Markets Edge — Capital flows, CMO moves, M&A

ISABELLA'S ISLAY Capital Markets May 23, 11:02 AM EDT

Banks & LBO Market

Banks restart $7.15B Sealed Air debt deal as rates stabilize

Investment banks are preparing a $7.15 billion debt package for the leveraged buyout of Sealed Air, signaling a return to aggressive LBO financing after years of write-downs on acquisition loans.

ReadingCapital is flooding back into leverage, not into equity. The asymmetry matters. Watch which targets move first.

WatchThe next three LBO financings will close at tighter spreads. The ones after that will be repriced upward again.

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HENRI IV Venture Intelligence May 23, 11:02 AM EDT

Billionaire Family Offices

Business Times ↗

Ultra-high-net-worth families fueling $20B private equity buyout wave

Individuals and families worth more than $150 billion are increasingly providing capital for private equity buyouts, driving a resurgence in LBO activity as institutional PE returns compress.

ReadingPE dry powder is shifting from institutional to ultra-wealthy. Dealflow will follow the capital.

WatchThe next wave of sponsors to announce primary funds will have family office anchors. Watch for those announcements.

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MACALLAN 1926 Executive Appointments May 23, 11:02 AM EDT

Starboard Value

NBC Dallas ↗

Starboard amasses Autodesk stake, weighs litigation over probe delay

Starboard Value, the activist fund run by Jeff Smith, has taken a sizable stake in Autodesk and has engaged with the company's board, while also considering legal action over delayed disclosure of an internal probe.

ReadingLate disclosure plus activist scrutiny equals acceleration. Watch for board announcements within 60 days.

WatchAutodesk will announce either a CFO change or a strategic review. Possibly both.

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LOUIS XIII Capital Markets May 23, 11:02 AM EDT

Starboard Value / Dynatrace

Yahoo Finance ↗

Starboard takes top-5 stake in Dynatrace, pushes buyback program

Starboard Value has become a top-5 shareholder in AI software company Dynatrace and is pushing for share buybacks as the stock has declined more than 15% this year.

ReadingBuyback pressure at software companies with depressed valuations is now routine. The real question is whether the team can execute faster than the market reprices.

WatchWatch Q3 guidance. If it holds, the stock rebounds. If it misses, the proxy fight escalates.

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PAPPY 23 Brand Intelligence May 23, 11:02 AM EDT

Deutsche Boerse

Global Banking and Finance ↗

TCI takes 5.15% stake in Deutsche Boerse; shares rise 2.6%

TCI Fund Management has taken a 5.15% stake in Deutsche Boerse, causing the German exchange operator's shares to rise 2.6% on the news.

ReadingExchange operators trade on regulatory perception and revenue diversification. TCI's arrival suggests one or both are undervalued.

WatchDeutsche Boerse will announce either a cost initiative or a strategic acquisition within 90 days. The stock has told TCI which one it prefers.

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JOHNNIE BLUE Luxury Sector May 23, 11:02 AM EDT

Auction Houses / Asia Expansion

The Star Malaysia ↗

Christie's and Sotheby's open Hong Kong flagships to capture Greater China growth

Major auction houses Christie's and Sotheby's are opening new Hong Kong spaces, with Christie's taking four floors of the Henderson building and Sotheby's expanding operations to serve growth in Greater China.

ReadingAsia's ultra-wealthy are no longer selling into London and New York price discovery. They are making it at home.

WatchThe next two years will show which houses own the greater China supply chain. Sotheby's has the Hong Kong real estate. Christie's has the floor count. Watch the lot flow.

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WELL POUR M&A Intelligence May 23, 11:02 AM EDT

Toyota / TICO Buyout

Asahi Shimbun ↗

Activist investors challenge Toyota TICO buyout as opaque and governance-deficient

A U.S.-based activist fund holding 6.7% of TICO has attacked Toyota's buyout bid as opaque and falling short of basic governance standards, turning the transaction into a contested battleground.

ReadingActivist pressure on buyouts rarely stops the deal. It usually raises the price. Watch for a revised offer within 45 days.

WatchThe next regulatory filing will show if the activist has recruited other shareholders. That determines whether this is a speed bump or a roadblock.

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