Klein plans First Boston summit; Cvent rebuffs Blackstone; Ares offers to bankroll Man United bids; and much more
Happy Friday!
Earlier today, my colleagues Sumeet Chatterjee, Andres Gonzalez and Tatiana Bautzer were first to report that Credit Suisse’s new investment banking chief, Michael Klein, is expected to lay out his plans for the division next week as questions linger about the spin-out's funding and structure.
Klein is expected to brief Credit Suisse's senior bankers at a meeting in New York on efforts to secure capital for CS First Boston (CSFB). He is also expected to provide detail on which Credit Suisse activities will go into the business and on plans for an eventual initial public offering (IPO) of the advisory firm.
One option now under consideration is for CSFB, which will contain advisory and deal-lending businesses, to also house the Swiss bank's equity research operations, three of the sources said. This would help its investment bankers in their pitches to clients, especially for IPOs.
Klein, a veteran dealmaker, is merging his eponymous investment banking boutique into Credit Suisse's investment banking operations to create CSFB as a standalone business which he will lead from New York. Klein is selling his business to Credit Suisse for $175 million, the two said earlier this month.
The CSFB carve-out is part of a sweeping overhaul by the Zurich-based bank to restore profitability after a string of heavy losses and scandals that threatened its survival. Credit Suisse will focus on managing money for the wealthy after the carve-out.
Many questions remain about the newly planned CSFB, including who will provide capital to allow lending for dealmaking and fund the business. The creation of a boutique advisory firm also coincides with a slowdown in mergers and IPOs as central banks' war on inflation roil markets. Credit Suisse said in October that merger advice and risky lending will go into CSFB while the bank plans to keep some securities trading activities, including equities.
If the Swiss bank's equity research operations also move to CSFB, it would be similar to Deutsche Bank AG, which exited equities trading but kept equity research when it undertook a deep reorganization in 2019.
Elsewhere, Milana Vinn scooped that Cvent, a U.S. software provider that facilitates in-person and virtual meetings, has rejected a $3.9 billion acquisition offer from buyout firm Blackstone .
Blackstone is taking a break from the negotiations after Cvent rejected its $8-per-share offer as too low. Shares of Cvent, which is controlled by private equity firm Vista Equity Partners, had ended trading on Thursday at $7.64.
Cvent was not exploring a sale when Blackstone approached it with an unsolicited offer, and it is unclear whether the latter with return with a new offer or if any other bidder will emerge.
Based in Tysons, Virginia, Cvent offers a marketing and management platform used by the events and hospitality industries. Vista acquired Cvent for $1.65 billion in 2016 and took it public at a $5.3 billion valuation in a merger with a blank-check acquisition company in 2021.
Cvent shares have since dropped due to concerns that an economic slowdown, brought about by the U.S. Federal Reserve's higher interest rates to fight inflation, will lower demand for conferences and events that drive the company's business. Blackstone's acquisition attempt highlights how some private equity firms are pouncing on the plunge in valuation of some companies in their pursuit of a bargain, especially in the technology sector where many stocks posted big drops.
And finally, my London colleagues Chiara Elisei, Pablo Mayo Cerqueiro and Amy-Jo Crowley were first to report that buyout financier Ares Management has been offering funds to support a takeover of Manchester United .
It is the latest U.S. asset manager to seek a financing role in the battle for the English soccer club. Hedge fund Elliot Management is also looking to finance a bid, having ruled out a full takeover of the club. Oaktree Capital is also reported to have offered financing to bidders.
Manchester United's owners, the Glazer family, are considering selling the club in what could become the biggest sports deal ever. The club received indicative offers last Friday.
Ares, which oversees roughly $350 billion in assets, has offered funds in the form of structured equity to at least one bidder. However, this bidder turned down the funding because the terms were unattractive.
Structured equity refers to a form of funding that typically sits between equity and debt in a company's capital stack and comes with regular payments.
Ares, one of the largest providers of private credit, was reported in 2020 to be backing Miami-based soccer investor Kapital Football Group in its pursuit of buying an English Premier League club. Kapital was reported a year later to have abandoned efforts to acquire Southampton.
Ares was also reported to have backed two of the failed bids for Chelsea last year, before that club's 4.25 billion pound ($5.1 billion) sale to a consortium led by Los Angeles Dodgers part-owner Todd Boehly and backed by Clearlake Capital.
Ares recently raised $3.7 billion for a dedicated sports fund with a mandate to invest in leagues and teams.
It was unclear whether Ares has been looking to finance bids for Manchester United through that fund, which has already invested in Spain's Atletico de Madrid soccer club and Inter Miami CF, or another vehicle.
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And here’s a quick recap of the other highlights of the Reuters corporate finance file this week:
Microsoft has struck a 10-year deal to bring "Call of Duty" and other Activision games to Nvidia Corp's gaming platform if the Xbox maker is allowed to complete its much-contested $69 billion acquisition of Activision.
Digital payments processor Stripe Inc is close to raising $4 billion in fresh capital at a valuation of about $55 billion, people familiar with the matter said.
Blackstone, the world's largest private equity firm, is set to raise as much as $10 billion for its tactical opportunities strategy, which gives it versatility to invest in a range of assets, people familiar with the matter told Reuters.
Swiss financial regulator Finma is reviewing remarks made by Credit Suisse Chairman Axel Lehmann about outflows from the lender having stabilized in early December, two people with knowledge of the matter told Reuters.
CoStar said it was no longer in talks to buy Realtor.com owner Move Inc from News Corp and forecast disappointing first-quarter revenue that sent its shares down 15% in extended trading.
Bill Gates has bought 3.76% stake in Dutch drinks giant Heineken Holding, although the billionaire founder of Microsoft has previously said he was "not a big beer drinker."
American Equity Investment Life Holding Co's shares fell nearly 13% on Tuesday as insurer Prosperity Group ended its efforts to acquire the annuities provider.
Caligan Partners is urging Anika Therapeutics to consider strategic alternatives including a full sale, and is preparing to nominate directors to the biotech company's board, according to a letter to the board which was seen by Reuters.
Thank you for reading this week’s edition! Please do share the newsletter with anyone you think might be interested – feedback will be most welcome.
Warm regards,
Anirban?
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Anirban Sen
Editor in Charge, U.S. Mergers & Acquisitions
Thomson Reuters
Twitter: @asenjourno