Private Equity

UK defence buyout is Exhibit A for cash glut

25 Jul 2019

Private-equity firm Advent and Blackstone funds are buying Cobham for 4 bln pounds, larding up to 2.5 bln pounds of leverage onto a company that has worked hard to have essentially none. It suggests both equity and debt investors have plenty of money and limited opportunities.

Goldman enlivened by condition it wants to cure

16 Jul 2019

The $77 bln Wall Street firm’s decent second quarter relied on gains from private-equity investments and equities traders who performed much better than some rivals. Boss David Solomon wants over time to downplay those volatile businesses. For now he’s probably glad he didn’t.

Abu Dhabi’s private equity plunge is sensible idea

15 Jul 2019

Hiking direct investments to the asset class by the emirate’s $700 bln sovereign wealth fund - and cutting reliance on fee-hungry buyout firms - raises risks when the economic cycle turns. But ADIA’s status as one of the more measured SWF dealmakers affords a degree of comfort.

China’s tech funding rut shifts power to investors

11 Jul 2019

Startup whizz-kids have plenty to bemoan in Hong Kong this week: fewer venture deals in the mainland, lacklustre IPOs and a trade war clouding prospects for all. That marks a change from past exuberance. For those investing, though, it's a chance to be a little more demanding.

Frere family’s private push is double-edged sword

10 Jul 2019

GBL, the holding company of Belgium’s Frere and Canada’s Desmarais families, may buy part of a 2.4 bln euro call-centre operator from KKR. CEO Ian Gallienne’s shift into unlisted assets could boost returns. But thin disclosure means his shares will suffer from a steeper discount.

German $4 bln lighting bid is radiant enough

4 Jul 2019

Bain and Carlyle’s offer for Osram Licht is fairer than the small premium suggests, especially as returns could be humdrum. While the board and investors might have hoped for more, rejecting the deal will leave shareholders stuck with a shrinking company in need of restructuring.

KKR puts fresh eyes on Japanese conglomerates

3 Jul 2019

Just two years after buying Hitachi Kokusai for $2.2 bln, the LBO shop is selling one of its two units for the same sum. Japan Inc has been slow to offload unloved businesses, but deals like this reveal some of the missing value. It could also make it harder for bargain hunters.

WPP disposal offers cautionary tale for Publicis

2 Jul 2019

The UK ad group is selling the debris from a debt-driven acquisition spree under former boss Martin Sorrell. Its $12.3 bln French rival is borrowing to splurge on a data business. Publicis’ lowly valuation shows investors fear that CEO Arthur Sadoun may repeat Sorrell’s mistakes.

Blackstone opens child-friendly Legoland LBO ride

28 Jun 2019

The private equity firm will help Denmark’s founding Lego family take Merlin Entertainments private for $6 bln. Rather than slashing costs and flipping the theme park owner, they’ll invest in growth. The trade-off is that returns may be much lower than a typical leveraged buyout.

Private equity’s broken record plays on in Japan

27 Jun 2019

Buyout barons gathered in Tokyo were giddy again about corporate carve-outs, inspired partly by Hitachi. Some of the latest exuberance is merely driven by fresh funds. Although Japan Inc may be changing, there are few signs yet of any bonanza. And sellers now have some leverage.

Greyhound activist gets few scraps from board coup

25 Jun 2019

Coast Capital failed in its move to revamp the board of FirstGroup, UK owner of the bus operator. True, Chairman Wolfhart Hauser won’t stand for re-election. But the board is mostly unchanged. And, having defeated one revolt, FirstGroup may take longer to break itself up.

UK $2.4 bln car-sale LBO has a quiet engine rattle

20 Jun 2019

Private equity firm TDR may buy used-car auctioneer BCA. Its experience in the sector may give it an edge over Apax, which walked away from the group last year, and returns look decent if Europeans sell more motors online. The longer-term risk is that fewer punters own cars.

Schwarzman’s Oxford gift widens UK university gulf

19 Jun 2019

The Blackstone founder is giving 150 mln pounds to the 900-year-old institution for a humanities centre bearing his name. Oxford and other top universities already outspend less prestigious peers. Weaker players will have to borrow more to keep up, increasing their vulnerability.

Ontario gives succor to Hudson’s Bay activist

18 Jun 2019

The Canadian province’s pension plan has ended a deal to sell shares to the retailer’s chairman at the same price he is now bidding for the whole company. That suggests common ground with investor Jonathan Litt, who says the buyers can pay more than the $1.3 bln offered so far.

KKR finds risky media bargain with Axel Springer

12 Jun 2019

The private equity group is partnering with the German company’s founding family to buy out minority investors for 3 bln euros. It gets a racy digital listings business at the price of a sluggish newspaper publisher. Yet the lack of control limits KKR’s options if growth slows.

Apollo’s eye for composition finds value in photos

11 Jun 2019

The private equity firm is paying $2.7 bln for Shutterfly despite growing competition and fickle consumer taste. Demand for the firm’s photo-based albums and gifts is stronger than its tanking share price suggests. Teaming up with rival Snapfish can put extra gloss on the deal.

Hudson’s Bay needs more from WeWork-backed bid

10 Jun 2019

The executive chair and other shareholders want to take the Canadian owner of Saks Fifth Avenue private for C$1.74 bln. While that’s a 48% premium, it’s also an opportunistic lunge with C$1.5 bln of cash coming in. Retail is suffering, but the company’s property has real value.

Thrice-ditched Aussie telco has its work cut out

5 Jun 2019

Swedish fund EQT has dropped its toppy $2.3 bln bid for Vocus after due diligence. Shares dropped 20%. It’s the third financial buyer to walk since 2017. It casts doubt on the target’s efforts to integrate deals. New boss Kevin Russell has to find a way to dial up confidence.

China’s censors expose a truth about corporate JVs

4 Jun 2019

Reuters’ 30th anniversary coverage of Tiananmen was blocked by Blackstone-backed partner Refinitiv in China amid pressure from Beijing. The $20 bln data provider’s priorities deviate from those of the news publisher. It’s a prime example of how partnerships can be strained.

U.S.-PRC tensions upend tech funding supply chain

4 Jun 2019

American venture capitalists pumped a record $19 bln into Chinese startups in 2018 while flows the other way reached a high of $3.6 bln. Tougher foreign-investment rules and rising nationalism are set to add friction to capital movement, creating new winners and losers.