Latest Reports

January 11, 2021 | Industrials | Europe | Active

Signature Aviation / Global Infrastructure Partners : New Deal Insights

The battle to control Signature Aviation heated up on 11-Jan-21 after infrastructure investment fund, Global Infrastructure Partners (“GIP”), offered £3.4bn to buy the British aviation services group, outbidding a buyout consortium of Blackstone and Cascade Investment. Signature’s board agreed to GIP’s offer, which is an all-cash deal at $5.50 per share (405p based on announcement exchange rate), but added that it would consider any further offers from Blackstone and Cascade, as well as from private equity firm Carlyle. This follows weeks of press speculation, starting on 17-Dec-20, when Signature disclosed possible offers while confirming that Blackstone had proposed $5.17 (or 383p) per share. Deal risks assessed in this research report: The other two private equity suitors walk away; antitrust concerns stemming from GIP’s airport assets.


January 06, 2021 | Health Care | North America | Active

Change Healthcare / UnitedHealth Group : New Deal Insights

On the heels of Centene’s $2.2bn agreement to acquire Magellan Health (MGLN US), UnitedHealth (“UHG”) has announced a definitive, $8bn all-cash takeover of healthcare software and data analytics firm, Change Healthcare. Announced on 6-Jan-21, UHG’s offer represents a 41.2% one-day premium and requisite conditions include Change shareholder approval and antitrust and other regulatory approvals. Blackstone owns 20% of the target and has agreed to support the deal ... Deal risks assessed in this research report: Antitrust scrutiny leading to divestitures required; uncertain market definitions; questions over UHG’s dominance.


January 04, 2021 | Technology | North America | Active

FLIR Systems / Teledyne Technologies : New Deal Insights

US industrial sensor giant, Teledyne Technologies, has agreed to acquire smaller rival, FLIR, an Oregon-based company that makes thermal imaging and night vision technology. The cash and stock deal values the target at $8.0bn and based on FLIR’s last undisturbed date of 31-Dec-20, shareholders were offered total consideration of $56.14 per share at announcement, representing a one-day premium of 28%. The merger is subject to both FLIR and Teledyne shareholder approvals and applicable antitrust clearances, including HSR approval. Deal risks assessed in this research report: Timing bottlenecks stemming from China's SAMR or US antitrust; significant US government contracts could require remedies.


December 21, 2020 | Technology | North America | Active

RealPage / Thoma Bravo : New Deal Insights

Following its successful $3.9bn LBO of UK-based cyber security company, Sophos (SOPH LN), in March 2020, Thoma Bravo is now targeting a much larger buyout, and the largest in its history. RealPage, a Texas-based real estate software company, is being taken private at $88.75 per share, which equates to an enterprise value of $10.2bn. The buyout is the second largest LBO of 2020, behind Advent and Cinven’s €17.2bn acquisition of Thyssenkrupp’s elevator business in February. The offer price represents ... Deal risks assessed in this report: high pro forma leverage; undisclosed competition issue with a sponsor holding; timing on money transmitter approvals.


December 11, 2020 | Technology | Europe | Active

Siltronic / GlobalWafers : New Deal Insights

The recently announced merger between German silicon wafer company, Siltronic, and Taiwan-based GlobalWafers, is yet another sign that consolidation in the global semiconductor industry continues unabated. On 9-Dec-20, the two companies agreed to a tie-up whereby GlobalWafers will offer Siltronic shareholders €125 per share in cash through a voluntary public tender offer. Additionally, Siltronic typically pays a regular cash dividend every summer and plans to distribute a dividend of approximately €2 per share prior to the completion of the transaction. Siltronic’s executive and supervisory boards have approved the offer, and the price represents ... Deal risks assessed in this report: 65% minimum acceptance condition is rested and GlobalWafers does not bump; antitrust scrutiny from CFIUS in the US, China's SAMR, and Germany's BMWi.


October 21, 2020 | All | Global | Active

Cayman-Incorporated / US-Listed Chinese Takeovers : Back-End Risks and Opportunities for Dissenters

Hedge funds are noticing an uptick in the number of exits by Chinese companies from US exchanges, primarily through buyouts or Hong Kong re-listings. With multiple US-listed, Chinese privatisations announced or proposed, and following the successful completion of, event driven funds are focusing on potential back-end opportunities in the next three largest billion-dollar takeovers: Bitauto, Sina and DouYu. A prominent feature of these Cayman statutory mergers is that minority shareholders benefit from an appraisal rights system. To date there are five precedent cases that have received Cayman court rulings, and these contain details on courts’ and experts’ assumptions and approaches to calculating “fair value”. In this report, we explain and quantify opportunities presented to investors that exercise dissenters’ rights in US-listed, Cayman-incorporated statutory mergers. We define actions needed to trigger the rights, what to expect in Cayman courts and whether it is worthwhile to dissent. Finally, and perhaps most importantly, we stress the risks in solely assuming upside in these situations and warn of potential short-term trading pitfalls upon dissenters’ cap conditions being breached.


September 11, 2020 | Consumer Discretionary | North America | Ended

Tiffany / LVMH : Specific Performance, French Government Intervention, Outcomes

In our 9-Jun-20 in-depth report, we argued that Tiffany / LVMH was far from a done deal and warned that LVMH CEO Bernard Arnault would continue to seek ways to renegotiate the offer terms in order to avoid overpaying, including scrutinising Tiffany’s response to COVID-19. Recent actions from LVMH confirmed our bearish thesis with the companies now suing each other in Delaware. Justifying its right to walk away from the deal, LVMH has pulled nearly every lever we identified, including invoking a material adverse effect, citing the failure to achieve a closing condition, and accusing Tiffany of breaching a covenant. In this report, we explain how developments from both sides have altered the course of the transaction. We discuss the impact of the French government’s involvement, the Tiffany Playbook (specific performance, damages), the LVMH Playbook (limiting liabilities, repricing), and a realistic Tiffany standalone price. We provide our latest recommendation after assigning weighted probabilities to various outcomes, including a reprice, a court ruling, or LVMH confirming another unexpected twist.


August 14, 2020 | Consumer Discretionary | Europe | Active

GrandVision / EssilorLuxottica : Cut and Termination Scenarios

The vertical merger between GrandVision (“GV”), a pan-European optical retailer, and EssilorLuxottica (“EL”), a predominant supplier of eyewear, is under increased pressure after the acquirer, EL, initiated legal proceedings against its target. Dutch courts are expected to rule on the litigation elements within a couple weeks but EL’s actions make it clear that it is seeking to either reduce the offer terms – announced pre-COVID-19, over a year ago – or to walk away from the transaction. In this report, we analyse EL’s ability to lapse or renegotiate under multiple circumstances and assess the likelihood of EL doing so given changes in the deal dynamics, companies, funding, and antitrust reviews. We forecast feasible Dutch court and arbitration rulings and their implications for the deal. Finally, after analysing other pending and ‘cut’ public M&A deals due to COVID-19, we suggest how to strategically invest in this situation.


July 15, 2020 | Telecom | North America | Active

Fitbit / Alphabet : Fitbit’s Data and its Conglomerate and Vertical Effects

Google’s acquisition of wearable maker Fitbit is being scrutinised by global antitrust regulators on conglomerate, vertical and horizontal grounds. Simultaneously, some of the same regulators are investigating Google and Big Tech on alleged violations of antitrust laws, data accumulation and privacy breaches. Although the merger and Big Tech antitrust reviews will remain mutually exclusive, they are linked, whereby the regulators are concerned that Google is being less than transparent on what it plans to do with its accumulated data. In this report, we examine the conglomerate, vertical and horizontal antitrust effects of Fitbit / Google and discuss whether remedies will be enough to appease regulators and allow Google to ultimately own a wearable maker, access to vast amounts of health data and maintain its operating system for wearables. We identify which companies will be harmed in absence of antitrust action and the deal’s effects on online advertising participants, search competitors and wearable manufacturers.


June 09, 2020 | Consumer Discretionary | North America | Ended

Tiffany / LVMH : Reprice and ‘Out’ Viability, Pandemic Impact

One of the most closely watched pending M&A transactions is LVMH’s purchase of Tiffany, a crowded risk arbitrage situation where the outcome remains in question. Uncertainty has swirled over transaction consummation and volatility in Tiffany shares increased on news that LVMH’s board recently met to discuss ways to get a price cut. Investors’ concerns surround merger agreement language and Tiffany’s credit facility debt covenants. In this report, we look at Tiffany leverage and separately assess the strength of the merger agreement to identify where LVMH could argue to reprice or threaten to walk, such as by invoking a material adverse effect, citing failure to achieve a closing condition, accusing Tiffany of breaching a covenant, repudiating the agreement, and mutually agreeing to reprice or terminate. As a direct result of COVID-19, acquirers have attempted to use these methods to renegotiate or break their deals, and we study 20 M&A transactions that have recently failed or wobbled due to the pandemic. We also discuss considerations behind Tiffany remedies, LVMH liability protections and trading considerations, such as the appropriate Tiffany break price and a fair implied probability of completion.



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