Banking M&A Digest #99 (5.11.2020)

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Corporate Financier’s Notes by Aivars Jurcans

Done! And Done

Waterfall, a US asset manager, has agreed to buy Alternative Credit Investments, a UK firm, for GBP 639 million in cash. 

Source: Reuters

JPMorgan has raised its stake in the Chinese JV to 71% after it bought a 20% stake put up for sale by Shanghai Waigaoqiao FTZ for USD 26.6 million.

Source: Bloomberg

Budapest Bank, a state-owned lender, MKB Bank and Takarekbank, a savings group, have agreed to merge to form Hungary’s 2nd largest banking group. The value of the new group is expected to exceed USD 2.35 billion, with the state retaining a 30.35% stake.

Source: Reuters

Conductor, a Brazilian payments firm, has raised USD 150 million in a private funding round. Backed by Riverwood Capital, an investment firm, and Visa, a payments processor, the firm has 30 million active users. The valuation was not disclosed.

Source: Reuters

Deals On The Table

Itau Unibanco Holding, a Sao Paolo-based bank, is said to be considering spinning off most of its 46% stake in XP, an investment platform. 

Source: Reuters

Societe Generale, a French lender, is said to have decided to pursue a sale of Lyxor, its asset management business, after a yearlong strategic review. Lyxor manages about EUR 149.8 billion in assets.

Source: Bloomberg

J.Sainsbury, a UK retailer, is said to be considering a sale of Sainsbury’s Bank, its banking arm, which provides products including mortgages, credit cards and insurance to more than 2 million customers.

Source: FT

Nexi, an Italian payments technology firm, is said to have entered 10 days of exclusive negotiations to buy Nets, its Nordic rival, in an all-stock deal worth about EUR 7.2 billion.

Source: Reuters, FT

Credit Karma, a personal finance firm, is said to be in talks to sell its tax-preparation business to Square.

Source: Reuters

Ares Management, a US based entity, is said to have made a non-binding offer to buy AMP, an Australian wealth manager. AMP has a market value of USD 3.1 billion while the conditional buyout offer is said to have an implied value of USD 4.47 billion.

Source: Reuters

Bank of Montreal, a Canadian lender, is said to be exploring options for its asset management operations. BMO Global Asset Management had more than USD 273 billion of assets under management at the end of 2019.

Source: Bloomberg

Thanks, But No Deal

Caliber Home Loans, a mortgage lender, has postponed its IPO “amid adverse market conditions … and the absence of any signs of imminent stimulus”.

Source: Reuters

The Money Trail

Bpifrance, a French public investment bank, has bought 5.08% of Arkema, a chemicals group, in the first investment of Lac1, its new equity investment fund. 

Source: Reuters

Julius Baer, a Swiss private bank, is said to be planning to set up a wealth management unit in China in partnership with a local financial firm. If successful, the lender will be the 1st major private bank to set up a wealth management JV in China.

Source: Reuters

Metrics To Watch

BNP Paribas shares are trading at 0.4x times tangible book value, double the ratio of Societe Generale, a rival, but barely in line with European peers.

Source: FT

Credit Suisse’s return on equity of 9.8% after Q3 2020 remains only marginally below the long term targets of between 10% and 12%. Its shares trade at 0.5x times book value compared with UBS at 0.7x times.

Source: FT

Up-and-Comers

PayPal shares now trade on 40x times forward earnings, while Mastercard and Visa are on 35x and 27x times respectively.

Source: FT

Lufax, a China’s online lender, raised USD 2.36 billion in an IPO which valued it at USD 32.9 billion. The company which is backed by Ping An Insurance Group reported net income of USD 1 billion in H1 2020.

Source: FT

Exciting Numbers

For the first time, in 60% of the global economy – including 97% of advanced economies – central banks have pushed policy rates below 1%. In 1/5th of the world they are negative.

Source: FT

A Thought Worth Noting

“… in the event that the US economy slows again – and a winter Covid wave is likely – then it will be down to monetary policy to provide support once more.”

Jim Leaviss, chief investment officer of public fixed income, M&G

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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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