Brian Roberts, chairman and chief executive of Comcast, strolled into the Financial Times on Tuesday with a message: his US cable group is intent on buying UK broadcasterSky. Why?
“With Facebook, Google and Apple, scale has been redefined,” Roberts told us.
Only a few hours earlier, Comcast had unveiled a £22.1bn bid for Sky, in a move that sent shockwaves through the media industry. Comcast wants to add Sky’s 23m subscribers in the UK, Germany and Italy to its 29m customers across broadband and cable in the US.
But by doing so, it also threatened a carefully orchestrated set of transactions put together by Rupert Murdoch. Now Murdoch’s plans to acquire the 61 per cent of Sky that his 21st Century Fox does not already own, as well as his plans to sell much of Fox to Walt Disney, look deeply troubled.
Some of the most important takeaways:
Shares in Sky soared to £13.30 on Tuesday, well above Comcast’s all-cash offer of £12.50. That’s because investors are pricing in a bidding war as they expect Fox/Disney to come back with a new offer and improve their existing £10.75 per share bid. Here’s Lex on that.
But Comcast shares fell 7.4 per cent in US trading, in a sign of just how much its investors do not value a protracted bidding war. Here’s how one analyst put it: "For Comcast shareholders, there is a mix of good and bad in this morning’s announcement of a topping bid for Sky. Unfortunately, the bad outweighs the good." Disney shares dropped 4.5 per cent on the news, while 21st Century Fox shares dropped 3 per cent.
Roberts has not spoken to any member of the Murdoch family about the Comcast bid and has set the acceptance threshold at 50 per cent plus one share — a sign that he wants to get the deal done regardless of the Murdochs’ approval.
Attention now shifts to how Sky’s independent directors will handle the situation. Key man: Martin Gilbert, the asset management executive and deputy chairman of the board. See our mini tick-tock on the original Fox/Sky deal.
What has Disney/Fox said? So far, not much. Disney chief Bob Iger was with French president Emmanuel Macron when the news hit.
We’ll have lots more coverage in the days to come. Stay tuned.
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Who is Deutsche Bank’s largest shareholder?
It’s HNA Group, right?
Well, not quite. As regular DD readers know, things are always a bit more complicated than they seem when it comes to the Chinese airline-to-finance conglomerate. That brings us to this FT Alphaville deep dive, which takes us on a trip involving a medical "magic mushroom" investor, opaque equity derivatives, and a mysterious Bermuda entity about which Deutsche Bank itself says it has no information.
The key to the puzzle appears to be this enigmatic entity called GAR Holdings.
But while a corporate logo for GAR appears in some HNA presentations, there is no public information on what the company does and who exactly owns it. Even Deutsche Bank itself has declared in court that it does not know anything about GAR, despite the entity being in the chain of companies that controls the German bank’s stock.
To get the whole story, you really must read Robert Smith’s investigation in full here.
Food fight: the latest Alibaba-Tencent turf war
There has never been a better time in China to tuck into a bowl of chow mein at home on your couch.
Online food delivery services have proliferated in the country, and the price of getting fried chicken delivered to your door is only set to fall as China’s two largest tech giants — Alibaba and Tencent — face off in their latest battle for supremacy.
Ecommerce group Alibaba is in talks to acquire online food delivery start-up Ele.me in a deal that could value the company at as much as $9.5bn. Here is the FT story.
Alibaba and its payments affiliate Ant Financial already own 40 per cent of Ele.me but are looking to buy the remaining 60 per cent from existing investors including Baidu, according to people familiar with the matter.
The deal will put Alibaba in direct competition with internet company Tencent, which controls China’s largest online-to-offline food delivery platform Meituan-Dianping, which was valued at $30bn in its latest funding round last year.
China’s food delivery market is already massive, at a value at Rmb204.6bn ($32.5bn) in 2017, according to the China Cuisine Association, an industry group.
The face-off between Alibaba and Tencent seems familiar. The groups have already waged expensive battles to dominate areas such as ride-hailing apps and bike-sharing businesses in China.
They have also been exceedingly active in M&A recently. Tencent has partnered with Chinese supermarket operator Yonghui and Carrefour of France and has invested in online retailer Vipshop, while most recently Alibaba has taken a stake in Easyhome, a furniture retailer, and Shiji, a data service company focusing on the hotel and travel industry.
David de Rothschild is stepping aside as chairman of Rothschild this summer to pass the reins to his son Alexandre, who has long been groomed to succeed his father as the seventh generation of the Franco-British banking dynasty that was founded 200 years ago. The 37-year-old joined Rothschild in 2008 charged with building up its private equity business. His career has included a stint as an analyst at Bear Stearns and time as a manager in Argan Capital’s private equity department. ( FT, FT Lex)
Dina Powell, who spent about a year as Donald Trump’s deputy national security adviser, is returning to Goldman Sachs, where she spent nearly a decade before being tapped by the White House. She will be a member of the investment bank’s management committee and focus on boosting relationships with sovereign clients. She was previously an assistant secretary of state and senior White House staffer in the George W Bush administration.
Roberto Costa, who advised on Ferrari’s IPO and the Luxottica-Essilor merger, has been hired by Citigroup to focus on deals in the luxury and retail sectors, according to a memo seen by DD. Costa, who will be based in Milan, spent the past 15 years at Mediobanca.
HSBC has hired Mark Epley and George Patterson as it builds out its North American business, DD has learnt. Epley, who hails from Jamieson Corporate Finance following stints at Nomura and Deutsche Bank, will head HSBC’s financial sponsors group in the Americas. Patterson joins from CODE Advisors and will lead the bank’s work with tech companies in North America.
Stifel Financial has launched a new activism defence practice and hired Juan Bonifacino, who joins the firm as managing director in New York. Bonifacino previously worked at ISS and CamberView.
SeaWorld chief executive Joel Manby has stepped down from the company. The board has hired an outside company to find a successor. ( FT)
Japan’s crown jewels Some of Japan’s largest conglomerates are looking at Toshiba’s chip unit sale and considering divestments of their own. While selling off non-core assets has long been considered taboo, the example from Toshiba is expected to accelerate such sales this year. ( FT)
Why there’s no #MeToo on Wall Street yet Wall Street #metoo reckoning may be a long ways away writes Bethany McLean, herself a one-time junior analyst at Goldman Sachs. (Vanity Fair)
Goldman comes to Main Street To get the attention of an elite Goldman private banker, customers once needed $10m. Today they can open an online savings account with the bank with only $1. The bank is planning to push into mortgages, insurance, and car loans as it bets on a consumer-facing business. (WSJ)
Gupta empire crumbles The mining-to-media group established by the Gupta family in South Africa is coming undone, with businesses falling into administration and the Gupta brothers believed to have fled the country. ( FT)
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