Only trophy hunters would bid $3 bln for Chelsea 29 Aug 2018 That’s what Roman Abramovich wants for the barely-profitable London soccer club, the Times says. But Chelsea’s dependence on selling players and the need to rebuild its stadium makes it hard for a new owner to earn a return. Any buyer would have to put glory ahead of money.
Apollo reinsurance buyout bets on calmer waters 28 Aug 2018 The private equity group paid $2.6 bln for Aspen Insurance, less than expected. Hurricanes and wildfires have weakened small reinsurers, offering a chance to raise premiums. Even then, Apollo will have to contend with bigger players squeezing prices, and avoid more disasters.
Cyprus’ bad debt cleanup has lessons for Italy 28 Aug 2018 Bank of Cyprus will sell 2.7 bln euros in non-performing loans to private equity group Apollo. A price of nearly half book value is higher than comparable deals in Italy or Greece, thanks to government reforms. That should lead to healthier, more profitable banks.
Santos doubles down on independence with Quadrant 23 Aug 2018 Fresh from rejecting a $10.8 bln takeover bid, the Australian energy group is buying its Perth peer for $2.2 bln. The move tests a newly healed balance sheet, but investors value Santos equally as predator and prey. It’s a big bet on Quadrant’s new discoveries and the oil price.
West Texas mergers test shareholder blind faith 21 Aug 2018 A gush of mergers in the oil-rich Permian Basin region has totaled nearly $30 bln in a few months. Consolidation brings down costs, which have been rising. But high prices leave scant margin for error, and synergies may be overstated. “Trust us” strategies don’t suit wildcatters.
Australian telco M&A logic trumps messy governance 22 Aug 2018 Vodafone and Hutchison’s mobile joint venture may combine with the A$7 bln TPG. Mergers of equals are hard enough without three parties, and the embattled broadband group looks like an unequal match. The benefits of less competition mean both sides have reason to hold their nose.
Pepsi’s fizzy water deal may have flat aftertaste 20 Aug 2018 As CEO Indra Nooyi departs, the drinks giant is buying SodaStream for $3.2 bln. Diversifying into the high-growth carbonated water market has strategic logic, and Pepsi has cash. But new boss Ramon Laguarta will need sparkling revenue growth to make a decent return.
Rio’s Canadian opportunism amplifies cash quandary 17 Aug 2018 The $80 bln miner wants to list its 59 pct stake in Iron Ore Company of Canada, Reuters says. The timing suggests an eye on amenable markets for the operation's premium product, as China goes green. Success will benefit Rio’s cash pile, but only makes the growth debate louder.
Activist board hack is a boon for Symantec 16 Aug 2018 Hedge fund Starboard is seeking five seats at the $12 bln cybersecurity outfit after taking a 5.8 pct interest. Accounting troubles and upheaval in its enterprise software business have slashed the firm’s value by a third this year. Fresh oversight could help fix the bugs.
Britain’s Disney M&A ruling is a bit Mickey Mouse 16 Aug 2018 The Takeover Panel, generally a sound custodian of UK bid rules, is keeping the Magic Kingdom’s minimum buyout price for Sky at 14 pounds per share. Nudging it higher, in line with Disney’s Fox bid, would have set a better precedent for similar deals in the future.
Fried chicken risks diverting Beijing state fund 15 Aug 2018 China Investment Corporation may join a bid to take private the owner of local KFC outlets, Bloomberg reports. A takeout has merits, but is also a distraction for the $940 bln giant. Its mission is to invest foreign exchange reserves abroad, not dabble in private equity at home.
Icahn got it half right with Cigna battle 14 Aug 2018 The activist investor has backed away from his fight against the U.S. health insurer's $52 bln deal to buy Express Scripts. On merit alone, his opposition was justified. But for activists, that is no longer enough to win. Shifting shareholder rosters have changed the game.
UK insurer buyout depends on avoiding potholes 14 Aug 2018 Bain Capital is offering 1.2 bln pounds in cash for esure. To justify a multiple of 12 times 2019 earnings, the private equity firm will need to ramp up the motor and property insurer’s digital credentials. An overhaul is necessary to counter the industry’s shaky prospects.
China Literature splurges on confusing plot twist 14 Aug 2018 Shares in the $7 bln online publisher sank on lacklustre earnings and a big cash and stock acquisition. Diversifying to buy a video producer one third its size is bad enough. That Tencent, which already owns a movie-studio, is on both sides of the deal makes it more muddled.
Wrangler jeans breakup gets a dressing down 13 Aug 2018 Owner VF is separating its denim brands from the rest of its wares. The Wrangler and Lee jeans division will be more indebted and pay a higher dividend. But VF’s pieces add up to less than its $37 bln valuation, which takes the impact out of the company's big reveal.
Nielsen’s best option is to rip off the band-aid 13 Aug 2018 Paul Singer’s Elliott disclosed a 5 pct stake in the stumbling $8.5 bln TV-ratings firm and is pushing for a sale. It’s a surer remedy than auctioning one floundering business unit amidst a protracted CEO search. Buyout firms took Nielsen on once before. Maybe they will again.
Review: Fear and loathing in the Philippines 10 Aug 2018 Rodrigo Duterte's two years as president have been dominated by a vicious war on drugs. A biography of the mercurial man-of-the-people known as "Duterte Harry", after the fictional cop, is blistering. It doesn't do enough, though, to address the economic cost of wanton brutality.
Collapsing deals point to tired M&A bull market 9 Aug 2018 Tribune and Rite Aid terminated plans to sell themselves after shareholders and regulators objected. Perceived double-dealing also played a role. But crummy transactions falling apart is to be expected from a late-stage of a merger cycle that has run its course.
Thyssenkrupp makes investors slightly less angry 9 Aug 2018 The ailing German conglomerate’s boss Guido Kerkhoff has set margin targets for its various businesses, after shareholder pressure. It’s a start, but the group has missed goals before. And Kerkhoff’s interim status makes it harder to tackle more radical solutions, like a breakup.
Alibaba deal seats SoftBank on both sides of table 8 Aug 2018 Masayoshi Son's $100 bln Vision Fund is mulling an investment in the Chinese e-commerce group's food delivery units. The billionaire is a board member of Alibaba, in which his SoftBank Group holds a 29 pct stake. Potential conflicts of interest in this cosy deal raise red flags.