A sudden spate of multibillion-dollar stock sales and corporate takeovers has raised hopes of a rebound from the severe dropoff in dealmaking brought on by the coronavirus crisis.
JDE Peet’s, the world’s largest pure-play coffee company, on Tuesday unveiled plans for an Amsterdam initial public offering. The share sale could raise as much as 2 billion euros ($2.2 billion), according to people with knowledge of the matter, which would make it Europe’s biggest market debut in more than a year.
Separately, Uber Technologies Inc. is negotiating a purchase of food-delivery rival Grubhub Inc., which has a market value of about $5.4 billion, Bloomberg News has reported. KKR & Co. agreed last week to invest in beleaguered cosmetics company Coty Inc. and take control of some hair-care brands it owns.
Billionaire Masayoshi Son’s SoftBank Group Corp. also plans to announce a deal as soon as this week to offload about $20 billion of T-Mobile US Inc. stock, a person with knowledge of the matter said. This would follow PNC Financial Services Group Inc.’s sale of a $14 billion stake in BlackRock Inc., which helped equity capital markets desks make up some revenue lost in the frozen IPO market.
In the U.K., London-listed catering provider Compass Group Plc is seeking to raise 2 billion pounds ($2.5 billion) in the biggest European share placement this year. Earlier this month, Telefonica SA and billionaire John Malone’s Liberty Global Plc agreed to combine their U.K. units to create the country’s largest phone and internet operator valued at about 31.4 billion pounds.
Global mergers and acquisitions volumes fell in April to the lowest monthly level since 2004 as the viral pandemic took hold and remain down 41% this year, according to data compiled by Bloomberg. In the equity markets, recent deals have been aimed at shoring up companies’ balance sheets rather than bold expansion moves. IPO fundraising has fallen about 8% this year from the same period in 2019.
The potential deals will add to optimism among bankers, including those at Goldman Sachs Group Inc., who predict transactions will pick up in the second half of the year. Senior dealmakers at Citigroup Inc. and UBS Group AG have said the Covid-19 crisis will give way to a wave of capital raisings and consolidation across key industries in Europe.
Bankers are hoping that transformational deals are on the horizon. Companies that are well-positioned at the start of a crisis have historically been able to pursue strategic deals that wouldn’t otherwise have been possible, according to an analysis by JPMorgan Chase & Co.
Buyers who take the initiative can often secure attractive financial terms on acquisitions, JPMorgan’s global M&A co-heads, Anu Aiyengar and Dirk Albersmeier, wrote in a report Monday. They said buyers must be prepared to pay a premium to acquire healthy companies and face near-term stock pressure.
Other deals in the pipeline include European infrastructure operator Atlantia SpA’s planned sale of a stake in its 2 billion-euro toll payment unit Telepass, Bloomberg News reported this week. Telecom Italia SpA confirmed late Monday it’s in exclusive talks to sell a minority holding in its wireless tower arm to a group of investors led by private equity firm Ardian SAS.
To be sure, as long as uncertainty over the duration and severity of the Covid-19 pandemic remains, live transactions are in danger of collapse. ForeScout Technologies Inc. said on Monday that buyout firm Advent International wouldn’t close its $1.9 billion acquisition of the cybersecurity company as planned.
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