Corporate Financier’s Notes by Aivars Jurcans
Done! And Done
I&M Holdings, a Kenyan lender, has agreed to buy 90% of the shares in Orient Bank Uganda.
Saudi Real Estate Refinance Co, a wholly-owned subsidiary of Saudi Arabia’s sovereign wealth fund and an equivalent of Fannie Mae (a US mortgage finance business), has agreed to buy a mortgage portfolio worth over USD 799.8 million) from Saudi Public Pension Agency.
Deals On The Table
Silver Lake, a US private equity group, is said to be close to an agreement to buy Meilleurtaux, a French financial services broker best known for its mortgage comparison tools, from Goldman Sachs for about EUR 700 million.
Ant Group, the payments arm of Alibaba, is said to be preparing for an IPO with a dual listing in Shanghai and Hong Kong. Ant Group was valued at USD 150 billion in mid-2018 but recent transactions in secondary markets suggest a valuation of upwards of USD 200 billion. To compare, PayPal, a US fintech, is valued at USD 214 billion.
Intesa Sanpaolo, an Italian lender, has increased its bid for UBI Banca, its smaller rival, by adding a cash sweetener of EUR 0.57 in addition to 1.7 of its own shares for each share of UBI. The cash component is going to amount to EUR 652 million.
Source: FT, Bloomberg
Caixa Seguridade, a Brazilian insurer, is said to resume its plans for an IPO (suspended in March due to Covid-19 pandemic). Its shareholder, Caixa Economica Federal, is said to be planning to raise more than USD 1.88 billion by partially selling its stake.
Thanks, But No Deal
QIWI, a Russian payment services provider listed in New York, is said to have cancelled a secondary public offering of its shares.
Metrics To Watch
Morgan Stanley’s return on equity rose to 15.7% in Q2 2020.
Goldman Sachs’s annualised return on equity, excluding special charges, exceeded 16% in Q2 2020.
Where The Smart Money Goes
Bpifrance, a French public investment bank, has taken a stake in a holding company that controls Voyageurs du Monde, a high-end travel firm hit by Covid-19 epidemic. The details of the deal were not disclosed.
Robinhood, a US stock trading-app, has abandoned plans to expand in to the UK. It raised USD 600 million in equity fundraising in 2020, giving it a valuation of USD 8.6 billion (up from USD 7.6 billion it achieved in its previous round in 2019).
Hippo Enterprises, a Palo Alto-based insurance technology business, has closed a USD 150 million financing round at a valuation of USD 1.5 billion. It is said to be on track for more than USD 100 million in revenue in 2021 when it plans to go public.
Policybazaar, an Indian online insurance platform, is said to be aiming to go public in 2021 at a valuation above of USD 3.5 billion. The IPO size is expected to be about USD 500 million.
Between1985 and 2018, art as an asset class delivered annualised returns of 5.3%, according to Citi estimates; contemporary paintings returned 7.5%.
According to Oliver Wyman report, European banks are facing as much as EUR 800 billion in loan losses and a EUR 30 billion hit on their revenue over the next 3 years as a result of the coronavirus crisis.
According to McKinsey research, the costs of European private banks have risen almost 2x as fast as revenues since 2007 across the entire industry, pushing the average cost-to-income ratio to an 8-year high at 71% in 2019.
A Thought Worth Noting
“There is no better business model than mega-cap tech. Cloud computing, media streaming, and the delivery of [consumer] goods are tailor-made models for a life with Covid-19.”
Todd Jablonski, chief investment officer, Principal Portfolio Strategies
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