WSJ : FlyExclusive to Go Public Through $600 Million SPAC Merger

FlyExclusive to Go Public Through $600 Million SPAC Merger
Private-jet company set to merge with EG Acquisition

On-demand private-jet provider flyExclusive has struck a deal to go public through a merger with a special-purpose acquisition company that would value the combined entity at $600 million.

The Kinston, N.C., business is set to merge with EG Acquisition Corp. EGGF 0.10% , a SPAC led by Gregg Hymowitz, chairman and chief executive of investment firm EnTrust Global, executives with the companies said. The SPAC, which is also backed by Gary Fegel’s private-investment platform GMF Capital, raised $225 million through an initial public offering in late May of 2021.

FlyExclusive plans to use the funds to bolster its fleet of more than 90 jets, according to the company’s CEO Jim Segrave. Every airplane the company has purchased has increased in value, as demand for aircraft has skyrocketed and parts to construct new planes have been harder to come by in the U.S., he said.

FlyExclusive‘s Jet Club is a multitiered membership program that allows customers to access its fleet for a monthly fee—for short trips or cross-country excursions. Mr. Segrave said the company, started in 2015, has been profitable since its second year of operations.

Upon completion of the deal, expected in the first quarter of 2023, flyExclusive and EG Acquisition will combine under a new holding company that will be listed on the New York Stock Exchange. Mr. Segrave is set to lead the merged entity, with Messrs. Hymowitz and Fegel holding board positions.

Proceeds from the deal would amount to about $310 million, including $85 million from sovereign-wealth and U.S. institutional investors via convertible notes.

SPACs are empty shells that raise money in a public offering with a plan to combine with a business later on that gets a listing through the deal. There has been a falloff in such deal making as markets swoon, after it allowed several money-losing businesses to flood the public market in 2020 and 2021.

Chamath Palihapitiya, one of the biggest promoters of SPACs, said last month that he would wind down and return cash from two of his SPACs after the market collapsed. Hedge-fund manager Bill Ackman and baseball executive Billy Beane have also shut down their respective blank-check companies.

“The SPAC world in general has been somewhat unstable in the last year or so, and we were really looking for that unicorn opportunity,” said Mr. Segrave.

Mr. Hymowitz, who has written checks for some of the most prominent activist investors over the years, said his SPAC was on the hunt for “real companies” with a legitimate need for capital.

Two of flyExclusive’s peers, Wheels Up Experience Inc. and Blade Air Mobility Inc., merged with SPACs only to see their share prices tumble. Shares of Wheels Up are down 78% this year, while Blade has dropped 60%.

Subscription-based jet company Flexjet Inc. earlier this month struck a deal to go public through a merger with Horizon Acquisition Corp. II, a SPAC led by billionaire investor Todd Boehly, one of the new owners of soccer club Chelsea FC and a part-owner of the Los Angeles Dodgers.

WSJ : BP Buys Renewable Natural Gas Company in $4.1 Billion Deal

BP Buys Renewable Natural Gas Company in $4.1 Billion Deal
Archaea Energy to be acquired for $26 a share in cash

Archaea Energy Inc. LFG -4.90% said Monday it is being bought by BP BP -2.63% PLC for $26 a share in cash, or a total enterprise value of $4.1 billion, including $800 million of net debt.

The cash consideration represents a 38% premium to the renewable natural gas company’s average share price for the 30 days ended Friday, Archaea said.

The companies are targeting closing the acquisition by the end of this year.

Certain existing Archaea shareholders, who collectively own 27% of its outstanding shares, have agreed to vote their shares in favor of the transaction. Closing isn’t subject to any financing condition, Archaea said.

Upon completion of the transaction, Archaea will operate as a subsidiary within BP and become part of the larger global organization, the company said.

Archaea shares were up 50% to $25.31 in premarket trading.

>>> US Research Calls

Research Calls

  • Upgrades:
    • Church & Dwight (CHD) upgraded to Equal-Weight from Underweight at Morgan Stanley; tgt $82
    • Clorox (CLX) upgraded to Equal-Weight from Underweight at Morgan Stanley; tgt $130
    • Cloudflare (NET) upgraded to Overweight from Equal Weight at Wells Fargo; tgt raised to $65
    • First Republic Bank (FRC) upgraded to Strong Buy from Mkt Perform at Raymond James; tgt $143
    • FirstCash (FCFS) upgraded to Neutral from Underperform at Credit Suisse; tgt raised to $88
    • Prologis (PLD) upgraded to Sector Outperform from Sector Perform at Scotiabank; tgt lowered to $116
    • Radian Group (RDN) upgraded to Outperform from Mkt Perform at Keefe Bruyette; tgt lowered to $25
  • Downgrades:
    • Albertsons (ACI) downgraded to Neutral from Buy at Guggenheim
    • Edgewell Personal Care (EPC) downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt lowered to $36
    • Ero Copper (ERO) downgraded to Equal Weight from Overweight at Barclays
    • Fox Corporation (FOXA) downgraded to Hold from Buy at Loop Capital; tgt lowered to $34
    • Fox Corporation (FOXA) downgraded to Neutral from Outperform at Credit Suisse; tgt lowered to $36
    • Hims & Hers Health (HIMS) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $6
    • Hudbay Minerals (HBM) downgraded to Equal Weight from Overweight at Barclays
    • Kroger (KR) downgraded to Neutral from Buy at Northcoast
    • Lloyds Banking (LYG) downgraded to Equal-Weight from Overweight at Morgan Stanley
    • News Corp. (NWSA) downgraded to Hold from Buy at Loop Capital; tgt lowered to $17
    • NMI Hldgs (NMIH) downgraded to Mkt Perform from Outperform at Keefe Bruyette; tgt lowered to $23
    • Opendoor Technologies (OPEN) downgraded to Sell from Neutral at Goldman; tgt lowered to $2
    • Terreno Realty (TRNO) downgraded to Sector Perform from Sector Outperform at Scotiabank; tgt lowered to $54
    • Westlake Corporation (WLK) downgraded to Hold from Buy at Deutsche Bank; tgt lowered to $95
    • XPO Logistics (XPO) downgraded to Hold from Buy at Deutsche Bank; tgt lowered to $50
  • Others:
    • Aehr Test Systems (AEHR) initiated with an Outperform at William Blair
    • Applied Materials (AMAT) initiated with a Mkt Perform at William Blair
    • Ashland (ASH) named Catalyst Call Buy Idea at Deutsche Bank
    • Avient (AVNT) initiated with a Buy at Deutsche Bank; tgt $40
    • CDW (CDW) placed on Tactical Outperform List at Evercore ISI
    • Coherent (COHR) initiated with a Mkt Perform at William Blair
    • CTI BioPharma (CTIC) initiated with an Outperform at SVB Leerink; tgt $13
    • Digital Turbine (APPS) initiated with a Buy at BofA Securities; tgt $24
    • IGM Biosciences (IGMS) initiated with a Neutral at JP Morgan; tgt $27
    • Livent (LTHM) initiated with a Neutral at JP Morgan; tgt $28
    • Loop Media (LPTV) initiated with a Buy at ROTH Capital; tgt $6.50
    • Lyell Immunopharma (LYEL) initiated with a Buy at H.C. Wainwright; tgt $12
    • ON Semiconductor (ON) initiated with an Outperform at William Blair
    • Orocobre (OROCF) initiated with a Sector Perform at RBC Capital Mkts
    • Prologis (PLD) resumed with an Overweight at Morgan Stanley; tgt $120
    • PPG Industries (PPG) initiated with an Overweight at KeyBanc Capital Markets; tgt $127
    • Proterra (PTRA) initiated with a Buy at BTIG Research; tgt $7
    • Sensata Tech (ST) placed on Tactical Outperform List at Evercore ISI; tgt $46
    • STMicroelectronics (STM) initiated with a Mkt Perform at William Blair
    • Sunnova Energy (NOVA) initiated with a Positive at Susquehanna; tgt $38
    • SunPower (SPWR) initiated with a Positive at Susquehanna; tgt $25
    • TPG Inc. (TPG) initiated with a Hold at Jefferies; tgt $30
    • Wolfspeed (WOLF) initiated with an Outperform at William Blair

>>> US Gapping down

Gapping down
In reaction to earnings/guidance
:

  • HAIN -2.1% (guidance), TPB -1% (guidance)

Other news:

  • FOXA -5.5% (forms special committee to begin exploring a potential combination with News Corporation (NWSA))
  • BMEA -4.9% (files $350 mln mixed securities shelf offering)
  • CLVS -0.9% (Highlights Updated LuMIERE Phase 1 Data of Targeted Radiotherapy Candidate FAP-2286 at the 35th Annual EANM Congress)

Analyst comments:

  • EPC -1.1% (downgraded to Underweight from Equal-Weight at Morgan Stanley)

>>> US Gapping up

Gapping up
In reaction to earnings/guidance
:

  • BK +4.4%, BAC +2.9%, NYMT +2.1% (guidance), WIT +1.1% (guidance)

Select ETFs trading higher:

  • IWM +1.5%, QQQ +1.3%, SPY +1.2%, DIA +1%

Other news:

  • LFG +53.1% (to be acquired by bp (BP) for ~$4.1 bln)
  • MIST +31.9% (Positive Results from Phase 3 RAPID Clinical Trial of Etripamil Nasal Spray in Patients with Paroxysmal Supraventricular Tachycardia)
  • CLR +8.3% (to be acquired by the Hamm Family for $74.28 per share)
  • AVXL +5.7% (Late-Breaking Presentation of Phase 2b/3 Data of Oral ANAVEX 2-73)
  • CIXX +4.9% (reports total assets of $338.1 billion as at September 30)
  • MUFG +3.8% (receives approval from the U.S. Federal Banking Regulators for the sale of MUFG Union Bank to U.S. Bancorp (USB) )
  • BKSY +3.4% (files for $200 mln mixed securities shelf offering)
  • CS +3.2% (settles RMBS Legacy Case)
  • NWSA +3% (confirms receipt of letters from Rupert Murdoch regarding potential combination with Fox)
  • SPB +2.5% (ASSA ABLOY formally responds to the DOJ's complaint to block the acquisition of the Hardware and Home Improvement division of Spectrum Brands (SPB))
  • GSK +2.1% (receives FDA approval for new presentation of Menveo)
  • BP +2.1% (to acquire LFG for $4.1 bln)
  • UBER +1.8% (Uber Eats partners with Leafly (LFLY) to bring cannabis delivery to Torontonians)

Analyst comments:

  • CHD +3.4% (upgraded to Equal-Weight from Underweight at Morgan Stanley)

ARTnews : French Dealers Cast Doubt on FIAC’s Future as Art Basel’s Paris Fair T

French Dealers Cast Doubt on FIAC’s Future as Art Basel’s Paris Fair Takes the Spotlight

The French art world has been astir for months about the future of FIAC, which used to be the biggest art fair held regularly in Paris.

Earlier this year, Art Basel revealed plans to launch a new fair, Paris+. In the process, it kicked FIAC out of its longtime partnership with the Grand Palais and its October slot.

Anne-Claude Coric, executive director of Paris’s Galerie Templon, told ARTnews, “We have been participating in FIAC since 1974 and Art Basel since 1978, so the replacement of FIAC by a new Art Basel fair came as a major surprise. No one expected FIAC to be ousted so fast.

“Now that Art Basel has taken over its time slot, its locations, most of its exhibitors, and even some of its staff,” she continued, “I do not see how FIAC could possibly reinvent itself.”

Some questioned whether FIAC, which is owned by RX France, would ever come back to the august venue where it has previously been held.

“It seems unlikely that FIAC will return to the Grand Palais, given that RX France’s request to extend their stay was rejected by both the administrative court and the state council,” said intellectual property lawyer Julie de Lassus Saint-Geniès.

Yet she remained hopeful that the fair would continue to live on in some form. “An exhibition is not only a space, but first and foremost a concept. We should not be too quick to dismiss RX France. They still own the French, European, and international trademarks for FIAC. They are free to launch a new event anywhere else in France, Aix, Monaco… Plus, Paris is not short of venues likely to welcome a new fair.”

Those involved with RX France are also still optimistic. “We are still considering rebooting FIAC,” Michael Filzi, the company’s CEO, told ARTnews in an interview. “The name belongs to us. And we have no intention of selling it.”

He declined to comment on when or where that may happen, and some cast into doubt whether a return in Paris was even worth it altogether.

“The international fair calendar is already so crowded that it is hard to imagine how the city of Paris could accommodate yet another fair,” Coric said. “There is already Art Paris in the spring, as well as many other fairs devoted to design, modern art, photography.”

The doubt surrounding FIAC dates back to December 8 of last year, when RMN-Grand Palais launched an open-call competition for a new art fair to open in October 2022, followed by a new photo exhibition in November 2022 at the Grand Palais Éphémère, its temporary venue in use while the main one is being renovated for the 2024 Olympic Games.

These slots formerly belonged to FIAC and Paris Photo, both RX properties. Applicants had until December 31 to plead their cases. The deadline to apply was unusually short, causing some in the French press to question if the process had been in some way rigged.

Thrown off by the initiative, RX France filed a summons for urgent proceedings to assert their right to continue holding fairs at the Grand Palais. The request was rejected on January 14, 2022, by the urgent applications judge. According to the court, RMN-Grand Palais was entitled to explore its options, since it was not contractually bound to hosting RX France’s 2022 and 2023 fairs.

Some argue Paris+ is destined to make Paris the new international capital for contemporary art, and that it may be even more Parisian than FIAC, if that’s even possible. Coric called Paris+ “a new chapter in the Parisian cultural life. We are all ready to embrace it.”

Gaudel de Stampa, located in Paris’s 6th Arrondissement, not far from the Pont Neuf, and which had participated in every edition of FIAC, applied for Paris+ but did not make the cut. (An Art Basel representative did not respond to request for comment.)

“We were on the waiting list. We wanted to feature four emerging artists. Perhaps it was too much. Perhaps they were too emerging,” Denis Gaudel, the gallery’s founder, said, adding, “FIAC was a way for us to meet international curators, art critics, and museum directors. The bright side is that we are currently devoting a solo show to Gaia Vincensini, who was the star of our [FIAC] booth at the Grand Palais Éphémère last year.”

Saint Paul de Vence–based dealer Catherine Issert was also rejected from Paris+. “It’s a real disappointment for me and my artists. FIAC provided huge exposure to non-Parisian galleries like mine,” said Issert, who has attended almost every edition of FIAC, since 1976. She plans to try her luck again next year. Meanwhile, her gallery will be at Paris Photo in November and at Art Paris 2023 next spring. Why were FIAC alumni like her not making the cut for Paris+’s exhibitor list? Issert said, “My guess is there is not enough space for an increasing number of applicants.”

ARTnews : Paris+, Explained: Why Art Basel Arrived in Paris, and What’s Happenin

Paris+, Explained: Why Art Basel Arrived in Paris, and What’s Happening to FIAC

In January, Art Basel shocked the Parisian art world by confirming rumors that it would launch a new fair in the French capital. In the process, it knocked FIAC, which has for years reigned as the supreme fair of the French scene, out of its longtime venue and its typical October slot.

At long last, the new fair, titled Paris+, Art Basel, is finally here. It opens to VIPs on Wednesday, and will run through Sunday. Hundreds of galleries from all across the world are on tap; some of them also appeared at Frieze London just the week before.

But what, exactly, is Paris+, and what’s the deal with FIAC? Below, all your questions about the world’s newest high-profile fair, answered.

What is Paris+, par Art Basel?

Paris+, par Art Basel is the fourth event of its kind in the portfolio of Art Basel, the world’s biggest art fair. Other, related editions are regularly held in Hong Kong, Miami Beach, and the Swiss city of Basel, where its tentpole fair is held. Expect big sales and even bigger crowds, as has long been the case with Art Basel’s other editions.

Why Paris?

The launch of Art Basel’s newest fair in the French capital comes as many figures in the market turn their attention from London—long a locus of economic activity, not just in the art sector but in others too—to Paris.

Brexit, which went into effect at the beginning of 2020, was the determining factor for most. But the pandemic also aided in the shift. Dealer Marian Goodman, who has also operated a Paris space for over 25 years, said as much when she shuttered her London gallery that year.

Add to this the changing international consensus about Paris’s scene. The commonly held belief among many outside France was that the gallery infrastructure and art ecosystem in the city had withered in the mid-20th century, after New York displaced Paris as the art capital of the world, and never regained its foothold. Things are shifting once more, however, according to some. “Even if people are fearful for no reason and the build-up is in some way artificial,” dealer Thaddaeus Ropac told ARTnews in 2021, “it’s a fact now: Paris is having a renaissance.”

Does Paris have other major fairs?

Yes. FIAC, a blue-chip fair that has regularly attracted mega-galleries, has been in operation for nearly 50 years and his typically been held in the fall. (This year, it may not happen, but more on that in a bit.) Beyond that, however, there are no other art fairs of Art Basel’s scale. Still, there are interesting, cutting-edge ones for smaller galleries like the Paris Internationale, a roving fair mainly devoted to younger spaces. The Paris Internationale will coincide with Art Basel this time. There’s also Art Paris, a fair that takes place in the spring, and Paris Photo in November, also at the Grand Palais Éphémère.

So, what’s the deal with FIAC?

FIAC’s status this year remains unclear because Art Basel effectively stole its venue and its slot. FIAC regularly takes place at the Grand Palais, which is now closed for renovations; this year, it was expected to be held in October at the Grand Palais Éphémère, a temporary space.

Word that that would no longer be the case emerged toward the end of 2021, when it was rumored that Grand Palais director Chris Dercon and others there were exploring the possibility of hosting another major fair in October. Once the news was announced, the Grand Palais said it no longer had a contract with RX Global, the group that runs FIAC and Paris Photo. RX Global’s FIAC competed with Art Basel for the October but ultimately lost; it managed to receive a seven-year contract to continue Paris Photo in November. Months later, Dercon revealed that he will depart his post at the Grand Palais to lead the Fondation Cartier pour l’art contemporain.

How did FIAC respond?

Upon the announcement of Paris+, par Art Basel, FIAC tried to challenge the decision in court. The court rejected FIAC’s challenge, saying that the Grand Palais was allowed to proceed with Art Basel, given that it had not been contractually bound to host FIAC in 2022 and 2023.

Who is at the helm of Paris+?

When Art Basel announced the name of its fair, it also announced its senior leadership: Clément Delépine is its director, Virginie Aubert is its general manager, and Maxime Hourdequin is its deputy director. The fair has a seven-person selection committee. It’s composed of three French dealers—Florence Bonnefous of Air de Paris, Niklas Svennung of Galerie Chantal Crousel, and Georges-Philippe Vallois of Galerie Georges-Philippe & Nathalie Vallois—and four non-French ones. The international ones are Ellen de Bruijne in Amsterdam, Anton Kern in New York, Christophe Van de Weghe also in New York, and Daniel Buchholz, whose Galerie Buchholz has spaces in Cologne, Berlin, and New York.

What’s so important about Paris+?

Art Basel’s other editions tend to draw collectors, dealers, curators, critics, advisers, and artists from across the globe, so you can expect this one to be the same way. Additionally, Art Basel’s events regularly commands the biggest sales out of all the art fairs in the world. (It’s worth remembering, however, that many works are pre-sold and that galleries’ self-reported sales data is often hard to independently verify.) Whether the Paris fair will continue those million-dollar purchases will be a good test of the French art scene’s market worth and its ability to attract collectors willing to spend top dollar.

How much does a ticket cost?

A day pass costs €40 ($39), which may seem not inexpensive until you consider the fact that it costs nearly double that to visit Art Basel Miami Beach.

What’s with the name of Paris+, par Art Basel?

The fair’s chunky title, à la a couture house’s diffusion line, is a mouthful, to say the least, and it’s made all the more odd by the fact that none of Art Basel’s other editions have quirky names in quite the same way. (Miami Beach+, by Art Basel—or Miami Beach X Art Basel for that matter—doesn’t have the same ring to it, it must be said.) There’s no official line on why Art Basel went this route, but when the name was announced, the fair’s global director said in a statement that the Paris edition “capitalizes both on Paris’s unparalleled legacy as a cultural capital.”

Additionally, Art Basel has previously said that Paris+ would attempt to highlight “the dynamic dialogue between its cultural industries—from fashion and design to film and music,” and how contemporary art is inextricably connected to them. Though it doesn’t seem like that will manifest in the fair’s booths, its Conversations series, organized by curatorial duo Pierre-Alexandre Mateos and Charles Teyssou, will include talks like “Sex and Art along the Seine” and “Dandyism in the 21st Century?,” the latter of which will include playwright Jeremy O. Harris.

Which may mean the fair is intended to connote French locality and then some, or something like that. Très chic, or vraiment gauche? You be the judge.

WSJ : Kanye West to Buy Libertarian Social Media Platform Parler

Kanye West to Buy Libertarian Social Media Platform Parler
Parler’s parent, Parlement Technologies, says it has agreed in principle for Ye, Mr. West’s latest moniker, to buy the platform

Kanye West has agreed to buy Parler, the libertarian-leaning social network popular with conservatives.

Parler’s parent company, Parlement Technologies, said Monday it had entered into an agreement in principle for Ye, Mr. West’s latest moniker, to buy the platform.

“This deal will change the world, and change the way the world thinks about free speech,” Parler Chief Executive George Farmer said in a statement. “Ye is making a groundbreaking move into the free speech media space and will never have to fear being removed from social media again.”

Financial terms of the deal weren’t disclosed. Parlement and Mr. West didn’t immediately respond to requests for comment.

FT : SEC must clarify which NFTs will be regulated, says commissioner

SEC must clarify which NFTs will be regulated, says commissioner
Some digital art could be treated like stocks or bonds, according to Hester Peirce

US regulators have kept digital art creators and investors in the dark about which non-fungible tokens (NFTs) could qualify as securities, according to SEC commissioner Hester Peirce.

In an interview with the Financial Times, the US stock market regulator’s senior Republican member said some NFTs could be regulated like stocks or bonds. She called for the SEC to publish more information on the market, which includes the Bored Ape caricatures.

NFTs that include “governance rights” or offer investors rights to revenue streams could be captured by US securities laws, Peirce said. Tokens that are split and then sold off could also fall into this category.

As retail investors have rushed to buy digital creations by artists and other enthusiasts, “NFTs are one particular area where we could provide some guidelines,” she said. “What would be the harm in us going out with something like that?” 

Peirce, one of five SEC members, has often split with chair Gary Gensler over cryptocurrency regulation.

Gensler has taken a tough enforcement stance against the crypto market, which he has called the “wild west”. He has urged digital asset platforms to register with the regulator and deems most tokens to be securities.

The SEC chair has resisted crafting new rules for crypto markets, arguing existing laws are sufficiently clear. In May, the SEC doubled the size of its enforcement team looking at cryptocurrencies, including NFTs.

“If an NFT were a security and someone did make misrepresentations about it, then they’ve got a securities fraud kind of issue,” Peirce said.

Peirce joined the agency in 2018 after researching financial regulation at free-market think-tank Mercatus Center and serving as an SEC counsel.

Her comments come as Yuga Labs, the NFTs pioneer and creator of the well-known Bored Ape Yacht Club collection, is reportedly being probed by the SEC. The company said it was “well-known” that regulators had “sought to learn more about” online decentralisation and blockchain, adding it was “committed to fully co-operating with any inquiries along the way.” Peirce declined to comment on reports about the investigation.

NFTs, which use blockchain technology to validate the ownership and authenticity of digital artworks and items, surged in popularity last year.

But calls for more regulation have coincided with a slump in the NFT market, where trading volumes have tumbled since the beginning of the year. The average price of the Bored Ape Yacht Club NFTs has fallen nearly 20 per cent in the last 30 days, according to tracker DappRadar.

At the start of the year, Yuga was valued at $5bn in a funding round led by Andreessen Horowitz, making the start-up one of the most valuable NFT players.

As the SEC under Gensler has unveiled a flurry of proposed rule changes since last year, Peirce has questioned the need for new regulations for private funds. In February, the SEC proposed rules that would require annual audits of private funds, ban certain fees that buyout shops charge and prohibit preferential terms for certain investors.

Big, sophisticated investors have typically not needed the same SEC oversight for funds that retail investors do, she said.

Asked whether US regulators had a part to play in increasing oversight to avoid blow-ups akin to Archegos Capital Management — a private fund whose 2021 defaults on margin calls triggered losses of more than $10bn across Wall Street banks — Peirce said: “I’m just not sure that the regulator is the one that’s going to come in and prevent those problems. I think regulators tend to come in after the fact but you really need risk managers to come in before.” 

FT : Diplomacy should not be a dirty word in the Ukraine war (G.Rachman)

Diplomacy should not be a dirty word in the Ukraine war
Far from being mutually exclusive, fighting and talking need to happen at the same time
GIDEON RACHMANA

Joe Biden is one of the few world leaders who will vividly remember the Cuban missile crisis. He was a student, almost 20 years old, when the US and the Soviet Union came to the brink of nuclear war. Now, as US president, Biden has half-mused, half-warned that the world is currently closer to nuclear Armageddon than at any time since the crisis that unfolded in October 1962 — exactly 60 years ago.

There has been some tut-tutting that Biden should not be saying such things. The argument is that by publicly discussing nuclear war, the US president is playing into Vladimir Putin’s hands. Russia’s president and his army are in an increasingly desperate situation. Western intelligence services believe that the Russians are running out of ammunition and that this has only recently become apparent to Putin. By threatening to use nuclear weapons, Putin is using one of his remaining tools — trying to terrify Ukraine and its western backers into concessions.

Biden, however, is not alone in talking publicly about the nuclear threat. Volodymyr Zelenskyy has also said that Putin is psychologically preparing the Russian people for the use of nuclear weapons. As Ukraine’s leader put it, this is “very dangerous”.

With the dangers of escalation mounting — alongside the death toll — the absence of serious diplomatic efforts to end the conflict is both striking and worrying.

For some of Ukraine’s most ardent backers, even talking about diplomacy amounts to appeasement. Their argument is that the only acceptable and realistic way to end the war is for Putin to be defeated. This is fine as a statement of principle, but not hugely helpful in practice.

Russia’s options include economic pressure, indiscriminate bombing of Ukraine and sabotage of western infrastructure. But increasingly overt nuclear threats are also likely. The actual use of tactical nuclear weapons cannot be excluded. The frequency with which western leaders make reference to this and talk about possible responses — the latest to do so was France’s Emmanuel Macron — is a sign of the briefings they are getting in private.

In 1962, nuclear brinkmanship took place against the backdrop of secret diplomacy that eventually defused the Cuban missile crisis. That kind of diplomatic activity is the missing ingredient in the war in Ukraine.

The big mistake is to believe that diplomacy is an alternative to strong military support for Ukraine. On the contrary, the two approaches should go hand in hand and be complementary to each other.

Giving the Ukrainians the military help they need to advance on the battlefield puts them in the best possible position to secure their aims in an eventual peace settlement. But diplomacy should not simply be deferred to some point in the future. It needs to be going on at the same time as the fighting. And the Ukrainians have to be involved and consulted at every step.

Some western military leaders are frustrated that their efforts in Ukraine are not being supported by simultaneous diplomacy. As one senior military source puts it: “Military action is ineffective on its own. It’s only truly effective when it’s combined with economic and diplomatic efforts. And we’re not seeing enough diplomacy.”

Although some might assume there is more secret diplomacy going on than meets the eye, those who should know suggest there are few channels open with the Kremlin. Senior members of Biden’s team are believed to have spoken to their counterparts in Moscow. But the results have been less than inspiring, with the Russian side sticking to Kremlin-approved talking points.

Third-party diplomacy might be a more fruitful path. The model here could be the deal that was reached to allow Ukrainian grain to leave Black Sea ports, alleviating the global food crisis. Turkey played a crucial role in brokering those talks. Recep Tayyip Erdoğan, the Turkish president, is not everybody’s idea of a stable intermediary. But he has longstanding links in Washington, Brussels and Moscow.

The Indians are also potential interlocutors. Their failure to support resolutions condemning Russia at the UN has attracted plenty of unfavourable commentary in the west. But it may make them credible messengers in Moscow. S Jaishankar, the Indian foreign minister, is also a respected operator.

In the west, some who are thinking about an eventual peace deal lay out broad parameters. Russia must withdraw to at least where its forces were before the February 24 invasion. Ukraine must have its future as a viable state assured — with access to the sea, control of its own airspace and reliable security guarantees that are not dependent on Russian good faith. The status of Crimea will be the most difficult issue in any negotiation. But finding creative solutions to intractable problems is what high-level diplomacy is all about. We need to see more of it.