Tue. Dec 7th, 2021


A scoop to start: David Cameron lobbied Lloyds Banking Group to reverse a decision to sever ties with the sick Greensill Capital, with an appeal to a councilor he had ennobled as prime minister. Full story here.

Former British Prime Minister David Cameron has contacted leftist Lord James Lupton, a Lloyds director and former Conservative party treasurer, in a successful bid to persuade the bank to continue doing business with Greensill © FT montage ; Getty

Welcome to Due Diligence, your information, private equity and corporate finance briefing. This article is an on-site version of the newsletter. Sign in here to have the newsletter sent to your inbox every Tuesday to Friday. Contact us at any time: Due.Diligence@ft.com

Is Spacs making a comeback?

The special purpose procurement company’s sauce train returned to the station just in time for the Thanksgiving holiday. And the UK stock market is eager to get a seat at the table.

Hambro Perks, London’s venture capital firm, will seek to raise up to £ 150m for a procurement vehicle in what could be the UK’s first major blank check debut since the government revised its rules to compete with New York’s operating Spac -scene.

The Spac will then be used within 15 months to merge with a fast-growing private European technology company, the group announced on Tuesday.

Dominic Perks, CEO of Hambro Perks: ‘We looked at the US, we looked at Amsterdam, but London was ready for us’

Behind the wheel is Dominic Perks, a former Mckinsey consultant in Morgan Stanley banker what told the FT that changes to the UK’s listing rules were “crucial” in bringing the Spacs company to London.

But those entering London’s slow-roasting Spac market may soon realize that blank check transactions are the juiciest for guarantors and Pipe investors (or institutional investors who have agreed to engage in so-called private transactions). investment in public-equity transactions), while retail. investors are often sort by legs.

In the first quarter of this year, for example, US blank check companies broke records in terms of fundraiser and make a transaction. But when DD shrank the figures, 65 percent of transactions completed in 2021 traded at a valuation of more than $ 1 billion below $ 10 – the price at which they were driven.

The market seemed to be catching on when redemptions of blank check vehicles rose to an average rate of 52.4 percent in the third quarter of this year amid a series of scandals. A top Wall Street banker stated: “We will never see Q1 again, never.”

Never never never say. As DD’s Ortenca Aliaj and Miles Kruppa reported in this Great Read, a new round of transactions creates new signs of life in the market.

Big Read chart showing how Spac IPOs started to recover

Sponsors hope this is a sign of a mature market, a bit like the steady revival of scandal-ridden junk effects in the 1980s.

But here’s the more likely scenario: a withdrawal of institutional investors over the past six months, whose Pipe investments previously turbo-charged the market, means that transaction makers are now being forced to rely on a smaller group of initial investors who then better terms can extract.

Big Read chart showing Pipe liabilities against Spac transaction scores

This means that sponsors can be forced to sacrifice some of the big windfalls they usually receive when a transaction goes through, as private investors demand more for their money.

But even as the fine print evolves, one thing remains true when it comes to Spacs: the higher up the food chain, the better.

Decoding the Alden Global Capital Playbook

Alden Global Capital is one of two things, depending on who you ask.

Critics call it “The Grim Reaper of American Newspapers”, one of several unsavory nicknames applied over the years as the mysterious New York hedge fund gained notoriety for buying up local newspapers and relentlessly cutting costs.

If you ask Heath Freeman, the firm’s president, it’s the guardian angel of a dying industry. “It is important for people to understand that we are actually trying to save many newspapers from extinction. And put them on a path to sustainability, ”he wrote in an email to the FT in January.

Heath Freeman, President of Alden Global Capital

(Read more about Alden’s tactics in this informative long read, published earlier this year.)

Whatever Alden’s motives, the firm uses its distinctive cut-and-burn methods with calculated efficiency.

After obtain the rest of Tribune Publishing did not already own it in May, Alden placed a bid to buy Lee Enterprises, the publisher of 90 dailies, including The Buffalo News, Sioux City Journal and Omaha World-Herald, for $ 24 per share.

The deal will appreciate the Iowa-based media company, which owns a number of newspapers that were once owned Warren Buffett, at $ 141m. If the takeover proves effective, staff at Lee’s newspapers will now know what to expect.

Alden borrows his zero-based budget strategy directly from the playbook of dreaded corporate poachers, such as DD’s James Fontanella-Khan explained in this video: sell excellent property to recover the purchase price of the newspapers, relocate the newsroom, then reduce costs by cutting jobs and other resources.

The hedge fund has now become the second largest owner of newspapers in the US, second only to the USA Today publisher Gannett, which could not obtain it in 2019 when the publisher assert it was not a credible buyer and undervalued the media group.

And it’s not the only player in the game, as local newspapers have become an excellent choice for hedge funds and private equity over the past decade amid shrinking revenue from print advertising and the growth of online media.

Private equity firm Cerberus Capital Management served as Alden’s financial backer in the Tribune takeover among other transactions. More private lenders may soon follow suit.

The Time Warner Fee Machine

AT&T‘s purchase of entertainment group WarnerMedia back in 2016 was a costly mistake for the telecommunications company. But for his bankers, the decision to buy and sell the media company unexpectedly five years later was very profitable.

Investment banks raised more than $ 320 million from the sale of WarnerMedia on Discovery earlier this year, and some of the same advisers have large fees from AT&T‘s fatal 2016 acquisition as well.

Take New York-based Allen & Kie. The mysterious boutique bank, which does not have a website or a public phone number, received $ 75 million from Discovery for working on the merger. Five years earlier, the bank had made $ 50 million from the other side of the table – for advice to WarnerMedia – then called TimeWarner – on the sale to AT&T.

The deal combines Discovery’s content with valued media assets, including the HBO network behind the TV series ‘Succession’

Other banks involved in the creation of the world’s second largest media group include JPMorgan Chase, which earned $ 15 million for advice to Discovery and a further $ 140 million for financing services. In 2016, the Wall Street firm earned about $ 32 million for advising AT&T.

The transaction will combine Discoverybrands ranging from nature to history, with valued Hollywood media assets including the HBO network behind TV series Follow-up, the Warner Bros. studios and television channels including CNN.

AT&T‘s agreement with Discovery highlights how fast traditional media groups are rushing to compete in the power wars. The fees generated by investment banks emphasize the rewards offered for doing and undoing transactions for clients.

For the bankers, the outcome does not matter much. In the words of Follow-up Logan Roy, “money wins”.

Job moves

KPMG’s 582 partners give Bina Mehta their ‘overwhelming support’ by voting in favor of the extension © Chris Lobina

  • KPMG‘s partners voted extends the term of office of Bina Mehta as chair of the British firm until 2024, as it seeks to continue from the exit of her predecessor Bill Michael, who resigned after telling employees to “stop moaning” about their working conditions during the coronavirus pandemic.

  • Lazard entered into an exclusive M&A partnership with Independence Point Advisors, the newly established investment bank established by veteran in the industry Anne Clarke Wolff. Prior to the launch of IPA, Wolff held senior roles at Citigroup, JPMorgan and Bank of America.

  • Vanguard preferred Tara Bunch, Airbnb head of global operations, to his board of directors and his board of trustees of each of the Vanguard funds.

  • Deutsche Bank named it James Liddy as head of games, accommodation and leisure across Europe, the Middle East and Asia, based in London. He previously had the same role at Moelis.

  • Clifford Chance rented it Paul Seraganian as a partner in its U.S. tax, retirement, and employment practice, based in New York. He joins from Osler, Hoskin and Harcourt.

Smart reading

Keep it in the family With a $ 208 billion dynasty at stake, Asia’s richest man, Mukesh Ambani, is leading the region’s new class of magnates in hatching a succession plan that passes the reins on to his children without endangering his empire. (Bloomberg)

Play dirty Qatar has for years used a former CIA agent to spy on football officials in an attempt to win the 2022 World Cup. This is not the first time that US intelligence officials have been questioned by foreign governments with questionable motives. (AP)

Alternative alternatives A new legion of investors is looking for private equity strategies in the public market. Whether these so-called PE-lite funds can take on the $ 4 billion buyout industry remains unproven. (BBG)

News summary

The ‘Tesla financial complex’: how carmakers gained influence over markets (FT)

Apple sues Israeli spyware group NSO (FT)

Getir grabs Weezy as competition in grocery delivery increases (FT)

Mishcon sues £ 2.9m after family dispute (FT)

Aareal / Centerbridge: a softer, friendlier type of private equity buyout (Lex)

Martin Gilbert fights rival in attempt to take over River and Mercantile (FT)

Atom Bank moves to four days working week without reducing salary (FT)

Venture capital funds pile up in India’s opening scene (Nikkei Asia)

Binance talks to sovereign wealth funds while seeking investments (FT + Lex)

China intensifies suppression of celebrity culture and fans (FT)

Counting table – Key news and analysis behind the business decisions in sports. Sign in here

FT Asset Management The inside story about the shifts and shakes behind a multi-trillion-dollar industry. Sign in here



Source link

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *