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

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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

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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

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December 21, 2020 | Technology | North America | Ended


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

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December 12, 2020 | Health Care | North America | Active


Alexion / AstraZeneca : New Deal Insights

US-based Alexion Pharmaceuticals has agreed to be acquired by UK drug maker, AstraZeneca, is what is the largest pharma deal announced this year and since Allergan / AbbVie in 2019 ($63bn). On 12-Dec-20, the companies confirmed a cash and stock definitive agreement that valued Alexion at $39.4bn, or $175 per share, representing a one-day takeover premium of 44.7%. Through the deal, Alexion shareholders will own 15% of the combined entity while AstraZeneca shareholders will own the remaining 85%. AstraZeneca has sought $17.5bn in bridge financing from a consortium of banks. The size of Alexion makes this a Class 1 transaction for AstraZeneca, meaning that ... Deal risks assessed in this research report: • Acquirer activism after AstraZeneca’s initial share price decline • A recall is issued on one of Alexion’s drugs

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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.

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December 01, 2020 | Technology | North America | Active


Slack Technologies / Salesforce.com : New Deal Insights

On 1-Dec-20, Salesforce.com, a leader in cloud-based customer relationship management (CRM) platforms, confirmed its acquisition of Slack Technologies for $27.7bn. Slack shareholders are being offered $26.79 in cash and 0.0776 in Salesforce common stock, subject to a cash limitation mechanism. The offer represents a 59% premium to Slack’s undisturbed share price on 24-Nov-20, before the Wall Street Journal reported that the parties were in advanced discussions. The deal is conditional on a majority of Slack shareholders voting in favour, not Salesforce’s, as well as requisite regulatory approvals, including HSR clearance. The parties are expected to file a notification with the FTC within 15 business days from the date of the merger agreement. The DMA contains provisions on ... Deal risks assessed in this research report: Antitrust scrutiny in the US, Europe, possibly China; hedging complications due to limit on cash consideration payable.

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November 30, 2020 | Technology | North America | Active


IHS Markit / S&P Global : New Deal Insights

On the heels of London Stock Exchange’s (LSE LN) $28.9bn plan to acquire one of the largest providers of financial data, Refinitiv (private), announced in August 2019 and expected to consummate in 1Q’21, S&P Global has announced its plan to acquire US-listed, London-based and Bermuda-Incorporated IHS Markit. The all-stock merger takes direct aim at the current dominance of Refinitiv and Bloomberg (private) and equates to a $96.94 per share offer based on last Friday’s closing, a relatively underwhelming 4.7% one-day premium. IHS shareholders will own 32.25% of the combined company with S&P Global shareholders owning the remaining 67.75%. The deal requires approval from ... Deal risks assessed in this research report: • Antitrust scrutiny in the US and Europe • Target shareholder activism

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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 58.com, 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.

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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.

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