Wall Street Gets a Sporting Chance in Tough M&A Field

Hi, it’s Fareed Sahloul in London, taking a look at a corner of the M&A market that’s fast becoming a nice little earner for Wall Street. Elsewhere, Microsoft softens stance and why it’s time for Glencore to buy big again. 

Today's top stories

• Microsoft ‘willing to address concerns’ to save megadeal
• Germany discusses €20 billion-plus takeover of TenneT grid.
• Hybe CEO says SM takeover needed for K-Pop to grow.
• Star banker’s disappearance surprises China’s state lenders.
• Teck Resources to spin off steelmaking coal unit.

If you build it...

As a born and bred Londoner it pains me to do this, but for the purposes of avoiding confusion in today’s newsletter (and this newsletter alone!) I’ll be referring to American football as ‘football’ and European football (aka proper football) as ‘soccer.’

It’s a distinction that Wall Street is having to get a little more comfortable with too because, even as global dealmaking dropped by around a third in 2022, the value of mergers and acquisitions in professional sports rose 79% to a record $18.6 billion, Bloomberg data show.

The sector was boosted by two of its biggest-ever deals with the takeovers of the Denver Broncos football team and English soccer club Chelsea FC and this year is already shaping up to be a carbon copy—both the NFL’s Washington Commanders and Premier League’s Manchester United FC are on the block with multibillion-dollar price tags. There are  of plenty more soccer deals in particular in the works; Chris Hughes has been wondering if Tottenham Hotspur FC could be next

Football and soccer team valuations have hit the stratosphere in recent years because of the rampant demand for the rights to broadcast live sports. As colleagues Gerry Smith Lucas Shaw have already noted, TV money has turned pro sports into somewhat of a recession-proof investment. 

Investors from Tulsa to  are pouring billions of dollars into clubs and leagues to grab a slice of the seemingly endless growth potential of major sporting franchises, and Wall Street, alert as ever to such opportunity, has started following the money.

Nowhere is this perhaps clearer than in soccer, which used to be the preserve of wealthy Europeans and a small group of their trusted advisers. Now it’s game time for the likes of Goldman Sachs, JPMorgan and Bank of America, which are chasing revenue from trophy deals. Read today’s piece from David Hellier to find out which bankers they’re using.

It’s not just the headline-grabbing takeovers of your Chelseas and Manchester Uniteds that’s got the big banks engaged. They’re also finding lots of work helping clubs and leagues secure money to shore up balance sheets and upgrade infrastructure—whether that’s lending themselves or advising on in which private equity firms buy slices of media rights.

For now, banks seem to be wheeling out top relationship and financing bankers and/or specialists from TMT teams to work on big soccer mandates. But as more sports owners looks to cash out and billionaires battle to buy in, don’t be surprised if a need for dedicated sports advisory desks drives one of the Street’s next big hiring trends. —Fareed Sahloul

M&A focus

Microsoft headed into a showdown with European Union antitrust watchdogs by insisting its $69 billion takeover of Activision Blizzard will “bring more competition” for gamers but pledging to show willingness to address antitrust concerns.

A takeover of SM Entertainment is crucial to solidify K-pop’s influence and make it mainstream globally, Hybe’s chief executive officer said, underscoring the BTS label’s determination to control its K-pop rival.

Teck Resources will spin off its steelmaking coal business to shareholders as the rest of the Canadian miner shifts focus to producing base metals. The news confirms reportingThomas Biesheuvel, Dinesh Nair Jacob Lorinc earlier this month.

Germany’s government is in talks to pay more than €20 billion for the local unit of power grid operator TenneT in a deal that could mark the starting point for a consolidation of the country’s power grids, write Eyk Henning, Michael Nienaber Cagan Koc

Tommaso Ebhardt, Daniele Lepido Chiara Albanese report that Italy may move to end a stalemate over the sale of Telecom Italia’s landline network by backing a single bid which would see state lender CDP joining forces with KKR, which has already submitted a preliminary offer.

SPAC wrap

Bridgetown Holdings, the US-listed SPAC backed by billionaires Peter Thiel and Richard Li, is considering a merger with financial technology firm Hyphen, write Manuel Baigorri Elffie Chew. A transaction could value the combined company at several hundred million dollars

IPO watch

Amman Mineral Internasional, which owns the second-largest copper and gold mine in Indonesia, is considering an initial public offering in Jakarta that could raise as much as $1 billion, report Baiju Kalesh, Fathiya Dahrul Elffie Chew.

Ivan Glasenberg always preferred to buy rather than build as he assembled Glencore. In two decades, he created the world’s fourth-largest mining company by buying others, from miner group Xtrata to grain trader Viterra, before his retirement. Now is the moment for another giant acquisition, writes

Who’s news

JPMorgan is letting go of about 30 investment bankers in Asia-Pacific, with a majority of them based in Greater China, as deal flows in its biggest growth market in the region struggle to rebound, writes 

The disappearance of Chinese banker Bao Fan has surprised even some of his state-owned lenders, several of which are asking his firm for more information as they assess their exposure, we report today

And lastly, Harris Williams has hired a managing director from Needham & Co. in a move by the mergers and acquisition advisory firm to build its technology practice. Xinyi Luohas the details

Best of the rest

• Sigma Lithium as Tesla weighs bid for metal miner.
• American Equity falls as Prosperity withdraws offer.
• East Money taps BofA, CICC for $1 billion Swiss GDR sale.
• HSBC bonus pool to lowest since 2020 as deals slump.
• Billionaire-run Kotak Bank taps Egon Zehnder for CEO search
• Son now has 35% of his SoftBank shares pledged as collateral.
• Ex-Binance M&A chief seeks $100 million for crypto VC fund.
• Activist pushes Airbus to drop purchase of Atos division.
• Wall Street clashes with green bankers fed up with oil agenda.
• LaunchDarkly co-founder Harbaugh replaced as CEO

Got a tip or want to send in questions? Email [email protected] Tweet/DM @bloombergdeals or any of our reporters.