Featuring DocuSign, Devon-Enerplus, MorphoSys, Cohesity-Veritas, Kohl's, Flynn Group, ShipBob, DWAC, and much more
Happy Friday!?
This week, David French scooped that oil and gas producer Devon Energy has approached Enerplus, a peer with a market value of C$4 billion ($3 billion), with an acquisition offer.
Such a combination would continue the dealmaking spree seen in the North American oil patch in recent months, which has included many of Devon's rivals -- including Exxon Mobil, Chevron and Occidental Petroleum -- making major acquisitions.
There is no certainty that Devon and Enerplus will negotiate a deal. Devon's proposed acquisition terms could not be learned. Enerplus shares traded up 8.6% higher at C$20.93 on the news. Devon Energy shares rose 2.6% to $42.39.
Kimmeridge Energy Management, an investment firm that according to LSEG data is Enerplus' second-largest shareholder with a 3.8% stake, said Enerplus should make sure any deal price it agrees to values the company fairly.
Elsewhere, Milana Vinn and I were first to report that Bain Capital and Hellman & Friedman have cooled in their pursuit of DocuSign over disagreements on how much they should pay to acquire the provider of online signature services. A day after our scoop, DocuSign revealed it was cutting about 6% of its workforce as part of a restructuring effort
The private equity firms, which were competing to buy DocuSign, have not been able to agree a deal price with the company, which has a market value
It remains, possible, however, that the deal talks will resume in the future. DocuSign shares dropped more than 7% after our story broke.
A deal for DocuSign would have been one of the biggest leveraged buyouts of the last two years as a spike in financing costs has made larger deals harder to clinch.
Over the past year, only a handful of such deals have been inked. In November, Blackstone and Permira unveiled a deal to buy European online classifieds company Adevinta ASA for about 14 billion euros ($15 billion).
In July, buyout firm GTCR agreed to buy a majority stake in Worldpay, the merchant services business of Fidelity National Information Services, in a deal that valued the unit at $18.5 billion.
Abigail Summerville scooped that Flynn Group, the world's largest franchisee operator of restaurants and fitness clubs, is exploring a majority stake sale that could value it at more than $5 billion, including debt.
Flynn Group, which operates Applebees, Taco Bell, Panera Bread, Arby's, Pizza Hut, Wendy's and Planet Fitness franchises, is working with Bank of America on a sale process.
Flynn Group, which is based in San Francisco, generates over $450 million of annual earnings before interest, taxes, depreciation and amortization.
Private equity firms and sovereign wealth funds are among the suitors for the majority stake that is up for sale.
Ontario Teachers' Pension Plan (OTPP) and private equity firm Main Post Partners, which are investors in Flynn Group, could sell part of their stakes and remain invested following a deal. Flynn Group's management, who are also significant shareholders, may do the same.
David Carnevali reported on Monday that drugmaker Novartis was in advanced talks to acquire MorphoSys, a developer of cancer treatments. David’s scoop, which drove up the US-listed shares of MorphoSys by 50%, was confirmed later during the day.
Novartis prevailed over rival drugmaker Incyte, which also made an offer for MorphoSys.
Headquartered in Planegg, Germany, MorphoSys develops drugs to fight deadly forms of cancers such as myelofibrosis, which is a rare type of bone marrow cancer, and certain types of knotty lymphomas.
MorphoSys main revenue generator is a lymphoma drug called Monjuvi, which it sells as part of a profit-sharing agreement with Incyte. MorphoSys said last week that Monjuvi's U.S. net product sales were $92 million in 2023, and that it expected these sales to come in between $80 million and $95 million in 2024. The company has said it expects revenue to go up as Monjuvi is approved for more indications.
One of MorphoSys' most promising drugs, known as Pelabresib, is an inhibitor of proteins implicated in the development and progression of myelofibrosis.
Krystal Hu and I teamed up to report that SoftBank-backed data security software firm Cohesity had agreed to acquire Veritas' data protection business in a deal that values the combined entity at $7 billion.
The cash and stock acquisition is expected to help Cohesity, which is backed by Japan's SoftBank Group, achieve positive growth margins
The deal comes at a time when Cohesity's biggest competitor Rubrik is, according to sources, planning to launch a stock market flotation in the coming weeks.
Cohesity raised about $1 billion in equity and $2 billion in debt from investors including Haveli Investments, Premji Invest and Madrona to help fund the deal.
“We look forward to working with the talented Cohesity and Veritas leadership team to propel the combined company into its next phase of growth,” said Sumit Pande, senior managing director at Haveli Investments.
Cohesity's takeover of the Veritas unit values the business at over $3 billion including debt.
Svea Herbst-Bayliss was first to report that an activist hedge fund chaired by former Canadian Prime Minister Stephen Harper is pushing U.S. department store operator Kohl's to sell itself.
Vision One Management Partners, a fund co-founded by Harper and former Carl Icahn protege Courtney Mather, has built a stake in Kohl's and expressed concerns to the company about its future.
Vision One has asked Kohl's to launch a sale process and also give it board representation. Kohl's shares ended trading on Tuesday in New York up 4.9% at $26.80 on the news, giving the company a market value of $3 billion.
The development makes Kohl's the second U.S. department store operator to come under investor pressure to sell itself in as many months. Last month, Macy's rejected a $5.8 billion offer to be taken private by investors Arkhouse Management and Brigade Capital Management, on the grounds it was too cheap and may not have the necessary financing.
In recent years, other activist shareholders have also pushed Kohl's to explore a sale. The retailer rejected offers worth as much as $64 per share in 2022, because it wanted more than $70 per share, but never got an offer that high.
Echo Wang and I reported that SoftBank-backed e-commerce logistics provider ShipBob is seeking to hire underwriters for a U.S. IPO that could be launched this year.
The Chicago-based company has invited several major investment banks, including Goldman Sachs, JPMorgan Chase, Morgan Stanley, Citigroup, Bank of America and Barclays, to pitch for underwriter roles on the IPO.
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The IPO could value ShipBob at as much as $4 billion.
The U.S. IPO market is slowly recovering after two years of subdued activity. Last week, athletic apparel maker Amer Sports raised $1.37 billion in a discounted U.S. IPO, one week after BrightSpring Health Services priced its $633 million offering below its indicated range.
And finally, yours truly was first to report that Digital World Acquisition, the blank-check acquisition company that has agreed to take former U.S. President Donald Trump's social media platform public, was nearing a $50 million financing deal. The deal was announced a few hours later, confirming our scoop.
The deal is based on convertible notes and will help fund DWAC while it tries to complete its merger with Trump Media & Technology Group (TMTG), owner of social media platform Truth Social.
DWAC shares ended trading on Thursday up 4.4% at $47.66 on the news. They are up almost threefold since Jan. 15 -- when Trump won the Iowa caucus on his way to the Republican nomination for president -- as investors bet that his re-emergence as a major political figure will make Truth Social more valuable.
Investment firms Anson Funds, All Blue Capital and Mangrove Partners have offered to buy the convertible notes on offer.
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And here’s a quick recap of the?highlights from the Reuters corporate finance file from the past week:?
Adam Neumann knows three things. He knows how to encourage investors to value a company at a ridiculous price. He knows how to get himself paid. He also, having founded the now-bankrupt WeWork, knows something about office real estate. Neumann wants his new investment firm to buy his former brainchild out of restructuring and is irritated WeWork’s new managers aren’t giving him a chance, according to a letter published by the New York Times on Tuesday. WeWork’s new guard could perhaps use a believer like Neumann. It just can’t be Neumann.
Novo Nordisk is creating a moat for its obesity drug crown jewel. On Monday, Novo Holdings, the parent company of $400 billion Novo Nordisk, scooped up contract drug manufacturer Catalent for $16.5 billion including debt. The deal helps Novo bulk up its manufacturing, and also makes it harder for rivals to muscle in on the market.
A U.S. court auction weighing the fate of Venezuela-owned oil refiner Citgo Petroleum has received bids using claims in lieu of cash, according to people familiar with the process and documents, part of a historic case to settle Venezuelan debts. Oil producer ConocoPhillips, the largest creditor in the case after presenting the court with some $12 billion from asset expropriations in Venezuela, last month submitted a credit bid using its claims.
One year ago, star dealmaker Bao Fan was taken away by Chinese authorities and hasn't been seen by colleagues since - an absence that has caused mounting concern among staff and clients about the future of his boutique investment bank.
Nvidia is building a new business unit focused on designing bespoke chips for cloud computing firms and others, including advanced artificial intelligence (AI) processors, nine sources familiar with its plans told Reuters.
Private equity firm Apollo Global Management is in talks to buy a minority stake in the Middle East, North Africa and central Asia Starbucks franchise operated by Kuwait's AlShaya Group, three sources close to the matter said.
European bourses could welcome a string of new companies in the coming months, with at least five major listings penciled in for launch before the summer, people familiar with the matter told Reuters.
Chinese conglomerate Fosun International is exploring the sale of a minority stake in its luxury resort chain Club Med, targeting a valuation of $800 million for the whole business, according to two people with knowledge of the matter.
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Have a wonderful weekend!
Best,
Anirban?
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Anirban Sen
Editor in Charge, U.S. Mergers & Acquisitions
Reuters News
Thomson Reuters