Finance forum: Private equity

Private equity is a form of venture capital investment in unlisted companies. It involves purchasing shares in companies as equity capital with the aim of earning over time based on the company’s development or its listing on the stock exchange. This type of investment is aimed at companies with high growth potential. It’s also characterised by a more or less direct involvement in the company’s development and decision-making activities to which equity investors are usually entitled.

Markets brace for possible Toshiba mega takeover deal

Posted on 08.04.2021

Japanese firm Toshiba has received a 20.8 billion dollar buyout offer from CVC Capital Partners, the company announced yesterday. The offer prices the company at a 30% premium to its closing share price on Tuesday.  Toshiba has had its fair share of drama, with a financial scandal in 2015 followed by a threat of bankruptcy, which the company barely managed to survive. More recently, the company has experienced a shareholder revolt, with Effissimo Capital Management, a firm that holds a 9.9 ...

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Breaking down recent M&A spikes

Posted on 01.04.2021

M&A across the world has attracted 484.5 billion in the first two months of 2021. The number is up 33% YoY, which means many companies are aggressively buying out smaller companies as part of their strategy. Recently, Greg Wendt, an equity portfolio manager, and Scott Sykes, an income portfolio manager at Capital Group, shared their insights on the spike in M&A activity in the recent months. What’s lit the flame? Greg Wendt believes one reason for the increased activity is that c ...

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Bidding wars between hedge funds and private equity heats up

Posted on 19.03.2021

In the UK, mergers and acquisitions often result in bidding wars that drive up share prices. At first glance, this may look like healthy competition. But is it really so? When a company receives a buyout offer at a certain share price, its shares start trading well above that price in the anticipation of a better buyout offer. The hedge funds driving up the price do so in hopes of a sweeter deal. That, however, doesn’t always materialize. Losing money on speculation is a normal part of fin ...

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Why private equity is so interested in advised platform mergers

Posted on 12.03.2021

Private equity has been interested in the advised platform sector for a while. However, such platforms pose some challenges that are not exactly compatible with the traditional private equity business model. Private equity deals in the sector date back all the way to 2015 when Caledonia investments purchased a majority stake in 7IM, a portfolio management and advisory services company serving individual and retail clients. Another landmark deal in the space was JC Flowers’s investment in ...

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Issa Brothers and TDR Capital Acquire ASDA for $9.5 Billion

Posted on 18.02.2021

The acquisition of ASDA finally came to completion this week. The British supermarket chain was acquired by the Issa brothers who, together with TDR Capital, a private equity firm, completed the deal for a total value of 6.8 billion pounds. History Last October, two billionaires from Blackburn bought a majority stake in ASDA. Commonly known as the ISSA brothers, they own the EG Group which operates over 6000 petrol stations in Europe and employs over 44000 workers.  The acquisition raise ...

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