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Each week, we report instances where the money junky hedge funds, private equity groups and the already big companies swallow another piece of the global economy. Here are some more of what the BIGS have been gobbling up and how the Bigs keep getting bigger and the rich keep getting richer.
BAIN CAPITAL MULLS TOSHIBA TAKEOVER
Boston-based Bain Capital is considering making a takeover bid for Toshiba Corp., the Japanese electronics and industrial conglomerate.
Bain wants to hold “careful and sincere” discussions with banks, Toshiba’s management, and the Japanese government about the possible sale, it said.
The Bain prospect appeared a week after Toshiba’s management failed to win shareholders’ support for its plan to break the company into two parts.
Sixty percent of stockholders voted down the idea, led by foreign shareholders who suggested that the company remain whole but sell itself to a private equity firm.
Effissimo Capital Management, a Singapore asset manager that is Toshiba’s biggest stockholder with 10 percent of the company’s shares, said it would sell its stake to Bain if the deal moves forward.
Toshiba, founded in 1875, builds power systems, elevators, and is involved in Japan’s national security industry, making the idea of a foreign takeover particularly sensitive.
Bain led a group of private investors that bought the chip maker now called Kioxia Holdings from Toshiba in 2018 for $18 billion.
PRIVATE EQUITY FIRMS BUY NIELSEN RATINGS SERVICE
A group of private equity companies led by Brookfield Asset Management and Elliott Management Corp. has agreed to buy Nielsen Holdings, the company that operates the iconic television ratings service, for $28 a share, valuing the deal at about $16 billion in cash and debt.
The price places about a 60-percent premium on Nielsen’s share price before The Wall Street Journal broke news earlier this month that a deal was pending.
WindAcre Partnership, an equity firm that owns about 24 percent of Nielsen, has said it would buy enough shares to block the sale but had taken no action as of 30 March.
Nielsen has been losing its ability to measure the size of audiences for television programs since streaming services have become more popular.
MACQUARIE BUYS CONTROL OF U.K. GAS DISTRIBUTOR
Australia-based Macquarie Group has bought a 60-percent controlling interest in National Grid’s British gas distribution system, paying €4.2 billion in partnership with British Columbia Investment, one of Canada’s largest private equity firms.
The deal includes about €3.8 billion in debt.
With the purchase, Macquarie, which the Financial Times calls “the world’s largest infrastructure investor,” takes control of 7,660 kilometers—about 4,600 miles—of gas pipelines and of the company that controls gas distribution in the U.K.
The partners also have an option to buy the other 40 percent of National Grid.
The deal’s price implies National Grid’s value is €9.6 billion, a 26-percent premium to the value estimated by British regulators.
Macquarie has pledged a “significant” investment in upgrading the gas distribution network as part of its transition to hydrogen fuel as an alternative to imported natural gas.
About 70 percent of the iron pipes in Britain’s natural gas network already have been replaced by plastic pipes that are able to handle hydrogen gas, the FT noted.
UNITEDHEALTH BUYS LHC FOR $6 BILLION
Managed care giant UnitedHealth Group, with $200 billion in annual revenues, will buy home health services provider LHC Group in a cash-and-debt deal valued at between $5.4 billion and $6 billion.
The takeover is another in a series of managed care firms entering the growing home health care industry.
“This trend has only just begun, of how much care can be delivered in the home,” Wyatt Decker, CEO of United’s Optum Health division, which made the purchase, said in a statement quoted by The Wall Street Journal.
“The home is a lower-cost setting than nursing homes or more advanced care facilities,” he noted.
Providing medical services at home has been shown to reduce the number of visits to physicians’ offices, emergency rooms, and delay placements in nursing homes.
The deal is expected to lower costs for United’s Healthcare division, which sells Medicare supplement insurance policies to older adults.
United will pay about $170 a share for LHC, which operates home and hospice care services and long-term care centers in 37 states and tends about 500,000 patients annually, LHC said.
The company had revenues of about $2.2 billion in its most recent operating year.