Latest Reports

October 20, 2023 | Industrials | Europe | Ended

Euronav / CMB : Deal Insight

On 9-Oct-23, Euronav, the Belgian oil tanker company, confirmed a significant development between its two major shareholders, Compagnie Maritime Belge (“CMB”, 22.93%) and Frontline (FRO US, 26.12%), whereby CMB will purchase the stake held by Frontline and will make a mandatory offer to Euronav’s minority shareholders. This brings an end to the uncertainty surrounding Euronav’s future after Frontline, which is under the control of Norwegian shipping magnate John Fredriksen, abandoned its $4.2bn merger with Euronav earlier this year. Euronav and Frontline had originally signed an agreement in July 2022 to create a vast global shipping business that stores and transports oil tankers. The deal would have resulted in Euronav shareholders owning 55% of the merged business, with Frontline shareholders holding the rest. However, Frontline called off the merger in January 2023, leading to Euronav initiating arbitration proceedings against Frontline. Now, with the new transactions in place, Euronav has confirmed that it will terminate its arbitration pursuit. This latest agreement entails that CMB will acquire Frontline’s 26.1% equity stake in Euronav for $18.43 per share and will, as a result, secure 53.0% of the target’s voting rights. Following this stake acquisition, CMB will ...


October 17, 2023 | Industrials | North America | Active

Pioneer / Exxon : Deal Insight

The largest US oil producer, Exxon Mobil (“Exxon”), announced a definitive plan to acquire Permian basin shale producer, Pioneer Natural Resources (“Pioneer”), on 11-Oct-23. Based on the companies’ respective undisturbed share prices on 5-Oct-23, before Reuters reported that they were in talks, the merger ratio of 1 PXD US = 2.3234 XOM US implies an offer consideration of $253 per Pioneer share and an 18% takeover premium to target shareholders. The deal has received unanimous approval from the boards of both companies. The conditions to closing include Pioneer shareholder approval (50%; Exxon shareholder approval is not required) and the receipt of regulatory approvals, including HSR. The merger agreement contains standard clauses on representations, warranties, covenants and a MAC with specific carve-outs for war and pandemics. Pioneer is bound by a no-solicitation clause with a fiduciary-out exception. There is a restrictive condition that prohibits the merger parties from offering any merger remedy that would reasonably be expected to have a material adverse effect on the business of either company. HSR notification is expected to be filed within ...


October 16, 2023 | Industrials | Europe | Ended

Vitesco / Schaeffler : Deal Insight

Shares in Vitesco Technologies surged to a record high on 9-Oct-23 after family-controlled Schaeffler announced a series of transactions, including a voluntary takeover offer, to acquire the German powertrain supplier for €3.6bn. The offer consideration is €91 per Vitesco share and represents a 20.8% premium to the company’s undisturbed share price. Through a holding company, IHO Holding (private, “IHO”), the Schaeffler family holds 49.9% of Vitesco and 46.0% of German auto part manufacturer Continental (CON GR). Schaeffler’s board has reached an agreement with the Schaeffler family concerning IHO’s 49.9% stake in Vitesco and thus the tender offer pertains solely to the remaining 50.1%. Of note, the Schaeffler family itself holds all the voting rights and 75% of the shares in its namesake electric vehicle components supplier. Vitesco, which was spun off from Continental in 2021, has confirmed the offer and will decide on its next steps. The offer wasn’t discussed with Vitesco beforehand due to overlaps in the companies’ supervisory boards. However, Schaeffler is confident that the transaction will result in a “friendly merger,” per its CEO, Klaus Rosenfeld, and certainly everything seems amicable so far. Georg Schaeffler, Schaeffler’s supervisory board chairman, also serves on Vitesco’s board, as does Austrian businessman Siegfried Wolf, who owns 5% of Schaeffler. Schaeffler anticipates publishing the offer document on 15-Nov-23, pending ...


September 21, 2023 | Consumer Discretionary | North America | Ended

Hostess Brands / JM Smucker : Deal Insight

JM Smucker has agreed to acquire snack maker Hostess Brands – the company behind Twinkies, HoHos and other pastry snacks – in a cash and stock offer worth $5.6bn. Under the terms of the deal, announced on 11-Sep-23, Smucker will offer Hostess shareholders $30 in cash and 0.03002 SJM US, worth $34.25 per share at announcement, implying a 54% premium to Hostess’ undisturbed share price on 24-Aug-23, before the media speculated about a potential transaction. On 25-Aug-23, Reuters reported that Hostess was exploring a sale and that companies including PepsiCo (PEP US) and Mondelez International (MDLZ US) expressed interest. The rumours caused Hostess’ share price to initially rise 21.7%, and upon the announcement, shares surged a further 19.1%. Conversely, Smucker shares dropped -7.0% as investors viewed the consideration as too expensive. Both companies’ boards unanimously support the deal, and they expect the transaction to close during Smucker’s fiscal 3Q’24 which spans 1-Nov-24 through 31-Jan-24; we assume 30-Nov-23 settlement. The deal is structured as a tender offer subject to a 50% minimum acceptance condition for Hostess shareholders and a vote on the Smucker side is not required. Other conditions to closing include antitrust approvals from the US and Canada, and requisite filings are expected within 10 business days (by 22-Sep-23). Hostess is subject to a non-solicitation clause with a fiduciary-out, and Smucker will ...


September 20, 2023 | Industrials | Europe | Active

WestRock / Smurfitt Kappa : Deal Insight

Irish paper and packaging company, Smurfit Kappa (“Smurfit”) announced on 12-Sep-23 that it will acquire US rival WestRock as it aims to become a global leader in sustainable packaging. WestRock shareholders will receive one share in the new entity, known as ‘Smurfit WestRock’, plus $5.00 in cash for each WestRock share, valuing it at $43.51 per share based on the previous day’s closing price (11-Sep-23) and implying a 36.5% takeover premium over WestRock’s undisturbed price on 6-Sep-23, before merger talks were publicly disclosed. The merger, which will result in 49.6% and 50.4% ownership by WestRock and Smurfit shareholders, respectively, is unanimously supported by both boards. Smurfit and WestRock will publish a shareholder circular and a prospectus, respectively, as the deal requires approvals from shareholders of both merger parties at meetings expected to be held in 1H’24. The notable thresholds are 75% of shares in attendance at a Smurfit Court Meeting and EGM, and 50% of shares at a WestRock shareholder meeting. Additionally, antitrust approvals are needed from EU and US regulators, with an HSR filing due by 2-Oct-23. A burdensome clause prevents the divestment of businesses that generated more than $750m in FY’22 revenues, and there are other customary clauses covering representations, warranties, covenants, a MAC that includes carve-outs for pandemics and wars, and non-solicitation clauses with fiduciary-outs. Both companies will continue distributing dividends through completion; we expect WestRock to pay ...


September 18, 2023 | Health Care | North America | Ended

Abcam / Danaher : Deal Insight

Healthcare technology conglomerate Danaher announced on 28-Aug-23 an agreement to buy Abcam, a UK-incorporated global supplier of protein research tools to life scientists, for $5.7bn, including debt. Danaher is offering $24.00 per Abcam share, which represents a 2.7% one-day takeover premium and a 42.7% premium to Abcam’s share price on 9-Jun-23, the last trading day before the target’s founder issued an open letter calling for actions to address financial underperformance and value destruction at the company. The now-definitive deal has received unanimous approval from the boards of both companies and is structured as a court-sanctioned scheme of arrangement under UK law. As such, approval by Abcam shareholders is required (75% in value at the Court Meeting, 75% of votes at the EGM), but Danaher shareholder approval is not needed. Antitrust clearances will be sought from the US, Germany, Austria and China. Filings for the first three are expected within 15 business days (by 19-Sep-23), while the SAMR filing will be made ...


August 25, 2023 | Technology | Asia | Ended

Itochu Techno-Solutions / Itochu : Deal Insight

On 2-Aug-23, Japanese conglomerate Itochu announced its intention to launch a recommended tender offer for its Tokyo-based subsidiary, Itochu Techno-Solutions (“CTC” is the operating company, for ‘Challenging Tomorrow’s Changes’), that specialises in software development and information processing. Itochu owns a 61.24% stake in CTC and will offer JPY 4,325 per share to acquire the 89,625,766 shares that it doesn’t already own (equivalent to a 38.76% stake), worth JPY 387bn (USD 2.7bn). The offer represents an 18.7% premium to CTC’s undisturbed share price on 1-Aug-23. The primary hurdle is a two-thirds minimum acceptance condition, but Itochu nearly owns this and only needs to secure an additional 5.43% of CTC, or 12,550,000 shares. The acceptance threshold was established so Itochu can conduct a two-step acquisition which requires a special resolution at the shareholder meeting. The tender offer, supported and recommended by CTC’s board, will be open for ...


August 24, 2023 | Energy | North America | Ended

Crestwood / Energy Transfer : Deal Insights

Texas energy company Energy Transfer announced on 16-Aug-23 that it will buy its smaller master limited partnership (“MLP”) rival, Crestwood Equity Partners (“Crestwood”), in an all-stock transaction valued at $7.1bn, including the assumption of $3.3bn of debt. According to the agreement, common unitholders of Houston-based Crestwood will receive 2.07 Energy Transfer common units for each Crestwood unit. As a result, Crestwood unitholders will own 6.5% of Energy Transfer, while Energy Transfer unitholders will own the remaining 93.5%. Based on the previous day’s closing prices, the offer implies a negative premium of ...


August 22, 2023 | Consumer Discretionary | North America | Active

Capri / Tapestry : Deal Insights

The parent company of Coach and Kate Spade, Tapestry, is seeking to acquire Capri Holdings, the owner of designer brands Versace and Jimmy Choo. The $57.00 per share offer price values Capri’s equity at $6.7bn and offers target shareholders a one-day 64.7% takeover premium. The anticipated closing of the transaction is set for 2024, with a long-stop date of 10-Aug-24, which can be extended twice, each time for a period of three months. Capri’s board has approved the offer and intends to recommend it to the company’s shareholders. While Capri shareholder approval (50%) is required, no vote from Tapestry shareholders is necessary. The preliminary proxy filing is expected within 20 business days, by 7-Sep-23, and the shareholder meeting will be held within 40 days following the mailing of the definitive proxy. Regulatory conditions to closing include HSR clearance, with a notification anticipated within 15 business days, by 30-Aug-23. Though the merger agreement does not explicitly mention ...


August 08, 2023 | Health Care | North America | Ended

Reata Pharmaceuticals / Biogen : Deal Insightss

Biotechnology company Biogen announced on 28-Jul-23 that it intends to buy Texas-based rare disease specialist Reata Pharmaceuticals for $172.50 per share in cash, implying a 58.9% premium to the previous day’s closing price. Both boards support the deal, which is expected to close in 4Q’23, against a long-stop date of 28-Jan-24. Conditions to closing include HSR clearance and approval by Reata shareholders; Biogen shareholder approval is not required. The preliminary merger proxy is expected within ten business days (by 11-Aug-23), and the target shareholder meeting will be held within 30 days from the initial mailing of the definitive proxy. The deal is not subject to financing, and despite $7.3bn of cash on its balance sheet, Biogen said it will fund the acquisition through cash and new debt, through a senior unsecured bridge loan for $1.5bn from JPMorgan. The merger agreement contains customary clauses on representations, warranties, and covenants, with MAC carve-outs for pandemic and war. A burdensome condition makes specific reference to Reata’s Skyclarys (omaveloxolone) drug, which is ...



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