14 September, 2010 by Andrew Wood
We all know that recessions have all sorts of unpleasant effects. But one thing they definitely do promote is financial innovation, as companies are forced to stop resting on their laurels and find value in unexpected places.
One species of transaction that has caught my eye in recent months is where various corporates have employed some of their core assets to help plug their pension deficits using funky structures. Diageo’s deal was splashed all over the financial press with its canny idea of monetising its stock of maturing whisky. And even Whitbread got plenty of column inches despite its budget hotels being a lot less exotic than Scotch. Now apparently, even the BBC is looking at doing something similar.
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22 February, 2010 by Andrew Wood
Now that it’s all over (including most of the shouting), it’s time to have a look at what kept financial journalists in print for most of the second half of last year. Indeed, what the Cadbury/Kraft deal eventually lacked in counter-bidders, was more than made up for in rhetoric, not just from management, but also politicians and, of course, that very famous restless investor.
Although both sides can (justifiably) claim victory, as ever, some winners are more equal than others. So the question remains. Who came out on top? There were of course any number of moving parts. But principally the answer lies in (i) which side’s views you believe on multiples and (ii) exactly how much the touted synergies were really worth.
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29 October, 2009 by Andrew Wood
Lots of people have been talking to me about debt-equity swaps, and indeed they are all the rage at the moment. In particular everyone’s interested in Four Seasons Healthcare, the UK care homes business, which has recently announced what is certainly one of the largest restructurings in the past few years. There’s certainly plenty to say.
With £1.5 billion of debt in 9 tranches (and that just the drawn ones) it was always going to be messy. Given that the acquisition was funded by, what was in effect, a two-year exploding bridge, as soon as everyone realised the credit crunch was here to stay, Four Seasons became a slow motion car crash.
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