Why First Republic Has Not Done a Deal

Challenges to rescue troubled lenders

First Republic will report quarterly results on Monday. This is the first time since the collapse of the Silicon Valley Bank triggered a regional banking crisis. The pressure on the sector isn’t over: Moody’s, rating agencies, Downgraded 11 regional lenders on Friday, including Zions and Western Alliance. And despite his $30 billion lifeline provided by one of the country’s largest banks, First Republic’s stock has fallen nearly 90% in the past six months.

So why aren’t there deals going on to raise more cash, sell assets, or even sell themselves?

This challenge is important. The hole in the First Republic’s balance sheet is Reportedly about $25 billionThis raises the question of who bears those liabilities and how. This is the problem First Republic is trying to solve with a combination of government, big banks and private equity (but not necessarily all three). Each of these parties has different priorities, timelines and constraints. The discussion continues.

What time is the clock? First Republic does not plan to announce the transaction with earnings. but, teeth It is expected to provide guidance on the stability of the deposit base and the size of potential losses. Assuming they’ve been mitigated, First Republic has time to fix the problem. However, the company’s decision to suspend dividends on preferred shares shows the bank’s clear focus on cash management.it’s already Lost Wealth Advisor That could change if further shocks to the commercial real estate industry trigger deposit redemptions or other unforeseen problems.

Still, analysts say those challenges may not yet be fatal, with First Republic falling into a somewhat painful holding pattern. “In our view, the only possible takeover scenario for the FRC is through a trustee who can take advantage of FDIC-assisted bargain purchases for would-be takeovers,” it wrote. Therefore, it concludes that FRC will try to crush it as an independent company in the near future. “

this is what is happening

Johnson & Johnson is reportedly looking to end its IPO slump. the group starts Pitch to prospective investors with KenvueAccording to The Wall Street Journal, the consumer health sector, which makes home products like Tylenol, still today. J.&J. hopes to raise at least $3.5 billion from the offering.

Budweiser’s marketing executive resigns amid conservative backlash. Alyssa Heinerscheid, who oversaw Bud Light’s partnership with transgender influencers, take a leave of absence After being called to boycott the brand by critics of the company’s efforts to adopt more inclusive marketing. Some have attacked Budweiser since then. movement to quell controversy.

Twitter’s validation overhaul is going in a weird direction. After the social network removed the check mark icon from thousands of notable users, it restored badges to some celebrities in a move meant to encourage subscriptions to the Twitter Blue service — including the dead Like chef and author Anthony Bourdain.Critics say the confusion The latest sign of chaos Elon Musk’s Twitter.

Dean of Tulane Law School retires. David Meyer is Became Dean of Brooklyn Law SchoolSince taking office in 2010, Meyer has helped oversee Tulane’s Corporate Law Institute. This institute, perhaps he hosts top meetings on M.&A. Lawyers, bankers, and other advisers who descend on the school’s hometown of New Orleans to negotiate business.

NBCUniversal loses a leader at a crucial moment

Yesterday’s news that Jeff Shell was stepping down as NBCUniversal’s CEO after developing an inappropriate workplace relationship with an employee shocked media executives in New York and Hollywood.

And at a critical time as NBCUniversal and its parent company Comcast try to figure out its future, there’s a hole at the top of NBCUniversal.

Shell was fired after weeks of investigation. After Women—who Wall Street Journal report was a veteran journalist for NBCUniversal — who filed a complaint against him.

Comcast CEO Brian Roberts told employees: “We built this company on a culture of integrity.”

It’s unclear who will replace Shell. Longtime Comcast executives who had Roberts’ ears. In the meantime, Comcast president Mike Cavanagh, who is believed to be Roberts’ successor, will oversee the business.

Long-term candidates include Mark Lazarus, who runs NBCUniversal’s television and streaming business. César Condé, head of the news department. Donna Langley, Chairman of Universal Pictures.

Shell’s departure comes at a difficult time for NBCUniversal. I’m having a hard time navigating the challenges of the current media age. His Peacock, the company’s streaming service, lost $2.5 billion last year and is expected to lose another $3 billion this year. Shell has long called on NBCUniversal to adopt streaming, and has led efforts to move the company’s content from Hulu (which is owned by Comcast about a third but controlled by Disney) to Peacock. was

Meanwhile, NBCUniversal’s vast array of cable channels is suffering from a significant decline in traditional TV viewership.

(One bright spot is the strong performance of Universal Pictures’ Super Mario Bros. Movie. Raised $871 million It is the highest-grossing title of the year at the global box office. )

The future of the sector is hazy. In a sign that Comcast has been considering all sorts of options for its media division, the conglomerate last year looked to merge NBCUniversal with video game giant Electronic Arts to spin out a new business. That deal never came to fruition, but it does suggest that pretty much everything is on the table, especially as analysts predict more media mergers to take place.

Comcast executives are expected to have many questions when they report their results on Thursday.

$69 billion runaway from Credit Suisse

In its final financial statement for Credit Suisse before its sale to UBS, Credit Suisse Bank today shed more light on its closing date. This includes a massive capital flight that most likely helped convince Swiss regulators that long-struggling banks needed bailouts.

Clients withdrew approximately $69 billion in assets in the first quarter. Especially in late March, what Credit Suisse called a “significant net outflow”. The numbers highlight the loss of confidence in the company amid the market turmoil triggered by the failure of Silicon Valley Bank.

Credit Suisse borrowed billions from the Swiss central bank to ease investor health concerns, but years of scandals and financial failures left months of doubts over its ability to survive. Ultimately, the authorities bailed out the lenders and coordinated the sale to UBS.

Overall, Credit Suisse lost CHF 1.3 billion ($1.46 billion) in the quarter.

The client is not yet fully back, but Credit Suisse is going to be absorbed by a more powerful rival. This highlights some of the challenges UBS faces in trying to stabilize the bank it agreed to buy for his $3.2 billion.

Credit Suisse also closed a $175 million transaction to acquire M. Klein. A boutique financial advisory firm owned by longtime dealmaker and former director Michael Klein. The acquisition was intended to support Credit Suisse’s turnaround plan, which included consolidating Credit Suisse’s investment bank with Clynes and spinning out the business.

Bed Bath & Beyond Bite The Dust

Bed Bath & Beyond finally died Sunday after the retailer filed for bankruptcy after months of trying to come up with a rescue plan. Wedding dress chain David’s Bridal also filed for bankruptcy Its collapse days later is the latest sign that the post-pandemic retail industry, fueled by free money and stimulus spending, is over.

Bed Bath & Beyond’s debt became a problem. As of November 2020, the company had approximately $1.5 billion in cash on hand and approximately $1.2 billion in debt. filing for bankruptcyBut just as earnings plummeted, it spent $1 billion on buybacks. This, combined with a sharp decline in the company’s stock price (trading at less than $1 for a month after peaking at about $80 about a decade ago), has contributed to Bed Bath & Beyond’s financial stability. gave a blow to

Suppliers have lost confidence. According to filings, in the third quarter of 2021, the retailer didn’t have the product and therefore missed the estimated $100 million in sales. Bed Bath & Beyond delayed payments to vendors and cut orders early last year to private label brandand the supplier went elsewhere.

Sue Gove, who took over as CEO in October, said inventory levels were around 70% during past holiday seasons.

The company was straining to operate in physical stores. Bed Bath & Beyond is underinvesting in e-commerce, facing the enormous costs associated with having over 300 stores, and facing the deadly combination of declining store sales. There was no.

one week before

A number of large tech and consumer goods groups will report quarterly results this week, while the US will release economic data for the first three months of the year. President Biden You may declare your candidacy for re-election.

tomorrow: alphabet and microsoftboth report cutting jobs and competing with each other in AI. McDonald’s, pepsi and Nestle A glimpse of consumer confidence.and UBSMore We will announce the results.

Wednesday: Meta We will release the results after last week’s latest round of layoffs. UK regulators Microsoft’s Acquired Activision Blizzard for $69 billion.

Thursday: Amazon announced earnings after its stock rose last week with a report that sales were set to beat analyst forecasts. The United States reports its first quarter GDP numbers.

Friday: investors will take note exxon mobil You can sustain skyrocketing profits against the backdrop of high energy prices.

speed lead

bargain

• What investments do tech moguls like Jeff Bezos, Bill Gates, and Marc Benioff have in common? Nuclear fusion. (WSJ)

• Ann Celsius AuctionBankrupt cryptocurrency lender . (luck)

policy

• The Sackler family, who own the makers of OxyContin, donated $19 million to a federally chartered advisory group that helped shape the government’s response to the opioid crisis. (NYT)

• “Small Towns Chase Americas $3 Trillion Climate Gold Rush(WSJ)

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