Billion-Dollar Buyouts up in the Air
KKR and Viridor just tied the knot on the biggest post-coronavirus buyout to-date, $4.9-billion-dollars. Granted, they’re not the most glamorous of companies. One is a titan of private equity and the other a subsidiary of major British sewage operator, Pennon Group. However, the M&A world is showing signs of life, and that’s the main thing!
As a utility stalwart, Viridor’s business comes from long-term contracts with the government. It specializes in recycling, which none of us have any excuses not to be doing from home, so KKR feels happy signing on the dotted line.
Some investors are surprised KKR was able to round up $4.9 billion in the first place. The private equity crowd, known for buying big into non-stock market listed firms, has been running low on dry powder.
Lenders haven’t been keen to part with cash amid this downturn, and that’s the reason behind the selling of KKR’s stock before yesterday. Interestingly, though, nearly three-quarters of the Invstr community make money when trading KKR.
It’s safe to say some of our resident traders probably did quite well out of this breaking news, but the buyout buzz doesn’t end there. We need to talk about Tiffany!
The jeweller shook on a cash offer last year to merge with Louis Vuitton Moet Hennessey (now, that’s glamorous!). It’s unclear if the deal is still on, but those close to Vuitton’s monsieur Arnault say he’s a very long-term investor.
The buyout could still go ahead, and if it does at the agreed $135 per share, Tiffany at $125 has ten bucks of upside in it. What’s Bernard Arnault’s word worth? A punt, maybe?
