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M&A insights: Goldman bullish on 2023 and BREIT gets $4 billion

Here is a look at some significant M&A news in the last two weeks:

1. Cineworld desperately seeks buyers for its assets:

The second largest cinema company in the world, Cineworld, is set to launch its formal sales process. Having filed for bankruptcy in October, it has undergone a financial restructuring due to its debt burden from acquiring Regal Cinemas in 2017, compounded by forced covid closures. The most hopeful of buyers is Cineworld’s biggest rival, AMC, who claimed to have held talks with some lenders. However, Cineworld CEO Mooky Gredinger has denied any AMC talks and claimed that “there is no guarantee of recovery” for current equity owners.

2. Struggling UK funeral provider set for £262mn takeover

Dignity PLC, one of the largest UK funeral providers is expected to be taken over by a Consortium led by Direct Line owner, Sir Peter Wood. From its peak in 2016 at £20, Dignity’s share price has fallen miserably to £4.35 as of the new year. The prospective buyers hope to mitigate their current operational difficulties that have arisen from low profit socially distanced funerals during Covid and high cost cremations caused by the energy crisis.

3. JPMorgan dominates Canadian M&A market share:

For the first time since 2017, JPMorgan has become Canada’s leading advisor in mergers and acquisitions, after advising on 31 announced deals for a combined value of $73.6bn, according to Bloomberg. The New York based bank was able to beat fierce competition from RBC ($67.7bn) and Goldman Sachs (66.9bn). This outperformance took hold, despite the retreat in deal volumes caused by high borrowing costs and recession fears.

4. Goldman Sachs are bullish on recovery forecast for M&A in late 2023

After global M&A values slumped 36% to $3.78 trillion in 2022, from a record $5.91 trillion in 2021, many banks have cut jobs and slashed bonuses due to slowing activity. However, Goldman Global Markets Executive, Dan Dees, confidently said that periods of volatility create opportunity. This confidence has arisen from his belief that once economic uncertainty fades, there will be a quick resurgence in deals as many companies have been patiently waiting to diversify their businesses and spend their profits.

5. University of California invests $4billion in BlackStone REIT

The unlisted BlackStone real estate income trust, or BREIT as it is more commonly known, secured this investment amidst massive investor redemptions. BlackStone exercised their right to limit redemptions in the $69 billion BREIT in November as the requests for redemptions exceeded 5% of the fund's net asset value. The private equity group has offered the University of California a $1billion backstop to their returns in the fund.

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