|Bid||25.96 x 1100|
|Ask||25.98 x 900|
|Day's Range||25.50 - 26.08|
|52 Week Range||18.30 - 28.73|
|Beta (3Y Monthly)||1.69|
|PE Ratio (TTM)||9.59|
|Earnings Date||Oct 23, 2019 - Oct 28, 2019|
|Forward Dividend & Yield||0.50 (1.95%)|
|1y Target Est||31.54|
Companies such as Epicor that generate recurring revenue through business software sales have been popular targets for the private equity industry. The sources said that Epicor will likely attract interest from other buyout firms. KKR is working with an investment bank on an auction for Epicor, the sources said, cautioning that no deal is certain and requesting anonymity because the matter is confidential.
Favorable markets and conversions into C-corps, which kick-started post the 2017 tax overhaul, are providing a boost to shares of private equity firms.
(Bloomberg Opinion) -- Private equity — a form of investing that typically involves assuming control of companies — has long been among the most controversial and poorly understood areas of finance. Even as it attracts ever more money from institutional investors, including pension funds acting on behalf of teachers and firefighters, its practitioners face increasing criticism for taking undue advantage the businesses they target.Now, with a new bill in Congress, presidential candidate Elizabeth Warren has sparked a debate about how to curb private equity’s more predatory aspects. Despite the political posturing, her plan includes a couple of good ideas.The most popular private-equity strategy stems from a tenet of finance theory — that an actively involved owner can do a better job of running a company than a diffuse group of passive shareholders. To put this into practice, firms such as Blackstone, TPG, Apollo and KKR raise money from investors, which they use to take significant or controlling stakes in companies. Ideally, they then improve the businesses, with the goal of selling at a profit within several years.When they adhere to this model, private-equity firms can play a useful role in the economy. The process isn’t always great for everyone involved. It can entail layoffs, cost-cutting and even dismantling. (Sometimes the best option for a mature business is to shrink along with a diminishing market.) But if assets are put to their best use, the country as a whole gains.The trouble is that private-equity executives’ incentives aren’t always aligned with the greater good.Consider compensation. Private-equity funds are typically set up as partnerships, with the firms serving as general partners and investors as limited partners. The latter pay management and performance fees to the former, which choose the target companies. Yet the general partners also extract fees directly from the companies — purportedly for management services and advice on mergers and acquisitions, although the fee agreements often don’t require them to do anything at all. Thanks to such “monitoring and transaction” payments, which amount to hundreds of millions of dollars a year in the U.S., private-equity executives can come out ahead even if the companies go bankrupt and investors lose out.One might reasonably ask why investors accept such terms. The answer, in part, is that they suffer from the same oversight problems that private equity is supposed to solve: They’re diffuse, have limited powers and are usually managing other people’s money.Granted, in recent years investors have pushed private-equity firms to rebate a portion of monitoring and transaction payments. This can make investment managers at pension funds and endowments look better by offsetting the management fees that their bosses and clients track. These rebates do not, however, lessen the drain on the companies concerned or necessarily erase the firms’ perverse incentives.Private-equity firms also have strong incentives to load up companies with too much debt. For one, they can use the borrowed money to pay themselves special dividends — a way of cashing out their investments quickly. And the government subsidizes debt: The tax code treats most interest payments as a deductible expense, unlike payments to shareholders. This makes borrowing artificially cheap, allowing firms to reap added returns merely by levering up. As of late 2018, the typical ratio of debt to operating income at private-equity-owned companies was about four times that of the average company in the S&P 500 index. Such extreme leverage has a big downside. It makes the target companies — and the people they employ — more vulnerable in slumps, as interest payments overwhelm their declining income.How can lawmakers discourage the bad kind of private equity without killing off the good? Warren has a plan. Together with several Democratic co-sponsors, she has introduced a 103-page bill that she says will stop “legalized looting.” It contains provisions dealing with everything from the basics of corporate structure to the minutiae of bankruptcy proceedings. Moderate it is not.One provision takes aim at a foundation of modern capitalism: limited liability, the idea that shareholders should not be on the hook for a company’s debts. It makes an exception for general partners in private-equity firms, holding them responsible for the obligations of target companies. This means that a single failed investment could lead to personal bankruptcy.No doubt, the prospect of financial ruin would make private-equity executives more cautious about borrowing. But it would also make them less willing to participate in an inherently risky endeavor — most likely killing private equity as an investment strategy. It’s hard to see how this would be a net gain for the economy.Setting aside that sledgehammer, the bill has some constructive proposals. For example, it would halt the fees that private-equity firms extract directly from target companies. That’s wise, because the firms have no good reason to pay themselves for running companies they own, particularly when they are already receiving fees from investors. If the market can’t impose this discipline, legislators are right to step in.The bill also prohibits special dividends in the first two years after an acquisition. The period is somewhat arbitrary, but this could lead private equity firms to focus more on improving businesses than on extracting cash, at least initially. Experience suggests it wouldn’t be too onerous: Europe imposed a similar ban several years ago with no ill effect.When it comes to the government subsidy, the legislation is strangely timid. It limits the deductibility of interest only for highly leveraged companies. Why not remove the subsidy completely, by taxing payments to creditors and shareholders equally? This would have beneficial effects far beyond private equity, eliminating an incentive to lever up that renders the whole economy more fragile.Lastly, Warren would shut down the well-known “carried interest” loophole, which allows performance fees to be taxed at low capital-gains rates rather than as ordinary income. That’s a good idea. It’s a pity the bill doesn’t also explicitly preclude other dodges, such as slipping private-equity stakes into individual retirement accounts — a strategy made famous by former presidential candidate Mitt Romney.In sum, policy makers do need to take a look at how private equity is taxed and regulated. Warren’s plan includes some good ideas but fails to take up others — and can’t seem to decide whether it wants to shut the business down or just nudge it in a better direction. It’s a plan, all right, but one that needs more work.—Editors: Mark Whitehouse, Timothy Lavin.To contact the senior editor responsible for Bloomberg Opinion’s editorials: David Shipley at email@example.com, .Editorials are written by the Bloomberg Opinion editorial board.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The grandchildren of the founder of German publisher Axel Springer have tendered some of their shares to KKR, the U.S. private equity investor that has offered to buy out minority shareholders. Ariane Springer and Axel Sven Springer sold approximately 3.7% of the share capital in the business but will retain the rest of their holdings as independent shareholders, KKR said in a statement on Friday. KKR had already secured a 27.8% stake in Axel Springer via its offer of 63 euros per share, which has been extended on the same terms until Aug. 21.
(Bloomberg) -- KKR & Co. is considering selling LGC Group, the British scientific measurement and testing company, people familiar with the matter said.The buyout firm is speaking to advisers as it reviews its holding in the business, which could fetch more than 1 billion pounds ($1.2 billion) in a sale, the people said, asking not to be identified because the deliberations are private. The deliberations are at an early stage, and KKR may decide to retain the company for longer, they said.A spokesman for KKR declined to comment.KKR bought LGC from Bridgepoint in 2016 after announcing the deal in December 2015 without disclosing terms. Since then, LGC has made a number of acquisitions including Axolabs in 2017, which added to the company’s analytical drug-development services, specialty reagents maker Berry & Associates in 2018 and a majority stake in Toronto Research Chemicals this month.The more-than 175-year-old company’s revenue rose 18% to 331.2 million pounds in the fiscal year ending in March 2018, according to its annual report. Adjusted earnings before interest, taxes, depreciation and amortization rose 19% to 86.4 million pounds, the report showed.LGC traces its origins to 1842 to a body created in London to regulate tobacco adulteration. It still provides independent chemical and bioanalytical measurements to resolve disputes relating to food and agriculture and advises the U.K. government. Previously known as Laboratory of the Government Chemist, the firm was privatized in 1996.To contact the reporters on this story: Sarah Syed in London at firstname.lastname@example.org;Dinesh Nair in London at email@example.comTo contact the editors responsible for this story: Dinesh Nair at firstname.lastname@example.org, Amy Thomson, Fion LiFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
German publisher Axel Springer said it was actively looking at potential takeovers, even as a buyout of its minority shareholders awaits completion, amid speculation that the digital classifieds sector will consolidate in Europe. CEO Mathias Doepfner's comments on Wednesday came after Scout24 said it would explore a sale or spin-off of its autos platform, bowing to U.S. activist investor Elliott's call to break up the business. Doepfner, speaking after Springer reported a decline in second quarter revenue and earnings, said he had "no concrete thoughts" on those particular assets but was holding constant market soundings and analysing acquisition opportunities.
(Bloomberg Opinion) -- When the market doesn’t go your way, there’s a certain deflective comfort to be found in blaming the market. The slump in energy stocks has spurred some talk of getting out of public markets altogether – even as one company, Saudi Aramco, is apparently considering finally taking a giant plunge into them. Conflicting signals, yes, but united in one important aspect. Harold Hamm, CEO of fracker Continental Resources Inc., was asked on the latest earnings call what value there was in the company remaining public. The stock has fallen by more than half since last October to about $30, while the consensus target is about $51, according to figures compiled by Bloomberg. Hamm responded he didn’t see a lot of value in it “in today’s market,” and the analyst commiserated on the herd’s apparent short-sightedness, saying “there’s clearly something broken there.”Over in the power sector, Vistra Energy Corp.’s CEO, Curtis Morgan, fielded a similar question for similar reasons. While professing “faith” in public markets, he added that going private must be considered if the stock’s perceived discount doesn’t ultimately close.There are specific reasons why this question was asked of these two companies. Hamm owns almost 77% of Continental anyway, so the free float is currently valued at just $2.8 billion. Vistra, meanwhile, has private equity deep in its DNA, being one piece resulting from the 2007 buyout of TXU Corp. and run by an alumnus of Energy Capital Partners LLC.Public markets aren’t paragons of rationality, with the wisdom of the crowd repeatedly giving way to the mania of the mob. But it’s tough to argue the market is “broken” here. After all, if it’s irrational now, then wasn’t that also the case five years ago, when Continental traded at about $80 just as oil prices began to slip? Recall the company sold its hedging book around that time, ditching its insurance against an oil crash, with Hamm in November 2014 telling, coincidentally, the same analyst:… We feel like we're at the bottom rung here on the [oil] prices and we'll see them recover pretty drastically, pretty quick.Clearly, there isn’t a public-market monopoly on getting stuff wrong.The private market has its own checkered record in energy. There have been obvious blowups, such as KKR & Co. Inc.’s forays with Samson Resources Corp. and, of course, TXU. Vistra’s sector, merchant generation, has a long history of keeping bankruptcy judges busy, which is precisely why it’s one of only two public companies left – and why both are diversifying into more stable retail operations.Continental and Vistra have sold off for similar and quite rational reasons. Oil and gas prices are in the tank, and forecasts for Continental’s earnings take their cue from that. Similarly, as expectations of a hot and profitable summer in the Texas power market have cooled off, so Vistra’s stock has dropped with power futures.This cuts both ways, and investors with a bullish view on energy prices are free to swoop in. They haven’t. That may reflect such ordinary things as fear of a recession, but I think it has more to do with a deterioration in one longstanding reason to own energy stocks: gaining exposure to the underlying commodity.Chalk it up to a mixture of hindsight and foresight. Investors have noticed, especially with E&P companies, that past windfalls generated by price rallies tended to accrue to drilling budgets and executive compensation instead of them. Looking ahead, fundamental shifts in the energy market – from shale to renewables to peak demand forecasts to trade wars – inject volatility and raise doubts about long-term pricing. Rather than put a big multiple on future earnings tied to commodity prices and growth, investors prioritize near-term free cash flow that can underpin dividends – show me the money, in other words.You can see this in E&P valuation multiples. Traditionally, these swung low when oil prices were very high, in anticipation of an inevitable cyclical downswing, and rose when prices fell, pricing in the next recovery. In this latest cycle, however, that relationship has changed. When oil prices fell sharply in 2015 and 2016, valuation multiples soared (and equity issuance spiked). But when oil dropped in late 2018 and this summer, multiples fell alongside it.Similarly, while Bloomberg NEF reports Texas’ wholesale electricity market is the tightest it’s been since the lucrative summer of 2011, investors aren’t paying up for the option in Vistra’s stock. That may be a trust thing, in part, as the timetable for deleveraging set by Vistra when it bought Dynegy Inc. has slipped. But it also reflects the quite reasonable concern that new renewable capacity, especially solar power, could loosen Texas’ electricity market quite quickly – as has happened in the past.The higher risks around energy earnings and damaged trust means investors demand more to buy into them – meaning a higher cost of capital expressed in lower valuations.Herein lies a lesson for Saudi Arabian Oil Co., to give it its full name. The seemingly endless saga of Aramco’s IPO has been dogged by the $2 trillion market-cap target voiced by Prince Mohammed Bin Salman in 2016. As I wrote here, that number reflected a simplistic valuation of Aramco’s vast reserves, even though today’s oil investors prioritize dividends partly because they suspect barrels not due to be produced for another few decades may never see the light of day. Just like earnings streams for Continental and Vistra, the benefit of the doubt, expressed as a high multiple, has diminished.Talk of an Aramco IPO was revived, somewhat jarringly, in the same week Saudi officials were trying to talk up sagging oil prices. Maybe the IPO talk remains just that, but it could also mean Saudi Arabia may actually go ahead, even if that finally buries the $2 trillion fantasy. Facing chronic deficits, Riyadh could use the money; and, as cynics often contend, the public market is where the dumb – that is, cheap – money is to be found. The one catch is that, when it comes to energy, the dumb money looks a little wiser these days.To contact the author of this story: Liam Denning at email@example.comTo contact the editor responsible for this story: Mark Gongloff at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Liam Denning is a Bloomberg Opinion columnist covering energy, mining and commodities. He previously was editor of the Wall Street Journal's Heard on the Street column and wrote for the Financial Times' Lex column. He was also an investment banker.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Barely a year after serving as student body president at the NYU Stern School of Business, a junior analyst at RBC Capital Markets was charged by federal prosecutors with insider trading.Bill Tsai, 23, is accused of trading ahead of the April 15 announcement that private equity firm Siris Capital Group would acquire the digital printing technology company Electronics for Imaging, or EFI. The Securities and Exchange Commission also filed a related civil lawsuit in Manhattan on Monday.“Tsai learned of the impending acquisition through his work” at the firm, which the government identifies as Investment Bank A. Soon afterward, Tsai stole the “material nonpublic information” by buying options in EFI in a personal account he had concealed from the bank, earning $98,750, the U.S. said.Sanam Heidary, a spokeswoman for RBC Capital Markets, the investment-banking division of Royal Bank of Canada, said the New York firm had suspended Tsai. Tsai’s LinkedIn page identifies him as an investment banking analyst and says he joined the firm in July 2018.“RBC has a zero-tolerance approach to any breach of the law or our code of conduct,” Heidary said. “We have cooperated fully with law enforcement as it relates to this matter.”All-Cash DealEFI agreed to be purchased by Siris Capital in an all-cash deal valued at about $1.7 billion, representing about a 26% premium to the April 12 closing price. Siris secured committed debt financing from RBC Capital, KKR Capital, Deutsche Bank, Barclays, Credit Suisse and Macquarie Capital.Tsai, who lives in New York, used a secret trading account to buy 187 out-of-the-money call options for $28,410 in late March and early April, according to prosecutors. When the EFI deal was announced, shares shot up 29%, they said.Tsai was arrested Sunday morning and is charged with a single count of securities fraud. In court on Monday, he was released on a $100,000 bond. He faces a prison sentence if convicted. His attorney, Mark Hellerer, declined to comment. “His profits were not the result of trading acumen, diligent research, or blind luck, but rather, as alleged, the product of theft of confidential information from his employer,” U.S. Attorney Geoffrey Berman in Manhattan said in a statement.Summer InternTsai joined RBC as an intern in summer 2017, according to the government. He was hired full time beginning in July 2018, after his graduation from Stern’s undergraduate business program. One of his duties was updating and circulating a confidential internal report that tracked client deals, including mergers and acquisitions. He learned of the impending EFI deal from his work on the report, according to the criminal complaint.Tsai came to New York from his native Taiwan to attend Stern, one of the top programs in the U.S., where he concentrated in finance. He was the student body president of the undergraduate business school in 2018, according to his LinkedIn page.In a November 2017 interview with the Stern School website, Tsai was asked what advice he would give to first-year students.“Hold on to your values,” he answered, according to the website. “I think the biggest thing is that you learn so many things in school. That’s a beautiful part of the school, but it’s to figure out what you believe in.”The criminal case is U.S. v Tsai, 19-cr-7464, U.S. District Court, Southern District of New York (Manhattan). The SEC case is SEC v. Tsai, 19-cv-7501, U.S. District Court, Southern District of New York (Manhattan).(Updates with arrest, bail details.)To contact the reporters on this story: Bob Van Voris in federal court in Manhattan at email@example.com;Doug Alexander in Toronto at firstname.lastname@example.orgTo contact the editors responsible for this story: David Glovin at email@example.com, David S. JoachimFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
By John Jannarone Evercore Inc. has hired veteran investment banker Neil Shah as a Senior Managing Director to launch and lead its permanent capital business, which will include a push into special purpose acquisition companies, or SPACs. Mr. Shah, who will be part of Evercore’s advisory practice, has worked closely with financial sponsors for over […]
(Bloomberg) -- KKR & Co. said it will pay NVC Lighting Holding Ltd. $794 million for a majority stake in its China lighting business.The companies said in a statement they will set up a strategic partnership for the business. Once completed, KKR will own 70% of NVC China and NVC Lighting will hold the remaining 30%.NVC Lighting said it will pay a special dividend of at least 9 Hong Kong cents ($0.01) a share after the deal closes, which is expected in the fourth quarter.KKR said the investment is from its flagship Asian Fund III and that it’s invested more than $4.5 billion in China since 2007.Paul, Weiss, Rifkind, Wharton & Garrison LLP, Fangda Partners and Kirkland & Ellis acted as legal advisers to KKR. Freshfields Bruckhaus Deringer acted as legal adviser and Deloitte & Touche acted as financial adviser to NVC Lighting.To contact the reporter on this story: Sara Marley in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Andrew Davis at email@example.com, John Deane, Tony HalpinFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Global investment firm KKR and NVC Lighting Holding Limited (“NVC Lighting” or the “Company”) (Stock Code:2222) today announced the signing of a Share Purchase Agreement under which KKR has agreed to set up a strategic partnership with NVC Lighting and acquire a majority interest in NVC Lighting’s China Lighting Business (“NVC China”) for a total equity value of approximately US$794 million. Following the completion of the transaction, KKR will own 70% of NVC China and NVC Lighting will hold the remaining 30% and receive a cash consideration.
(Bloomberg) -- Despite warnings coming from the Treasury market, the U.S. economy will avoid a recession and negative-yielding government bonds, KKR & Co.’s Henry McVey said.The head of global macro and asset allocation at the private-equity firm said the Federal Reserve will continue to cut interest rates, keeping the economy from contracting even as growth slows. Rising tensions in the U.S.-China trade war and slowing global growth spurred a rally in bonds this week, with Treasury 30-year yields closing in on their lowest level ever.“Do I find it alarming? Yes,” McVey said in an interview on Bloomberg TV. “But nominal U.S. rates won’t go below zero. “You would have to believe that we’re having a very strong decline in nominal GDP or recession.”McVey’s view is in contrast to a growing chorus of analysts now warning that U.S. Treasury yields could eventually go negative, with Pacific Investment Management Co.’s Joachim Fels saying it’s no longer “absurd” to imagine the scenario.The U.S. should be able to keep growth positive, McVey said, but he warned that there currently is a “global manufacturing recession,” partly because of a trade war that has curtailed capital spending.McVey expects tensions to cool for now, with China unlikely to undertake a large-scale devaluation of its currency even after it weakened to an 11-year low earlier in the week. McVey said the drop sent a “shot across the bow,” representing a signal that the country has the tools to match what the Trump administration is doing on the trade front.U.S. stocks rose on Thursday after China’s stronger-than-expected daily fixing of its currency soothed fears about a worsening trade conflict. The yuan’s level became a closely-watched event after a weak reference rate on Monday triggered concern about a global currency war.To contact the reporters on this story: Erik Schatzker in New York at firstname.lastname@example.org;Vildana Hajric in New York at email@example.comTo contact the editors responsible for this story: Jeremy Herron at firstname.lastname@example.org, Rita NazarethFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- KKR & Co. exceeded the $1 billion fundraising goal for its first Global Impact Fund, according to a person with knowledge of the matter.The fund, aimed at addressing social and environmental problems with private capital, hasn’t closed and is still raising money from investors, said the person, who asked not to be identified because the information isn’t public.Co-led by KKR executives Ken Mehlman and Robert Antablin, the fund has been gathering commitments since early 2018. The billion-dollar mark makes it one of the largest impact pools, as private equity firms look to play a bigger role in the fast-growing socially responsible investing area.TPG’s $2 billion Rise Fund is the largest impact investing pool, though the firm is targeting at least $3 billion for the second version. Bain Capital raised $390 million in 2017 for its fund focusing on mission-oriented companies, and Partners Group closed a $210 million impact fund this year. Blackstone Group Inc. and Carlyle Group LP recently hired executives to build out their impact strategies, as pension funds and the wealthy increasingly embrace the trend.KKR’s Global Impact Fund has already made two investments, acquiring stakes in Indian recycling firm Ramky Enviro Engineers Ltd. and Singapore-based energy-efficiency company Barghest Building Performance.To contact the reporter on this story: Emily Chasan in New York at email@example.comTo contact the editors responsible for this story: Janet Paskin at firstname.lastname@example.org, Josh Friedman, Dan ReichlFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Elwy 3 Limited and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future.
KKR today announced the release of Hot Spots, a new macro Insights piece by Henry McVey, Head of Global Macro and Asset Allocation (GMAA), wherein McVey and his team share their learnings from a recent trip to Beijing and London, two of the most important geopolitical “hot spots” for investors these days. “Both China and the United Kingdom are enduring long, drawn-out discussions around their roles as trading partners as well as destinations for foreign capital… Amidst the heightened uncertainty we witnessed, we now see some emerging opportunities,” Henry McVey says. In his latest report, McVey emphasizes that we are living in an increasingly complicated world – one that requires investment flexibility, including operational expertise as well as the ability to move up and down the capital structure at different points in the cycle.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Elliott Management Corp. demanded German classifieds group Scout24 AG split itself in two and pursue a bigger share buyback to boost investor returns after a sale of the company fell through in May.The U.S. activist investor, which disclosed a 7% stake in Scout24 on Monday alongside a letter laying out its position, said the company should sell its car listing business and focus on its real-estate unit, a move that Elliott predicted could lift the stock close to 65 euros a share. That’s well beyond the company’s previous record and more than twice its initial-public offering of 30 euros in 2015.“We believe there is a growing demand among a wide array of stakeholders for Scout24’s leadership to demonstrate a level of urgency that has thus far been lacking,” Elliott said.Scout24 has been vulnerable to an activist since its shareholders rejected a 46-euro-per-share offer from private equity firms Blackstone Group LP and Hellman & Friedman in May. Last month, the company announced it would simplify its structure to better focus on its two biggest businesses -- auto and real estate -- as well as pursue a 300 million-euro ($334 million) share buyback. For Elliott, the moves aren’t enough.The stock is now trading near its record high, closing Friday at 50.25 euros, and is up about 25% this year. The shares rose 0.7% as of 12:08 p.m. in Frankfurt, while the broader Stoxx Europe 600 Index was down 1.6%.Elliott said it has outlined its views for a breakup of Scout24 in meetings with managers of the company, whom it said should never have recommended the Blackstone-Hellman & Friedman offer.The AutoScout24 car business and the Immobilienscout24 real estate unit “do not have any material synergies sitting under one roof,” Elliott said, arguing that the existing structure doesn’t allow for resources to be allocated efficiently across divisions and employees don’t have proper incentives.In a statement, Scout24 said it has had active discussions with shareholders including Elliott in the past few months, before and after announcing its new strategy and committed to continue the dialogue. “We have announced comprehensive steps to strengthen both core businesses, continue to grow revenue while increasing operational efficiency and capital structure optimization,” Scout24 said. AutoScout24 SuitorsThere is rumored or confirmed interest from potential buyers in AutoScout24, and Immobilienscout24 is worth more than 5 billion euros ($5.6 billion) alone, almost as much as the entire company, Elliott said.A number of competitors could bid for AutoScout24, Germany’s second-biggest car listings business after EBay Inc.’s Mobile.de, with 1.1 million listings and 1.5 million listings, respectively.Softbank Group Corp.-backed Auto1 Group GmbH has expressed interest in buying the business in the past, according to people familiar with the matter, who asked not to be identified because the deliberations were private. And German publisher Axel Springer SE, which is being acquired by KKR & Co., has been seen as a potential suitor by analysts at Liberum, who valued AutoScout24 at 2.3 billion euros in a note last month.Spokeswomen for Auto1 and Axel Springer declined to comment.Elliott’s six-page letter to Scout24, dated July 26, outlines what the activist sees as the company’s potential, what it views as “missed opportunities” and its opinion on Scout24’s path forward. Addressed to Chief Executive Officer Tobias Hartmann and Supervisory Board Chairman Hans-Holger Albrecht, it’s replete with strong criticisms. Elliott said Scout24’s current share buyback plan was “grossly lacking in ambition.”The investor complained that Scout24’s executives had heard the fund’s ideas privately and promised to give feedback on its proposals, but instead issued a July 19 press release with its strategy update that “widely missed the mark,” according to Elliott.Elliott in GermanyScout24 adds to Elliott’s campaigns in Germany, where it has recently targeted pharmaceutical giant Bayer AG, software company SAP SE and industrial firm Thyssenkrupp AG.Elliott wants Bayer to settle legal claims linked to products from its Monsanto unit to unlock shareholder value. SAP has pursued a restructuring since Elliott disclosed a 1.2 billion-euro stake in April. At Thyssenkrupp, the chief executive officer and chairman resigned following criticism from investors including Elliott, who derided the company’s slow turnaround and what they see as its poor share price performance.(Updates with Scout24 statement in eight paragraph, context throughout.)\--With assistance from Frank Connelly.To contact the reporters on this story: Stefan Nicola in Berlin at email@example.com;Eyk Henning in Frankfurt at firstname.lastname@example.orgTo contact the editors responsible for this story: Rebecca Penty at email@example.com, Benedikt KammelFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
heidelpay Group (“heidelpay”) and its majority shareholder AnaCap Financial Partners (“AnaCap”), a European financial services specialist investor, have today reached an agreement on the terms of an investment from KKR, a leading global investment firm. KKR will acquire a majority shareholding in the company, with Mirko Hüllemann, founder and CEO of heidelpay, and other key managers remaining as long-term shareholders.
Shares of Campbell Soup Co. gained 0.6% in morning trade to buck the selloff in the broader market, after the consumer foods company announced a deal to sell Arnott's, and certain international operations, to KKR & Co. Inc. for $2.2 billion in cash. Arnott's, the Australia-based snack brand that Campbell bought in 1997, had sales of $885 million in the latest 12 months and employs about 3,800 people. Under terms of the deal, Campbell and KKR will enter into a licensing agreement for the exclusive rights to use certain Campbell brands, including Campbell's, Swanson, V8, Prego, Chunky and Campbell's Real Stock. The deal comes after Campbell said a year ago that it would divest Campbell International and Campbell Fresh to focus on its North American businesses and cut debt. Campbell's stock has gained 1.6% over the past year, while the SPDR Consumer Staples Select Sector ETF has climbed 10.3% and the S&P 500 has gained 3.5%.
Investment firm KKR & Co. said it was buying some of Campbell Soup's international assets in a deal worth $2.2 billion. The transaction involves KKR taking over the Australian snacks unit, Arnott's, and the top-selling cookie brand Tim Tam. The deal also includes a long-term licensing deal that will allow KKR exclusive rights to use some Campbell brands including Swanson and V8 in the Asia Pacific.