Spurned Caltex can do some refining on its own 21 Apr 2020 Canada’s Couche-Tard abandoned its $5.5 bln plan to buy and break up the petrol station operator because of the pandemic. The Australian company’s mooted property spinoff looks like a poor consolation prize. It would make more sense just to proceed with the suitor’s blueprint.
Japanese hospitality has a long way to go in M&A 20 Apr 2020 Lone Star is buying Unizo, ending a process marred by murky disclosures, a lack of engagement with bidders and conflict of interest allegations. Lawmakers last year introduced guidelines to make takeovers fairer, but the tussle suggests boards may need a bigger kick.
Anti-Amazon antitrust is UK’s latest crisis victim 17 Apr 2020 Britain cleared a $575 mln investment in Deliveroo led by the U.S. giant because the food delivery startup would go bust otherwise. The pandemic has weakened the regulator’s scrutiny of big tech firms. As in the financial crisis, authorities may regret deals they hastily allow.
Review: Facebook and Instagram deserve each other 17 Apr 2020 The social network had a tense relationship with the photo-sharing app it bought in 2012. Sarah Frier’s “No Filter” offers fresh insight into the troubled $1 bln deal. A bigger problem was that their common pursuit of a higher purpose obscured the threat they posed to society.
Corona Capital: LVMH, L’Oréal, Pandemic bonds 16 Apr 2020 Concise views on the pandemic’s corporate and financial fallout. LVMH holds onto the luxury of cash, cutting its dividend; L’Oréal makes the best of lockdowns with more than 50% growth in e-commerce sales in the first quarter; and even Covid-19 fails to trigger pandemic bonds.
FCA’s big dividend ambitions bruised by pandemic 15 Apr 2020 Plummeting auto sales triggered by the Covid-19 crisis and idle plants expose carmakers’ acute need for cash. Tapping state aid would alleviate Fiat’s pandemic pain. But that would probably require delaying or reconsidering payouts to cement a planned union with France’s Peugeot.
A Chinese investment megabank looks big, not bad 15 Apr 2020 State-backed Citic Securities and CSC could merge in a $70 bln deal. The resulting giant could fend off encroaching foreign rivals like Goldman, plus consolidate a fragmented local industry. The trick will be generating synergies despite inevitable turf wars and culture clashes.
ValueAct slides an atypically ajar shōji 14 Apr 2020 After a victory at Olympus, the U.S. investor is trying to push open the latticed door at $4 bln JSR. Unusually for a Japanese company, the synthetic rubber and chemicals maker has a foreign CEO and regularly pays out cash. That means it could be receptive to an outsider’s ideas.
Poison pills don’t always taste so bitter 9 Apr 2020 Boards sometimes use these defenses to deflect activists or unwanted bidders. Restaurant chain Dave & Buster’s may have found a less suspect use. Its pill could help it get raider KKR to buy shares directly rather than in the market – and put cash into the company in the process.
Wobbly EU banking union gets extra Covid-19 shove 8 Apr 2020 Italy is boosting its ‘golden powers’ to shield banks hit by a pandemic-led market rout from unwanted takeovers. Germany and France have said they are ready to inject cash in crisis-hit companies. If such plans materialise, EU’s banking union will be even worse than half-baked.
EQT finds LBO immunity formula for virus era 7 Apr 2020 Air Liquide is in talks to sell its disinfectant unit to the Swedish private equity firm for around 900 mln euros. Even with rising medical demand, the purchase looks brave given its rich valuation. Still, the risk of future epidemics could see the buyout group double its money.
Three deals that can measure India’s pulling power 6 Apr 2020 Mukesh Ambani’s Reliance Industries and the Tata group want partners for businesses from oil and chemicals to consumer tech and cars. The success of stake sales by the country’s A-list will be a key measure of India’s attractiveness to foreign investors in a post-virus world.
Buffett’s main asset isn’t money but patience 3 Apr 2020 The Nebraska billionaire rescued companies before - think GE and Goldman. Lower asset prices give him a chance to double down on troubled investments, or buy firms outright. But with government aid buoying values, there's little reason to move until things get really desperate.
China’s wannabe fashion empire unravels 3 Apr 2020 Two years after agreeing to buy Swiss luxury brand Bally from JAB for $600 mln, Shandong Ruyi has failed to nail down financing. Its large and complex debt structure looks increasingly shaky. Even an HNA-like fire sale for the Lycra and SMCP owner will be tough in these times.
U.S. regulators didn’t have to meddle with Altria 2 Apr 2020 The FTC is suing the Marlboro maker to undo its 35% stake in Juul claiming it eliminated competition. The $12.8 bln investment has been a disaster for Altria and highlights one of many problems from buying disruptors. The market can beat watchdogs to the punch.
Buyout barons may trip up during their big moment 2 Apr 2020 The market crash has created opportunities for private equity bosses, who are sitting on $832 billion of dry powder. But debt, crucial for the model, looks harder to come by. And with institutional investors under pressure, funds may not be able to tap all the cash they need.
M&A protectionists get even stronger cover 1 Apr 2020 All foreign takeover bids will now be subject to review in Australia, shielding local companies from a recovering China and beyond. As anti-globalisation rises, other countries might retrench similarly. That could make it harder for the capital-hungry and encourage oligopolies.
Corona Capital: Rich vs. poor, Carnival 31 Mar 2020 Concise views on the pandemic’s corporate and financial fallout: The rich may save even more while the coronavirus rages while the poor will be further squeezed, and Carnival tries to bail out its sinking cruise business with a big sale of equity and debt.
Couchbound M&A bankers have a few straws to clutch 31 Mar 2020 The value of global deals fell 28% in the first quarter to $698 bln. Defensive all-stock mergers and distressed sales offer some hope for M&A bankers, who are also learning to schmooze from home rather than in person. Yet hopes of a quick snapback look forlorn.
Hedge funds’ German M&A pleasure flips to pain 31 Mar 2020 Covid-19 has turned the tables on speculators buzzing round AMS’ 4.6 bln euro takeover of Munich-based Osram. The Austrian group may struggle to buy out minority investors. That leaves funds using a well-worn legal loophole to squeeze out a premium facing hefty losses instead.