Check this out: http://business.timesonline.co.uk/tol/business/in…
Hey everyone, I've been following this forum now for a while and have always secretly wanted to post. I saw this article in the Times and thought it was remarkable. I don't know if anyone else is following financial services M&A activity (unless, of course, you work for a merger arb hedge fund!). But have you guys seen the amount of buyout speculation that is HSBC related?
First it was HSBC-DLJ, HSBC-Paine Webber, HSBC-Merrill Lynch, then HSBC-Morgan Stanley, now HSBC-UBS?? Looks like everyone on the street is really expecting HSBC to finally spend their 'war chest' of $25B cash they have on their balance sheet. I know they've been doing pretty poorly lately with the US subprime debacle. Any opinions?
And in case you didn't figure this out...HSBC Corporate, Investment Banking and Markets is struggling. After spending $800M since 2003 they went from #14 in the M&A League Tables to...#14! For all you anal-retentives...that's 2003 Thompson vs. 2006 Thompson global announced M&A.
Wow I've been in this business for too long...
My gut reaction is that a UBS/HSBC merger wouldn't happen. My first guess is that UBS bankers wouldn't be happy about it -- if the investment bank is acquired, I suspect that bankers will want to be acquired by an institution whose investment bank currently runs the show in the firm (not the case at UBS right now).
However, I can see how UBS would be an attractive target: 1. UBS is 4th in global M&A revenues -- not a bad way for HSBC to grab a piece of the action 2. Potential synergy: HSBC's huge balance sheet could be used to expand UBS's leveraged loan abilities. We all know that UBS has been extremely tight when it comes to lending -- sacrificing huge fees, potential relationships with sponsors, and (depending on how you look at it) banking talent (example: Moelis??) 3. UBS's absurdly strong presence in Hong Kong and China -- especially given their (near-impossible to replicate) underwriting license in China
Thoughts, anyone?
This would never happen, seeing the most recent Barclays & ABN Amro deal the speculation is at its height. But HSBC is a takeover target no doubt
You mean HSBC is a break-up target...Except BofA and Citi, I can't think of many banks who can afford to acquire a $200B entity...
If cost & benefits work out an LBO might take place in such type of large transactions... ???
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