One scoop to start: Panera Brands, the casual dining group owned by investment group JAB, has filed confidential paperwork for an initial public offering in the US, according to people familiar with the matter. Read the full story here.
One more thing to start: Meet the reclusive founder of Shein, the fast-fashion company — once valued at $100bn in private markets — which you are going to be hearing a lot about in 2024 as it looks at an IPO. Get smart with this feature here.
In today’s newsletter:
The scene from Slush
DD is coming to you from Helsinki today, where venture capitalists and tech bosses have gathered for Europe’s premier industry event: Slush. The saunas were hot and the fish roe cool, while the frozen Finnish tundra was the perfect backdrop for a start-up community suffering a deep chill.
The confab is unlike any other, drawing thousands to the snowy streets, and not just because of the organised shvitz time (where many a local deal has been struck), writes DD’s Ivan Levingston.
But it will take more than a good sweat to heat up Europe’s venture capital market, with funding expected to plunge by nearly half this year to about $45bn, according to an annual report compiled by London-based venture capital group Atomico.
That’s down from $82bn last year, as US investors increasingly abandon the continent amid a global retreat by VCs due to higher interest rates.
Speakers at Slush include DoorDash chief executive Tony Xu (who did one of Finland’s largest ever M&A deals when he acquired Wolt in 2021), Supercell boss Ilkka Paananen, and partners from leading VC firms like Sequoia, Benchmark, Index and Accel.
Artificial intelligence was inescapable, with representatives from top AI companies like Mistral and OpenAI attending. For one VC, the choice was either “follow the hype or choose to stay calm”.
Outside of AI, senior investors from the US and Europe said they expected the industry would continue to face challenges, with some investment firms unable to raise new funds and many start-ups under a cash crunch.
VCs that have portfolio companies ready to consider an initial public offering were in no rush to debut them to public investors given struggles in that market.
At Slush, the networking starts in the mornings with VC-sponsored breakfast events at local hotels, and ends late at night after elaborate dinners and parties. Dealmakers could distract themselves for a couple days with an ice hockey match or performances by Eurovision contestants and DJs.
But the reality is that deals have ground down dramatically to “almost nothing”, one UK investor said. Another European VC noted that start-ups are still avoiding having to test current market conditions to raise money: “Their investors are asking them to lay low.”
Nelson Peltz vs Bob Iger: the sequel
The approach of the festive season is usually a time for coming together and burying the hatchet. That is, unless you’re Nelson Peltz.
The activist investor relaunched his fight against Disney chief executive Bob Iger this week after the media conglomerate once again said it didn’t want to add him to its board.
Peltz’s hedge fund Trian Partners disclosed a stake in Disney in January and threatened a proxy fight to get a board seat. A few weeks later, he declared “the proxy fight is over” live on CNBC, a retreat that coincided with Iger’s birthday.
Peltz, who isn’t known for backing down from activist fights, said he decided to put his arms down after Iger unveiled plans to cut costs and get Disney’s streaming business on a path to profitability.
But the news on Wednesday that Disney planned to add outgoing Morgan Stanley chief executive James Gorman and former Sky boss Jeremy Darroch to its board appeared to rile up the octogenarian, who was not put forth for a seat.
In a statement released on Thursday morning, Trian said it was less than impressed with Iger’s progress so far. “Investor confidence is low, key strategic questions loom, and even Disney’s CEO is acknowledging that the company’s challenges are greater than previously believed,” it wrote.
As ever with proxy battles, what followed got ugly. Disney quickly counter-attacked with its own statement, in which it claimed that Peltz had partnered up with Isaac Perlmutter, who was unceremoniously fired from the entertainment giant in March and has a vendetta against Iger.
For some context: Peltz and Perlmutter, who is known as Ike, have been friends for a long time. And, of course, as good friends do, Perlmutter handed control of his more than $2bn worth of shares to Peltz. It was an agreement that gave Trian much greater heft to fight Iger and the Disney board.
There’s no wrath like a billionaire scorned.
Brookfield raises $30bn in a record infrastructure haul
It has been a miserable year for many private equity firms seeking new investments from cash-strapped institutions who are stuck holding trillions in buyout deals being crushed by higher rates.
But not everything is bad. Money continues to flow to a handful of large investors targeting infrastructure deals.
On Friday, Brookfield Infrastructure Partners closed on a $30bn infrastructure fundraising that sets a new record for the industry, reports DD’s Antoine Gara.
Institutional investors committed $21bn to Brookfield’s fifth flagship infrastructure fund, while the firm itself will invest $7bn. Add in another $2bn from co-investments carrying lower fees and the total haul was $30bn.
The Toronto-based investment behemoth has special powers when it comes to fundraising. Its $7bn commitment will be funded from cash on its balance sheet and by issuing stock from its publicly listed infrastructure and renewable energy arms.
Brookfield’s competitors in the space are increasing their ambitions at a time when many private equity investors have been forced to cut their fund sizes.
Global Infrastructure Partners, a pioneer of the infrastructure investment asset class, is targeting $25bn for its latest fund. Traditional buyout groups such as Blackstone and KKR are also seeing increasing momentum. Whether the flood of cash will lower returns is another story.
“I think there’s a huge amount of opportunity to deploy capital that should soak up any money coming in [to the sector],” Sam Pollock, chief executive of Brookfield Infrastructure Partners, told the FT.
ASML’s chief executive Peter Wennink will step down in April after more than a decade at the helm of Europe’s most valuable tech company. Christophe Fouquet, a chip industry veteran who is chief business officer, will replace him.
Chip Wars China’s flagship tech company kept its edge in the semiconductor war despite sanctions, the FT writes.
Keeping Secrets Citi is accused of tolerating a culture where women faced sexual harassment. Before 2022, it would have been a secret, The New York Times reports.
Deal Hunter Andrea Orcel took the reins of Italian bank UniCredit in 2021. He has boosted earnings and has €10bn in funds for targeted acquisitions or shareholder payouts, Bloomberg reports.
Due Diligence is written by Arash Massoudi, Ivan Levingston, William Louch and Robert Smith in London, James Fontanella-Khan, Francesca Friday, Ortenca Aliaj, Sujeet Indap, Eric Platt, Mark Vandevelde and Antoine Gara in New York, Kaye Wiggins in Hong Kong, George Hammond and Tabby Kinder in San Francisco, and Javier Espinoza in Brussels. Please send feedback to email@example.com