Blackstone, CVC Join Payments-Sector Deal Frenzy With $3.8 Billion Paysafe Bid
U.K.-based takeover target has specialized in online gaming, gambling sectors
Blackstone Group BX +0.88% LP and CVC Capital Partners have teamed up on a $3.8 billion bid for U.K. online payments processor Paysafe Group PAYS 6.83% PLC, joining a wave of consolidation in the payments sector.
The bid, if successful, comes as businesses and consumers are increasingly carrying out transactions online using smartphones and other mobile devices. The trend is expected to drive demand for the services of Paysafe and its competitors that can process online payments securely.
At the same time, the payment-processing sector is under pressure to consolidate as a way to cut costs amid greater regulatory scrutiny and rising competition that risks squeezing fees.
Earlier this month, Vantiv Inc. VNTV +0.09% agreed to acquire the U.K.’s Worldpay Group WPG 0.40% PLC for $10 billion in a deal that would create a trans-Atlantic payments giant with a combined market value exceeding $20 billion. Nets AS, a Denmark-based payments processor said it is entertaining potential takeover offers.
Buyout firms are also aiming to take advantage of the sector’s appetite for deal-making. This week Nordic Capital Ltd., a Jersey-based private-equity firm agreed to sell Stockholm-based payment-services firm Bambora for €1.5 billion ($1.75 billion) to French payment-technologies company Ingenico Group SA.
The Blackstone-CVC consortium first approached Paysafe in May, eventually offering £5.90 ($7.67) a share. That represents about a 9% premium to the Isle of Man-based company’s closing price Thursday, though the stock has risen steadily since May amid expectations of bid given the spate of deal-making in the sector. Paysafe said that the bid represents a 34% premium to its volume-weighted average price for the six months to end-June.In London trading around noon Friday, Paysafe was up 7% at £5.80.
Paysafe said its largest shareholder Old Mutual Global Investors U.K. Ltd., with about a 10% stake, has signed a nonbinding letter of intent to support the deal.
The acquisition of Paysafe would give Blackstone and CVC significant exposure to the online gambling and gaming sectors. A big part of the company’s business is its digital-wallet technology, which allows users to make bets online without tapping money from their bank accounts. That business generated revenue of $311 million for Paysafe last year, the second-biggest contributor to its overall revenue after payment-processing services. Revenue totaled $1.0 billion, up from $613.4 million in the year before.
Blackstone and CVC, under U.K. takeover rules, have until Aug. 18 to make a firm bid for Paysafe.
MPSYF US
Siemens, Bombardier could unveil USD 17bn rail merger early August - report
http://www.reuters.com/article/us-siemens-bombardier-transportation-idUSKBN1A61L9
Talks between German industrial conglomerate Siemens [SIE:ETR] and Montreal, Quebec-based Bombardier [BBDb:TO] to merge their railway operations are in the last stages, according to a newswire report.
Reuters, citing sources, wrote on Friday that a deal could be made public in early August.
Under the deal, the groups would establish two joint ventures - one for signalling and the other for rolling stock, the sources said.
The German company's supervisory board will look at the matter on 2 August, while Bombardier's board will review it next week, they added.
As reported by German newspaper Handelsblatt on 26 June, the companies have been in talks for months. The businesses being discussed have combined revenues of EUR 15bn (USD 17.3bn) and would provide a counterweight to CRRC, the EUR 32bn-revenue Chinese group that is making inroads in the Middle East and Southeast Asia, last month's report said.
Both companies have offered assurances on jobs to win the backing of German trade unions, Reuters reported.
ANDURAND COMMODITIES FUND
May/June 2017
Market and Portfolio Commentary:
The Fund lost -2.2% net during the month of May. The loss was due to the portfolio’s long crude exposure.
The price action in the oil markets has been ferocious and unforgiving as of late.
Our long term supply and demand forecast points toward a growing oil deficit even when assuming large oil demand displacement due to technology and efficiency gains. We believe US shale will not be able to bridge the gap and certainly not at current forward prices. Our intention is to remain patient and focus on active management. This will include periods of risk reduction when the price action is confusing and choppy. History has taught us that such periods do not last forever. The short term objective is to be defensive against further losses and remain focused and engaged to participate once the storm has passed.
Gapping up
In reaction to strong earnings/guidance:
- ATHN +4.7%, COF +3.8%, ETFC +2.5%, CTAS +2.1%, PBCT +2%, MCO +1.6%, SLB +1.5%, FITB +1.4%, HBAN +1.4%, V +1.3%, VOD +1.3%, CFG +1.2%, SYF +0.6%, MSFT +0.4%
M&A news:
- ASB +4% (Associated Banc-Corp to acquire Bank Mutual in all stock transaction is valued at approximately $482 mln)
Other news:
- APVO +17.8% (Aptevo Therapeutics and Alligator Bioscience to co-develop novel bispecific antibody for tumor-directed immunotherapy)
- PLUG +15.6% (announces a new collaborative agreement with Walmart (WMT); Walmart granted right to purchase Plug Power equity, vesting based on future business)
- AEZS +14.3% (names new CEO, forms special committee to consider and evaluate various strategic and financing alternatives)
- BCLI +14.1% (receives $16 mln grant from California Institute for Regenerative Medicine)
- ZN +9.4% (continues active drilling operations at its Megiddo-Jezreel #1 well in Israel; successfully raises sufficient funds to drill and test MJ #1 well to proposed total depth), SGLB +7.8% (announces publication of US patent application for Additive Manufacturing Processes)
- ANW +2.9% (appoints Jonathan Mcilroy as President, effective immediately )
- BZUN +2.8% (CEO featured on Mad Money)
- KEY +1.6% (CEO featured on Mad Money)
Analyst comments:
- TXMD +2.6% (initiated with a Buy at Deutsche Bank)
- SPSC +0.5% (initiated with a Outperform at Oppenheimer)
Gapping down
In reaction to disappointing earnings/guidance:
- BMI -9%, SMCI -8.8%, MXIM -6%, (also announces new share repurchase authorization $1 bln, raises dividend), NCR -5.8%, MANH -5.1%, EBAY -4.5%, SWKS -3%, DFRG -2.9%, CL -2.3%, GE -0.8%
Other news:
- SBLK -4.9% ( files for $1 bln mixed securities shelf offering and approx 39 mln common share offering by Selling Shareholders)
- SBLK -4.9% (ticking lower; files for $1 bln mixed securities shelf offering and approx 39 mln common share offering by Selling Shareholders)
- VRAY -3.9% (continued weakness)
- NAT -3.5% (reduces quarterly dividend to $0.15/share from $0.20/share)
- KEM -3.4% ( files ~8.416 mln share common stock offering by a selling security holder)
- CVM -2.5% (filed for ~1.787 mln share common stock offering by selling shareholders before the close)
- ANET -1.2% (attributed to unfavorable ruling for import ban against Cisco)
- CCI -1% (prices 36.5 mln common shares at $96.00/share)
Analyst comments:
- FGEN -2.4% (downgraded to Neutral from Buy at Goldman)
- FIZZ -2.3% (downgraded to Underperform from Neutral at Credit Suisse)
- RH -1.1% (downgraded to Hold from Buy at Deutsche Bank)
- PII -0.8% (downgraded to Neutral at Robert W. Baird)
- PAYX -0.8% (downgraded to Mkt Perform from Outperform at William Blair)
- JNJ -0.6% (downgraded to Sell from Neutral at BTIG Research)
Early premarket gappersGapping up:
- BCLI +21.2%, APVO +17.8%, AEZS +16.8%, PLUG +13.2%, SGLB +7.8%, ZN +6.3%, ATHN +5.7%, COF +4.3%, ASB +4%, ANW +2.9%, ETFC +2.5%, CLXT +2.2%, CTAS +2.1%, PBCT +2%, V +1.6%, VOD +1.5%, CFG +1.2%, FITB +1.2%, SRPT +1.1%, KEY +1%, SLB +0.9%, MCO +0.7%, MSFT +0.6%, SYF +0.6%
Gapping down:
- BMI -9%, SMCI -8.8%, MXIM -6%, NCR -5.8%, MANH -5.1%, EBAY -4.9%, SVU -4.1%, VRAY -3.6%, KEM -3.4%, FGEN -3.4%, SBLK -3.2%, SBLK -3.2%, CL -2.9%, DFRG -2.6%, CVM -2.5%, SWKS -2.5%, CCI -1.3%, ANET -1.2%, SKX -1.1%