Mixed signals from deal market
Happy Friday!
A couple of weeks ago, in early June, I wrote that it was my favorite weather in New York City. Well, that time is gone, and it's officially too hot to be outside. But extreme temperatures aside, I am excited for this weekend, because my mom is visiting, and I haven't seen her since January. People often ask me how I feel about my mom living in Russia, and all I can say is that she's happy there and has no interest living anywhere else. That answer surprises everyone, because there is an assumption that people in Russia generally want escape the country and build a new life elsewhere, especially if there is a legal path to do so. But it's really not the case for everyone (like nothing ever is), especially with the older generation. So while it's unfortunate for me, an only child, I will take whatever time with my family I can get.
In the world of M&A, I am getting mixed signals. People familiar tell me that pitch activity is picking up, especially for private assets. Some, however, remain cautious that those auctions won't lead to transactions. The deal of choice is one where the company isn't formally for sale and where the founding team is interested in staying on board and, in some instances, co-investing, a few private equity investors told me recently. Let's see if we see more deals like that.
In TMT...
This has been a quiet week, as you can see from my brief deal roundup below. So, like every M&A reporter, I am bracing for Monday. Please, no deal announcements! (ha)
Yesterday, Anirban Sen and I were first to report that U.S. casino operator Boyd Gaming has approached Penn Entertainment to express interest in acquiring its peer that has a market value of more than $9 billion, including debt, according to people familiar with the matter.
Penn's shares jumped 8% on Thursday afternoon in New York to $19.89 after Reuters reported Boyd's approach. Boyd's stock fell 3% to $51.90.
A deal would be the biggest merger among U.S. gambling companies since Eldorado Resorts' $17.3 billion acquisition of Caesars Entertainment in 2020.
It would be challenging since Boyd, the smaller company with a market value including debt of $7.8 billion, would need financial firepower to clinch a deal. The companies would also need the blessing of regulators and officials in several states where they both operate.
Boyd would also need to win over Walt Disney, which through its sports network ESPN has a partnership with Penn.
The sources said there was no certainty Penn will engage in negotiations with Boyd. They asked not to be identified because the matter is confidential.
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In Europe...
Our M&A colleagues reported that Apax Partners has held initial talks with potential advisers and investors as it considers selling Italy's Lutech, two sources told Reuters, adding that a sale could value the IT services provider at around 1 billion euros ($1.1 billion).
Apax took control of Lutech three years ago, when it bought a majority stake from U.S. buyout group One Equity Partners in a deal that valued the Milan-based company at 500 million euros, a source told Reuters at the time.
A sale would not take place before the first quarter of 2025, said the two sources and another briefed by Apax on the matter. All three declined to be named as the talks are private.
Other news & commentary:
What else is going on? For any anonymous deal tips you can find me on Signal and Telegram. I am also available by email [email protected] and via cell.
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Have a great weekend, and stay cool out there!
Milana