Private Equity

Qantas charts choppy path for Bain’s Aussie flight

26 Jun 2020

The U.S. buyout shop beat out rival bids for bankrupt Virgin Australia. There’s haggling to do with creditors and others before the sums are known. At the same time, Qantas is raising $940 mln and plans to axe 20% of its workforce in a fresh sign of the brutal challenges ahead.

Cerberus bags more waiting for Albertsons checkout

23 Jun 2020

Stephen Feinberg’s buyout firm has tried several times to exit the U.S. grocer it has owned for 14 years. But the pandemic has been a boon for both supermarkets and capital markets. That means Cerberus can get a better deal than was on offer when it last tried to leave the store.

Ancient Chinese governance tech stymies SoftBank

22 Jun 2020

The Japanese firm’s Chinese chipmaking venture can’t get rid of its CEO because he won’t return the company seal. It’s a common problem in the People’s Republic. Still, it puts 20% of Arm revenue at risk and adds to a list of investment headaches for SoftBank boss Masayoshi Son.

Virgin Australia suitors strain to soar like TPG

22 Jun 2020

Buyout shop Bain and hedgie Cyrus are jostling to buy the carrier out of bankruptcy. The industry has foiled everyone from Warren Buffett to Gordon Gekko. David Bonderman’s TPG is one of the few with happy tales to tell. Replicating its success will require some fancy flying.

Corona Capital: UK debt, Oaktree, KKR, Chanel

19 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: UK government borrowing surges past GDP; Howard Marks is sceptical about the stock market revival; KKR bets on cheap and local European holidays; Chanel takes a gloomier view than rivals on the luxury rebound.

Crisis patience will reward buyout barons in Asia

19 Jun 2020

Private equity dealmaking in the region is up, defying a global slump, thanks to big purchases by Bain, KKR and others. Funds are hunting for bargains, but some of the worst deals were done during the last crisis. Sitting it out and delaying exits may help to avoid past mistakes.

Italy’s soccer woes give buyout firms an open goal

17 Jun 2020

CVC and Bain Capital are vying to take a stake in the country’s top Serie A league. Empty stadiums will strain clubs’ finances, while broadcasters have dragged their feet on handing over 1.3 bln euros of annual TV money. It offers a rare opportunity for a cut-price cash transfer.

Wall Street underwriters get their day in the sun

16 Jun 2020

Investors are going bananas for new shares. Even bust rental-car firm Hertz can sell stock. Re-equitizing companies is bringing a bonanza of fees to global equity capital markets desks at investment banks. But the window is only open now thanks to central banks and governments.

China’s $9 bln classifieds buyout is an easy sale

16 Jun 2020

A group including Warburg Pincus will take U.S.-listed 58.com private. A 20% premium is decent for a business that has fallen out of favour to sexier tech stocks. Private equity boasts a strong record in classifieds, and can offer 58.com a clean exit from an unwelcoming market.

Buyout fund investors score some leverage on fees

15 Jun 2020

Private equity pools raised between 2006 and 2015 performed no better than public stocks, an Oxford University study found. Pension funds and other backers probably won’t abandon groups like Blackstone and KKR. Yet proof of shrinking returns helps make the case for lower costs.

Corona Capital: KKR, Rugby, Centene

12 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: KKR volunteers advisers to share the pain, Super Rugby heads back to the pitch, and Centene's best bet.

Ackman can help SPACs, but can SPACs help Ackman?

11 Jun 2020

Hedge fund maestro Bill Ackman is raising more than $1 bln for a blank-check company. These acquisition vehicles are having a good year, and so is Ackman. There’s room to make so-called SPACs work better – but they can also come with wrinkles. Ask rival investor Dan Loeb.

Corona Capital: Make infrastructure great again

10 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: Brookfield Asset Management CEO Bruce Flatt reckons national and local governments will start getting investors to help finance new roads, bridges and the like. That’s one way to plug deficits wrought by Covid-19.

Mets bid faces Philly-style conflict of interest

9 Jun 2020

Apollo’s Josh Harris and Blackstone’s David Blitzer are exploring buying the New York baseball team. But they already own a sports team in Philadelphia – home to the sluggers’ archrivals. Private equity understands conflicts. But handling sports fans may be their toughest test.

Samsung’s M&A controversy will have a final act

9 Jun 2020

Seoul is stepping up a probe into a 2015 group merger led by scion Jay Y. Lee. That might help U.S. fund Elliott which opposed the $8 bln deal and wants payback. Samsung went to great lengths to only narrowly win the first time around. Pressure on the conglomerate is building.

Private equity hangers-on face diminishing returns

3 Jun 2020

France’s Ardian raised $19 bln to buy stakes in other buyout funds. The niche, known as secondary investing, did well after the last crisis and is booming as conventional fundraising slows. Yet sellers are less desperate this time, and an oversupply of capital may hurt returns.

Buyout firms make first move in EU telco shake-out

1 Jun 2020

KKR, Cinven and Providence are offering $3.3 bln for low-cost Spanish operator MasMovil. Stricter financial discipline may mean less of the cut-throat pricing that hurt rivals. After an EU court ruling on a nixed UK merger, it may also be the start of a new round of mergers.

Corona Capital: GE cash burn, Macy’s lifeline

28 May 2020

Concise views on the pandemic’s corporate and financial fallout: General Electric’s cash flow will be more negative than expected as Covid-19 damages its aviation and power businesses; and U.S. department-store chain Macy’s borrows more, buying time but not much else.

Buyout barons will keep getting cake and eating it

18 May 2020

Private equity blowups like retailer J. Crew take on extra frisson in a crisis, because buyout firms themselves are benefiting from subsidized credit, low asset prices and tax loopholes. The cycle can continue while investors keep coming, and politicians have bigger fish to fry.

Bain’s latest Japan deal gets too cosy for comfort

13 May 2020

Nichii Gakkan is backing a $1.2 bln sale to the Boston buyout shop, whose board seat at the family-owned medical staffing company gave it an inside track. The governance lapses evoke TPG’s shoddy J Crew takeover. If shareholders let it slide, other MBOs in waiting will take note.