Corporate Financier’s Notes by Aivars Jurcans
Done! And Done
Shinsei Bank, a Japanese lender, has agreed to buy UDC Finance, a New Zealand’s non-bank finance provider, from Australia and New Zealand Banking Group for USD 480 million.
Credit Suisse has increased its shareholding in Credit Suisse Founder Securities, its Chinese securities JV, from 33.3% to 51% by injecting capital and diluting Founder Securities stake.
Pershing Square, a Bill Ackman’s hedge fund, has sold its entire stake in Berkshire Hathaway, Warren Buffet’s investment vehicle. The holding was worth USD 1 billion at the end of March, out of Pershing’s nearly USD 10 billion in assets under management.
Mercury UK, a vehicle of private equity firms Advent, Bain Capital and Clessidra, has reduced its stake in Nexi, an Italian payments group, to 43.3% after selling 8.8% of shares for EUR 781 million.
Warburg Pincus, a US private equity group, has raised its stake in ARA Asset Management, an Asian real estate fund manager, from 30.7% to 48.7%. ARA had USD 62 billion in gross assets under management at the end of 2019.
Deals On The Table
Western Union is said to have made an offer to acquire MoneyĢram, another money-transfer services provider. The market value of MoneyGram based on its latest stock price is about USD 164 million.
Societa Cattolica di Assicurazione – Societa Cooperativa, an Italian insurer backed by Berkshire Hathaway (with a 9% stake), is said to have been told by the local regulator to increase its capital by EUR 500 million by the early fall
Leonardo Del Vecchio, the billionaire founder of Luxottica (an eyewear company), is said to have asked for Bank of Italy’s approval to increase his stake in Mediobanca, an investment bank, from the current 10% to 20%. Mediobanca’s market value is around EUR 5.58 billion.
RenaissanceRe, a Bermuda-based insurer, is said to be aiming to raise around USD 900 million to be used “for general corporate purposes”.
Bank of East Asia, a Hong Kong-based family-owned lender, is said to be beginning discussions to sell off some of its assets. The bank’s return on average equity has more than halved in the span of a year to 2.7%.
Thanks, But No Deal
Texas Capital Bankshares and Independent Bank Group, two Texas lenders, have called off their merger, saying “the coronavirus pandemic has hit markets too hard and crushed the benefits of tying up”. The merger would have created the 2nd largest bank by assets in the state of Texas.
Metrics To Watch
Mediobanca, an Italian investment bank, reported a return on equity of 9% in 2019.
Marqeta, a payment card issuing startup, has raised USD 150 million from an undisclosed “US institutional investor” at a USD 4.3 billion valuation.
While the S&P 500 has clawed back to a deficit of just about 5% this year, the KBW bank index remains down almost 1/3.
A Thought Worth Noting
“We definitely feel that the markets are way ahead of reality. We really are telling every client to tap the market if they can because we think the pricing now couldn’t get any better.”
Manolo Falco, co-head, investment banking, Citigroup
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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.