Unizo check-in borders on being inhospitable 25 Feb 2020 Bids for the Japanese hotelier have reached $1.9 bln, and could go even higher. The company is already loaded with debt, meaning that any buyout will require some serious housekeeping to generate a solid return. Blackstone, Lone Star or Fortress may be sweating their equity.
HP defense makes Xerox deal more likely 24 Feb 2020 The printer maker’s comeback to Xerox’s $35 bln hostile bid hangs mainly on a planned $16 bln of payouts to shareholders. Printing sales are still falling, though, and the case for a merger with further savings remains strong. At least HP can now negotiate from a better position.
Besieged boards like HP’s must pick their poison 24 Feb 2020 Aggressive takeover defenses give boards breathing space, but don’t always help investors. Even poster child Airgas doesn’t provide a knockout case. HP’s defense against Xerox is neither the first or the worst. But most poison pills let boards ignore problems until it’s too late.
Cox: Anyone on Wall Street want a Swiss bank? 24 Feb 2020 UBS and Credit Suisse have attractive wealth and asset management businesses, but their investment banks suck up capital and weigh on valuations. Goldman Sachs, Morgan Stanley and others could unpick some of that value. They’ll be closely watching the Zurich pair’s new bosses.
Fintech M&A shows bank disruption stuck in infancy 21 Feb 2020 LendingClub set out to upend retail finance by making small loans online. But like Radius, the digital bank it’s now buying, it’s still small fry. Sure, venture-capital funding for such upstarts is robust, but deep-pocketed incumbents like JPMorgan retain the upper hand.
UBI will struggle to rebuff Intesa’s embrace 21 Feb 2020 The Italian bank is exploring alternatives to its larger rival’s $5.3 billion hostile takeover bid. A tie-up with state-owned lender Monte dei Paschi would be complex and costly. Other escape routes look equally unattractive. And Intesa has some room to woo reluctant investors.
SoftBank gives only an inch to clear Sprint static 20 Feb 2020 Masayoshi Son’s firm is taking a modest $5 bln hit to clinch Sprint's $120 bln merger with T-Mobile US. The latter could have pushed harder, but that might have put the long-awaited deal at risk. The dance with each other, and with regulators, seems to be over without a fall.
HP’s fire-with-fire defense does it no favors 20 Feb 2020 The printer maker adopted a poison pill to stop bidder Xerox from digging in further. Aggressive bids justify robust responses. But HP would gain more credibility by laying out its valuation argument clearly for shareholders before putting up prohibitively defensive measures.
Morgan Stanley-E*Trade deal puts D.C. on the spot 20 Feb 2020 It’s the first major acquisition by a big bank in over a decade, which virtually guarantees political scrutiny. Yet regulators like the Fed seem amenable to financial mergers. Political detractors can’t easily sabotage the $13 bln deal, but they could upset the delicate timing.
E*Trade embodies Wall Street’s stodgy middle age 20 Feb 2020 Serving armchair investors is as unracy as it gets for erstwhile masters of the universe. Yet Morgan Stanley’s $13 bln purchase of an online broker makes sense given the rise of passive funds and decline of securities trading. Wall Street’s future is boring, and profitably so.
Holding: Big Tech’s U.S. legal exceptionalism 20 Feb 2020 The approval of T-Mobile US’s merger with Sprint is the latest sign that different rules apply to technology firms. Consequences include gig-worker gripes, unchecked online lies, and abuses of corporate power. Congress and the courts should focus more on equality under the law.
Speedway could leave 7-Eleven with overfull tank 20 Feb 2020 The convenience store chain’s Japanese owner Seven & i may buy Marathon’s gas station business for $22 bln. If it does so with cash, then the acquisition would load it up with debt for what looks like a measly return. That might be why investors sent the shares down 9%.
Dutch grocer can afford $7 bln U.S. shopping spree 20 Feb 2020 Ahold Delhaize, the $28 bln owner of Stop & Shop supermarkets, churned out cash after another strong quarter. The success suggests it could hoover up smaller U.S. players. Several grocers might be an option, though Ahold might have to compromise on its preferences.
Morgan Stanley beats Goldman to E*Trade punch 20 Feb 2020 Buying the online broker for $13 bln gives James Gorman’s Wall Street firm stable income, higher returns and cheap retail deposits. David Solomon has promised that too at Goldman Sachs, albeit via other means. It leaves Solomon, still tackling regulatory issues, on the back foot.
Hostile bank M&A gets Italian makeover 19 Feb 2020 Acquisitions launched without prior agreement happen rarely in the banking sector and often go wrong. Regulators worry that taxpayers will pay for bad deals, as with RBS and ABN Amro. Intesa’s tilt at UBI Banca suggests a change. A big cross-border deal would be a true test.
Trump’s frenzied Huawei solution snarls Verizon 18 Feb 2020 The White House is keen to win the global 5G race after a slow start. One option is for Verizon to buy at least part of Ericsson, which may fit into the U.S. firm’s goals. But D.C. is grasping at several tactics and meddling is fraught with problems. It also doesn’t stop China.
Merger of active asset managers looks too passive 18 Feb 2020 Franklin Templeton is acquiring Legg Mason for $4.5 bln. The deal beats the status quo with heavy pressure on industry margins, and both groups’ stocks got a boost. But it’s a defensive move that neither prioritizes aggressive cost cuts nor offers a clear path to growth.
Intesa starts Italy M&A dance with UBI ambush 18 Feb 2020 Carlo Messina is taking Italy’s largest bank into an unsolicited takeover of $4 bln rival UBI Banca. It may not be polite but the numbers stack up, with promised cost savings worth several times the premium. The bold move calls other Italian rivals into action.
Alstom’s M&A detour has lower chance of derailment 17 Feb 2020 The French train maker is paying $6.7 bln for Bombardier’s locomotive unit, after its preferred deal with Siemens was blocked. Bulking up can counter the threat of China’s CRRC. Success hinges on punchy synergies and a green light from the sticky antitrust signal box in Brussels.
Thyssenkrupp’s big lift deal puts time over price 17 Feb 2020 The German group has narrowed the field of bidders for its elevator division to two private equity consortia. Trade buyer Kone’s 17 bln euro premium offer is out. Thyssenkrupp insists an IPO remains an option, but its need for a clean, quick deal implies otherwise.