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KKR snaps up UK infrastructure investor John Laing in £2bn deal

John Laing board to unanimously recommend KKR’s offer to shareholders to take firm private.

The private-equity firm KKR has agreed to buy the UK infrastructure investor John Laing, which has stakes in Alder Hey children’s hospital in Liverpool and a retirement homebuilding project with McCarthy & Stone, in a deal valued at about £2bn.

The takeover values the London-listed firm at 403p a share, which represents a 27% premium on the closing price of John Laing stock on 5 May, the day before it confirmed it was in talks with KKR.

John Laing has invested in more than 150 projects and businesses since it was founded, across a range of sectors including transport and energy.

The firm, which was floated in February 2015, owns assets including schools, hospitals and infrastructure predominantly in the US and Australia as well as in Europe.

The investor was involved in the 2013 redevelopment of Alder Hey, which was funded through a private finance initiative, and as a result still holds a 40% stake in the hospital.

John Laing said its board intended to unanimously recommend KKR’s offer to its shareholders to take the firm private, adding that it represented a fair and reasonable value for the company.

KKR has also proposed a £175m cash injection into John Laing’s pension fund, accompanied by a further £50m in 18 months.

John Laing’s shares rose by 11% in morning trading on Wednesday, to 402p, just below the offer price.

 

Read More – www.theguardian.com

 

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Sony Music buys UK podcast producer Somethin’ Else

Sony Music is latest after Spotify, Amazon and Apple to try to cash in on boom in audio listening.

Sony Music has acquired the UK’s largest independent podcast producer, Somethin’ Else, which makes David Tennant’s interview series and The Sun King, David Dimbleby’s deep dive into the life of Rupert Murdoch.

Home to artists from Beyoncé and AC/DC to Dolly Parton, Sony is using the acquisition to spearhead the launch of a new global podcast division.

“Our new global podcast division is key to our plans for a fast-paced expansion in the market, diversifying our creative abilities and providing a home for exciting content that will benefit millions of podcast lovers around the world,” said Dennis Kooker, the president of global digital business and US sales at Sony Music Entertainment, the Sony subsidiary that struck the deal.

Companies ranging from Spotify and Amazon to Apple have been snapping up now increasingly scarce prime podcast producers and platforms to cash in on a boom in audio listening and diversify away from a reliance on music streaming.

Read More – www.theguardian.com

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Buyout of AOL, Yahoo signals PE’s biggest bet on digital media

Apollo Global Management has for years wanted to become a major player in the media world. The firm finally got its wish Monday.

After days of speculation, Apollo has agreed to acquire a 90% stake in Verizon’s portfolio of digital news sites, including Yahoo and AOL, from Verizon for about $5 billion.

The deal marks private equity’s biggest bet yet on the embattled digital media industry, which has struggled to compete with Google and Facebook for a share of the digital advertising market. And it puts Apollo, an investor engulfed in controversy for the past year-plus over co-founder Leon Black’s connections to disgraced financier Jeffrey Epstein, in control of a collection of news sites after spending years betting on legacy media.

“It’s a textbook Apollo deal, They’ve been interested in media space for a while, judging by their past bidding activity. Apollo probably likes the space since many other investors are avoiding it.”

Indeed, Apollo’s history with media companies dates back years. But that history hasn’t always been successful.

 

Read More – www.pitchbook.com

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Private equity brushes off past club deal woes with $34B Medline buyout

Private equity’s biggest guns are once again showing they can have record-setting buyout firepower when they work as a team.

After recently backing away from so-called club deals that bring together multiple firms, the industry now has its largest acquisition in years. The Carlyle Group and Hellman & Friedman have joined forces to acquire Medline in a deal reportedly worth around $34 billion, including debt.

The deal comes after US private equity firms amassed approximately $721 billion in dry powder as of June 30, 2020 following years of record fundraising outputs. And it may signal that club deals involving multiple buyout shops have returned after they fell out of favor following a series of high-profile flops.

The Medline deal also marks the largest private equity buyout by value in at least a decade, according to PitchBook data. So far in 2021, private equity firms have struck 13 deals in the US worth $5 billion or more, surpassing last year’s total of 11.

 

Read More – www.pitchbook.com

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HelloFresh inks $277M deal for US meal delivery startup

Germany’s HelloFresh has agreed to buy Illinois-based meal delivery business Factor75 for up to $277 million, as European food companies turn their attention to the US to fuel growth.

The deal comes just a few weeks after Nestlé completed its $1.5 billion acquisition of New York-based meal delivery startup Freshly. In June, Just Eat Takeaway.com fought off a rival bid from Uber to buy Grubhub in an all-stock transaction worth about $7.3 billion.

Factor75 will join HelloFresh’s existing US portfolio including EveryPlate and Green Chef, which it bought in 2018. The deal will give HelloFresh its first office in Chicago, as well as four production and fulfillment facilities.

Frankfurt-listed HelloFresh is currently the largest meal-kit provider in the US in terms of market share, reportedly surpassing Blue Apron in 2018. It logged 2.5 million active customers in the US during Q3 2020, a near 70% increase year-over-year. The pandemic has created a surge in demand for meal kits as shoppers seek alternatives to grocery stores. The meal kit market is expected to reach $14.8 billion by 2025, representing a 10.6% compound annual growth rate, according to PitchBook’s Q3 2020 foodtech report.

Founded in 2013, Factor75 specializes in healthy ready-to-eat meals. It secured $12.5 million in May in a round led by Marcy Venture Partners. Factor75 is expected to generate revenue of around $100 million in 2020.

 

Read More – www.pitchbooks.com

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Bertelsmann set to buy US publisher Simon & Schuster

Penguin Random House owner Bertelsmann has agreed to acquire New York-based publisher Simon & Schuster from ViacomCBS for over $2 billion, Reuters reported.

Following the deal, the German group will hold nearly a third of the US publishing market by revenue. Bertelsmann beat out Rupert Murdoch’s News Corp and French media group Vivendi in an auction for the company, which ViacomCBS put up for sale in March in order to refocus on its core assets.

Rival book publishers, including News Corp-owned HarperCollins, have raised antitrust concerns about the acquisition, according to the Financial Times. Critics have said that Bertelsmann could exert too much power in specific genres, particularly hardcover fiction. Simon & Schuster publishes some of the world’s bestselling authors, including Dan Brown and Stephen King.

Through Penguin Random House, Bertelsmann is already the largest global book publisher by revenue, reporting €3.6 billion (about $4.3 billion) in 2019. The group agreed last December to acquire the remaining shares of Penguin from UK-based peer Pearson for $675 million, giving Bertelsmann full ownership.

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UK revisits IPO rules to entice tech founders

The UK government said Thursday it will review the rules around initial public offerings as it looks to make post-Brexit Britain more appealing to tech founders seeking to take their companies public.

The review includes measures that would give founders more influence over their companies upon listing, including the allowance of dual-class share structures that give some shareholders—notably founders—more voting rights per share than others.

Free float rules are also under review. Currently, companies listing on the London Stock Exchange must make 25% of their shares public. A lower free float threshold would let entrepreneurs maintain more control after going public.

Not everyone is a fan of the changes suggested.

“Traditionally, many institutional investors are wary of dual-class structures in the UK because they value the principle of one share, one vote,” said Claire Keast-Butler, a London-based partner with law firm Cooley who herself has been advocating for the use of dual-class shares. “They think that it is potentially bad for corporate governance because they’re putting too much power in the hands of a founder, or founders, rather than the shareholders as a whole.”

Keast-Butler said there has been a lot of resistance in the investor community to changing the system. Many fear rule changes could make founders less accountable. A case study often pointed to by critics is WeWork. The co-working giant imploded as it was preparing to go public in 2019, largely due to founder Adam Neumann taking advantage of a multi-class voting structure to wield outsized influence and thus eliminating any checks and balances on the company’s governance.

 

Read more – www.pitchbook.com

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Marston’s and Carlsberg UK announce £780m merger

Brewer Marston’s is to merge with Carlsberg’s UK arm, uniting ales such as Pedigree and Hobgoblin with Danish Pilsner and Somersby cider.

Marston Carlsberg Merger

The joint venture is valued at £780m, with stock market-listed Marston’s taking a 40% stake in the merged firm.

The deal involves Marston’s six breweries and distribution depots, but not its 1,400 pubs.

The new Carlsberg Marstons Brewery Company will create “synergies and productivity” benefits, Marston’s said.

Marston’s employs a total 14,000 people.

Carlsberg UK will put its Northampton brewery, London Fields brewery, and national distribution centre into the joint venture. Marston’s will put in its six national and regional breweries – Marston’s, Banks’s, Wychwood, Jennings, Ringwood and Eagle – and 11 distribution depots.

The deal means Carlsberg will have access to Marston’s pubs to sell a wider range of brands.

Ralph Findlay, chief executive of Wolverhampton-based Marston’s, said the joint venture brings together companies known for heritage and brand portfolio.

Tomasz Blawat, managing director of Carlsberg UK, said the deal enables the companies to offer “a bigger beer portfolio of complementary international, national and regional brands”.

The coronavirus lockdown means UK pubs are closed, with many in the industry saying that a mooted re-opening with a two-metre rule for customers would not work. Some pub operators have suggested that a one-metre rule might be a better compromise.

 

Read More – www.bbc.co.uk

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Hedge fund criticises ‘unjust’ takeover bid for Sirius Minerals

Crispin Odey’shedge fund has attacked Anglo-American’s “unjust” takeover bid for Sirius Minerals, saying the £405m offer does not represent a fair price for shareholders in the troubled fertiliser miner.

Odey Asset Management, which owns 1.3% of Sirius, said it would vote against the mining giant’s 5.5p-a-share bid for the company, which plans to dig the UK’s first deep mine in 40 years under the North York moors.

In an open letter to Anglo’s boss, Mark Cutifani, and Chris Fraser, the chief executive of Sirius, the London-based fund argued that Anglo had stopped short of making a “final” offer so that it could raise its bid to see off any potential counter bid for the company.

Odey said it believed Anglo would be willing to “bid substantially more” for Sirius if a counter bid for the company emerged, which it said proved that the existing offer did not represent a fair price for the company.

 

“It is Odey’s belief that Anglo American’s current offer does not represent fair value for shareholders in Sirius,” said the letter, which was signed by Odey’s fund manager, Henry Steel. The hedge fund said it would vote against any offer that was not final or that was less than 7p a share.

The existing takeover offer would wipe out the investments of thousands of small shareholders, but it still won the support of the Sirius chairman, Russell Scrimshaw. He said last month it was “the only viable proposal” to save the company’s multibillion-pound project to develop the Woodsmith fertiliser mine under the North York moors.

 

Read More – www.theguardian.com

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As big bank M&A heats up, Morgan Stanley will pay $13B for E*Trade

Morgan Stanley declared Thursday that it has agreed to buy discount brokerage pioneer E*Trade for a whopping $13 billion—representing the priciest acquisition announced by a major US bank since 2008, according to PitchBook data, when regulators arranged a string of hasty mergers to rescue the financial system.

With the deal’s emergence, the online brokerage wars may have reached an apex. Trading commissions are out the window. Charles Schwab has gobbled up smaller rival TD Ameritrade. Now, America’s second-largest investment firm is plunging into the battle in a bid to further diversify its business.

“Wealth management and online brokerage are both relatively steady and relatively capital-light, especially in comparison to sales and trading operations,” said Morningstar equity analyst Michael Wong.

This diversification effort has fueled a consistent acceleration of M&A activity in the US financial services sector. Deal value hit a decade-peak in 2018, with about $289 billion worth of acquisitions in the space, according to PitchBook data. 2019 was in second place with deals totaling $230 billion.

 

Read more – www.pitchbook.com