up the national agenda, however, sugary Horlicks could lose its healthy image and limit its shelf life.
L’Occitane buyout could be a fragrant option 28 Nov 2018 The $3 bln, Provence-inspired skincare brand may have attracted private equity interest. A costly expansion has hurt the group controlled by boss Reinold Geiger, but a clean balance sheet, prospects in China and an unglamorous share price suggest an alluring makeover candidate.
U.S. lenders keep M&A bankers on tenterhooks 27 Nov 2018 People’s United is the first to take advantage of new rules raising the $50 bln asset threshold for tougher regulation. But its purchase of BSB, with $3 bln of assets, barely takes it over the old line. And the modest deal value makes it at best an appetizer for Wall Street.
German lighting buyout relies on benign trade view 27 Nov 2018 Bain may be looking at Osram. Its stock has been hammered, and growth prospects are good. But the company that was spun off from Siemens is exposed to trade wars. A deal would show that private equity’s risk appetite has yet to be dulled by volatile markets and economic concerns.
EU sends mixed signals to scale-hungry corporates 27 Nov 2018 Commissioner Margrethe Vestager may wave through a Dutch mobile merger but not the Siemens-Alstom rail deal. One decision hints at flexibility in the EU’s antitrust thinking. Still, politicians hoping to build regional champions to counter the U.S. and China will be disappointed.
Analyst tie-up merely defers research bloodbath 20 Nov 2018 AllianceBernstein is set to buy Autonomous Research. The deal, for an undisclosed sum, endorses the value of independent insight in the wake of new European rules. But it also acknowledges that asset managers will continue to cut budgets, hitting less-celebrated rivals.
Colfax trades aging industry for aging Americans 19 Nov 2018 The industrial outfit is pivoting to healthcare by acquiring orthopedic-device maker DJO from Blackstone for $3.2 bln. Baby boomers’ growing need for knee braces and implants ensures a healthy market. But loading up on debt makes this a stressful way to chase perpetual youth.
Anta deal would be a marathon not a sprint 19 Nov 2018 Tencent may join the Chinese sportswear company and others in their $5.3 bln approach for Salomon owner Amer. The price, plus initial hits to the margin and dividend, worry shareholders. And yet if Anta could replicate what it did with Fila, the acquisition might pay off in time.
GE may be canary in credit market’s coal mine 15 Nov 2018 The firm’s bonds tanked this week even as an asset sale briefly lifted its shares. That’s a warning shot for all credit investors. U.S. companies carry more debt than ever, and quality has deteriorated. Rising interest rates and slowing growth could make this a big problem.
Dell puts $2 bln price tag on VMware resistance 15 Nov 2018 The PC maker’s second attempt to go public by buying out its subsidiary’s tracking stock should work. A higher valuation, extra cash and a board seat address skeptics’ main concerns, and have won over Elliott and others. The rewards of acceptance outweigh the risks of voting no.
Johnson Controls shows value of recharging early 13 Nov 2018 The conglomerate is selling its car-battery unit to a Brookfield-led investor group for $13 billion. The business has been humming but its lead-acid technology risks being overtaken by lithium-ion powered electric cars. That makes private equity a better ownership vehicle.