NEWSLETTER of December 4, 2020

The following content has been added at finexpert:

BCG
COVID-19 INVESTOR PULSE CHECK #12
BCG’s COVID-19 Investor Pulse Check series is intended to bring the voice of the investor to business leaders and board members. While we feature the most recent investor perspectives here, you can explore earlier editions below. The latest edition—conducted November 13–14, 2020—finds that investors are more bullish on the US economy and stock market than they were just one month ago. In addition, while investors continue to offer management unprecedented latitude, the window may be starting to close: 45% of investors now expect companies to maintain their dividend, up from a low of 29% in May. The respondents represent investment firms with more than $4 trillion in combined assets under management. They cover a broad spectrum of investing types and styles, and about 80% are portfolio managers and senior analysts directly responsible for making buy, sell, and hold decisions. >more
 

Arthur D Little | Invest Europe
THE INSIGHT: EUROPE’S PRIVATE EQUITY INDUSTRY DURING COVID-19 AND BEYOND
COVID-19 has had an exceptional impact on society as a whole and across most business sectors. Despite the challenges, the private equity market has proven itself to be both resilient and adaptable, which makes it well positioned to take advantage of new opportunities that will emerge post-pandemic. Although the full impact of COVID-19 is not yet fully known or understood, our recently conducted pan-European survey of private equity professionals gives some insights into the pandemic’s effect on the industry, particularly how limited partners (LPs) and general partners (GPs) have responded to what is still a fastmoving investment landscape, as well as their view of the private equity market going forward. >more

Dechert | Mergermarket
2021 GLOBAL PRIVATE EQUITY OUTLOOK
Despite the tumultuous events of 2020, the private equity industry has proven that it can roll with the punches, according to 2021 Global Private Equity Outlook, an annual report co-published by Dechert LLP and Mergermarket. This report discusses how the sector fared amid the ongoing global pandemic, economic upset, and geopolitical pressures that marked this year as well as what the future may hold for this robust and creative industry. >more

CMS Hasche Sigle
UPDATE ARBEITSRECHT DEZEMBER 2020
The focus is on questions regarding "corona-compatible behavior" of employees and Quarantäne / Absonderung / Arbeitsunfähigkeit. >more

PRIVATE EQUITY BUYOUTS AND EMPLOYEE HEALTH
Pilar Garcia-Gomez, Ernst G. Maug and Stefan Obernberger
2020
We examine the role of employee health in Private Equity buyouts using employee-level data on employment, wages, medical prescriptions, and health expenditures of more than 55,000 buyout employees. Employees with a lower health status before the buyout face the most substantial losses of income and employment from buyouts. Health characteristics associated with lower wages in the general population are strongly predictive of job loss after buyouts. Buyouts influence employees' career paths, and health outcomes after buyouts are associated with career-path outcomes: Those who become unemployed are in poorer health and the health of those who find new jobs is better. More than half of the negative effect of buyouts on employees' incomes is buffered by social transfers and this insurance effect is strongest for employees in poor health. We conclude that buyout-related restructuring has a stronger negative impact on the careers and human capital of employees with health problems. >more

TAILWIND AND HEADWIND BIDDING IN GERMAN TAKEOVER OFFERS – THE IMPACT OF PRICE RUNUPS ON TAKEOVER SUCCESS
Bernhard Schwetzler, and Lisa M. Uhlenkamp
2020
Pre-bid target share price runups are increasing the cost of takeovers and thus are seen as a detriment for the efficiency of the market for corporate control. This paper investigates the three-way relationship of pre-bid runups, offer premia and takeover success with a sample of 324 takeover offers of German publicly listed companies from 2006 to 2019. Germany is of particular interest as the minimum offer price required by takeover law is the 3 month average stock price of the target (VWAP). Combined with price runups or rundowns be-fore the offer this regulation creates “headwind” and “tailwind” environments for the bid-der: In case of a runup, the stock price at the offer is higher than the VWAP and thus a positive premium on the VWAP may not be sufficient to create a positive premium on the current stock price (“Headwind”). If the pre-bid stock price decreases, the VWAP is higher than the current stock price and the legal minimum requirement automatically enforces a positive premium on the current stock price (“Tailwind”). This asymmetry in setting the of-fer price is hypothesized to additionally reduce the chances of an offer being successful. Our results support this hypothesis. While we document a general significant negative ef-fect of runups on takeover success we also show that the impact of the (VWAP) premium on takeover success is significantly higher in headwind than in tailwind environments. Our results further suggest that offer announcements in the German takeover market are pre-ceded by significant price runups and that these are only partly substituted by lower markups. >more