TPG looks to Astound, SPACs think outside the Boxed and options narrow for TikTok
Happy Friday!
This week, I scooped that private equity firm TPG is exploring a sale of Astound that could value the owner of a U.S. network of regional cable TV and internet providers at more than $8 billion. The potential sale would come as cable operators have seen their fortunes buoyed by consumers requiring more internet bandwidth, as they stay home to work and be entertained during the COVID-19 pandemic.
Astound’s network includes RCN, Grande Communications Networks LLC and Wave Broadband. TPG acquired RCN and Grande for $2.25 billion in 2016 and a year later bought Wave Broadband in a $2.37 billion deal.
Elsewhere, Krystal Hu and I broke news that U.S. online wholesale retailer Boxed is exploring strategic options, including a sale or going public through a merger with a SPAC that could value it at around $1 billion. Referred to by some of its customers as Costco for millennials, New York-based Boxed offers everything from fresh groceries to office supplies without membership fees, and also provides free delivery for orders over $49.
Like many e-commerce businesses, it has benefited from a boom in online sales in the United States as consumers stay away from brick-and-mortar stores due to the COVID-19 pandemic. Boxed has seen an steady uptick in new customer signups since March, one of the sources said.
And finally, Echo Wang, Greg Roumeliotis and Krystal wrote about how TikTok's prospective buyers are discussing four ways to structure an acquisition from its Chinese owner ByteDance, which include buying the app's U.S. operations without key software, after Beijing stalled a deal which could be worth $30 billion.
Other options being considered include asking for Chinese approval to pass TikTok's algorithm on to the acquirer of the short video app's U.S. assets, licensing the algorithm from ByteDance, or seeking a transition period from a U.S. national security panel overseeing the deal, three sources said. ByteDance had been looking to pick a buyer for TikTok assets by this week so it can finalize a deal by mid-September and comply with President Donald Trump's order to divest those assets, after U.S. officials raised concerns over the safety of the personal data of U.S. citizens handled by TikTok.
With that, here are the main deal stories we put out this week:
Billionaire investor William Ackman has approached short-term home rental company Airbnb Inc about going public through a reverse merger with his blank-check company, according to people familiar with the matter.
It is not clear which, if any, of the options will be pursued. As days pass, the odds of a deal lengthen as TikTok faces a U.S. ban on Sept. 20 if no sale agreement has been reached. It has challenged the ban in court.
China’s Ant Group plans to raise more funds on Shanghai’s Nasdaq-style market than in Hong Kong as part of its up to $30 billion dual listing, people with direct knowledge of the matter said, in a major endorsement of the year-old mainland exchange.
The company has hired investment bank Citigroup Inc to advise on the sale, sources said.
TPG has hired Morgan Stanley and JPMorgan Chase & Co to advise on the sale process, sources said.
Cybersecurity startup KnowBe4 Inc, which helps train employees to detect phishing emails, is preparing for a U.S. IPO, people familiar with the matter said.
Tesla Inc unveiled its biggest program of new share sales as a public company, seeking to cash in on soaring Wall Street interest in the electric carmaker to raise up to $5 billion that will ease future debt pressures.
A buyout consortium led by Blackstone Group Inc and Global Infrastructure Partners (GIP) has made an offer to acquire U.S. railroad operator Kansas City Southern, according to people familiar with the matter.
QuantumScape, the 10-year-old Silicon Valley battery startup backed by Volkswagen AG, said it plans to go public through a reverse merger with Kensington Capital Acquisition Corp with an enterprise value of $3.3 billion.
Mobile gaming firm Skillz Inc will float its shares on the New York Stock Exchange through a merger with Flying Eagle Acquisition Corp, a blank-check company founded by Hollywood executives Harry Sloan and Jeff Sagansky.
Big Hit Entertainment, the management label of hugely popular South Korean K-Pop group BTS, said it plans to raise up to 962.6 billion won ($811 million) in its planned initial public offering (IPO).
Nobody starting from scratch would create the U.S. healthcare system as it is. And that’s the opportunity for GoodRx, which helps customers find discounts or cheaper options for prescription medications.
Thank you for reading this week’s edition! Feedback is always welcome. Please do pass on the newsletter with anyone you think might be interested.
To U.S. readers, have a great long weekend,
Josh
Joshua Franklin
M&A, IPO and corporate finance correspondent
Reuters News
See my stories at Reuters.com or follow me @ReutersJF