Private Equity

Bondholders are biggest losers in telco LBO frenzy

1 Dec 2021

Telecom Italia’s bonds fell on fears that the securities may not be redeemed if KKR’s $37 bln buyout succeeds. The M&A boom has made unexpected targets of large public companies. Even when investors enjoy stronger protections, as with UK rival BT, these offer limited solace.

Telecom Italia will keep bankers busy in 2022

29 Nov 2021

KKR’s $12 bln proposal has put the telco in play. The process is likely to involve multiple bidders and key actors including French shareholder Vivendi and the Italian government. As with Telecom Italia’s 1999 leveraged takeover, it’s a boon for bankers, lawyers and consultants.

Cox: Telecom Italia and the curse of the euro era

25 Nov 2021

The 1999 buyout of Italy’s phone monopoly baptised Europe’s new single currency. The years since have been terrible for the company and its many trophy-seeking owners, who have lost some $23 bln. Here’s why the latest offer from private equity firm KKR offers hope for redemption.

KKR has wiggle room to sweeten Telecom Italia bid

24 Nov 2021

The U.S. private equity group will need to raise its 33 bln euro offer for the Italian telco to win over investors Vivendi and CDP. It’s already the largest buyout in European history. But KKR has ways to fund the deal without overloading Telecom Italia with debt.

German $2 bln buyout flags bank investor myopia

23 Nov 2021

Advent and Centerbridge agreed to buy Aareal Bank, a real-estate lender that also owns an IT business. They could churn out a good return with a breakup or just by investing in the business rather than paying dividends. Payout-hungry shareholders in other banks should take note.

Elliott’s Athenahealth sale wins it future friends

22 Nov 2021

The activist firm has made roughly a fivefold return on the health-tech firm it bought after an acrimonious battle in 2019. While some of that’s down to market timing, Athenahealth’s old shareholders might have shared in the gains had the firm given Elliott more of a hearing.

KKR bid is next act in Telecom Italia soap opera

22 Nov 2021

The buyout group wants to take the phone operator private for 10.8 bln euros. Offering less than the pre-pandemic share price looks opportunistic. Yet the 47% premium will tempt all but top investor Vivendi, which is nursing hefty losses. The board should start a conversation.

Razer’s $4.5 bln buyout plan has a serrated edge

19 Nov 2021

The purveyor of pricey keyboards may swap a Hong Kong listing for one in New York as part of a management-led deal. A video-gaming fanbase gives it meme-stock potential while its Southeast Asian fintech unit might look hotter stateside. But any valuation gains may be subtle.

Carlyle bank buyout would need hard work and hope

16 Nov 2021

The U.S. private equity group is eyeing sickly UK lender Metro. It looks cheap, but an acquirer would have to throw in extra capital, slash costs and crank up risky lending to earn a respectable return. A merger with another small peer might help but would be tricky to pull off.

Capital Calls: Lordstown Motors, CVC

12 Nov 2021

Concise views on global finance: Shares of the short seller-targeted electric vehicle startup are falling as it drifts into the slow lane; the private equity company aims to bulk up with a 1.6 billion euro offer for Amsterdam-listed Intertrust.

Consumer rivals can beat buyout firms in GSK scrum

9 Nov 2021

The $106 bln drugmaker’s plan to spin off its Advil unit has drawn interest from industry giants and private equity firms. A leveraged buyout would stretch even the most daring financial buyers and leave GSK with a chunky stake. Selling to a rival like P&G looks a cleaner option.

Indian startup repackages deliveries for investors

9 Nov 2021

Delhivery has grown its reach by relying on partners for warehousing and last mile, so it owns fewer assets than FedEx and Chinese peers. That leaves it more dependent on tech and exposed to volatile costs like rising rents. A $5.5 bln IPO valuation might be slow to stack up.

Carlyle turns wrench on Aussie financial plumber

8 Nov 2021

The buyout shop is back with a solo $2.1 bln bid for Link, 13 months after a joint effort. The shareholder registry and pension services provider has dodged multiple entreaties for all or parts of the company, but failed so far to deliver much value. It’s time to let others try.

Political spotlight on Carlyle after U.S. election

3 Nov 2021

The buyout firm that once employed George H.W. Bush worked for years to shed its reputation as a shrewd Beltway operator. Former co-CEO Glenn Youngkin’s win makes him Virginia’s next governor. That gives him presidential potential, and puts Carlyle back on the Washington map.

Unilever’s tea makes for a tasty buyout brew

2 Nov 2021

The Dove maker is selling brands like PG Tips and Pukka, worth perhaps 4 bln pounds. Bringing sales to a proper boil could give private equity giants like Carlyle or Advent an invigorating 19% return. CEO Alan Jope’s struggling personal care lines may not hit the same sweet spot.

Silicon Valley can’t slice and dice lower returns

29 Oct 2021

Veteran Sequoia is ditching its traditional VC model in favor of allowing the fund to hold assets indefinitely. It’s an effort to stay competitive as SPACs and others bid up unicorns. But extraordinary valuations and founders with the catbird seat can’t be papered over.

Private equity M&A frenzy has cautious undertones

27 Oct 2021

Buyout barons launched deals with a record value of $1.4 trln in the U.S. and Europe this year. But they’ve sold companies worth three-quarters of that sum. That ratio has rarely been higher. Frothy markets allow the industry to take chips off the table – and restock its coffers.

Swiss bank-tech buyout would hit returns glitch

27 Oct 2021

Private equity firm EQT may bid for $10 bln software group Temenos. The Geneva-based outfit should gain from banks outsourcing more IT to specialists. Yet a deal would need a large chunk of equity, and making the numbers work in an increasingly competitive sector could be tricky.

CVC bets Indian cricket will set richer boundaries

26 Oct 2021

The buyout fund beat a billionaire banker and tycoon for one of two new Indian Premier League franchises, which sold for a combined $1.7 bln. Its bid stacks up providing hype about the upcoming auction of media rights, held by Disney, is realised. A longer season will help too.

Capital Calls: Zooplus frenzy, Volvo

25 Oct 2021

Concise views on global finance: Buyout barons EQT and Hellman & Friedman are going halves in their pursuit of the $4.3 bln petfood supplier; the $19 bln Swedish carmaker priced its IPO at the bottom of the range.