Apollo Global and Athene agree $11bn all-stock deal

BY Richard Summerfield

Apollo Global Management Inc has agreed to acquire Athene Holding Ltd in an all-stock deal that values the annuity business at around $11bn.

The deal is expected to close in January 2022, the companies said in a statement on Monday. Apollo was already the annuity seller’s biggest shareholder, with the firm and related entities owning a 35 percent stake in the company.

Under the terms of the deal, each Athene common share will be exchanged for 1.149 shares of Apollo common stock, with Apollo shareholders owning about 76 percent of the combined company once the transaction is completed.

By merging with Athene, the life insurance company Apollo established at the height of the financial crisis, the alternative asset manager will be transformed into a financial conglomerate with a market capitalisation worth almost $30bn.

“This merger is all about alignment between Apollo and Athene, amongst Apollo’s stockholders and with our limited partners,” said Marc Rowan, co-founder and incoming chief executive of Apollo. “For Apollo and Athene, we will have total alignment to optimize our strategy and allocate capital efficiently, which will include rapidly scaling our capability to originate attractive risk/reward assets, which are the limiter of growth for both firms. We have also created alignment among all our stockholders who will share in the upside of a larger, more liquid company with leading corporate governance. And it further aligns interests with our fund investors, giving us a bigger balance sheet to invest alongside clients in our various fund products.”

“Today’s announcement reflects the strength and strategic nature of our longstanding mutually beneficial relationship with Apollo – one which has already created enormous value for each other and our respective constituents,” said Jim Belardi, chairman and chief executive of Athene. “After carefully reviewing Athene’s options to unlock value for shareholders, Athene and Apollo determined that the potential of a fully aligned business would be significantly greater than a sum-of-the-parts.

“Coming together in this merger is a logical and exciting next step that will simplify our relationship while driving significant strategic and financial benefits in both the immediate and long-term future,” he added.

News: Apollo Global to buy annuities provider Athene in $11 billion deal

Las Vegas Sands to cash out of property portfolio

BY Richard Summerfield

An affiliate of funds managed by alternative investment firm Apollo Global Management Inc are to acquire the Las Vegas properties of Las Vegas Sands in a deal worth $6.5bn.

The properties being sold include the Venetian Resort Las Vegas and the Sands Expo and Convention Centre. Apollo Global Management Inc’s affiliate-managed funds will buy the operating company of the Venetian for $2.25bn and VICI Properties will buy the land and real estate assets of the Venetian for $4bn.

The sale will see Las Vegas Sands increase its focus on the increasingly lucrative Asian market, most notably, the world largest gambling hub, Macau. The deal comes just a few months after the death of the company’s then chief executive and chairman, Sheldon Adelson.

“The Venetian changed the face of future casino development and cemented Sheldon Adelson’s legacy as one of the most influential people in the history of the gaming and hospitality industry,” said Robert Goldstein, chairman and chief executive of Las Vegas Sands. “As we announce the sale of The Venetian Resort, we pay tribute to Mr. Adelson’s legacy while starting a new chapter in this company’s history.

He continued: “This company is focused on growth, and we see meaningful opportunities on a variety of fronts. Asia remains the backbone of this company and our developments in Macao and Singapore are the centre of our attention. We will always look for ways to reinvest in our properties and those communities.”

“The Venetian is America’s premier integrated resort, with an unrivalled set of amenities to serve guests across hospitality, meeting events, gaming, and entertainment – categories that we believe are well positioned for strong recovery and long-term growth,” said Alex van Hoek, a partner at Apollo. “The team at Las Vegas Sands, under the leadership and vision of Sheldon Adelson, built an irreplaceable asset that is renowned for its quality, scale and integrated offerings, and we see significant opportunity to invest in and accelerate its growth.

“This investment also underscores our conviction in a strong recovery for Las Vegas as vaccines usher in a reopening of leisure and travel in the United States and across the world,” he added.

“The Venetian is one of the most coveted properties in Las Vegas and a premier destination for gaming, business and leisure alike,” said John Payne, president and chief operating officer of VICI Properties. “We are thrilled to add The Venetian to our roster of best-in-class assets and believe the property is positioned to benefit from a rebound in Las Vegas under Apollo’s leadership. We look forward to what we expect will be a mutually beneficial and productive relationship with Apollo.”

The gambling industry has been badly affected by the COVID-19 pandemic. Sales growth vanished in March 2020 as infections spread across the US. Las Vegas Sands posted a quarterly loss of almost $300m in January.

News: Las Vegas Sands to sell Vegas properties for about $6.25bn

One day: Belk exits Chapter 11 – 24 hours after filing

BY Fraser Tennant

One day after filing for Chapter 11 bankruptcy, department store chain Belk has successfully completed its financial restructuring – finalising an expedited pre-packaged reorganisation to emerge well-positioned for long-term growth.

Belk's reorganisation plan received nearly unanimous support from majority owner Sycamore Partners and lenders, including KKR Credit and Blackstone Credit, and provides for suppliers and landlords to be paid in full as normal operations continue at all store locations and on Belk's e-commerce platform.

"We are pleased to have received nearly unanimous support from all of our stakeholders to complete this restructuring in just one day, positioning us to pursue our growth initiatives and move the company forward from a strengthened financial foundation," said Lisa Harper, chief executive of Belk. "We are immensely grateful for our loyal customers, dedicated associates, and supportive vendor partners who enabled us to complete this restructuring efficiently, without delay or disruption.”

As a result of the Chapter 11 restructuring, Belk has received $225m of new capital, significantly reduced its debt by approximately $450m and extended maturities on all term loans to July 2025. The infusion of cash and reduction in debt provides Belk with increased liquidity to focus on its key initiatives for growth, including further enhancements to its omnichannel capabilities and the expansion of merchandise offerings into new, relevant product categories.

"I want to congratulate the team at Belk for its impressive transformation from a traditional department store business into a full omni retailer," adds Stefan Kaluzny, managing director of Sycamore Partners. "The company has tripled its web business and currently fulfils over 70 percent of its web orders from its stores, providing a nimble and scalable platform for expansion. It has been a remarkable undertaking in a very challenging macro environment."

Privately-owned, Charlotte-based Belk opened its first store in 1888 and currently serves customers at nearly 300 stores in 16 south-eastern states.

Ms Harper concluded: “Belk has a bright future ahead, and I am looking forward to growing our more than 130-year legacy as a trusted retailer for many years to come.”

News: Belk OK'd to exit bankruptcy less than 24 hours after it filed

UK recruitment activity will rise as unemployment peaks, says new survey

BY Fraser Tennant

Recruitment activity in the UK will rise in the first quarter of 2021 as unemployment plateaus, according to a new report by the Chartered Institute of Personnel and Development (CIPD) and the Adecco Group. 

The ‘CIPD/Adecco Labour Market Outlook’ report, based on a survey of 2000 UK employers, reveals that over half (56 percent) indicated they are looking to recruit in Q1 2021, up from 53 percent in the previous quarter and 49 percent six months ago. This is down from 66 percent during Q1 2020. 

In terms of sectors, healthcare, finance and insurance, education, and information and communications have indicated strong hiring intentions. Other sectors however, such as hospitality, which continues to  be affected by social distancing measures, are less optimistic. 

In the private sector, companies have signalled a willingness to maintain their workforce, with the number of employers stating that they are planning redundancies dropping from 34 to 20 percent.

“These are the first signs of positive employment prospects that we have seen in a year,” said Gerwyn Davies, senior labour market adviser at the CIPD. “Our findings suggest that unemployment may be close to peak and may even undershoot official forecasts. However, it is far too soon to rule out further significant private sector redundancies later in the year if the government does not extend the furlough scheme or if the economy suffers any additional unexpected shocks.”

To this end, the report urges the UK government to extend the coronavirus (COVID-19) job retention scheme until at least the end of June to help support sectors most affected by the restrictions.

“The start of 2021 has been challenging, with the UK entering into its third lockdown,” said Alex Fleming, region president of Northern Europe at Adecco Workforce Solutions. “It is still positive to see some signs of labour market recovery, with a clear rise in net employment intentions. The furlough scheme and redeployment have enabled many organisations to avoid redundancies during the pandemic.”

The report also notes that investing in reskilling and upskilling will be important tactic in future-proofing the workforce – a key factor in helping to minimise any jobs fallout.

Mr Fleming concluded: “Companies that invest in career development, enhancing the skillsets of employees and maintaining a positive workplace culture will help to strengthen their talent attraction and retention strategies during what remains such an unprecedented time.” 

Report: CIPD/Adecco Labour Market Outlook

Record year for UK’s cyber security sector

BY Richard Summerfield

2020 was a landmark year for cyber security investment in the UK, according to a new government report from the Department for Digital, Culture, Media and Sport (DCMS).

As the UK workforce became largely remote over the last year due to COVID-19, there were record levels of investment in the cyber security sector. The report notes that more than £800m was invested in the sector in 2020, while the number of active cyber security firms in the UK increased 21 percent with almost 50,000 people now employed in UK cyber security.

The report, which tracked the UK’s cyber security industry across a range of indicators between April 2019 and December 2020, also highlighted a nine percent rise in employment in the industry, with more than 3800 new full-time jobs created, bringing the total number of people working in the sector to 46,683.

“The need for cutting-edge cybersecurity has never been greater and this resilient sector is growing, diversifying and solidifying its status as a jewel in the UK’s tech crown,” said digital minister Matt Warman, speaking at the CyberASAP online event. “With more than 3,800 new jobs created, firms – large and small – are doing vital work keeping people and businesses secure online so we can build back safer from the pandemic. I am committed to supporting the industry to reach new heights, create more jobs and lead new innovations in this field.”

The report also found that the sector’s total annual revenue continued to rise, by 7 percent, reaching £8.9bn within the most recent financial year. The sector also contributed more than £4bn to the economy – up 6 percent in the last year, with mainly mature firms driving growth.

The 2020 edition of the report also suggested that more than half of firms (54 percent) are now based outside of London and the South East, with cyber security clusters prospering across the country in areas such as Scotland, Northern Ireland and North West England.

Given the gravity of the situation over the last 12 months, it is, perhaps, unsurprising that the cyber security sector has seen such considerable growth. Businesses have seen a marked expansion in the number and type of cyber threats they have had to confront. Ransomware attacks against UK organisations surged during 2020, for example, while phishing attacks also exploded in volume as hackers sought to take advantage of more employees working from home.

Report: Cyber Security Sectoral Analysis 2021