Draftkings abandons offer for Entain

BY Richard Summerfield

US fantasy sports and gambling company DraftKings has confirmed that, following further analysis and discussions with the Entain board of directors, it will not make a firm offer for the company.

In September, Draftkings first declared its interest in a takeover and had until 16 November to make a ‘put up or shut up’ offer for Entain after being granted a one-month extension last week by the City’s Takeover Panel. Under the City’s takeover rules, Draftkings cannot return with a new offer for Entain for six months.

Following the effects of the coronavirus (COVID-19) pandemic and the relaxation of sports betting laws in the US, Entain has seen immense growth in its online revenues in recent years. Accordingly, the company has attracted interest from several parties. Earlier this year, Entain rejected an approach from MGM Resorts International. Draftkings offered £25 per share for the company, though that was rejected for being too low. It then upped the proposal to £28 per share, or $22.4bn, which represented a 43 percent premium over the company’s stock price.

“After several discussions with Entain leadership, DraftKings has decided that it will not make a firm offer for Entain at this time,” said Jason Robins, chief executive, co-founder and chairman of DraftKings. “Based on our vertically-integrated technology stack, best-in-class product and technology capabilities and leading brand, we are highly confident in our ability to maintain a leadership position and achieve our long-term growth plans in the rapidly growing North America market.”

Entain’s board said it remains focused on executing its growth and sustainability strategy. In a statement, the company said: “The board strongly believes in the future prospects of Entain, underpinned by its leading market positions, world class management team and industry-leading proprietary technology. Entain has an outstanding track record of growth having delivered 23 consecutive quarters of double digit online NGR growth.”

While neither firm explained in any significant detail the main reasons behind the deal’s collapse, Entain’s joint venture with MGM in the US, BetMGM, may have made the likelihood of a transaction more complicated.

Interest in UK bookmakers has grown markedly in recent years. In 2020, Las Vegas casino firm Caesars Entertainment agreed to acquire William Hill for £2.9bn.

News: Ladbrokes owner Entain's shares tumble as Draftkings drops $22bn offer

Telstra to acquire Digicel Pacific in $1.6bn transaction

BY Fraser Tennant

In a strategic move in the South Pacific, Australian telecommunications company Telstra Corporation is to buy the Pacific arm of fellow telecoms giant Digicel Group Holdings Limited (DGHL) in a transaction valued at $1.6bn.

Under the terms of the agreement, Telstra and the Australian government will acquire Digicel Pacific – a joint venture that many view as a political block to China's influence in the region. The deal involves Telstra contributing $270m, with the government providing the bulk of the financing with $1.33bn.

Headquartered in Papua New Guinea, Digicel is the biggest telecommunications business in the South Pacific. It also operates across Vanuatu, Nauru, Samoa, Tonga and Fiji, with 2.5 million mobile phone and internet subscribers and 1700 employees.

Upon completion, Digicel will have no operational responsibility for the Pacific operations, though customary transition services will be provided by DGHL for a limited period. Furthermore, there will be no change to the Digicel brand in the six markets in which it operates, and the current DPL management team will continue to lead the business.

"This announcement is a tremendous testament to our colleagues across Digicel Group and in particular, our 1700 staff in the Pacific,” said Denis O’Brien, founder and chairman of Digicel. “In 2006, we established a business in the South Pacific region that has helped democratise mobile communications and transform local economies and societies by making affordable best-in-class communications available to more than 10 million people across six of the most exciting markets in the South Pacific region.

"I am very pleased that today's agreement with Telstra, our very near neighbour in the Pacific, will further enhance DPL’s infrastructure, data and call termination links with one of the largest and most reliable networks in Australia,” he continued. “I thank all of our colleagues in the South Pacific and beyond who have made today possible, and I remain committed to ensuring a successful transition in my ongoing role as a director of the newly formed holding company.”

The transaction, which remains subject to customary government and regulatory approvals, is expected to complete in the first quarter of 2022.

Mr O’Brien concluded: “From a Digicel perspective, this transaction is a very successful realisation of a strategic investment following our entry in the South Pacific in 2006.”

News: Telstra to buy Digicel Pacific in Australia government-backed $1.6 bln deal

Columbia and Umpqua unite in $8.2bn transaction

BY Fraser Tennant

In a deal that creates the leading regional bank on the US West Coast, Columbia Banking System, Inc. and Umpqua Holdings Corporation are to merge in an all-stock combination valued at $8.2bn.

Under the terms of the definitive agreement, Umpqua shareholders will receive 0.5958 of a share of Columbia stock for each Umpqua share they own. Umpqua shareholders will own approximately 62 percent and Columbia shareholders will own approximately 38 percent of the combined company.

Upon completion, the combined company will be the West Coast's leading regional bank with $43bn in deposits, including $16bn of deposits in Oregon, $15bn in Washington, $10bn in California and $2bn collectively in Idaho and Nevada.

In addition, the deal strengthens the combined company's competitive position in high-growth, attractive markets, including leading market share in the Seattle, Portland and Sacramento metro areas.

"This combination brings together two well-respected organisations and talented teams, accelerating our shared strategic objectives to create the leading regional bank headquartered in the West,” said Cort O'Haver, president and chief executive of Umpqua. “Together, with increased scale, we will have the ability to provide expanded opportunities for associates and serve customers through an even more comprehensive suite of solutions.”

The transaction has been unanimously approved by the boards of directors of both companies.

"This is a historic partnership that will enhance what both banks are able to do for clients, team members and communities, while driving significant value for our shareholders,” said Clint Stein, president and chief executive of Columbia Banking System. “We believe blending the complementary expertise, services and innovative technology of both banks will position the combined organization as the preferred bank for business and families across the West.”

The combined company will be led by an executive team composed of leaders from both Columbia and Umpqua.

The transaction is expected to close in mid-2022, subject to satisfaction of customary closing conditions, including receipt of regulatory approvals and approvals from each company's shareholders.

Mr O’Haver concluded: “I look forward to partnering with the Columbia team to expand our market share as a combined organisation.”

News: Columbia Banking, Umpqua Bank to Merge in $5 Billion Deal

Eneos Holdings agrees $1.8bn Japan Renewable Energy deal

BY Richard Summerfield

Eneos Holdings Inc has agreed to acquire Japan Renewable Energy (JRE) from Goldman Sachs and Singaporean sovereign wealth fund GIC in a deal worth around $1.8bn. The deal is expected to complete in late January 2022.

Founded in 2012, JRE develops and builds renewable energy assets and has 419 MW of solar, onshore wind and biomass capacity in operation, with a further 410 MW currently under construction.

The deal would mark the first major purchase of a renewables company by a top Japanese oil company, as Eneos looks to shift away from fossil fuels. Eneos aims to become a leading renewable-energy company in Japan, with hopes to achieve net-zero carbon emissions by 2040.

Currently, Eneos controls half the market for gasoline and other fuels in Japan, but has seen its customer base shrink in recent years due to a declining population and shifting consumer opinion. JRE has also been actively engaged in developing offshore wind, including monitoring wind conditions and developing construction plans, which it intended to expand further to become a major source of renewable energy in the future.

“We are proud to have led the creation of JRE and built the company into one of the leading renewable energy producers in Japan,” said Philippe Camu, global co-head of the infrastructure business within Goldman Sachs Asset Management. “We thank JRE’s management team and employees for their amazing performance and achievements and wish them continued success.”

“JRE is now a leading renewable energy company in the country and GIC is pleased to have played a part in that growth,” said Ang Eng Seng, CIO of infrastructure at GIC. “We believe the company will continue to grow under the new ownership.”

“As the world moves toward a decarbonized and circular society, this acquisition will mark a key turning point to fundamentally transform our business structure,” said Keitaro Inoue, senior vice president at Eneos. He added that the price tag is “appropriate” given JRE’s asset size and ability to develop a wide range of renewables including solar, wind and biomass, and noted that the deal buys Eneos time to boost its renewable assets portfolio.

Eneos’ total renewable power-generation capacity in operation and under construction, both domestically and overseas, is expected to be approximately 1.2 million kW following completion of the deal.

News: Refiner Eneos to buy Japan Renewable Energy for $1.8 billion

Qualcomm and SSW Partners agree $4.5bn Veoneer deal

BY Richard Summerfield

Chip manufacturer Qualcomm and newly formed private equity firm SSW Partners have agreed to acquire Swedish automotive technology group Veoneer for $37 a share in a deal worth $4.5bn.

The deal for Veoneer ends the ongoing battle for the company which had been a target for both Qualcomm and Magna International Inc, a Canadian mobility technology company. In July, Magna made an offer worth around $3.8bn for Veoneer which was accepted by Veoneer’s board. As a result of the agreed Qualcomm/SWW deal, Veoneer has terminated its prior acquisition agreement with Magna, which means Veoneer will pay a termination fee of $110m to Magna.

The boards of Veoneer and Qualcomm have both approved the transaction and expect it to close next year. Under the terms of the deal, at closing, SSW Partners will acquire all of the outstanding capital stock of Veoneer, shortly after which it will sell Veoneer’s autonomous-driving software operation, known as Arriver, to Qualcomm and retain Veoneer’s Tier 1 supplier businesses. SSW will also seek owners for the rest of Veoneer’s businesses. The Arriver business emerged from a collaboration between Qualcomm and Veoneer first announced in August 2020. The transaction is the first deal for SSW Partners.

“Qualcomm is the natural owner of Arriver,” said Cristiano Amon, president and chief executive of Qualcomm. “By integrating these assets, Qualcomm accelerates its ability to deliver a leading and horizontal ADAS solution as part of its digital chassis platform. We believe that this transaction and structure benefits both Qualcomm’s and Veoneer’s shareholders, positions all of Veoneer’s businesses for success and provides a compelling opportunity to customers and employees.”

“This transaction creates superior value for our shareholders,” said Jan Carlson, chairman, president and chief executive of Veoneer. “It also provides attractive opportunities to our Arriver team at Qualcomm and allows our other businesses to find long-term industrial partners where they can continue to develop.”

“We are excited to partner with Qualcomm to acquire Veoneer,” said Antonio Weiss and Josh Steiner of SSW Partners. “While Qualcomm focuses on the Arriver business, we will focus on finding strong, long-term strategic homes for the rest of Veoneer’s businesses – we are committed to ensuring that Veoneer’s employees prosper, the businesses continue to innovate and grow and customers continue to have uninterrupted access to the outstanding service and quality for which Veoneer is known. We have high regard for Veoneer’s management team and look forward to partnering with them to ensure a successful outcome for all stakeholders.”

News: Qualcomm, SSW Partners to buy Veoneer in $4.5 billion deal