August 14, 2024 | Financials | Europe | Ended
Hargreaves Lansdown / CVC-led Consortium : Deal Insight
A group of investors, including CVC Capital, Nordic Capital and Abu Dhabi’s sovereign wealth fund (through wholly-owned subsidiary, Platinum Ivy), agreed on 9-Aug-24 to take private UK investment platform Hargreaves Lansdown (“Hargreaves”) for £5.4bn. The sponsors are offering Hargreaves shareholders 1,110p cash per share, plus a 30p dividend representing the company’s 2024 fiscal year (ended 30-Jun-24), expected to be paid on 1-Nov-24. Discussions with the consortium were disclosed on 22-May-24, so the offer price reflects a 22.2% takeover premium to 21-May-24. If Hargreaves shareholders do not approve the full-year dividend before the merger’s effective date, the target board intends to declare the dividend as an interim dividend instead. The transaction is structured as a UK scheme of arrangement and also includes an alternative offer that allows shareholders to elect to receive rollover loan notes issued by Bidco. The loan notes will be converted into rollover ordinary shares of Topco, a private limited company formed specifically for the offer, and under the terms of the alternative offer, Hargreaves shares will be eligible to receive the full-year dividend. Hargreaves’ board recommends the scheme led by directors holding ...
July 22, 2024 | Consumer Discretionary | Europe | Ended
Britvic / Carlsberg : Deal Insight
After being rejected twice, on 8-Jul-24, Danish brewer Carlsberg finally reached an agreement with Britvic to acquire the UK-based soft drink maker for £3.3bn. Carlsberg is offering 1,315p per Britvic share, which includes a 25p special dividend to be paid upon closing. This consideration represents a 35.6% premium to Britvic’s undisturbed price on 19-Jun-24, before media speculation about a potential deal. On 21-Jun-24, the companies confirmed the possibility of an offer. The consideration will be adjusted for any distribution apart from the special dividend, and Britvic directors holding 0.2% have given irrevocable commitments and intend to unanimously recommend that shareholders approve the deal. The transaction is structured as a UK scheme of arrangement and, accordingly, requires Britvic shareholder approval at a Court Meeting (75% in value) and at an EGM (75% of votes cast). The scheme document is expected to be published within 28 days from announcement, by 5-Aug-24, and conditions to closing include CMA and ...
July 15, 2024 | Energy | Europe | Ended
Neoen / Brookfield : Deal Insight
On 30-May-24, Canadian investment management firm Brookfield, in collaboration with its Brookfield Renewable arm (BEP-U CN) and Singapore’s Temasek Holdings, announced that it had entered into exclusive negotiations with major shareholders of French renewable producer, Neoen. Brookfield plans to acquire 53.32% of Neoen from several key stakeholders, including Impala (an investment holding company owned by French entrepreneur Jacques Veyrat, holding 42.14%), the Fonds Stratégique de Participations (“FSP”, an alliance of seven major French insurance companies: BNP Paribas Cardiff, CNP Assurances, Crédit Agricole Assurances, Groupama, BPCE Assurances, Société Générale Assurances, and Surave, holding 6.92%), Cartusia and Xavier Barbaro (Neoen’s chairman and CEO; Cartusia is his investment vehicle, holding 1.22%), Céleste Management (holding 2.48%), and Mosca Animation Participations et Conseil (holding 0.55%). The stakes will be purchased for €39.85 per share, representing a 26.9% one-day premium. Following the block acquisition, Brookfield will pursue a mandatory cash tender offer to acquire the minority shares at the same price. Of note, Neoen’s 2023 dividend of €0.15 per share was paid to target shareholders on 11-Jun-24. At the time of the May 2024 announcement, the companies confirmed that ...
June 11, 2024 | Industrials | North America | Ended
Stericycle / Waste Management : Deal Insight
On 3-Jun-24, Waste Management (“WM”) announced it has agreed to acquire medical waste company Stericycle at an enterprise value of approximately $7.2bn, which includes $1.4bn of debt. WM is offering $62.00 per Stericycle share, representing a 38.5% premium to the target’s undisturbed price on 23-May-24, when Bloomberg first reported that the company was exploring a sale. The deal has been approved by both boards and conditions to closing include Stericycle shareholder approval (50%; a WM vote is not required) and regulatory approvals, including HSR. The merger agreement does not specify any foreign antitrust or investment clearance conditions. However, since Stericycle generates over $400m from international operations, some foreign regulatory filings are possible. Clauses on reasonable best efforts require the companies to take “any and all steps” necessary to gain regulatory approvals and to “lift or rescind any injunction or restraining order” that would otherwise prohibit the transaction from closing. However, a burdensome clause restricts offering any remedies that would either (i) “adversely impact projected EBITDA for the first year after closing” by more than $25m, annually, or (ii) require the companies to provide prior notice, unless the requirement is immaterial. At the written request of WM, Stericycle is required to agree to take any action “that would constitute a burdensome condition” as long as such action is “conditioned upon the occurrence of the closing.” The termination fee is $175m, and the RTF is $262.5mn. The deal is not subject to a financing condition and WM intends to use a combination of bank debt and senior notes to fund the acquisition. An HSR notification will be made within ...
June 11, 2024 | Energy | North America | Ended
Marathon Oil / ConocoPhillips : Deal Insight
Continuing the wave of energy consolidation, on 29-May-24, ConocoPhillips, the largest independent oil producer in the US, agreed to acquire smaller rival Marathon Oil in an all-stock deal valued at $22.5bn, including debt. The merger ratio of 0.2550 ConocoPhillips shares for each Marathon share values the target at $30.33 per share, a 14.7% premium over the previous day’s closing. During the life of the transaction, Marathon will continue to pay its regular quarterly dividends, not exceeding $0.11 per share. ConocoPhillips will also maintain its quarterly cash dividends, including its variable return of cash. The companies have agreed to coordinate their quarterly dividend schedule to ensure that Marathon shareholders neither receive double dividends nor miss any dividend in any quarter. The deal is subject to approval from Marathon shareholders (50%), but a ConocoPhillips vote is not needed. The deal is also subject to regulatory approvals, including HSR, which is expected to be notified within 10 business days (by 11-Jun-24). A standard burdensome clause restricts the companies from making any divestments that would “reasonably be expected to have… a material adverse effect on the business, financial condition or operations of parent [ConocoPhillips] taken as a whole.” The merger agreement also contains ...
May 31, 2024 | Energy | North America | Ended
Avangrid / Iberdrola : Deal Insight
On 17-May-24, Spanish renewable energy company Iberdrola and its US-listed and incorporated portfolio company, Avangrid, announced an agreement whereby Iberdrola will take Avangrid private by purchasing the remaining issued and outstanding shares that it does not already own. Iberdrola is offering $35.75 per share for the outstanding 18.4% publicly-listed stake, representing a 11.4% premium to Avangrid’s undisturbed share price on 6-Mar-24, before Iberdrola’s unsolicited proposal was made public; on 7-Mar-24, Iberdrola proposed $34.25 per share. Avangrid plans to continue paying its quarterly cash dividends, of up to $0.44 per share, through deal completion, and a pro-rata dividend will also be paid for any partial quarter, prior to settlement. Avangrid’s board has accepted the offer based on a unanimous recommendation from a special committee that evaluated strategic alternatives and conducted negotiations. The minority buyout is subject to Avangrid shareholder approval and regulatory clearances from the Federal Energy Regulatory Commission (FERC), the Maine Public Utilities Commission, and the New York Public Service Commission. Notifications for these are expected to be made within 30 business days, by 2-Jul-24. The target vote requires majority of minority votes, and the merger agreement contains customary clauses on representations, warranties, and covenants with specific MAC carve-outs for war and pandemic. Avangrid is subject to non-solicitation clauses with customary fiduciary-out exemptions ...
May 28, 2024 | Technology | Europe | Ended
Darktrace / Thoma Bravo : Deal Insight
On 26-Apr-24, British cybersecurity firm Darktrace agreed to be taken private by US financial sponsor Thoma Bravo for $5.3bn. Under the terms of the buyout, Darktrace shareholders will receive $7.75 cash per share. This was equivalent to 620p per share at the time of the announcement (now 606p), then representing a one-day premium of 20.0%. Shareholders will have the option to receive the offer consideration in either US dollars or Sterling, with the latter being based on the latest practicable FX fixing date prior to the payment date. Darktrace currently does not pay any dividends. Thoma Bravo will fund the acquisition through a combination of both debt and equity, including an interim first lien term facility for $1.7bn and a second lien term facility for $460m. The transaction is structured as a UK scheme of arrangement and requires approval from Darktrace shareholders at a Court Meeting (75% in value of scheme shares voted) and an EGM (75% of votes cast). The scheme document was published on 23-May-24 and the shareholder meeting is scheduled to be held on 18-Jun-24. Darktrace directors (0.9%) consider the terms of the offer as fair and intend to unanimously recommend the scheme; the Directors and senior Darktrace employees collectively holding 3.4% of the target have signed irrevocable undertakings to support the scheme, even if a higher, competing offer is made. Additionally, the scheme has the support of US private equity firms KKR and Summit Partners, who collectively own 11.3% of the target, so Thoma Bravo already has 14.7% of support. Apart from shareholder approvals, the deal is subject to antitrust approvals from relevant authorities in Australia (ACCC), Austria (Federal Competition Authority), South Africa (Competition Commission), the UK (CMA), and the US (FTC / DoJ), as well as several foreign investment clearances (Australia, France, Italy, the Netherlands, Sweden, and the UK). Thoma Bravo has reserved the right to waive any of the regulatory conditions, but the shareholder vote is not waivable. Per the Cooperation Agreement, regulatory notifications were ...
May 16, 2024 | Technology | North America | Ended
HashiCorp / IBM : Deal Insight
In a strategic move aimed at bolstering its cloud solutions offerings, IBM announced on 24-Apr-24 that it had entered into a definitive agreement to acquire HashiCorp, a leading provider of infrastructure management solutions. The tech giant is offering $35 cash per share, representing a 42.6% premium over HashiCorp’s undisturbed price on 22-Apr-24, before media reports hinted at the possibility of a deal. The transaction has been approved by both companies’ boards, and conditions to closing include HashiCorp shareholder approval (50% vote), while an IBM shareholder vote is not required. HashiCorp’s largest shareholders, who collectively own nearly 43% of the company, have entered into a voting agreement to support the deal and to reject any alternative transactions. Notably, a majority of minority vote is not needed. The deal is also subject to HSR approval and antitrust clearances from foreign jurisdictions, including the EU, as well as clearances under foreign investment laws. The merger agreement includes customary clauses on covenants, representations, warranties and a MAC, with carve-outs for war and pandemic. HashiCorp is also subject to a non-solicitation clause with customary fiduciary out exceptions. IBM intends to finance the acquisition using cash on hand. The preliminary merger proxy is expected to be filed “as promptly as reasonably practicable.” The companies expect the acquisition to close by the end of 2024. We currently assume 31-Dec-24 settlement, against a long-stop date of 24-Apr-25, extendible to 24-Oct-25. The termination fee is $264.2m, and there is no RTF. Deal Rationale IBM says the acquisition of San Francisco-based HashiCorp will allow it to cater to clients grappling with the exponential expansion of the cloud. HashiCorp’s products provide automated infrastructure lifecycle management (ILM) and security lifecycle management (SLM), which IBM believes are ...
May 14, 2024 | Financials | Europe | Active
Banco de Sabadell / BBVA : Deal Insight
On 30-Apr-24, Banco Bilbao Vizcaya Argentaria (BBVA) confirmed ongoing discussions with the board of its smaller domestic rival, Banco de Sabadell, regarding a potential merger, and further disclosed the appointment of advisers. The following day, BBVA presented an indicative proposal to Sabadell’s board, suggesting an exchange ratio of 1 BBVA share for every 4.83 Sabadell shares; the ratio – equivalent to 1 SAB SM = 0.2070 BBVA SM – implied a 30% premium to Sabadell’s undisturbed price on 29-Apr-24. The offer consideration will be adjusted for any dividends, and upon completion, it is envisioned that Sabadell shareholders would own 16% of the combined entity, with BBVA shareholders retaining the remaining 84%. However, on 7-May-24, Sabadell rejected BBVA’s proposal, citing undervaluation. BBVA promptly shifted to a hostile approach, and upon receiving board approval on 8-May-24, it announced plans to launch a takeover offer directly to Sabadell shareholders on 9-May-24, at the previously outlined terms. BBVA intends to file with Spain’s financial industry regulator, the Spanish National Securities Market Commission (CNMV), within the first half of the maximum one-month period, indicating a filing later this month. To satisfy certain laws concerning the regulation, supervision and solvency of credit institutions, the CNMV can only approve ...
April 18, 2024 | Health Care | North America | Ended
Shockwave / Johnson & Johnson : Deal Insight
On 5-Apr-24, US pharmaceutical and medical device giant Johnson & Johnson (J&J) entered into a definitive agreement to acquire Shockwave Medical for $13.1bn, or $335 per share. This cash offer represents a 17% premium over Shockwave’s closing price on 25-Mar-24, prior to media reports on a potential deal. Shockwave cannot distribute dividends without prior written consent from J&J, with specific exceptions. The acquisition has been approved by the boards of both companies and, following completion, Shockwave will operate as a business unit within J&J MedTech’s cardiovascular portfolio. J&J plans to finance the transaction using a combination of its available cash and borrowing. The takeover requires approval from Shockwave shareholders (50%), but a J&J shareholder vote is not required. The merger agreement contains customary clauses on representations, warranties, covenants, and MAC, and Shockwave is bound by a non-solicitation clause with customary fiduciary-out exemptions. The deal is subject to regulatory approvals, including HSR and undisclosed foreign regulatory approvals. Clauses on reasonable best efforts read customary, while there is a burdensome condition that restricts divestments or remedies that would “reasonably be expected to (i) be material to the business, assets or financial condition of the company and its subsidiaries, taken as a whole, or (ii) be materially detrimental to the benefits parent and its affiliates expect as a result of the merger.” The termination fee is $448m, and there is no RTF. The preliminary proxy and regulatory filings are both expected to be filed within 10 business days, by 18-Apr-24. The companies expect the deal to close by mid-2024, against a long-stop date of 4-Jan-25, which can be extended until 7-Jul-25 if regulatory approvals remain pending. Deal Rationale Santa Clara, California-based Shockwave specialises in providing a minimally invasive, catheter-based treatment known as innovative intravascular lithotripsy, or IVL, which targets ...