Move over, private equity: There are some new buyers in town, and they know their targets better than anyone.
Billionaire owners from Japanese tycoon Masayoshi Son to French media magnate Patrick Drahi are looking at removing their crown jewels from the spotlight of public markets. The potential moves to take their firms private mean they won’t have to deal with volatile markets and increasingly vocal shareholders.
Companies have already announced $26 billion of transactions to be taken private by a related party this year, up about 2,500% from the same period in 2019, according to data compiled by Bloomberg. Many of the deals involve ultra-rich founders who have been helped by cheap financing and the sluggish share performance of their businesses at a time when the broader market is surging.
“While we have seen more companies deciding to stay private for longer in the last couple of years, we are also witnessing a trend where public companies are looking to go private,” said Isabelle Toledano-Koutsouris, head of private capital markets for Europe, the Middle East and Africa at UBS Group AG. “This has been in the making in the last few months given the market volatility resulting from the pandemic.”
Son, the chairman of SoftBank Group Corp, is revisiting the idea of a management buyout of the Japanese conglomerate, according to people with knowledge of the matter. The deliberations reflect continued frustration at the gap between the company’s $126 billion market capitalization and the value of its sprawling investment portfolio. On Friday, Drahi offered 2.5 billion euros ($3 billion) to buy the shares he doesn’t already own in telecommunications provider Altice Europe NV.
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