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☆ Private equity is being squeezed from all sides
▼ + stars: | 2023-05-12 | by ( Edward Chancellor | ) www.reuters.com time to read: +8 min

But this time around there’s a lot more private equity money chasing a limited number of opportunities. So private equity funds could face the prospect of a prolonged period of higher borrowing costs, lower valuations, and depressed investment returns. The birth of private equity coincided with the Reagan administration’s policy of relaxing regulations and tax cuts. Recent high profile corporate bankruptcies owned by private equity include car-rental firm Hertz and retailer Toys R Us. The private equity industry could soon find itself caught in a pincer, between tighter financing on the one hand and tighter regulation on the other.

A Virgin Australia spokesperson confirmed the contents of the internal email. A Bain Capital spokesperson declined to comment. "I can also confirm the IPO planning is well advanced," Cotton said in the email to staff seen by Reuters. Virgin Australia Chief Executive Jayne Hrdlicka said on Monday that she would take several weeks of leave to spend time with family after the death of her husband from cancer. Bain Capital bought Virgin Australia in 2020 after it was placed in voluntary administration, the closest Australian equivalent to Chapter 11 bankruptcy.

☆ Silver Lake reiterates offer in battle for Software AG takeover
▼ + stars: | 2023-05-10 | by ( ) www.reuters.com time to read: +1 min

BERLIN, May 10 (Reuters) - Silver Lake appeared unshaken in the battle to acquire Software AG (SOWGn.DE) on Wednesday, reiterating in a statement its offer of 32 euros ($35.23) per share for the German company. Rival Bain Capital via its portfolio firm Rocket Software has offered up to 36 euros per share for Software AG. "Silver Lake reiterates its conviction in the attractiveness of its previously announced offer of EUR 32.00 per share of Software AG, to whose stated strategy and whose status as an independent, Darmstadt-based company Silver Lake remains fully committed," Silver Lake said in a statement. Software AG said on Tuesday night that Silver Lake's offer presented a high degree of transaction security in addition to a significant premium for shareholders. ($1 = 0.9084 euros)Reporting by Hakan Ersen, Writing by Rachel More, Editing by Miranda MurrayOur Standards: The Thomson Reuters Trust Principles.

☆ -China's steps to control its data and information
▼ + stars: | 2023-05-09 | by ( Josh Ye | ) www.reuters.com time to read: +3 min

Below is a timeline of main events in China’s effort to tighten its grip on data and information and especially over their export. July 2015: China passes a national security law that broadened the scope to protect its cyberspace and also emphasised a need to develop key technologies. June 2021: China passes a data security law on the protection of “important data” and “core data”, including information involving national and economic security, people’s welfare and on issues of important public interest. July 2022: China unveils cross-border data review measures that require a security review for “important” offshore data transfers. September 2022: Regulators ask China's biggest financial data provider Wind Information Co to stop providing offshore users with certain data, sources told Reuters.

Hong Kong CNN —China’s state security authorities raided multiple offices of international advisory firm Capvision, state media reported Monday, part of a broader crackdown on the consulting industry as Beijing tightens control over what it considers sensitive information related to national security. The consultancy firm, which is headquartered in Shanghai and New York, adds to a growing list of global consulting companies that have been ensnared in Beijing’s widening crackdown on what it perceives as national security risks. In the report, Capvision was singled out as a “leading company” in the industry. According to state security police, he downloaded 5,000 documents from his state-owned company’s internal network. The authorities said he had provided clients with six pieces of information that were classified as state secrets, CCTV said.

Capvision said in a statement soon after the broadcast that it would resolutely abide by national security rules. The CCTV report was the first clear indication of the national security scope of recent police action against several consulting firms. "The state security organ and other authorities will intensify law enforcement against activities that endanger national security, such as illegal consulting," the state-owned Global Times said. The revisions will see all documents, data, materials and items "related to national security and interests" given the same protection as state secrets. The law does not define China's national security or interests.

☆ Rocket Software offers improved bid to acquire Germany's Software AG
▼ + stars: | 2023-05-09 | by ( ) www.reuters.com time to read: +1 min

May 9 (Reuters) - Rocket Software on Tuesday announced an improved offer for the acquisition of the entire share capital of Germany's Software AG (SOWGn.DE) at an initial offer price of 34 euros per share ($37.43). The non-binding offer from Rocket Software, which is backed by private equity firm Bain Capital, comes after a bidding war for the German software company emerged last week. Rocket Software said its latest offer "would be a more compelling opportunity for Software AG’s employees, customers, and other stakeholders, and will deliver a superior outcome for Software AG’s shareholders." The Boston, Massachusetts-based Rocket Software offers software solutions to enterprises across all industries, to help with IT challenges across infrastructure, data, and applications. German multinational software firm Software AG, which is listed in Frankfurt, develops enterprise software for business process management, integration, and big data analytics.

☆ China Confirms Campaign Against Alleged Spying by Foreign Consulting Firms
▼ + stars: | 2023-05-08 | by ( Liyan Qi | ) www.wsj.com time to read: 1 min

Police have raided corporate offices as part of China’s efforts to shield the country from foreign influence. Photo: Cfoto/Zuma PressChina’s national security agencies have uncovered espionage by local units of foreign consulting companies, according to state media, in the first official confirmation that a nationwide sweep of corporate intelligence and due diligence firms is under way. Police recently raided offices of Capvision across China, alleging the New York-based provider of expert consultations and research paid employees of state-owned companies to leak secrets, China Central Television reported Monday. The rare and detailed disclosure of such investigations came after authorities raided U.S. due diligence firm Mintz Group ’s Beijing office and detained local staff in late March. Police also questioned employees at Bain & Co. ’s office in Shanghai last month.

☆ China Confirms Campaign Against Alleged Spying by Foreign Consulting Companies
▼ + stars: | 2023-05-08 | by ( Liyan Qi | ) www.wsj.com time to read: +1 min

China is scrutinizing and pressuring Western management consultants, auditors and others that multinational companies rely on. Photo: Cfoto/Zuma PressChina’s national security agencies have uncovered espionage by local units of foreign consulting companies, according to state media, in the first official confirmation that a nationwide sweep of corporate intelligence and due diligence firms is under way. Police recently raided offices of Capvision across China, alleging the New York-based provider of expert consultations and research paid employees of state-owned companies to leak secrets, China Central Television reported Monday. The rare and detailed disclosure of such investigations came after authorities raided U.S. due diligence firm Mintz Group ’s Beijing office and detained local staff in late March. Police also questioned employees at Bain & Co. ’s office in Shanghai last month.

☆ It's riskier than ever to be a foreign business in China, as evidenced by a series of recent sanctions, detentions, and an updated anti-espionage law that has watchdogs on edge
▼ + stars: | 2023-05-08 | by ( Huileng Tan | ) www.businessinsider.com time to read: +5 min

The updated law doesn't clearly define what constitutes China's national security or interests. The new law follows a recent spate of sanctions, probes, and detentions into foreign firms in China. Even now, the terms relating to national security and interest are still "not explicitly defined," the Eurasia Group wrote. The updated law is also particularly concerning because of the recent developments surrounding foreign firms in China. China's recent crackdown on foreign businesses is spurring concernsIn April, Chinese police questioned staff at American consultancy Bain in Shanghai.

In 2020, Bain Capital set up a previous global fund after securing $3.2 billion in commitments. The program was previously called Bain Capital Distressed and Special Situations Fund and used to sit within Bain Capital's credit business. Bain Capital's special situations strategy is now a standalone business, after being carved out with an independent team outside the umbrella of the credit unit. Globally, Bain Capital currently has $16 billion of assets under management as part of its special situations strategy. Last year, Bain Capital closed a $2 billion "special situations fund" for Asia Pacific to cover a range of asset types, which included a focus on real estate.

☆ China Raids Offices of Another Global Firm in Espionage Crackdown
▼ + stars: | 2023-05-08 | by ( David Pierson | Daisuke Wakabayashi | ) www.nytimes.com time to read: +1 min

China has targeted another global business consulting firm on national security grounds, launching an investigation of the Shanghai-based Capvision Partners as part of a broader crackdown on the industry, state media reported on Monday night. Officers raided several of the firm’s offices in China, including in Shanghai, Beijing, Suzhou and Shenzhen, state media said, explaining that the company was not “earnestly fulfilling the responsibilities and obligations” of preventing espionage. The investigation is the latest in a recent government crackdown on consulting and advisory firms, whose clients include overseas investors and foreign companies seeking information into Chinese industry. Mintz Group, an American company that specializes in corporate investigations, said in March that Chinese authorities had raided its offices, detained five of its Chinese staff and closed the branch. Last month, Bain & Company, a U.S. consulting firm, said security officials had visited its offices and questioned employees.

☆ Beijing expects foreigners to trust, not verify
▼ + stars: | 2023-05-05 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +4 min

In recent months, Chinese investigators have detained employees of U.S. due-diligence firm Mintz Group, visited consultancy Bain & Company and suspended auditor Deloitte’s Beijing operations for three months. Security watchdogs have restricted overseas access to financial data providers like Wind Information, as well as academic database China National Knowledge Infrastructure. Local banks loaned 3.9 trillion yuan ($560 billion) in March alone while corporations issued 328 billion yuan of bonds. Besides Wind, other Chinese data providers including company databases Qichacha and TianYanCha have stopped opening to offshore users, according to three of the sources. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Exclusive: Bain Capital nearing final close of Asia fund worth $6 billion - sources
▼ + stars: | 2023-05-05 | by ( Kane Wu | ) www.reuters.com time to read: +3 min

The committed capital to the fund has exceeded the firm's initial target of $5 billion, said one of the two people and a third source with knowledge of the fundraising. Bain Capital declined to comment. About $131.6 billion in total was raised in 2022 for Asia-focused funds, about half of 2021's $251.2 billion, Preqin data showed. Fundraising so far this year has totalled just $15.5 billion, the data showed. Last year, Bain Capital closed a $2 billion "special situations fund" for Asia Pacific to cover a range of asset types but with a focus on real estate.

☆ Foreign Firms in China Squeezed by U.S. Disclosure Demands, Beijing’s Security Clampdown
▼ + stars: | 2023-05-04 | by ( Elaine Yu | Dan Strumpf | ) www.wsj.com time to read: 1 min

Mintz Group’s Beijing office was raided by authorities, who detained five of the company’s workers. Photo: greg baker/Agence France-Presse/Getty ImagesHONG KONG—Foreign companies in China are walking a tightrope between their need for business intelligence to comply with proliferating U.S. sanctions and mounting concerns about the risks of carrying out the due diligence required for business on the ground. Authorities recently questioned staff at consulting firm Bain & Co.’s Shanghai office and detained the Beijing-based workers for U.S. due-diligence company Mintz Group. The news has put companies that conduct due diligence and business intelligence in China on heightened alert, with details about the visits scant and uncertainty swirling around what triggered them.

But a drumbeat of government security measures, including a broadening of counterespionage laws, and unannounced visits by investigators to the Chinese offices of several foreign firms have sent a shiver of worry that under Xi Jinping, economic pragmatism could again give way to a heightened focus on state control. International consulting and advisory firms are among those that have faced questioning from Chinese security officers in recent weeks, adding to fears among foreign investors that the authorities may be trying to choke off their access to unvarnished information about markets, competitors and potential deals in China. The scrutiny has left some companies questioning whether their China operations are at risk. Officers visited the Shanghai office of Bain & Company, a major American consulting firm, and questioned employees, Bain said in late April. And the Mintz Group, an American company specializing in corporate investigations, said in late March that officials visited its Beijing office and detained five Chinese employees.

HONG KONG, May 4 (Reuters) - China's biggest financial data provider Wind Information Co told some customers late last year that it was restricting offshore users from accessing certain business and economic data as a result of the cybersecurity regulator's new data rules, two sources said. Restricted access to Wind by offshore users comes as China sharpens its focus on data usage and security amid rising geopolitical tensions and concerns about privacy in the world's second-largest economy. A Wind salesperson told the source in September the company had made the changes as per instructions from the Cyberspace Administration of China (CAC), which asked it to stop providing offshore users with certain data. The restrictions on offshore users' access to certain Wind data have expanded since last September, said the first source. Reuters has reported, citing sources that Chinese data providers including company databases Qichacha, partially owned by Wind, and TianYanCha have stopped opening to offshore users for at least months.

☆ Software AG supports Silver Lake's improved bid
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +1 min

Software AG has received multiple offers according to media reports but has chosen to go ahead with the first bidder - Silver Lake. Silver Lake in April offered 30 euros per share for Software AG. Following Silver Lake's increased bid, Software AG said it does not intend to enter into discussions with a "US competitor". Software AG said in a subsequent filing that the competitor's non-binding offer was subject to specific conditions that were "not achievable". Silver Lake previously said in a regulatory disclosure that it had acquired additional 5% stake in Software AG, bringing its total holding in the company to over 30%.

☆ After First Republic's rescue, economists predict further pain with a 'new era' of higher inflation
▼ + stars: | 2023-05-03 | by ( Elliot Smith | ) www.cnbc.com time to read: +5 min

Leah Millis | ReutersAfter the rescue of First Republic Bank by JPMorgan Chase over the weekend, leading economists predict a prolonged period of higher interest rates will expose further frailties in the banking sector, potentially compromising the capacity of central banks to rein in inflation. Almost 80% of chief economists surveyed said central banks face "a trade-off between managing inflation and maintaining financial sector stability," while a similar proportion expects central banks to struggle to reach their inflation targets. Yet several leading economists told a panel at the World Economic Forum Growth Summit in Geneva on Tuesday that higher inflation and greater financial instability are here to stay. That means inflation, the impulse of inflation will be higher." She added that it "defies logic" that as the industry tries to pivot rapidly to a higher interest rate environment, there won't be further casualties beyond SVB, Signature, Credit Suisse and First Republic.

"Since Xi Jinping took power in 2012, China has expanded the legal landscape for exit bans and increasingly used them, sometimes outside legal justification," the Safeguard Defenders report reads. Attention on the exit bans comes as China-U.S. tensions have risen over trade and security disputes. The Reuters analysis of records on exit bans, from China's Supreme Court database, shows an eight-fold increase in cases mentioning bans between 2016 and 2022. Most of the cases in the database referring to exit bans are civil, not criminal. Some activists say the wider use of exit bans reflects tighter security measures under President Xi.

☆ Inflation and interest rates: It's easier to gain weight than to lose it, says Bain & Co
▼ + stars: | 2023-05-02 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailInflation and interest rates: It's easier to gain weight than to lose it, says Bain & CoKaren Harris, managing director of macro trends group at Bain & Co, says "I'd rather be the bank of India than the bank of Japan."

☆ We're entering a 'structurally more inflationary' world —and that will mean more failures, Bain & Co MD says
▼ + stars: | 2023-05-02 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWe're entering a 'structurally more inflationary' world —and that will mean more failures, Bain & Co MD says"The calibration to an era of low rates is so entrenched that getting used to higher rates, that torque, will create failures that we haven't yet seen or anticipated," said Karen Harris, managing director of the Macro Trends Group at Bain & Company.

Ambassador to China Nicholas Burns said on Tuesday Washington was very concerned about China's recent "punitive" action toward some U.S. companies, and that foreign firms are delaying investments in the country due to uncertainty about the openness of its economy. "If you put that together with some of the punitive actions that the government here in Beijing has taken against several American companies recently, we're very concerned about this," Burns said, adding: "We intend to have a full discussion with the government here about it." China's foreign ministry said at the time Mintz was suspected of engaging in unlawful business operations. Burns said a lot of foreign firms were delaying making major investments until they could see some consistency in messaging from China. He said he had warned American companies to carefully abide by a U.S. law that prohibits importing goods from China's Xinjiang region over concerns about forced labor by Uyghurs and other Muslim ethnic minorities.

☆ US Chamber of Commerce warns of major increase in risks for businesses in China
▼ + stars: | 2023-05-01 | by ( Michelle Toh | ) edition.cnn.com time to read: +2 min

Hong Kong CNN —The United States Chamber of Commerce has warned that rising scrutiny of American firms in China “dramatically increases” the uncertainties and risks of doing business in the country. “The services these firms provide are fundamental to establishing investor confidence in any market, including China,” the chamber said in a statement, without naming either company. Suzanne Clark, president and chief executive officer of the US Chamber of Commerce, speaking during an event in Ottawa, Canada, in April. The news came a month after Chinese authorities closed the Beijing offices of Mintz, detaining five of its local staff. The news about Bain has spooked the US business community in China, the American Chamber of Commerce in China told CNN last week.

☆ Subway comes up with $5 billion debt plan to clinch $10 billion-plus sale, sources say
▼ + stars: | 2023-05-01 | by ( ) www.cnbc.com time to read: +4 min

This is weighing on how much the private equity firms are offering to buy companies. So far, bids for Subway have ranged between $8.5 billion and $10 billion, one of the sources said. Barclays, a major player in the market for WBS financing, is one of the banks in discussions about long-term financing, the sources said. JPMorgan's financing package also offers the option of a preferred equity component with a roughly 15% interest rate, the sources said. This is a more expensive route that private equity firms may not opt for, three of the sources added.

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