Banking M&A Digest #97 (22.10.2020)

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Corporate Financier’s Notes by Aivars Jurcans

Done! And Done

First Citizens BancShares has agreed to buy CIT Group in an all-stock transaction valued at more than USD 2 billion. The deal will create the 19th largest US bank measured by assets.

Source: Bloomberg

Deals On The Table

Deutsche Bank is said to be in advanced talks to sell Postbank Systems, a Bonn-based information technology unit, to an Indian buyer. PB Systems generated EUR 533 million in revenue in 2015, according to its latest available annual report.

Source: Bloomberg

Billtrust, a payments services provider, is said to be going public through a merger with South Mountain Merger Corp, a blank-check firm, in a deal valued at USD 1.3 billion, including debt.

Source: Reuters

Credit Agricole, a French bank, and Banco BPM, an Italian lender, are said to be exploring  a potential merger with the French bank’s Italian unit. Apparently, one of the options is an all-stock deal that would make Credit Agricole the biggest shareholder in the joint business.

Source: Bloomberg

Thanks, But No Deal

American Equity Investment Life Holding has rejected an unsolicited acquisition proposal from Athene Holding and Massachusetts Mutual Life Insurance. Instead, American Equity has entered into a strategic partnership with Brookfield Asset Management, a Canadian private equity firm, which is taking a 19.9% stake in the company.

Source: Reuters

TCS Group Holding, a parent to Tinkoff Bank (a Russian lender), has agreed with Yandex, a Russian internet company, not to proceed with the proposed USD 5.48 billion cash-and-share sale transaction. 

Source: Reuters

Sayonara

AJO Partners, a quantitative fund manager which manages USD 10 billion, is planning to shut down at the end of 2020 and to return money to its clients. It says the decision was driven by “market forces” that have led to underperformance of value funds.

Source: FT 

Metrics To Watch

Julius Baer’s, a Swiss bank, cost-to-income ratio fell to 66.1% in Q3 2020, a half percentage point lower than in June 2020.

Source: FT

On a price-to-book basis, Morgan Stanley’s stock is trading at just 1.0x times. That is the same as Goldman Sachs’s and trails behind JPMorgan’s 1.4x times.

Source: FT

Wells Fargo efficiency ratio, a measure of expenses to revenue, stands at more than 80% at the end of Q3 2020 compared with an average of around 61% for its peers. Its price-to-book ratio has fallen from 1.25x times to 0.6x times over the past year.

Source: FT

The Money Trail

Intesa Sanpaolo, an Italian lender, is said to be planning to buy 2.85% of SIA, a payments group, from Banca Mediolanum. Intesa is set to own 7% of a combined Nexi-SIA after the merger which valued SIA at EUR 4.6 billion.

Source: Reuters

Up-and-Comers

Root, an automobile insurance startup, is said to be planning to raise as much as USD 604.1 million in its IPO on the Nasdaq. The firm, which provides insurance to customers through mobile applications, is looking at a top-end valuation of about USD 6.25 billion.

Source: Reuters

Stripe, a US payments company, has bought Paystack, a Nigerian fintech startup, in a deal said to be worth some USD 200 million. Established in 2016, Paystack works with more than 60,000 businesses. Stripe, which is unlisted, is being valued at USD 36 billion.

Source: Reuters

Exciting Numbers

European equities trade on a multiple of their expected earnings over the next 12 months of 17x times, a slight premium to the long-run average of 15x times.

Source: FT

Corporate Europe paid out close to EUR 350 billion of dividends in 2019; consensus expectations are for dividends to fall roughly 20% this year.

Source: FT

A Thought Worth Noting

“The shift to digital forms of currencies is inevitable.”

Dan Schulman, president and chief executive, PayPal

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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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