Private Equity

Flailing property firms make for risky buyout prey

13 Jun 2023

Shares in Swedish landlord SBB crashed, while listed European peers also trade at heavily discounted valuations. It looks like a golden opportunity for private funds, with $700 bln of cash. The tough part will be securing debt financing and avoiding catching a falling knife.

Capital Calls: UBS, Brookfield

9 Jun 2023

Concise views on global finance: The Swiss bank’s state loss guarantee is structured like an insurance policy against an unlikely event; the Canadian investment group teams up with UAE and Saudi investors to beat CVC’s consortium and win payments provider Network International.

Private equity hurtles towards hard Asia reset

7 Jun 2023

China is the area’s powerhouse, but funds are under pressure from investors to limit exposure to the People’s Republic. Sequoia splitting the country off from the rest of emerging Asia formalises a growing trend, but an industry pivot to politically safer shores may sap returns.

Capital Calls: $6 bln pet buyout

2 Jun 2023

Concise views on global finance: Shares in UK veterinary pharmaceuticals group Dechra are trading 6% below private equity firm EQT’s new, lower bid. That looks too pessimistic given the chunky valuation on offer.

Paramount’s cast addition hints at exciting finale

31 May 2023

Byron Trott’s firm is joining scion Shari Redstone and billionaire Warren Buffett as a backer of the $10 bln media empire. Its capital infusion should help ease debt concerns for the controlling shareholder. The banker’s family-business ties also dangle the prospect of a buyout.

Activist Yelp review is worth hearing out

23 May 2023

TCS Capital wants the local listings site to explore a sale, pitching a tie-up with Barry Diller’s home-services rival Angi. A targeted $70-per-share price – double Yelp’s current valuation – seems absurdly high. But potential cost savings make the combo an intriguing blueprint.

Center Parcs buyout would offer low thrills stay

17 May 2023

Brookfield plans to sell the British holiday park operator for up to 5 bln pounds. The company’s unique assets and brand loyalty have made it an appealing asset for private equity. But its own limits on expansion and Britain’s cost-of-living crisis may now dent returns.

Guy Hands’ misery offers bondholders a free lunch

16 May 2023

The Terra Firma owner lost a legal fight with the UK, which wants to end a controversial housing privatisation. That could force Hands to sell properties and repay 4 bln pounds of debt at a premium to its market price. It’s the kind of bet the former bond trader might have loved.

TPG returns to credit party fashionably late

15 May 2023

The buyout firm’s $3 bln purchase of direct-lending firm Angelo Gordon takes it back into a business it split off in 2020, and will make it look more like bigger peers like KKR. Missing the last private-credit wave is no bad thing, since TPG could catch the crest of the next one.

Capital Calls: Wood Group

15 May 2023

Concise views on global finance: Apollo’s aborted bid for the $1 bln UK infrastructure firm prompted a 35% share price fall.

Private equity is being squeezed from all sides

12 May 2023

Buyout firms thrived in the era of low interest rates and deregulation. Both of those factors are coming to an end, argues Edward Chancellor. Higher financing costs and tighter rules suggest a future of depressed investment returns.

KKR’s $10 bln medical deal overlooked risk factors

10 May 2023

Since the 2018 buyout that larded Envision Healthcare with debt, it has struggled with Covid-19, hypertension induced by feisty insurers and rehab on its billing practices. Bankruptcy is now the prescription. It’s a reminder to beware combining operational and financial leverage.

German software buyout battle hits investor glitch

10 May 2023

Bain Capital has launched a 2.5 bln euro knockout offer for IT group Software AG. But the target seems oddly happy to stick with a lower bid from existing backer Silver Lake. Shareholders can either take an inferior price or risk a messy stalemate.

Plastic packaging is buyout funds’ lucrative sin

5 May 2023

Private equity players are doubling down on plastic. Despite pollution concerns and rising regulation, companies like $5 bln ProMach have lured suitors due to stable growth and recyclable wrapping. Yet the world’s failure to reprocess used containers will generate more waste.

Telecom Italia is stuck in risky game of chicken

4 May 2023

The telco’s board must decide on rival bids from KKR and state investor CDP for its fixed-line grid. None comes close to the 31 bln euro price wanted by top investor Vivendi, but cash is needed to slash debt. If neither side blinks, the group could face a messy capital increase.

Blackstone is cautious enough with its mall IPO

4 May 2023

It has trimmed the size of a $400 mln REIT deal to list Indian shopping malls and pricing looks conservative. A successful float of a portfolio where occupancy rates are near maxed out will give the US fund something small to cheer about in a tough global real estate market.

Buyout barons make bloody return in Europe

3 May 2023

Silver Lake and Bain are facing off to buy German company Software AG amid a revival in takeovers. Cheap stock prices mean deals can work despite debt constraints. But a limited pool of targets will make it hard to deploy $2 trln of dry powder, and stay disciplined.

Private equity is the new fuel for India’s tycoons

3 May 2023

Big conglomerates Reliance, Tata and Bharti are putting more skin in the game by looking to outside shareholders including tech giants and sovereign funds to finance new ventures. It heralds a shift from debt to equity, and towards better governance at the expense of lenders.

US ‘systemically important’ tag lacks fine print

24 Apr 2023

Financial regulators are once again making it easier to pick non-bank institutions, from hedge funds to private equity giants, for stricter supervision. Identifying firms that might threaten the system is the easy part. Writing effective rules for such diverse targets is harder.

Capital Calls: Disney, Thyssenkrupp

24 Apr 2023

Concise views on global finance: The CEO of the $180 billion entertainment company has to thread the needle between layoffs and degrading value as he finds a successor; the 4 bln euro German steel-to-cars group’s shares tanked after CEO Martina Merz left.