Latest news with #takeovers
Reuters
3 days ago
- Business
- Reuters
Breakingviews - Political meddling changes euro-bank M&A playbook
LONDON, June 30 (Reuters Breakingviews) - Is major bank M&A politically possible in Europe? That's what dealmakers and CEOs across the continent are wondering after politicians in Berlin, Madrid and Rome erected obstacles to some 60 billion euros ($70 billion) worth of possible deals. The takeaway from the recent flurry of activity is that bank takeovers can still happen, but dealmakers and bidders may need to refine their tactics. After a quiet decade for tie-ups between European lenders, BBVA ( opens new tab Chair Carlos Torres Vila fired the starting gun last April with a share-based bid for 14-billion-euro Banco de Sabadell ( opens new tab. Then, in September, UniCredit ( opens new tab CEO Andrea Orcel snapped up a stake in 30-billion-euro Commerzbank ( opens new tab as a prelude to a possible takeover, before launching an unsolicited all-share offer for Banco BPM ( opens new tab, currently worth 15 billion euros. All three situations were effectively hostile, and at least two of them now seem likely to go nowhere. Orcel has accepted that his BPM hunt may have ended, after Rome handed down painful conditions, including selling his Russian business and maintaining the target's loan-to-deposit ratio. Equally, his Commerzbank tilt seems over for now after Chancellor Friedrich Merz's recent criticism of what many in Germany saw as a hostile raid. BBVA's planned takeover of Sabadell, meanwhile, is looking increasingly complicated. The Spanish government, ostensibly fearing job losses and fewer small-business loans, last week said, opens new tab 70-billion-euro BBVA could not integrate its target for three to five years if it goes ahead with a deal. That pushes out some of the 850 million euros in planned cost savings, making it harder for Torres to raise his bid, which seems necessary since the current offer looks low. It would be rash, however, to conclude that governments simply don't want bank deals to happen. Some tie-ups are proceeding without drama, including BPCE's recent purchase of 6-billion-euro Novo Banco. That deal, with a French buyer, works for Portugal because Lisbon is worried about Spanish dominance of its financial system and has no reason to fear the Gallic interloper. And Italy's government seems to have no issue with Banca Monte dei Paschi di Siena's ( opens new tab hostile 15-billion-euro Mediobanca ( opens new tab play, made in January. That may be because it aligns with Rome's mission of creating a third major bank to rival twin 90-billion-euro giants Intesa Sanpaolo ( opens new tab and UniCredit. The common thread is that the deals that seem more probable also seem to fit a pre-existing government agenda. Some deals will always be politically tricky. Spanish Prime Minister Pedro Sánchez, for example, relies on support from politicians in the Catalan region, where Sabadell has a deep history. That made it unlikely that his government would look kindly on a takeover of the smaller lender. Rome, meanwhile, doesn't seem to want either of its banking behemoths to get bigger domestically. And Berlin has always been sensitive about the perceived risk of its banks being infected by supposedly riskier southern European rivals stuffed with Mediterranean government bonds. Those aren't necessarily good reasons to oppose M&A, but for dealmakers they're a fact of life. Still, some of the bidders' tactics haven't always helped. Orcel continued upping his exposure to Commerzbank, through derivatives, even after his initial approach met opposition. That gave German politicians an easy way to kick a potential deal without even debating its merits. And both Orcel and Torres adopted a hard-nosed approach to valuation and returns which, while justifiable from their own shareholders' perspective, made it easier for their targets to resist. UniCredit's BPM offer came with a scant 0.5% premium. Meanwhile Torres, for now, is sticking with a price that represents effectively no premium after accounting for the overall rise in Spanish bank shares since last April, even though the target's earnings forecasts have risen more than its rivals. BPM and Sabadell are trading some 1% and 6% respectively above the offers, suggesting that investors either expect a bump or judge the targets' standalone prospects to be more valuable than the bids. The charitable telling is that BBVA and UniCredit had to force the issue to get a hearing, given the target boards' likely recalcitrance. Yet from governments' perspective, hostile campaigns can seem destabilising in a highly sensitive sector, raising the odds of intervention. Rome, Berlin and Madrid would probably be less likely to meddle in deals that both acquirer and target have already agreed. Having a relatively low bid on the table, or none at all in the case of Commerzbank, also means the targets' boards don't have to worry about angry phone calls from investors eager to get their hands on a juicy premium. So one lesson for future would-be acquirers, like 60-billion-euro Dutch lender ING ( opens new tab, is that hostile deals should only be a very last resort – and may even be more hassle than they're worth. The alternative is to try harder to offer to share more of the merger goodies upfront to win target boards over, with a higher price. That may ultimately mean lower returns than the 15% or so that Orcel was targeting in his deals. The good news, however, is that bank takeovers typically generate larger synergies than bidders typically expect. Intesa, for example, initially pencilled in about 700 million euros of annual cost savings from buying UBI Banca, but raised that number to over 1 billion euros in 2021. Of course, a more generous approach does not guarantee that politicians will stay out of the picture. Dealmakers may simply need to learn to live with a more interventionist state. From now on, getting deals done will require more diplomacy – and financial generosity. Follow Liam Proud on Bluesky, opens new tab and LinkedIn, opens new tab.
Yahoo
7 days ago
- Yahoo
Police in Wisconsin increase enforcement following ‘takeovers' at public beaches
RACINE, Wis. (WFRV) – Authorities in Wisconsin are taking proactive measures to ensure safety following reports of recent 'takeovers' at public beaches. According to the Racine Police Department, officers have responded to large gatherings and 'takeovers' occurring at North Beach and other area parks. Person hospitalized after being hit in crosswalk while using mobility scooter in Manitowoc In response, the department says it is implementing proactive steps to preserve safety and enjoyment of public spaces for both residents and visitors. Efforts include: Increased police presence during daytime and evening hours Enhanced video surveillance in public areas Strict enforcement of laws, including a zero-tolerance policy for illegal activity Officials reminded the public that curfew for individuals under 18 is 11 p.m., and all city parks and beaches close at 10 p.m. Alcohol and glass containers are prohibited on beaches, in parks and on playgrounds. 'Our goal is to maintain North Beach and all local parks as safe, welcoming spaces for everyone,' the department stated. 'We ask all visitors to be respectful of public spaces and of one another.' Wisconsin man sentenced to 30 years for attacking correctional officer, fellow inmate Anyone with concerns or who witnesses suspicious behavior is encouraged to contact the Racine Police Department at 262-886-2300. No additional details were provided. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Times
13-06-2025
- Business
- Times
Five ways to stem the exodus from London's stock markets
It's been the best of times and the worst of times for the UK stock market in the past few days. The FTSE 100 index of blue chips surged to a record high on Thursday and its year-to-date performance has crushed mighty Wall Street and beaten other fashionable markets such as India and Japan. While the price may be right, however, the number of players on the pitch has been shrinking, with a flurry of listed companies defecting to other jurisdictions or succumbing to takeover bids. The £11 billion payments group Wise, which had been seen as a candidate for FTSE 100 inclusion, instead set out plans last week to move its primary listing to New York. Then this week came a trio of takeover bids for three technology-driven companies — Spectris, Alphawave and Oxford Ionics — meaning in aggregate that £6 billion of market value, and all the trading volume that goes with it, was being taken out of London. • Long-term vision is needed to revive stock market: Alistair Osborne's view A final blow was the decision by the board of Assura to reject a home-grown merger offer that would have doubled its size and kept it on the London market. Instead the Cheshire-based £1.6 billion owner of GP surgeries up and down Britain agreed on Wednesday to be taken over by the US private equity group KKR. The tally of companies with market values of more than £100 million leaving the London market has now reached 30 so far this year according to Charles Hall, head of research at the broker Peel Hunt and a leading campaigner for reforms to stem the outflow. Twelve of the thirty are relatively large companies, big enough to qualify for FTSE 250 membership, the bread-and-butter of the London market. Meanwhile, Hall said, the hopper is just not being replenished. Just one flotation has been clinched to offset the flood of departures. The UK accountancy firm MHA, under the Baker Tilly umbrella, successfully raised £98 million in an initial public offering and joined the junior market Aim with a market value today of £271 million. 'I think it is fair to say [the pace of exits] is getting worse,' Hall said. 'It's broadly based. It's across all sectors. It's just relentless. At the current run rate we're not going to have much of a stock market left. Politicians don't get it. They don't understand the scale of the problem. We are losing our future FTSE 100 members. 'Wise was a massive shot across the bows. People should be horrified.' The damage is not just to the City eco-system of brokers, lawyers, consultants, bankers and accountants; it also tarnishes the image of London as a place to do business, deters the next generation of entrepreneurs from choosing London and ultimately shifts the centre of gravity of delisted firms away from the UK, hitting jobs and tax revenues in the long run. Not everyone is so gloomy. Charlie Walker, deputy chief executive of the London Stock Exchange, argues that the flotations slump hitting the UK is just as bad across Europe and the take-private shift is widespread. 'This is a global challenge and not just a UK issue. Even the US has 40 per cent fewer listed companies today than it did in the late 1990s.' Even so, the gigantic premiums at which UK companies are being taken out underlines the scale of the funds outflow plaguing London and piling into private equity. Advent is offering an 85 per cent premium for Spectris. Investors are in effect putting money to work with Advent to buy assets 85 per cent more expensively than if they had just bought Spectris shares in the London market, Hall said. 'It's bananas.' So what can be done to narrow the valuation gap and so stem the exodus? At least five solutions have been proposed. The relatively small allocation to UK assets by British pension funds is seen as one of the key reasons for London's decline. Retirement schemes in the UK apportion far less to domestic assets than their counterparts in other countries such as Australia, Canada, Sweden and the US. Pension schemes have pledged to do more in the two Mansion House accords but the focus has not been on publicly listed shares but on unlisted assets such as private equity and infrastructure. That has been no help to the listed sector and, although senior City people are wary of making it mandatory for pension funds to allocate to the UK, they say there should be a quid pro quo for the tax breaks they enjoy. David Schwimmer, chief executive of the London Stock Exchange Group, told Tech Week delegates this week: 'Some argue the government shouldn't meddle in where investors invest. Yet pension fund managers happily accept £49 billion a year in tax breaks, effectively a UK taxpayer subsidy for investing in the S&P 500. 'Those tax benefits should only be available to UK pension funds that invest a minimum share of their assets back into the UK. It's just common sense.' Hall at Peel Hunt has suggested a minimum of 10 per cent of their total equities pot to UK shares to qualify for tax relief. He is also hopeful that a new disclosure requirement on defined contribution schemes to disclose UK allocations by 2026 will prod or embarrass them into a more pro-UK stance. Reforming the Isa regime would be a 'very rapid solution to the problem' facing the London stock market, according to Mark Slater, who runs the fund manager Slater Investments. Like some others in the City he questions why overseas shares are allowed in the tax-free wrappers. Changing the rules to allow only London-listed shares and funds that invest in British stocks into these tax-free accounts could help to turbo boost the market, they argue. 'You don't want government to tell people where to invest ideally,' Slater said. 'But I think you can say if money is tax-advantaged, in other words the government's giving you money, then they have a right to tell you the terms on which you get that benefit. 'If people want to own Apple, they can still own Apple, they just can't do it through an Isa. Why should the British government seek to lower the cost of capital of Apple?' The previous Conservative government proposed a 'UK Isa', which would have been an additional £5,000 allowance on top of the existing £20,000 annual sum that can be used at present across Isa products. Only UK investments would have been held in this new product but the proposal was dropped by the Labour government last autumn. Some in the financial services industry had criticised the idea for further complicating the Isa landscape, which already includes several different types of account, and had warned that investors already invest in UK stocks through Isas and might have simply used the additional £5,000 to reduce their allocations to British shares in their main £20,000 allowance. There was also the problem of defining a UK company. Still, the idea of revamping Isas has not gone away. Rachel Reeves signalled in February that she wanted to overhaul the savings regime to 'create more of a culture in the UK of retail investing'. This could possibly involve cutting the £20,000 allowance for cash Isas to encourage a switch to shares. Another way to boost investment in the London stock market would be to axe stamp duty on shares purchases. At present a 0.5 per cent levy is applied to transactions for shares on the main market of the London Stock Exchange, putting the UK at a disadvantage to many other markets, including its main rival in the US. The Capital Markets Industry Taskforce (CMIT), a body that aims to boost the City, is chaired by Dame Julia Hoggett, the head of the London Stock Exchange (LSE). It warned last year that the tax was a barrier to retail investment and noted that it created the unusual situation where investors are taxed 'when buying a UK-listed Aston Martin share but not when buying a German-listed Porsche share or US-listed Tesla share'. Abolition may encourage retail investors into the London market. It may also boost overall liquidity. The tax pushes up the cost of trading and encourages hedge funds and other investors that trade more frequently to make investments using derivatives such as contracts-for-difference, which are exempt from the duty. Abolition may also deliver a broader tailwind for the UK by ultimately lowering companies' funding costs. Yet given the pressure on Britain's public finances, the Treasury is likely to be unwilling to give up this source of revenues, which brought in £3.2 billion in 2023-24. 'It's a little bit tone-deaf to the fact that the Treasury have got themselves in a fiscal knot,' Simon French, chief economist at stockbroker Panmure Liberum, said. 'I've always thought the chance of it happening is relatively low.' He believes, nevertheless, that abolition 'would be impactful' for the market. Talk privately to most UK-listed company chairs and the burden and distraction of complying with UK rules and on listing, disclosure and governance soon comes up. It may not be the first reason for seeking a different listing jurisdiction or opting to be taken private, but it carries weight. The burden is already easing. Listing rules have been watered down and prospectus rules will shortly be given a makeover. The Financial Reporting Council recently unveiled a new version of its stewardship code, which it says offers more flexibility and reduces the reporting burden on listed companies. Some chairs say that less hostility to large pay packets for strongly performing bosses would also be a helpful way of deterring some companies from considering a flit to more tolerant regimes such as the US. They would also like to see shareholders standing up to the blandishments of proxy voting agencies, whom they accuse of a rigid box-ticking agenda. One other suggestion is that a new owner for the LSE would help to concentrate minds on London's troubles. The current owner, London Stock Exchange Group, might contain the LSE name but the London exchange accounts for only £236 million, or 2.75 per cent, of its total £8.6 billion in revenues. Its main operations are in data, indices and clearing. A new owner more focused on London and more dependent on its success might be no bad thing, some contend. Hall at Peel Hunt paid tribute to LSE's lobbying power in pushing for favourable reforms such as the relaxation of listing rules, but said that it had done too little on the marketing front to promote the idea of stock market investment. 'We don't have the razzmatazz, we don't have the pulling power,' he said, pointing to how much more exchanges such as Nasdaq do to promote the excitement of investment to US consumers. This is disputed by Walker: 'We already do a huge amount to promote London. For example, we held 65 events globally last year, attracting 6,500 delegates, including our annual IPO Forum for existing and prospective issuers and our Tech Summit attended by established and emerging tech companies.' Is LSEG, with all its global ambitions, supportive enough? 'Absolutely. David [Schwimmer] is relentlessly focused on LSE,' Walker said.
New York Times
11-06-2025
- Business
- New York Times
Richard Beattie, Who Helped Pioneer Private Equity Takeovers, Dies at 86
Richard Beattie, a mergers lawyer who helped pioneer private equity takeovers — work that was immortalized in the much-lauded book 'Barbarians at the Gate' — and who served in Washington and New York City government, died on Friday at his home in Manhattan. He was 86. His daughter Lisa Beattie Frelinghuysen said the cause was cancer. Over nearly six decades at the white-shoe New York firm Simpson Thacher & Bartlett, the soft-spoken Mr. Beattie — Dick, as he was widely known — became one of Wall Street's most-sought corporate advisers. He helped put together AOL's $165 billion takeover of Time Warner in 2001 and JPMorgan Chase's $58 billion acquisition of Bank One in 2004, and advised the board of the insurer American International Group on its $85 billion federal bailout during the 2008 financial crisis. He went on to serve as Simpson Thacher's chairman from 1991 to 2004 and as senior chairman until his death. But his earliest and most enduring claim to fame was in the late 1960s, when he presciently recognized that private equity firms — corporate takeover artists who used debt to buy companies — would become a major force on Wall Street. As a young associate, Mr. Beattie was introduced to Henry R. Kravis, who would go on to be one of the top names in leveraged buyouts. Mr. Beattie became Mr. Kravis's go-to counsel on ever-larger takeovers, culminating in the $25 billion takeover of RJR Nabisco, completed in 1989, that was chronicled by the journalists Bryan Burrough and John Helyar in the book 'Barbarians at the Gate,' published that year. For a decade, the transaction held the record as the biggest leveraged buyout. Want all of The Times? Subscribe.
Bloomberg
10-06-2025
- Business
- Bloomberg
Private Equity-Backed VeloBank Eyes Polish M&As After Citi Deal
Fast growing VeloBank SA, backed by US private equity fund Cerberus Capital Management LP, is on the prowl for more Polish takeovers after it bought Citigroup Inc.'s retail operations in the country. 'Any assets that will help our strategy to expand our scale may be potentially interesting for us and our investors,' VeloBank Chief Executive Officer Adam Marciniak said in an interview. He declined to name any specific targets but said 'our cooperation with Cerberus is optimal.'
