WESCO WINS BIDDING WAR FOR ANIXTER AT $100 PER SHARE
The most exciting public company bidding war of 2019 came to an end with interloper WESCO’s $100.00 bid topping private equity firm Clayton, Dubilier & Rice’s (CD&R) $93.50 friendly deal. The final price resulted in a 23.5% increase in the price paid for Anixter from the initial deal announcement, a big win for Anixter arbitrageurs and investors.
RECENT IPO TROUBLES DON’T SPOOK CASPER AS MATTRESS COMPANY FILES FOR IPO
Direct-to-consumer mattress company Casper filed its paperwork for an initial public offering. The unprofitable company has raised over $300 million in the private market to date, with the last $100 million Series D round valuing Casper at $1.1 billion. It intends to list on the NYSE under the symbol CSPR.
U.S. AND CHINA STRIKE PHASE ONE TRADE DEAL
After nearly two years of fits and starts, the U.S. and China signed the “phase one” trade deal, which will have Beijing purchase an additional $200 billion of American goods and services over the next two years. In return, the U.S. agreed to reduce the 15% of tariffs on $120 billion in Chinese goods to 7.5%. Investors cheered the news and pushed market indices to new all-time highs.
VISA ACQUIRES FINTECH STARTUP PLAID FOR $5.3 BILLION
Visa announced that it is acquiring privately held fintech startup Plaid in a $5.3 deal. Plaid’s technology helps people link their bank accounts to mobile apps and is used by one in four Americans with a bank account. The price tag is double what the startup was valued at in its December 2018 Series C round financing.
Recommended Articles, Podcasts, Books and Tweets
Listen to famed natural resource investor Rick Rule discuss his outlook for precious metals and other resources on the Meb Faber Show podcast.
Check out “The Ride of a Lifetime” by Disney CEO Bob Iger, in which he discusses the acquisitions of Pixar, Marvel and Lucasfilm.
Research Affiliates analyzes the near-record valuation dispersion between value and growth stocks. Value stocks are incredibly cheap on a relative basis and a “full reversion to the median, if it happened overnight, would require value to beat growth by 45%.”
On the recent poor performance of quantitative investment strategies: “When [quant winters] occur everyone goes into overtime trying to explain why winter came. But it just does happen. Of course, this is like saying ‘there will be a bear stock market again’. It’s absolutely true, but if you can’t predict when, you stay invested and earn the long-term return.”
Blank-check company Far Point announced an agreement to buy tax-free shopping firm Global Blue for $2.6 billion.
China’s economic growth of 6.1% in 2019 was its lowest in 29 years.
Howard Marks’ wisdom from his latest memo: “Success in investing doesn’t come from buying good things, but from buying things well, and it’s essential to know the difference.”
Institutional investors have been getting hoodwinked by private equity and they’re finally pushing back: “IRR is a misleading tool to measure returns. It is a tool which is highly manipulated due to credit lines and other financial engineering tricks. It has no correlation with the risk taken.”
New research indicates that private equity returns are based on luck and reversion to the mean.
Speculation mounts that Canadian engineering giant WSP Global is making a play for rival Aecom in a potential $12 billion deal.
West-African focused gold miner Endeavour dropped its proposed unsolicited takeover of Centamin.
Private equity firm Cerberus is looking to take grocery company Albertsons public in a $19 billion IPO.
The T-Mobile / Sprint merger spread has reached its widest point as arbitrageurs fret and wait on U.S. District Judge Victor Marrero’s decision to allow the deal to go ahead.