Banking M&A Digest #94 (1.10.2020)

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Corporate Financier’s Notes by Aivars Jurcans

Done! And Done

Blackstone, a private equity group, has sold its 36% stake in Rothesay Life, a UK privately owned insurer, for GBP 2.1 billion in a deal that values the company at GBP 5.75 billion. The buyers (MassMutual, a US insurer, and GIC, the Singapore sovereign wealth fund), both of which were already big shareholders in Rothesay, will now each own 49% of the company.

Source: FT

Credit Agricole, a French lender, has sold its remaining 4% holding in Banque Saudi Fransi, a corporate bank, for USD 387 million to two Saudi government-related institutional investors. 

Source: Bloomberg

Hg, a private equity firm, has agreed to take a stake worth almost USD 1 billion in Hyperion, an insurance broker, in a deal that values the target at about USD 5 billion including debt. Hyperion made GBP 211 million in ebitda in 2019.

Source: FT

Ping An Asset Management has increased its holding in HSBC from 7.95% to 8.0%. Ping An has been the largest shareholder in the bank since 2018 when it surpassed BlackRock with a holding then of about 7.0%.

Source: FT

Mitsubishi  UFJ Lease has agreed to buy Hitachi Capital, a smaller rival, in a deal valued at USD 2.8 billion. The combined business will have revenue of around USD 13.2 billion. 

Source: Reuters

Deals On The Table

TP ICAP, an inter-dealer broker, is said to be “in advanced talks” to buy Liquidnet Holdings, an electronic trading network, for a total consideration of between USD 600 million and USD 700 million.

Source: Reuters

LV, a UK-based mutually owned life insurer, is said to be in talks over a takeover. Established in 1843 in Liverpool, LV has more than 1.1 million members and could be worth more than GBP 500 million.

Source: FT

Allianz, a German insurer, and Athora Holding, a life insurer, are said to be in “advanced talks” to buy Aviva’s French operations in a deal worth between EUR 2 billion and EUR 3 billion. Aviva’s French operations reported an adjusted operating profit of GBP 473 million pounds in 2019.

Source: Reuters

Allianz is said to be considering a deal to transfer all its existing French run-off portfolio to Athora.

Source: Reuters

Kaspi.kz, a Kazakh banking and fintech firm, is said to be considering reviving plans to list in London. It previously aimed to raise between USD 500 million and USD 700 million but abandoned the plans in 2019. Its number of active mobile app users reached 7.8 million in June 2020.

Source: Reuters

Credit Agricole, a French lender, is said to be scouting for potential acquisitions in Italy. Potential targets could include Banco BPM and Credito Valtellinese (commonly known as Creval) but ”deliberations are still preliminary and there are no formal talks”. 

Source: Bloomberg

United Wholesale Mortgage, a non-bank mortgage lender with 4.6% of the total US mortgage market, is said to be planning to go public via a merger with a blank-cheque company. The deal is expected to value the mortgage lender at USD 16 billion. 

Source: FT

Thanks, But No Deal

Mediobanca is said to have approached Assicurazioni Generali about acquiring Banca Generali, the insurer’s private banking and wealth management unit, before abandoning the plan because “conditions were unfavourable”. Banca Generali is said to have a market value of EUR 3.2 billion.

Source: Bloomberg

Sayonara

UniCredit, an Italian lender, is said to be ready to leave the life insurance partnership it has with Aviva, a British insurer. The partnership manages a portfolio of some EUR 3 billion in premiums.

Source: Reuters

Metrics To Watch

Yandex’s, Russia’s technology group, offer to buy Tinkoff, a Russian digital bank, for USD 5.5 billion values Tinkoff at 10.5x times earnings and 2.9x times its book value.

Source: Reuters

Financial Lingo

“Portability language” – changes in loan documentation whereby creditors are giving up their historic right to have their loans paid back when the company is sold. As a result, an acquirer could buy a capital structure at a price they may not get themselves.

Source: FT

Exciting Numbers

The combined value of USD 5 billion-plus M&A deals worldwide soared to USD 456 billion in the 3 months to September, figures from Refinitiv show.

Source: FT

A Thought Worth Noting

“It is a sign of the times – the whole world is desperate for yield, so anything that yields a positive number has a bid.”

Brian Foran, Autonomous Research

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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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