Corporate Financier’s Notes by Aivars Jurcans
Done! And Done
UniCredit, an Italian lender, has acquired a 32.5% stake in La Villata, a company which owns the real estate assets of supermarket chain Esselunga, for EUR 435 million.
Intesa Sanpaolo has consented to a revision in the terms of a deal agreed with BPER Banca and will accept a lower price (estimated at EUR 400 million compared with EUR 780 million previously) because of the coronavirus crisis. BPER had agreed to buy branches and loans that will be spun off from the merged entity after the Intesa’s takeover of UBI Banca to address possible antitrust issues.
Prudential, a UK-based insurer, has agreed to acquire FWD Group’s Thailand bankassurance partnership for USD 754 million.
Deals On The Table
Because of the coronavirus outbreak, Prudential, a UK insurer, is said to be “actively evaluating other options” in relation to Jackson, its US business, along with preparations for a minority IPO.
AlphaCentric, a fund manager, is said to be seeking buyers for more than USD 1 billion of US mortgage bonds to help cover outflows.
Thai Life Insurance, Thailand’s 3rd largest insurer by assets (USD 12.8 billion at the end of 2018), is said to be planning to raise as much as USD 700 million in an IPO.
Commerzbank is said to be still planning to sell mBank, its Polish arm, but “only at the right price”. Some potential buyers have apparently already walked away from bidding.
Metrics To Watch
BOK’s, an Oklahoma-based US regional bank with about USD 5 billion (about the value of its common equity) in energy loans, ratio of assets to equity is roughly 8.5x times.
“Corona clause” – a clause in loan agreements allowing companies to add back lost profits that stem from an “extraordinary, unusual, infrequently occurring or nonrecurring loss, charge or expense,” (or, even to add back estimates of revenues that would have come in, were it not for such extraordinary events), in order to keep debt levels within certain multiples of operating income.
S&P Global, a credit rating agency, has downgraded 121 companies and has warned of the prospects of another 176 groups due to the global health pandemic.
A Thought Worth Noting
“We put a lot of weight on saving lives. But it’s not the only consideration. That’s why we don’t shut down the economy every flu season. They’re ignoring the costs of what they’re doing. They also have very little clue how many lives they’re saving.”
Casey Mulligan, economist, University of Chicago
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Aivars Jurcans has more than 20 years of corporate finance and investment banking experience. His services are currently available through MURINUS ADVISERS.