One scoop to start: Mubadala Capital’s $3bn bid for Fortress Investment Group, a powerhouse investor in credit markets with a large bet on US rail infrastructure, has cleared a major regulatory hurdle after the parties agreed to important concessions.
And a Todd Boehly bid to start: US financier Todd Boehly’s investment house is in advanced talks to buy European private credit firm Hayfin Capital Management, said people familiar with the matter.
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In today’s newsletter:
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DD’s report from Milken
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Anglo American’s right price
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Spain’s BBVA goes hostile
Milken 2024: Oil money, DEI and Drexel’s diaspora
Getting a well-publicised soundbite at the Milken Institute Global Conference in Beverly Hills can be an expensive proposition.
The conference, which has become a mainstay on the schedules of executives across Wall Street’s private capital food chain, can charge well over $100,000 for sponsors who want their leaders onstage to offer wisdom on financial markets.
But much of the activity at the Beverly Hilton, once home to Milken’s infamous “Predator’s Ball”, is offstage, or at least out of the public eye.
This year’s conference started early at 7am Monday morning with a private fireside conversation between Carlyle Group co-founder David Rubenstein and Bill Ackman, the founder of Pershing Square Capital Management. The hedge fund billionaire has been ubiquitous in the public consciousness this year and is working to raise tens of billions for a new fund, the FT reported in February.
Ackman made waves at a second invite-only panel later on as he made a stump speech about how diversity, equity and inclusion has been hijacked on college campuses amid protests over the death toll of Palestinians in Gaza during Israel’s war against Hamas.
Ackman absorbed testy exchanges from a person in the audience in what was a vigorous debate. Raymond McGuire, the president of Lazard, brought the session to an orderly conclusion with political finesse, according to a person who attended.
Political critiques have always filtered through Milken from speakers such as Bari Weiss and Ken Griffin, but the conference is mostly devoted to big money — with philanthropic and cultural interludes.
To that end, the place to be at Milken was on the roof of the Peninsula Hotel between 5pm and 7pm on Tuesday evening, at a poolside private party hosted by Abu Dhabi Investment Council, the investment arm of the government of Abu Dhabi.
A who’s who of private equity and private credit billionaires were onsite to charm what has become a vital pool of capital.
Middle Eastern funds in attendance such as ADIC, Mubadala, Lunate Capital and others have become a power centre at the conference as oil-rich states tap Wall Street to diversify their economies. The cash pouring out of their coffers has kept the private capital ecosystem in motion amid two years of stagnant activity caused by higher interest rates.
The conference is also a time when the diaspora of Michael Milken’s failed investment bank Drexel Burnham & Lambert reconvene and pay homage to the “junk bond king”, whose popularisation of leveraged finance made an entire generation of financial billionaires.
Spotted in attendance this year were former Drexel bankers Leon Black, Marc Rowan and Richard Handler. So too was Drexel’s most famous client Rupert Murdoch, who built a right-wing media empire in part using its financing.
Money and debate are only part of Milken. There are also many great parties. This year’s highlight hosted by Leonard Green managing partner Jonathan Sokoloff featured former Manchester United superstar David Beckham and Jamie Salter, the founder of private equity roll-up Authentic Brands.
How poisonous is Anglo American’s ‘poison pill’, really?
Now that some of the dust has settled on BHP’s unsolicited offer for mining company Anglo American, shareholders are starting to take a serious look at the proposal. And they might be open to a deal — at the right price.
While South African officials have raised concerns BHP’s £30bn-plus proposal for the mining company could be bad for the continent’s most industrialised economy, some of the company’s most crucial shareholders in the country seem to be more receptive.
But, of course, they’re not going to roll over easily. The investors, which collectively hold more than 15 per cent of the company, told the FT that BHP would need to sweeten the bid — but they’re not categorically opposed to an acquisition by the Australian group.
Dawid Heyl, a fund manager at Ninety One, which owns 2.1 per cent of Anglo, said a deal along the lines proposed could be struck, but the price would have to be “substantially” higher.
Investors have long considered South Africa to be somewhat of a “poison pill” for the mining company. The company’s largest investor is state entity Public Investment Corporation. With more than a century of history in the country, it’s been well known that Anglo’s birthplace isn’t likely to be welcoming of any unsolicited takeover.
Some government officials have been vocal critics. Mining minister Gwede Mantashe said he was personally “negative” on the deal, which would spin off two South African subsidiaries.
For BHP, the clock’s ticking. It has until May 22 to make its next move. Anglo’s successfully fended off takeover offers before, but if it wants to survive this latest round, it needs a plan to create value from the troubled mining house, Lex writes.
In the meantime, all eyes will be on Miami, where Bank of America is hosting a global metals, mining and steel conference next week. With practically every mining banker and adviser at the 1 Hotel in South Beach, it could very well be a ripe time for BHP to throw out another number.
A Spanish bank goes hostile
It’s not every day you see a hostile banking deal.
But Spain’s BBVA has gone there in its pursuit of a €12bn acquisition for domestic rival Banco Sabadell, ruffling plenty of feathers in the process.
Backing up: earlier this month BBVA — which has a market capitalisation of roughly €60bn — unveiled a surprise bid for its local rival Sabadell (which owns the UK’s TSB) at a 30 per cent premium.
That bid was roundly rejected by Sabadell’s board days later, which argued the proposed deal “significantly undervalues” its future prospects.
However, this is BBVA’s second attempt at acquiring Sabadell in less than four years, and they are not backing off.
On Thursday, BBVA launched its tender offer and took its all-share proposal directly to Sabadell shareholders.
The bank is sticking to the terms that it had already seen rejected by Sabadell’s board, and has insisted there is “no room” to sweeten its proposal in a private email that was then released by Sabadell in an unusual move.
The decision to appeal directly to shareholders marks an escalation in what was already a fractious stand-off between the banks.
The deal would bring together the third- and fourth-largest banks in the Spanish market, creating a lender with the biggest domestic balance sheet.
For BBVA, the logic of a deal would be to increase its exposure in Spain. While most of its assets are in the country, nearly half of its income last year came from Mexico — where it operates Bancomer, the country’s largest lender.
However, along with opposition from Sabadell, the Spanish government has taken umbrage at the decision to go hostile.
“The government rejects BBVA’s decision to launch a hostile takeover bid for Sabadell, both in form and in substance,” said a government official, warning of “potentially damaging effects on the Spanish financial system”.
While the challenges keep increasing, BBVA chair Carlos Torres says one of his attributes is his ability to stay calm. “There should be no regret that we attempted this even if it fails,” he told the FT’s Barney Jopson in an interview.
Job moves
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Charles Martin has joined French law firm Darrois Villey Maillot Brochier as a senior adviser based in London. Martin previously served as senior partner at law firm Macfarlanes, where he worked for 40 years. He is also a senior adviser at Rothschild & Co.
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JPMorgan has made a series of appointments in its infrastructure and strategic investors group. Tim Chow will lead Asia-Pacific financial sponsors, and Sid Punshi and Isik Guven Toktamis are heading Emea sponsors, while Fariah Feinstein and Adam Schwarzschild co-head North America sponsors. Milena Grayde and Cory Winig are co-heads of the family coverage group. Frank Puleo is vice-chair.
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Lazard has hired Michele Colocci as vice-chair for investment banking and managing director of healthcare. He most recently worked for Morgan Stanley.
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Bain Capital has hired Angelo Rufino as head of special situations in North America and corporate special situations in Europe. He most recently worked at Brookfield Asset Management as global head and chief investment officer of the firm’s special investments business.
Smart reads
Binance’s investigator The world’s largest digital currency exchange launched an internal investigation when it was accused of favouring profits over protecting customers. It didn’t last long, The Wall Street Journal reports.
When to quit Chief executives often have a hard time retiring, The New York Times writes. What does that do to a company — and the economy?
‘Money loser’ Data centres have snagged hundreds of millions in tax breaks. Amid the AI boom, US lawmakers are starting to question whether they made a bad deal, Bloomberg reports.
News round-up
T-Mobile, Verizon in talks to carve up US cellular (WSJ)
Activist wins three board seats at US railroad Norfolk Southern but fails to oust CEO (FT)
Blackstone in pole position over $1.6bn Hipgnosis takeover (FT)
Europe must close productivity gap with US to lift growth, says Riksbank chief (FT)
Nippon Steel predicts ‘calmer discussions’ with unions after US presidential election (FT)
Due Diligence is written by Arash Massoudi, Ivan Levingston, Ortenca Aliaj, William Louch and Robert Smith in London, James Fontanella-Khan, Sujeet Indap, Eric Platt, Antoine Gara, Amelia Pollard and Maria Heeter in New York, Kaye Wiggins in Hong Kong, George Hammond and Tabby Kinder in San Francisco, and Javier Espinoza in Brussels. Please send feedback to due.diligence@ft.com
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