🏥 EQT bagged its £4.5bn vet whale

Good morning. In today’s update - EQT landed one of the biggest European buyouts this year, airlines are enjoying a post-pandemic travel surge, the UK’s largest privately-held building merchants is potentially going up for sale and OPEC+ looks set to extend oil production cuts into 2024.

Markets

• Despite being largely priced in already, UK shares popped on Friday after the Senate passed a bill to increase the debt ceiling and avoid a US default.

• Miners rallied yet again after a rise in copper prices, helping to push the UK’s top flight FTSE 100 1.6% higher.

Corporate News

Airlines Wizz Air and Ryanair hailed a further increase in passenger numbers through May as the post-pandemic recovery in travel continues - Irish carrier Ryanair saw 17m passengers across the month, its highest ever monthly total and 10% higher than 2022; Wizz also saw an impressive 22% year-over-year jump in passenger numbers (to 5m). (Link)

City grandee Richard Buxton is set to retire from Jupiter at the end of the summer after nearly four decades in the asset management industry; Buxton led the management buyout of Merian Global Investors in 2017, which was subsequently sold to Jupiter in 2020 for £370m. (Link)

Furious commercial property investors are set to appeal a restructuring plan for troubled gym operator Fitness First, at a court hearing later this month; The Crown Estate, M&G and Land Securities are amongst those unhappy at the terms of the deal, which would see 10 sites closed and rent slashed at 34 other sites. (Link)

Deals

In one of the largest European buyout deals this year, Veterinary pharma company Dechra agreed to be acquired by Swedish private equity group EQT for £4.5bn - a 44% premium to the share price before the deal was announced; the Board of Dechra are recommending shareholders accept the deal, with chair Elizabeth Alison Platt claiming it was a “compelling” opportunity for shareholders to realise value. (Link, Dechra)

Independent Builders Merchant Group (IMBG) - the UK’s largest privately-owned builders’ merchants - is potentially being put up for sale by its private equity owners for around £500m; IMBG was a roll-up play by owners Cairngorm Capital, which started with the acquisition of Kent-based Parkers and branched out with deals for more than 20 other merchants. (Times)

Geely - the Chinese auto company who recently upped its stake in Aston Martin - is reportedly looking to raise up to £1bn in outside capital for London Electric Vehicle Company (supplier of London taxis); production capacity at LEVC’s Coventry factory has been massively under-utilised to date, as competition from ride-hailing services heats up. (BBG)

British-based Cranfield Aerospace is in talks to raise around £30m to fund the development of a small, hydrogen-powered aircraft; the company initially plans to retrofit a nine-seater demonstration aircraft as a first step, with the ultimate aim of developing their own regional aircraft powered by hydrogen. (FT)

Asos were reportedly approached by Turkish retailer, Trendyol, about a potential £1bn deal late last year, with talks having broken down; Alibaba-backed Trendyol seemingly dodged a bullet as Asos’ shares have since tanked. (Times)

London-based private equity firm Apax led a $38m Series C funding round in Swing Education - an online marketplace connecting schools and substitute teachers. (Link)

Economy / General

The talent war for traders at hedge funds in London and New York is heating up, with reports that one senior portfolio manager was offered a guaranteed $120m bonus. (BBG)

🌎 Global Snapshot

OPEC+ members agreed to extend production cuts into 2024 in a bid to support oil prices, following a contentious meeting in Vienna - Saudi Arabia, de-facto chair of the group, offered a “sweetener” to OPEC+ members in the form of an additional 1m reduction in barrels per day. (Link)

US payrolls smashed expectations during May as the labour market continues to show resilience in the face of economic headwinds; non-farm payrolls increase by 339k across the month, far higher than the 190k forecast by economists. (Link)

Disney confirmed it would eat a $1.5bn writedown on content its pulling from its streaming platform, as the media giant looks to trim fat and boost profitability. Separately, Pixar announced its first significant headcount reductions in almost a decade, slashing 75 jobs - senior executives involved in the box office flop, Lightyear, were among those let go. (Link, Link)

The bidding war for sandwich chain Subway is expected to reach its conclusion within the next month, with a handful of bidders still in the process including Advent, TDR and Roark Capital; expectations for value have reportedly tapered off to $9bn, down from the $10bn+ originally sought. (BBG)

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