Banking M&A Digest #85 (30.7.2020)

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Corporate Financier’s Notes by Aivars Jurcans

Done! And Done

On Deck Capital, an online lender, has agreed to sell itself for USD 90 million to Enova International. At its IPO in 2014 On Deck Capital was valued at USD 1.85 billion.

Source: Bloomberg

Perpetual, an Australian fund manager, has agreed to buy a 75% stake in Barrow Hanley, a US-based asset manager, for USD 319 million. The acquisition is expected to triple Perpetual’s funds under management.

Source: Reuters

Berkshire Hathaway, Warren Buffet’s investment vehicle, has increased its stake in Bank of America by more than USD 800 million. 

Source: FT

UniCredit, Italy’s largest lender by assets, has sold non-performing loans worth EUR 1.54 billion. The 2 portfolios of non-performing unsecured loans issued to small and medium-sized enterprises and worth EUR 702 million and EUR 840 million had been bought by illimity (a digital bank), Banca Ifis and a securitisation vehicle managed by Guber Banca (a digital bank) and Barclays.

Source: FT

Deals On The Table

Intesa Sanpaolo, an Italian lender, has achieved majority support for its hostile takeover bid for UBI Banca, its smaller rival. The overall shareholder acceptance stands at about 2/3 while the offer period has been extended by the regulator until July 30.

Source: FT, Reuters

Axis Bank, an Indian lender, is said to be preparing to raise at least USD 1.3 billion from institutional investors through the sale of equities, depository receipts or similar instruments.

Source: Bloomberg

Metrics To Watch

Barclays reported a return on tangible equity of 2.9% in Q2 2020; its cost-to-income ratio stood at 57%.

Source: WSJ

Nomura’s shares are trading at 0.6x times book value; Nomura nevertheless trades at a premium of about 2/3 to local peers such as MUFG.

Source: FT

Up-and-Comers

Early investors and employees of TransferWise, a cross-border payments group, have sold USD 319 million worth of shares. The transaction values the company at USD 5 billion, a 40% increase compared with a similar secondary share sale in 2019.

Source: FT

Thought Machine, a UK-based fintech founded in 2014, has raised USD 33 million from Eurazeo, a French private equity firm.

Source: Reuters

Revolut, a UK fintech, has raised USD 80 million in new funding from TSG Consumer Partners, a US private equity group, holding on to the USD 5.5 billion valuation despite the fallout from the pandemic.

Source: FT

Nu Pagamentos (a.k.a. Nubank), a Brazilian digital bank which is backed by Tencent Holdings, has acquired Cognitect, a North Carolina-based software firm. The terms of the deal were not disclosed. Nubank has about 26 million clients and was valued at USD 10.4 billion in a 2019 fundraising.

Source: Bloomberg

Lufax, a Chinese fintech backed by Ping An Insurance Group, is said to be targeting to raise at least USD 3 billion in a US IPO. 

Source: Bloomberg

The Money Trail

Acrisure, an insurance brokerage, has agreed to purchase an artificial-intelligence business from Tulco in a  stock-for-stock transaction valued at about USD 400 million.

Source: Bloomberg

BNDES, a Brazilian development bank, has agreed to sell 65% of its stake in AES Tiete, a power company, to AES Corp in a cash deal, The sale will reduce BNDES’s shareholding from 28.41% to 9.9%.

Source: Reuters

Credit Suisse Group has invested nearly USD 100 million in Ant Group during its 2018 fundraising which valued the company at USD 150 billion. If the planned public offering gets a strong reception, Ant’s valuation is expected to be around USD 210 billion, or a 40% increase from the earlier investment level.

Source: Bloomberg

Cassa Depositi e Prestiti, an Italian state lender, is said to be considering buying a controlling stake in Autostrade per l’Italia, a toll-road operator, in an IPO that would separate Autostrade from its parent company. 

Source: Bloomberg

Exciting Numbers

On average, the European banks are trading at less than 40% of the book value of their net assets. Barclays (EUR 22 billion), Deutsche Bank (EUR 17 billion) and UniCredit (EUR 20 billion) have a combined market capitalisation less than Zoom, the EUR 64 billion video-conferencing company.

Source: FT

A Thought Worth Noting

“It is a universal consensus that given the headwinds, investing in banks is as stupid an activity as investing in oil majors. It is unlikely that anything revelatory emerges from this reporting season to change that.”

Richard Buxton, head of UK Alpha strategy, Jupiter Asset Management

 

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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.

Design by Artis Briedis, Photo by Joe Taylor on Unsplash

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