Divestment

Imperial sale shows cigars’ soggy luxury status

27 Apr 2020

Tobacco group Imperial Brands sold premium stogies like Montecristo to undisclosed buyers for $1.4 bln. A low valuation of 12 times EBITDA fits with tobacco products’ niche appeal, and the uncertain virus hit. Other disposals needed to meet a 2 bln pound goal may be even harder.

Hoarding to extend sell-by date of tired brands

17 Apr 2020

Consumers stockpiled pantries and freezers with long-life grub, boosting dowdy products like frozen Hot Pockets. Unilever and Nestlé had been tilting towards higher-end brands. Lockdowns will force CEOs and investors to reconsider the value of what’s in their cupboards.

Prudential’s U.S. listing throws spotlight on Asia

11 Mar 2020

CEO Mike Wells plans to sell a slab of the UK insurer’s Jackson unit. It’s the second stage of a breakup, and partly satisfies activist Dan Loeb’s call for a full split. But any meaningful boost in the $37 bln company’s value depends on investors reassessing its Asian business.

Tesco’s Asia retreat seals humdrum UK future

9 Mar 2020

The retailer sold its Thai and Malaysian units for $10.6 bln. The price of 12.5 times EBITDA suggests CEO Dave Lewis prioritised a fast sale. Investors will pocket a 5 bln pound special dividend. With a clear focus on its dominant British business, Tesco will be safer but duller.

Agnellis best the French in $9 bln reinsurer sale

4 Mar 2020

Covea is paying a 38% premium over book value for PartnerRe. That’s more than Exor paid four years ago and the same price mooted three-plus weeks ago. Since then, rival insurers have tumbled in value. Covea’s mutual structure looks to give it incentives to misallocate capital.

Dan Loeb kicks on open door with Pru breakup plan

24 Feb 2020

The outspoken investor has called for $47 bln UK insurer Prudential to carve itself up. There’s plenty of value to be unlocked by separating the fast-growing Asian business from the sleepier U.S. retirement unit. An open-minded board means Loeb won’t have to shout too loudly.

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.

Kone may hold trump card in Thyssenkrupp endgame

13 Feb 2020

The Finnish lift maker could waive a requirement for its 17 bln euro German elevator bid to hinge on the upshot of antitrust probes. Kone’s plan can fly if it sells any forced disposals to partner CVC. Either way, Thyssenkrupp will find it harder to reject its premium offer.

Insurance tie-up leaves Scor out in the cold

11 Feb 2020

The $7.5 bln French insurer fought off an unwanted offer from Covea. Now its erstwhile suitor may team up with rival PartnerRe. That leaves CEO Denis Kessler short of options. If Covea sells its 8% stake in Scor, shares which have trailed the industry will face further pressure.

Insurance sale gives Agnellis a cash conundrum

10 Feb 2020

Exor, run by Fiat scion John Elkann, is in talks to sell PartnerRe to France’s Covea for $9 bln. Factor in a big dividend from the Peugeot merger and the Italian family’s investment vehicle will be liquid but less diversified. Deploying the proceeds wisely is a new challenge.

Merck spinoff pits cash now vs. excitement later

5 Feb 2020

The $217 bln U.S. drugmaker joins Pfizer and GSK with plans to separate its steady from fast-growing products. The former’s cash flow will appeal to investors seeking stability. The latter will have Keytruda, its monster cancer drug. But stodgier businesses can be the better bet.

Thyssenkrupp’s ailments give edge to buyout barons

29 Jan 2020

Finnish lift maker Kone is offering 17 bln euros for the German steel giant’s elevator unit. That’s 6% more than the closest private equity bid. But competition regulators could hold up the juicier deal. Given its dismal profitability, Thyssenkrupp may prefer the cleaner option.

Home cleanup lets Philips focus on health push

28 Jan 2020

The 40 bln euro Dutch group is offloading its vacuum and coffee maker arm which brings in 12% of revenue. Detangling the business is fiddly but lets CEO Frans van Houten focus on its health units. Catching up with rivals like Siemens Healthineers requires more reliable results.

Fire sale further weakens NMC’s defence

8 Jan 2020

The $3 billion hospital operator fell 15% after big shareholders dumped its stock. The sale, which follows attacks by short seller Muddy Waters, was needed to repay debt. But it highlights the reluctance of the Gulf group’s backers and management to support its depressed shares.

Japan’s buyout teams face endurance challenge

19 Dec 2019

Industrial group Showa Denko is buying Hitachi’s chemical arm for $9 bln, disappointing private equity suitors like Bain and Carlyle. Firms are raising record sums in the hope that corporate reforms unleash a wave of dealmaking. Flush with cash, Japan Inc is crashing the party.

German listings breakup puts LBO shop in fast lane

18 Dec 2019

Hellman & Friedman paid 3 bln euros for the car sales division of classifieds group Scout24. It’s a rich price, but the unit’s racy growth means the buyout fund should make a healthy return. A higher exposure to risky property leaves the seller’s investors with a bumpier ride.

DuPont’s latest reinvention risks deal fatigue

16 Dec 2019

The $26 bln sale of its nutrition unit looks smart on paper. Yet DuPont has been reworking itself for four years, with no real boost for shareholders. Buyer IFF is still digesting another purchase. And closing is over a year away. Even the right deal can be too much of a grind.

DuPont comes out smelling of roses in $45 bln deal

16 Dec 2019

Executive Chairman Ed Breen is merging his nutrition and biosciences business into International Flavors & Fragrances. He has secured a premium valuation, cash sweetener and a tax-free transfer for DuPont shareholders. IFF gets little besides the dubious benefits of scale.

Altice scores narrow win with Portugal fibre deal

13 Dec 2019

Billionaire Patrick Drahi’s telecom group sold half its local broadband network for 2.3 bln euros. Some of the payment is delayed but the price still gives Drahi reason to celebrate. Besides eating into his debt mountain, the cash helps him lay more fibre to stay ahead of rivals.