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.
Corona Capital: Banking bonuses, Local TV M&A 30 Mar 2020 Concise views on the pandemic’s corporate and financial fallout: BBVA’s ditched bonuses pressure peers; local TV deal has more than one struggle.
Ritz sale suggests some assets are virus-proof 30 Mar 2020 The high-end London hotel has been sold to an undisclosed Qatari investor for 800 million pounds. While that may not be enough for some members of the feuding family of sellers, it’s what it might have fetched pre-coronavirus. London property remains a safe haven of sorts.
Xerox-HP deal is dead for now 26 Mar 2020 The smaller printer maker's hostile $35 bln offer for its rival looks even more like a fool’s errand in today's market. It would pile on debt, and HP’s resistance suggests a friendly deal won't happen. As with other pending mergers, industrial logic will still exist in a year.
Chinese video-game deal is fight for extra life 26 Mar 2020 Tencent-backed iDreamSky wants to take over larger rival Leyou for $1.3 bln with CVC’s help. The suitor’s Nasdaq delisting and subsequent relisting in Hong Kong have not gone well, but owning the Warframe developer makes strategic sense. The financial logic is less compelling.
M&A will be lasting casualty of post-viral world 25 Mar 2020 Notions of national security will broaden as companies are expected to do their bit to keep stricken economies afloat. Buyers will face greater onus to show they won’t strip away assets and jobs. And as countries recover at different speeds, accusations of opportunism will fly.
Selloff forces merger arbs to pass up free money 24 Mar 2020 Funds which bet on M&A deals have suffered hefty losses. Gyrating markets triggered risk limits, forcing some to sell out of deals that are very likely to go ahead, like luxury group LVMH’s $16 bln takeover of Tiffany. Arbitrageurs will lose much more than they stood to gain.
Hong Kong is ripe for more tycoon-led buyouts 23 Mar 2020 The Fung clan wants to take Li & Fung private. Online retail, the trade war and Covid-19 have battered the supply-chain group, making a $1.4 bln valuation look generous. As such opportunistic deals gather pace, investors in the Asian hub may start to demand more of buyers.
Viewsroom: How to run virus bailouts 20 Mar 2020 The rapid economic slowdown caused by the spread of Covid-19 has brought to the fore the prospect of companies getting help from taxpayers. Which firms to target and what strings to attach will be the big questions. Plus: Pepsi, credit cards and cancer drugs drive virus-era M&A.
Corona Capital: Dining bonds 20 Mar 2020 Concise views on the pandemic’s corporate and financial fallout: Restaurant industry cooks up a unique form of funding to help alleviate revenue wipeout.
Covea should be haggling hard with the Agnellis 20 Mar 2020 The French insurer’s proposed $9 bln purchase of Exor’s reinsurer PartnerRe has gone from dear to ridiculous in a month. Crashing peer valuations, pressure on Agnelli-owned Fiat Chrysler and a shortage of cash buyers give boss Thierry Derez ample room to negotiate a better deal.
KKR spots brass in British muck 19 Mar 2020 The private equity group’s infrastructure arm is buying water company Pennon’s trash management unit for 4.2 bln pounds. The valuation looks rich, given recent market moves. But lengthy contracts and growth in recycling mean co-CEO Henry Kravis needn’t fear a grubby return.
It takes a plague to make Paul Singer fold 18 Mar 2020 Elliott dropped its resistance to French IT firm Capgemini’s $4.1 bln bid for Altran. Tendering shares is an awkward U-turn after complaining the offer undervalued its target. But cash talks. In walking away, the activist U.S. fund crystallises a rare gain in a crashing market.
Cash isn’t king for M&A in falling markets 16 Mar 2020 Prices of bid targets are diverging from where they would be if deals were a sure thing. Bidders who have offered cash have more of an incentive to try and walk away, or at least try to change the terms. But the mechanisms that keep prices predictable may also be under pressure.
Pepsi bottles an antiviral deal solution 13 Mar 2020 The U.S. beverage giant is buying snacks brand Be & Cheery for $705 million, boldly expanding in China during an epidemic. It comes with expertise in e-commerce, a rare Covid-19 beneficiary. Containment efforts also kept some due diligence at a distance, challenging M&A conventions.
Market mess may save Xerox from itself 12 Mar 2020 The fallout from Covid-19 makes the printer maker’s hostile $35 bln bid for HP even edgier – and Xerox hasn’t raised all the cash yet. If it can do so, and if volatility continues, HP owners might bite. The problem for Xerox shareholders is that could mean too much risk for them.
Henkel needs a visit to the salon to shine again 11 Mar 2020 The shampoo maker is vying to buy Coty’s near-$8 bln professional haircare brands. Henkel has the cash. And focusing on hairdressers is sensible. CEO Carsten Knobel’s challenge is to avoid letting the German group’s stagnant portfolio dilute the impact of good acquisitions.
PepsiCo buys energy kick to keep up with Coke 11 Mar 2020 The soda and snack company’s $4 bln purchase of Rockstar energy drinks fills a gap in its portfolio that Coca-Cola has already got covered. Pepsi has lagged its nemesis in growth and valuation. Rockstar should help close that gap, even if it’s hardly a bet on healthy lifestyles.
Blackstone unearths rough Chinese property gem 10 Mar 2020 The private equity firm is in talks to buy Soho China for $6.3 bln. A 101% premium is eye-catching, but the collection of skyscrapers – some designed by Zaha Hadid – look cheap. After Blackstone’s lucrative run selling to mainland buyers, this deal’s timing warrants attention.