Two billionaires, French media mogul Patrick Drahi (Altice Europe) and German tech investor Oliver Samwer (Rocket Internet), have announced their intention to take their company off the stock market. Japan’s Masayoshi Son (Softbank) is reportedly considering the same option. Why?
Shortly after Softbank sold the Arm company to Nvidia (microchips), rumors suggested that the Japanese holding company could exit the stock market. Masayoshi Son has been studying this possibility for years.
For their part, billionaires Patrick Drahi (Altice Europe) and Oliver Samwer (Rocket Internet) have announced in recent weeks that they wish to buy back from investors the shares of their company which they did not yet own and which had been placed on the stock market. . The relatively low price of their company’s stock and equally low interest rates make it possible to do so at a relatively low price.
This ‘write-off’ is easier said than done, as the company’s external investors must first accept the price offered.
The fact that some major players among the external shareholders are becoming more and more activists is perhaps one of the main reasons why investors like Son or Oliver Samwer, one of the brothers who went public, in 2014 , the Rocket Internet start-up group with great fanfare, want to make their empire private again.
Specialized funds deliberately take a stake in a listed company in order to openly question the authority of the founding CEO and influence policy. Son and Samwer would rather get rid of these interests than get rich.
“It’s easier to make long-term strategic decisions outside of the stock market,” Rocket Internet says of the proposed withdrawal. Patrick Drahi also mentions ‘a long-term strategy’ as the reason for his plan to take the telecommunications group Altice Europe off the stock market. According to the founders, their company and its components are misunderstood and structurally undervalued by the market. According to critics, however, this is linked to the policy pursued.
Another not insignificant element, a private company must no longer comply with the reporting and notification obligations imposed by the stock exchange supervisory authorities. This makes it easier to conclude large transactions, away from the spotlight of the stock market.
Statistics from Bloomberg’s news service show that this is a general trend. This year, $ 26 billion in similar deals were announced, 26 times more than the same period last year.
Corporate bankers point to a second trend, less visible this time: not only are more and more public companies wanting to become private again, but more and more unlisted companies are putting aside their stock market projects. The stock market listing is no longer considered a consecration.
Henrik Johnsson, investment banker at Deutsche Bank, expects a double movement in the coming months: more withdrawals from the stock market and more technology companies going public.
‘There are differences by sector. It all depends on how owners perceive the appreciation for their business, ‘he told Bloomberg. ‘Entrepreneurs who think the stock market values their business too little, like Patrick Drahi, are exiting. But for young tech companies, stock market valuations are important, and they want to make them public. ‘
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