NEWSLETTER of February 26, 2021

The following content has been added at finexpert:

finexpert | ValueTrust

The 2021 issue of the finexpert-ValueTrust German takeover report covers all takeover offers and delisting tender offers of the year 2020 according to the German takeover code WpÜG and provides extensive information on relevant variables like bid types, premia offered, market reaction of target’s and (if available) on bidder’s stock prices. >more
3 Market Overview
12 Capital Market Reaction
16 Statements & Fairness Opinions
22 Success Rates
29 Takeover Case Study: ISRA Vision AG
31 Transaction Details 2020

Skadden
SPACS: RESHAPING M&A AND IPOS FOR EUROPEAN COMPANIES
Special purpose acquisition companies (SPACs), also referred to as “blank check” companies, have reached record numbers in the United States, with 242 SPACs conducting an initial public offering (IPO) on either NYSE or Nasdaq Stock Market and 52 announcing an initial business combination or “de-SPAC” in 2020, up 320% and 156% respectively over 2019, according to the research firm Deal Point Data. Although listings of SPAC entities on European exchanges have been much less common, the number of European companies choosing to go public in the U.S. by way of a de-SPAC transaction is on the rise. >more

PwCs
WORKING CAPITAL REPORT 2021
The COVID 19 crisis has left deep scars on the working capital performance of companies in various industries. While the sales of companies from the DACH region and the Benelux countries slumped by an average of 16 percent in the second quarter of 2020 compared with the same quarter of the previous year, the capital tied up in the company fell by only 5 percent in this period. At the same time, the capital commitment period increased by 8 days - to 60 days. >more

Goldman Sachs
THE IPO SPAC-TACLE
The IPO market slammed shut in the first part of 2020 as pandemic uncertainty set in, only to open up with gusto in 2H even as risks around the virus and its economic impact remained high. This surprising strength following years of tepid IPO markets, as well as lofty valuations for newly public companies, have led to fears of an IPO “bubble”, especially in tech. Adding to these concerns has been a surge in IPOs via Special Purpose Acquisition Companies (SPACs) — public investment vehicles created to merge with a company, thereby bringing it public — which comprised over half of US IPOs in 2020. >more

Clearwater International
MULTIPLES HEATMAP: Q4 2020
The report identifies key themes driving European Private Equity (PE) deals’ EV/EBITDA multiples on a quarterly basis. A strong performance in the second half of the year meant that any drop-off in activity was not as pronounced as was first feared, with 2020 deal value and volume falling by just 5% and 6% year-on-year, respectively. At 11x, average multiples paid in PE-backed transactions across Europe reached a new high in the final quarter of the year. >more

ARTIFICIAL INTELLIGENCE AND HIGH-SKILLED WORK: EVIDENCE FROM ANALYSTS
Jillian Grennan, and Roni Michaely
2020
Policymakers fear artificial intelligence (AI) will disrupt labor markets, especially for high-skilled workers. We investigate this concern using novel, task-specific data for security analysts. Exploiting variation in AI's power across stocks, we show analysts with portfolios that are more exposed to AI are more likely to reallocate efforts to soft skills, shift coverage towards low AI stocks, and even leave the profession. Analyst departures disproportionately occur among highly accurate analysts, leaving for non-research jobs. Reallocating efforts toward tasks that rely on social skills improve consensus forecasts. However, increased exposure to AI reduces the novelty in analysts' research which reduces compensation. >more

FOREIGN SAFE ASSET DEMAND AND THE DOLLAR EXCHANGE RATE
Zhengyang Jiang, Arvind Krishnamurthy, and Hanno N. Lustig
2020
We develop a theory that links the U.S. dollar's valuation in FX markets to the convenience yield that foreign investors derive from holding U.S. safe assets. We show that this convenience yield can be inferred from the Treasury basis: the yield gap between U.S. government and currency-hedged foreign government bonds. Consistent with the theory, a widening of the basis coincides with an immediate appreciation and a subsequent depreciation of the dollar. Our results lend empirical support to models which impute a special role to the U.S. as the world's provider of safe assets and the dollar, the world's reserve currency. >more