Tag Archives: Investing/Securities

KKR Purchases New Zealand Premium Pet Food Business | Instant News


WELLINGTON, New Zealand – KKR & Co. has purchased New Zealand’s premium pet food company, Natural Pet Food Group, and will support its international expansion as affluent pet owners increasingly seek “high-quality, low-carb” food for their diets. animal.

The acquisition, whose financial terms were not disclosed, was funded by KKR Asian Fund IV, the global investment firm said on Monday.

Natural…

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New Zealand Rugby is getting closer and closer to selling shares to Silver Lake | Instant News


Stakeholders in New Zealand Rugby, the island’s Pacific island game governing body, have voted unanimously to sell a 12.5% ​​stake in its commercial rights to US private equity firm Silver Lake.

The vote in favor of the NZ $ 387 million investment came despite opposition from the New Zealand Rugby Players Association, including players on the country’s most famous team, the All Blacks.

Players have expressed concern that the game could become too commercialized if the proposed private equity investment was made: the fear other sports players also came up with a voice in the last few months.

Without player association ratification, the deal could be canceled. In a statement, the NZR said it would continue talks over the coming weeks with the NZR in an effort to find a solution.

According to New Zealand Rugby, the deal will bring important investment to grassroots rugby and technology and help to keep New Zealand players from moving to clubs in Europe and Japan.

Silver Lake’s stock portfolio in clubs and sporting events includes the mixed martial arts Ultimate Fighting Championship and Manchester City football club in the English Premier League.

To contact the author of this story with feedback or news, email Mark Latham

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Convertible lending and private equity: growth opportunities in Germany | Instant News


Classic convertible loans, a popular financing instrument in the venture capital sector, can also be an investment option for private equity investors at a time when attractive equity investments in Germany are very competitive. In particular, in the context of growth investment, which is often akin to venture capital conditions, convertible loans may be a better alternative when further capitalization is sought alongside the main investor (private equity).

From a venture capital perspective, convertible loans are very flexible financing instruments that are often available on short notice and can usually be completed without much effort. Convertible loans can be characterized by a loan component and a conversion component and are usually found in the early stages of the company’s existence, when the parties were still difficult to evaluate their inception.

However, convertible loans are increasingly being used by private equity investors to develop growing investment opportunities. The terms and conditions of the convertible loan must then be adjusted accordingly. This provides different scenarios for investors to consider, such as a leading private equity investor looking for additional investors. In this case, the lead investor will have a concrete idea of ​​their investment that will allow them to let other, more prudent private equity investors make more senior investments for them, allowing for predictable and attractive returns based on a fixed interest rate, plus options. equity investment later. This is even more so if private equity investors replace corporate debt financing, that is often an alternative route to get further funding.

Another example might be a situation where a private equity investor wants to postpone an equity investment decision while also being willing to invest in a more senior instrument with subsequent options for conversion to equity at an attractive conversion rate (via a predetermined internal rate of return).

German banking supervisory regulations, for credit transaction licenses, must be observed for any convertible loan, regardless of whether the loan is provided by venture capitalists or private equity investors. Although convertible bonds do not require such a license, parties often find this alternative too expensive and inflexible.

Such regulatory permit requirements can be avoided if investors have control over the company from a corporate perspective. Such control can be based, for example, on voting agreements or on transfers of share securities. In the latter process, the borrower’s shares would become collateral for the lender and would be sufficient to meet regulatory control requirements, as opposed to a single share pledge, which would only provide collateral but no control.

Security transfer
Of course, such control is not often desired by the parties, but there may be situations where shareholders believe in the growth of their business and are therefore willing to accept the transfer of such guarantees to enable the company’s next step in growth.

With regards to adaptation of convertible loans, private equity investors want to retain as much freedom as possible. In addition, investors will expect to be able to convert at any time, to exclude discontinuation by the company and, even in the event of a major investor’s exit, to be paid or still allowed to convert. Unlike in the case of venture capital, the company’s conversion or valuation is not based on the next round of financing (including potential discount or valuation limits) but on the pre-agreed internal rate of return of the primary investor’s equity investment or, alternatively, the pre-approved internal rate of return of instruments that can be converted in case of conversion.

In addition, private equity investors will request certain veto rights that can be supported by small equity participation, allowing appropriate minority protection rights in shareholder meetings for investors. Finally, especially in the case of foreign private equity investors, a common “gross tax” on financing can be included in the documentation.

Interest in the growth sector in Germany is growing and will continue to grow. Private equity investors are increasingly investing in the growth sector in part because of high competition for mature companies and attractive business models. Convertible instruments are a good vehicle for investing in this area which is characterized by a higher risk of reducing structural exposure.

Foot on the door
Throughout 2021, we expect private equity investors to use the convertible loan situation as an additional option to enter attractive target company doors even if the current situation / valuation does not (yet) allow direct equity investment.

From a corporate perspective, we feel this arrangement could also be a good option for avoiding debt financing by banks at an early stage, which usually provides for a stricter regime in terms of agreements.

Dr. Nikolaus von Jacobs is a partner and Matthias Weingut is a partner focused on private equity as well as mergers and acquisitions at law firm McDermott Will & Emery in Munich.

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The gap between German bond yields and the US Treasury is narrowing due to the acceleration of the EU vaccine rollout | Instant News


EU countries can finally make progress to contain the COVID-19 pandemic, raising hopes the bloc’s economic recovery may be on its way to catching up with the US.

A series of well-publicized barriers to vaccine purchasing and distribution, with several launch programs suspended and restarted, hit EU countries, but the sell-off in European and German debt suggests investors may be taking a more optimistic view of the eurozone’s efforts to soften the pandemic. . distribution.

10 year yield on German government bonds
BX: TMBMKDE-10Y,

or bunds, were at negative 0.24% on Monday, equaling the highest level since last January, and up from negative 0.61% earlier in the year. The price of debt moves in the opposite direction to the yield.

At the last check on Wednesday, Germany’s benchmark maturity was at negative 0.26%, leaving the gap between the 10-year gains in US yields.
BX: TMUBMUSD10Y

and his German counterpart with the equivalent of 1.84 percentage points.

Two weeks ago, the gap was more than 2 percentage points amid concerns the distribution of the US vaccine could easily outpace the EU’s own efforts to inject the continent’s population.

Dollar
DXY,
-0.13%

also took a hit on Monday as prospects for the eurozone to catch up with the US vaccination program supported the euro
USDEUR,
-0.01
,
rose 0.2% against the greenback this week.

The narrowing yield gap between the US and Germany is due to increased vaccination rates in Germany and France, with about 20% of Germans having received the vaccine so far, and 18% of the EU population vaccinated, while around 40% of Americans have received a single dose.

“The vaccination campaign accelerated significantly during the second quarter,” he said German Health Minister Jens Spahn, after vaccine makers BioNTech and Moderna increased the doses they will give to the EU.

“EU authorities are increasingly convinced they have solved the problem of vaccine supply going forward,” said Krishna Guha of ISI Evercore.

Some of these broader beliefs have also supported business and consumer expectations of recovery, raising speculation that the ECB could begin to halt its pandemic asset purchase program in the second half of 2021.

But it is unclear whether the improvement in economic sentiment will be reflected in the European Central Bank meeting on Thursday, with analysts pointing to the June meeting as a possible date for the direction of future bond purchases.

“The risk is that even the ECB this weekend can admit it [the vaccine rollout] during his press conference, although we think the central bank’s aim should be more to bridge the time to the June meeting, when the pace of purchasing its assets for revaluation, without causing too many obstacles, ”said Antoine Bouvet, senior assessing strategist at ING, in a note Tuesday.

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Blackstone Offer to Buy Australian Crown Resorts | Instant News


SYDNEY—

Blackstone Group Inc.

BX -0.77%

made a takeover bid for an Australian casino operator

Crown Resort Ltd.

DOG 18.46%

worth $ 6 billion, as regulators investigated Crown’s business practices and threatened to revoke its casino license.

The US investment firm has offered 11.85 Australian dollars, or the equivalent of $ 9.15, a stake for Crown, a 20% premium over last week’s closing share price, Crown said Monday. The deal is dependent on Australian gambling regulators allowing Blackstone to own and operate Crown casinos in Sydney, Melbourne and Perth.

Crown said its board had not yet decided whether to support the deal and would begin assessing Blackstone’s offer. Blackstone, which already owns nearly 10% of Crown’s shares, confirmed it had submitted the proposal. Blackstone already has real estate assets in Australia and a trail of play in other countries, including the casino and resort Cosmopolitan in Las Vegas.

The offer came at a critical time for Crown. Last month, an investigation by gambling regulators in the state of New South Wales ruled Crown was unsuitable for operating a new casino on Sydney’s waterfront.

Crown has spent an estimated $ 1.6 billion on the gleaming new skyscrapers that include hotel rooms and residences apart from a VIP-only casino. Officials in the states of Victoria and Western Australia, where Crown also operates casinos, have opened their own investigations into whether Crown remains fit to operate casinos there.

View of the Sydney Crown resort (center). Crown has spent about $ 1.6 billion on the new skyscraper, but hasn’t convinced regulators that it can run a casino there.


Photo:

Brent Lewin / Bloomberg News

A 751-page report from New South Wales, based on 60 days of public hearings that included Crown executives, found that Crown was neglecting the welfare of its employees in China by pursuing lucrative highrollers – ultimately leading to the arrest of Crown employees in China for gambling-related crimes.

Bank accounts at Crown subsidiaries are used to launder money, and Crown is working improperly with junkyard operators in Asia to bring gamblers to Australia, the report also found. Regulators began investigating Crown after questionable business matters were reported in the local media.

Crown has previously taken steps to address some of the issues raised by the New South Wales report, such as cutting off all junkets and creating a compliance and financial crime department. The report said Crown could implement certain changes to improve its suitability, and Crown said it was in discussions with regulators on the matter.

Blackstone’s bid gives Crown’s major shareholder, Australian billionaire James Packer, a chance to get out of business amid regulatory uncertainty. The New South Wales report criticized Mr. Packer, who previously sat on Crown’s board of directors but no longer does so, having too much control over the company. After the report, several members of the Crown board who had ties to Mr. Packer resigned.

Mr Packer controls about 37% of Crown’s shares through his investment company Consolidated Press Holdings. A CPH spokesman declined to comment on Blackstone’s offer.

As well as regulatory concerns, Crown’s business has taken a big hit from the coronavirus pandemic. International travel restrictions have slowed the flow of top players to Australian casinos from abroad, and have had to close casinos at various points due to local lockdowns. The company said revenue fell 62% in the six months to December, and reported a loss of half of about $ 93 million.

Crown, which operates private gaming clubs in London apart from Australian casinos, once had a wider international footprint and sought to expand further. But it pulled back from its global ambitions after the arrest of its employees in China in late 2016, and sold a stake in a Macau casino operator and pulled out of the Las Vegas casino project.

The US company has previously expressed interest in Crown. In 2019,

Wynn Resorts Ltd.

, made an indicative takeover offer that later valued Crown at $ 7.1 billion, but Wynn dropped the discussion after saying Crown had disclosed their talks prematurely.

Write to Mike Cherney at [email protected]

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Appears in the print issue of March 22, 2021 as ‘Blackstone Seeks Australian Casino.’

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