BX - The Blackstone Group Inc.

NYSE - NYSE Delayed Price. Currency in USD
47.23
+1.51 (+3.30%)
At close: 4:02PM EDT
Stock chart is not supported by your current browser
Previous Close 45.72
Open 46.10
Bid 0.00 x 1800
Ask 0.00 x 4000
Day's Range 46.05 - 47.31
52 Week Range 26.88 - 49.81
Volume 3,702,019
Avg. Volume 6,946,482
Market Cap 56.445B
Beta (3Y Monthly) 1.62
PE Ratio (TTM) 32.59
EPS (TTM) 1.45
Earnings Date Oct 16, 2019 - Oct 21, 2019
Forward Dividend & Yield 1.92 (4.20%)
Ex-Dividend Date 2019-07-26
1y Target Est 52.17
Trade prices are not sourced from all markets
  • Why Is Blackstone Group (BX) Up 3.5% Since Last Earnings Report?
    Zacks

    Why Is Blackstone Group (BX) Up 3.5% Since Last Earnings Report?

    Blackstone Group (BX) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

  • Julian Robertson Buys 3 Stocks in 2nd Quarter
    GuruFocus.com

    Julian Robertson Buys 3 Stocks in 2nd Quarter

    New positions include David Tepper’s former top holding Micron Technology Continue reading...

  • 7 Ways to Play Private Equity Without Being a Billionaire
    InvestorPlace

    7 Ways to Play Private Equity Without Being a Billionaire

    The world of private equity involves some of the world's most prominent asset managers. On Aug. 9, BlackRock (NYSE:BLK) closed a deal to invest $875 million for a 30% stake in Authentic Brands, the owner of Sports Illustrated, Nine West, Juicy Couture and many others. The investment was the first from the asset manager's new private-equity fund, Long Term Private Capital, which finished raising $2.75 billion in April from several cornerstone investors. Authentic Brands is the fund's first significant investment. InvestorPlace - Stock Market News, Stock Advice & Trading TipsWhat makes BlackRock's private equity fund different is that it intends to make investments for the long haul. * 10 Cheap Dividend Stocks to Load Up On "For institutional investors who want equity exposure, there's a need for an additional type of investment on the continuum between publicly traded equities and leveraged buyout style private equity - one that is potentially more rewarding than public equities but less risky than highly-leveraged buyouts," said Mark Wiseman, Chairman of BlackRock's alternative investors division in April. Most private equity firms buy a company, add leverage to help pay for the acquisition, find some growth either organically or through bolt-on purchases, and then sell it of five to seven years later for several times the original equity investment. Private equity investing can be very lucrative. However, unless you've got billions to invest, many of the best opportunities are unavailable to the retail investor. To gain access to these private equity deals, there are some ways a regular Joe can do it. Here are seven options on how to invest in private equity without being a billionaire. Ways to Play Private Equity: BlackRock (BLK)Source: Shutterstock For those investors who aren't familiar with BlackRock, it's one of the largest asset managers in the world with $6.8 trillion in assets under management (AUM) as of the end of June. It operates iShares, the largest ETF provider in the world, with $2 trillion in AUM. iShares provides ETFs at relatively inexpensive management expense ratios. However, when you have $2 trillion in assets to generate fees from those ETFs, the revenues accumulate pretty quickly. In BlackRock's Q2 2019, iShares ETFs accounted for 39% of the company's base fees in the quarter. The company's ongoing foray into alternative investments such as private equity is going to take a long time to catch up to iShares' fee generation. In the second quarter, alternative investments accounted for just 8% of BlackRock's $2.9 billion in base fees.So, if you buy into BLK stock because of its Long Term Private Capital Fund, it's important to remember that it's but a small piece of the BlackRock pie; albeit a very interesting and innovative approach to private equity investing. Buying into BlackRock is a great way to play private equity while still hedging your bets. Brookfield Business Partners (BBU)Brookfield Business Partners (NYSE:BBU), the private equity arm of Toronto-based Brookfield Asset Management (NYSE:BAM), announced Aug. 13 that it was buying Genworth Financial's (NYSE:GNW) 57% stake in Genworth MI Canada, one of Canada's largest mortgage insurance providers. Brookfield is paying C$48.86 a share for the C$2.4 billion controlling interest. Genworth MI Canada is one of just three companies that provide mortgage insurance in Canada. This is the kind of deal Brookfield likes to make. It's paying a reasonable price for an asset that's got a lot of upside outside of Canada. "This hints at potential global expansion of MIC (Genworth MI Canada) operations … which could drive enhanced growth and profitability," National Bank of Canada analyst Jaeme Gloyn wrote in a note to clients. Under Genworth Financial's ownership, the Canadian unit was unable to operate in any countries where the parent operated. Now, it will be able to head south with a strong financial backer in its corner.Brookfield is known for adding value to its investments while remaining patient about its exit. The company will do what needs to be done to deliver excellent returns for shareholders. * 10 Stocks Under $5 to Buy for Fall BAM is one of my favorite stocks to hold forever because they understand capital allocation better than most. Blackstone Group (BX) Source: Shutterstock New York-based Blackstone Group (NYSE:BX) is one of the world's largest alternative asset managers with $512 billion in assets under management. On July 1, it completed its conversion from a publicly-traded partnership to a corporation. The company made the switch to make it easier for investors to own its stock. By converting, investors no longer need to file a Schedule K-1 for their taxes, making the paperwork from the investment far less cumbersome.Of the 150 largest U.S. public companies, Blackstone ranks first in terms of its long-term 10-year growth rate for revenues and earnings as well as its pre-tax margin and dividend yield. So, despite being one of the best-run businesses in the country, its partnership structure limited the market for its stock.For example, 58% of the largest 150 companies referenced above are included in U.S. long-only and index ETFs. By comparison, BX is only included in 21% of the U.S. long-only and index ETFs. That's all because it wasn't a corporation.As far as private equity goes, Blackstone has $171 billion in assets under management. Those assets are invested in more than 97 companies with combined revenues of more than $76 billion and employing more than 400,000 people around the world. At the current moment, it has $75 billion in available capital. Onex (ONEXF)Source: Shutterstock One of two Canadian private equity companies on the list, Onex (OTCMKTS:ONEX) has been in the news a lot lately for its acquisition of WestJet Airlines (OTCMKTS:WJAFF), Canada's second-largest airline behind Air Canada (OTCMKTS:ACDVF).On Aug. 13, the Canadian Competition Bureau OK'd the transaction. Previously, Canada's Transport Minister, Marc Garneau, approved the C$3.5 billion deal. Originally, Onex was prepared to pay C$35.75 a share. However, the ongoing troubles with the Boeing 737 Max reduced the price by C$4.75 to C$31. The deal's expected to be approved by the remaining Canadian regulators who have yet to render a decision. The transaction should close in the fourth quarter of 2019.Although WestJet is one of Onex's highest-profile acquisitions in its 35-year history, it manages more than C$39 billion in assets including C$6.9 billion of its own capital. Of the $39 billion, approximately 69% is invested in private equity with the rest in cash (18%), credit (12%) and fixed-income investments, as well as a small amount in real estate (1%). Onex's private equity investing has generated a gross multiple of capital invested of 2.6 times and a 27% gross IRR (internal rate of return) on realized, substantially realized, and publicly traded investments. * 15 Growth Stocks to Buy for the Long Haul Like Brookfield, it's a patient investor. Compass Diversified Holdings (CODI)Compass Diversified Holdings (NYSE:CODI) is by far the smallest of the private equity stocks listed in this article with a market cap of just $1.1 billion.Not only does CODI take majority-ownership stakes in middle-market businesses in North America, it also provides debt and equity for its subsidiaries to grow. It currently owns eight different companies.2019 has been a hectic year for CODI selling two of its businesses for large amounts. On July 1, it announced the sale of Clean Earth, one of the largest specialty waste processors in the U.S, for $625 million. The sale netted Compass Diversified $200 million which it used to eliminate the outstanding debt on CODI's revolving credit facility. In February, CODI sold Manitoba Harvest Hemp Foods to Tilray (NASDAQ:TLRY) for $316.6 million. Manitoba Harvest gives Tilray a big piece of the U.S. hemp foods market. Compass Diversified will turn around and find one or two new platform companies on which to grow. Once upon a time, CODI owned Fox Factory Holding (NASDAQ:FOXF), makers of bike and truck shocks, until it took FOXF public in 2013. With just eight businesses owned, it has a much easier job managing its investments. If you're patient, CODI will reward you over the long haul. Ways to Play Private Equity: Invesco Global Listed Private Equity ETF (PSP)The first of two available private equity ETFs, the Invesco Global Listed Private Equity ETF (NYSEARCA:PSP) has an exceptionally high management expense ratio of 2.03%. The ETF tracks the performance of the Red Rocks Global Listed Private Equity Index. The index typically invests in 40 to 75 private equity companies including BDCs, MLPs, and other investment vehicles. Currently, PSP has 68 holdings with 41% allocated to U.S. companies, another 16% to the UK, and Switzerland at 6%. If you like to invest in mid-cap and small-cap stocks, PSP allocates just 29% to large caps. Of its top 10 holdings, one of the companies listed in this article (Blackstone) is held in its largest holdings. Brookfield Business Partners, Onex, and Compass Diversified are also held. Over the past 10 years, PSP has generated an annualized total return of 9.5%, which is a decent, if not great return over the period. * 10 Stocks Under $5 to Buy for Fall If you're wondering why the fee is so high, it incorporates the fund fees of the 68 holdings in the ETF. The management fee itself is 0.50%. ProShares Global Listed Private Equity ETF (PEX)Not nearly as large an ETF in terms of assets with just $18.8 million, the ProShares Global Listed Private Equity (BATS:PEX), the ETF tracks the performance of the LPX Direct Listed Private Equity Index, a diversified global portfolio of listed private equity companies whose primary business is direct investments in private enterprises. It currently owns 30 stocks, including Onex, which is the ETFs second-largest holding, accounting for almost 10% of the entire portfolio. The largest holding in PEX is Ares Capital (NYSE:ARCC), a BDC with nearly $8 billion in market cap. It's hard to believe, but PEX is 75 basis points more expensive than PSP at 2.78% annually. Excluding the acquired fund fees from the ETFs 30 holdings, it charges 0.60%. There's no mystery why private equity ETFs haven't grown their net assets beyond $220 million. You're probably better off just putting money into an ETF that holds some of the companies listed above. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post 7 Ways to Play Private Equity Without Being a Billionaire appeared first on InvestorPlace.

  • Now the London Stock Exchange Is Back to Life, It’s Investigation Time
    Bloomberg

    Now the London Stock Exchange Is Back to Life, It’s Investigation Time

    (Bloomberg Opinion) -- The London Stock Exchange’s trading failure on Friday came at a bad time for the markets but a relatively good time for its newish CEO David Schwimmer. The former Goldman Sachs Group Inc. banker has been enjoying a glorious honeymoon. It had to end at some point.The precise cause of the outage, fixed within an hour and 40 minutes, isn’t clear. But when trading isn’t available for such a long period after the scheduled open, something has gone badly wrong. Time for an investigation.Schwimmer’s mind has been on big strategic matters. That’s what bankers like to do. Last month’s $27 billion deal to acquire the data provider Refinitiv (which competes with Bloomberg LP, the parent of Bloomberg News) from a Blackstone Group LP-led consortium and Thomson Reuters Corp was widely applauded. It saves London Stock Exchange Group Plc’s investment case from being defined by worries about Brexit. As a result, Schwimmer has plenty of personal capital right now. It helps also that he is relatively new and was appointed after a period of board turmoil.Leading the LSE nevertheless requires operational expertise. Schwimmer ran teams in his previous career, but in taking this job he has chosen a life as a full-time operator. Day-to-day management is as important as the 10-year vision. The consequences of this outage could have been far worse: It's been a volatile week in financial markets. Fortunately, there was little market-moving news flow on Friday morning.The LSE is a relatively small company, with roughly 4,500 staff. It comprises semi-autonomous silos, partly the result of being assembled through acquisition. When the former CEO Xavier Rolet’s future was in doubt, investors were relaxed about the individual units being able to run themselves if there was a long wait for a successor.Maybe the LSE’s fragmented organizational structure and governance has nothing to do with Friday’s failure. However, the outage gives Schwimmer a good reason to probe whether operations are sufficiently robust and ask if operational expertise is fully shared across the entire group. While this is a dull job compared to transformational M&A, management so often is.Refinitiv takes the LSE into new rather than overlapping areas. A big integration looms, although with little overlap it may not hamper the enlarged group’s ability to deal with a mini-crisis like this one. The deal will also further diminish the revenue contribution from trading in the FTSE 100 and FTSE 250 stocks that were suspended on Friday. Cash equities will still be the disproportionate driver of the LSE’s corporate reputation. Failures are highly visible. The business requires disproportionate focus.A week ago, large parts of the U.K. – including elements of the London transport commuter network – were hit by a power cut. Memories of that are already fading. People tend to forget about temporary outages so long as they don’t repeat. But Schwimmer shouldn’t waste this opportunity to channel his gaze inwardly.To contact the author of this story: Chris Hughes at chughes89@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Multifamily madness: Top deals of 2019 could lead to Denver's 'best year' ever (Photos)
    American City Business Journals

    Multifamily madness: Top deals of 2019 could lead to Denver's 'best year' ever (Photos)

    This year is shaping up to be one of the hottest for multifamily sales across metro Denver. With the big sale of Union Denver, record-setting portfolio deals and plenty of recent activity in the suburbs, brokers are saying they’ve never been busier. “Calls are coming in on a weekly basis with interest in this market,” said Terrance Hunt, vice chairman of Newmark Knight Frank’s multifamily team.

  • Houston-based energy co. has 2 paths forward through bankruptcy
    American City Business Journals

    Houston-based energy co. has 2 paths forward through bankruptcy

    The company has to try to sell its assets, but if it can't, it will survive the process with new ownership and a fresh line of credit.

  • Coffee Day to sell Bengaluru tech park to Blackstone, cut debt
    Reuters

    Coffee Day to sell Bengaluru tech park to Blackstone, cut debt

    Coffee Day Enterprises Ltd said on Wednesday it planned to sell a tech park it owned in the southern Indian city of Bengaluru to Blackstone for up to 30 billion rupees ($421 million), in an effort to cut debt. The announcement comes weeks after the company's founder was found dead in a river in southern India, sparking speculation that he was under intense financial strain and prompting the company to look for options to deleverage its assets. Coffee Day said it entered a non-binding letter of intent with U.S.-based private equity firm Blackstone for the sale.

  • India's Coffee Day to sell Bengaluru tech park to Blackstone, cut debt
    Reuters

    India's Coffee Day to sell Bengaluru tech park to Blackstone, cut debt

    Coffee Day Enterprises Ltd said on Wednesday it planned to sell a tech park it owned in the southern Indian city of Bengaluru to Blackstone for up to 30 billion rupees ($421 million), in an effort to cut debt. The announcement comes weeks after the company's founder was found dead in a river in southern India, sparking speculation that he was under intense financial strain and prompting the company to look for options to deleverage its assets. Coffee Day said it entered a non-binding letter of intent with U.S.-based private equity firm Blackstone for the sale.

  • Reuters

    UPDATE 1-Anbang's Japan properties up for sale, Blackstone seen bidding -sources

    China's troubled Anbang Insurance Group has put its $2.4 billion property portfolio in Japan up for sale and previous owner Blackstone Group is bidding, two people familiar with the company's plans said. The insurer is offering its entire portfolio of mainly residential buildings in Tokyo and other big cities after it failed to sell some of the assets last year, the sources said. Anbang is planning to sell the entire portfolio it bought from Blackstone," said one of the sources who declined to be identified because they were not authorised to speak publicly about the company's plans.

  • Reuters

    Anbang to sell entire $2.4 bln Japanese property portfolio, Blackstone seen bidding -sources

    China's troubled Anbang Insurance Group has started a sale of its entire $2.4 billion Japanese property portfolio and previous owner Blackstone Group is bidding, two people said, after the insurer failed to sell some of the assets last year. Anbang is aiming to sell the entire residential portfolio it bought from the U.S. private equity firm, said the people, declining to be identified because the deal is not public. Anbang paid Blackstone around 260 billion yen ($2.4 billion) for the assets in 2017, in what was Japan's biggest property deal since the global financial crisis.

  • BlackRock Buys Stake in Authentic Brands: How Should Investors React?
    Zacks

    BlackRock Buys Stake in Authentic Brands: How Should Investors React?

    On Sunday, August 11th, BlackRock (BLK) announced that it would be purchasing a roughly 30% stake in privately held Authentic Brands for $875 million, a deal that values the company at over $4 billion. Shares closed down 2.62% in trading Monday.

  • Business Wire

    Blackstone Hires Limin Wang as a Managing Director in Quantitative Research

    Blackstone (BX) today announced that Limin Wang has joined the firm as a Managing Director on the Quantitative Research team in Blackstone Alternative Asset Management (BAAM). Limin joins from Laurion Capital Management, where he spent four years as a Portfolio Manager. Prior to that, he spent over ten years with Credit Suisse as a director on their proprietary trading desk.

  • IPO-Edge.com

    Evercore Hires Neil Shah as Senior MD to Lead Permanent Capital Business, Including SPACs

    By John Jannarone Evercore Inc. has hired veteran investment banker Neil Shah as a Senior Managing Director to launch and lead its permanent capital business, which will include a push into special purpose acquisition companies, or SPACs. Mr. Shah, who will be part of Evercore’s advisory practice, has worked closely with financial sponsors for over […]

  • Risk for BX Isn't so Black and White
    TheStreet.com

    Risk for BX Isn't so Black and White

    It's unclear whether Blackstone Group will decline to $38, but that is a potential danger, so buyers need to keep that in mind.

  • Blackstone Takes Stake in European Buyout Firm BC Partners
    Bloomberg

    Blackstone Takes Stake in European Buyout Firm BC Partners

    (Bloomberg) -- Blackstone Group Inc. has taken a stake in BC Partners in a deal that will give the European private equity firm capital to expand.Blackstone acquired a passive, minority stake in the buyout firm through its Strategic Capital Group, which specializes in minority partnerships with alternative asset managers, BC Partners said in a statement on Tuesday.Blackstone is likely to invest about 500 million euros ($560 million) in the firm for a 10% to 15% stake, a person familiar with the deal had said, asking not to be identified because the terms of the deal are private.“This investment is a testament to the growth and institutionalization of our business, and will enable us to take the Firm to the next level for the benefit of our investors,” BC Partners Chairman Raymond Svider said in the statement.BC Partners will use the potential cash injection to help develop existing businesses as well as new strategies, such as real estate and credit. Blackstone and rivals, including units of Goldman Sachs Group Inc. and Neuberger Berman Group, have raised multibillion-dollar funds to acquire interests in firms that manage private equity, real estate and other alternative investments.While some firms have used proceeds to cash out founders, others have redeployed the money to diversify or commit additional capital to existing funds. A minority interest in asset managers can give investors a share of ongoing fee income, which is relatively predictable for firms with several closed-end funds.Evercore Inc. acted as BC Partners’s financial adviser.\--With assistance from Sarah Syed.To contact the reporters on this story: Heather Perlberg in Washington at hperlberg@bloomberg.net;Gillian Tan in New York at gtan129@bloomberg.netTo contact the editors responsible for this story: Alan Mirabella at amirabella@bloomberg.net, Amy Thomson, Ben ScentFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Bloomberg

    The Leveraged Buyout Industry Is Starting to Eat Itself

    (Bloomberg Opinion) -- A giant of U.S. private equity is taking a stake in a smaller European rival. It’s easy to see what’s in the deal for London-based BC Partners; for Blackstone Group LP, the investment logic requires more imagination.BC, which has $27 billion under management, was carved out of Barings Bank following the lender’s collapse in 1995. The firm made its name by shunning technology companies before the dot com bubble burst and focusing instead on unloved industries – a strategy that helped the funds it raised in 1997 and 2000 to make an impressive 24% internal rate of return.In recent years, though, performance has been deteriorating. Returns from its 2011 vehicle – which is still to be fully liquidated – are in the third quartile of funds for which Bloomberg has performance figures. The latest fund, which is still investing, is down 11% so far.BC has suffered from some troubled investments: British real estate agents Foxtons, satellite group Intelsat SA, U.K. retailer Phones4U and U.S. retailer PetSmart Inc. In private equity, you can have one dud – but a handful gets noticed.In 2017, Raymond Svider tried to revamp BC’s management structure, installing himself as sole head. That overhaul will take time to feed into improved investment returns. And the stubborn fact of life is that past performance is a key driver of fundraising success: The firm took 18 months to raise its most recent 7 billion-euro ($7.8 billion) fund.For BC, raising the next fund is going to be challenging at a time when the industry as a whole seems to be awash with cash.Enter Blackstone. It may invest about 500 million euros in BC for a 10% to 15% stake, according to Bloomberg News.The benefits to BC are plain to see. Above all, it gets an important vote of confidence from an industry leader. This is an ingenious way to get a halo. The financial proceeds can be used to bolster its core private equity business and expand its newer real-estate and credit operations. Blackstone may be able to advise BC on precisely what kind of firm it should be, in particular whether it should narrow its focus from the seven industries it currently targets.For Blackstone? It invests in alternative asset managers as an asset class in their own right through its Strategic Capital Group, so this isn’t a new departure. It probably has more money than opportunities. There is some logic to investing in familiar territory.What's more, there's a hint of opportunism here. The worst may already be behind BC. It has scored some decent exits lately, with the sale of financial data provider Acuris and animal health unit Antelliq. And it's not often that the chance comes along to take a meaningful stake in a firm like this.Europe’s private equity shops, still closely-held partnerships, are typically smaller than their U.S. peers, something that is making it increasingly difficult for them to compete in a world where buyouts are getting ever bigger. Don’t expect BC to be the last in the region to seek an ally.To contact the author of this story: Chris Hughes at chughes89@bloomberg.netTo contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Financial Times

    Blackstone takes stake in smaller rival BC Partners

    has snapped up a stake in private equity rival BC Partners, as buyout groups turn to unconventional ways to benefit from the industry’s boom. The New York-based group has agreed to buy a stake of between 10 per cent and 15 per cent in its smaller rival BC Partners for about €500m, said people briefed on the matter. Blackstone Alternative Asset Management (BAAM), a division of the US buyout group, owns stakes in Kohlberg & Co, New Mountain Capital and Leonard Green.

  • NY investor buys more Phoenix apartments — this time for $100M
    American City Business Journals

    NY investor buys more Phoenix apartments — this time for $100M

    The New York group has been scooping up multifamily properties around the Valley. An industry expert spoke to the Business Journal about the significance of the deal.

  • Barrons.com

    Blackstone, Apollo and Ares Stocks Are Private-Equity Buys, Barclays Says

    Private-equity firms have been hot investments this year, and they could still produce more gains, according to Barclays analyst Jeremy Campbell,

  • Moody's

    Marble II Pte. Ltd. -- Moody's affirms Marble II's Ba2 ratings; outlook stable

    "The ratings affirmation reflects continued strong operating performance and robust liquidity at Mphasis Limited, Marble II's 52.3% owned operating entity and its only investment," says Sweta Patodia, a Moody's Analyst. Mphasis' performance remains in line with Moody's expectation with revenue growth of around 20% and EBITA margins of around 17% for the 12 months ended June 2019. Apart from currency impact, the growth has mainly been driven by new deal wins within the 'Direct International' customer segment that remains the largest contributor to Mphasis' revenues.

  • Activist Investor Elliott Holds Scout24 Stake, Demands Strategy Review
    Bloomberg

    Activist Investor Elliott Holds Scout24 Stake, Demands Strategy Review

    (Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Elliott Management Corp. demanded German classifieds group Scout24 AG split itself in two and pursue a bigger share buyback to boost investor returns after a sale of the company fell through in May.The U.S. activist investor, which disclosed a 7% stake in Scout24 on Monday alongside a letter laying out its position, said the company should sell its car listing business and focus on its real-estate unit, a move that Elliott predicted could lift the stock close to 65 euros a share. That’s well beyond the company’s previous record and more than twice its initial-public offering of 30 euros in 2015.“We believe there is a growing demand among a wide array of stakeholders for Scout24’s leadership to demonstrate a level of urgency that has thus far been lacking,” Elliott said.Scout24 has been vulnerable to an activist since its shareholders rejected a 46-euro-per-share offer from private equity firms Blackstone Group LP and Hellman & Friedman in May. Last month, the company announced it would simplify its structure to better focus on its two biggest businesses -- auto and real estate -- as well as pursue a 300 million-euro ($334 million) share buyback. For Elliott, the moves aren’t enough.The stock is now trading near its record high, closing Friday at 50.25 euros, and is up about 25% this year. The shares rose 0.7% as of 12:08 p.m. in Frankfurt, while the broader Stoxx Europe 600 Index was down 1.6%.Elliott said it has outlined its views for a breakup of Scout24 in meetings with managers of the company, whom it said should never have recommended the Blackstone-Hellman & Friedman offer.The AutoScout24 car business and the Immobilienscout24 real estate unit “do not have any material synergies sitting under one roof,” Elliott said, arguing that the existing structure doesn’t allow for resources to be allocated efficiently across divisions and employees don’t have proper incentives.In a statement, Scout24 said it has had active discussions with shareholders including Elliott in the past few months, before and after announcing its new strategy and committed to continue the dialogue. “We have announced comprehensive steps to strengthen both core businesses, continue to grow revenue while increasing operational efficiency and capital structure optimization,” Scout24 said. AutoScout24 SuitorsThere is rumored or confirmed interest from potential buyers in AutoScout24, and Immobilienscout24 is worth more than 5 billion euros ($5.6 billion) alone, almost as much as the entire company, Elliott said.A number of competitors could bid for AutoScout24, Germany’s second-biggest car listings business after EBay Inc.’s Mobile.de, with 1.1 million listings and 1.5 million listings, respectively.Softbank Group Corp.-backed Auto1 Group GmbH has expressed interest in buying the business in the past, according to people familiar with the matter, who asked not to be identified because the deliberations were private. And German publisher Axel Springer SE, which is being acquired by KKR & Co., has been seen as a potential suitor by analysts at Liberum, who valued AutoScout24 at 2.3 billion euros in a note last month.Spokeswomen for Auto1 and Axel Springer declined to comment.Elliott’s six-page letter to Scout24, dated July 26, outlines what the activist sees as the company’s potential, what it views as “missed opportunities” and its opinion on Scout24’s path forward. Addressed to Chief Executive Officer Tobias Hartmann and Supervisory Board Chairman Hans-Holger Albrecht, it’s replete with strong criticisms. Elliott said Scout24’s current share buyback plan was “grossly lacking in ambition.”The investor complained that Scout24’s executives had heard the fund’s ideas privately and promised to give feedback on its proposals, but instead issued a July 19 press release with its strategy update that “widely missed the mark,” according to Elliott.Elliott in GermanyScout24 adds to Elliott’s campaigns in Germany, where it has recently targeted pharmaceutical giant Bayer AG, software company SAP SE and industrial firm Thyssenkrupp AG.Elliott wants Bayer to settle legal claims linked to products from its Monsanto unit to unlock shareholder value. SAP has pursued a restructuring since Elliott disclosed a 1.2 billion-euro stake in April. At Thyssenkrupp, the chief executive officer and chairman resigned following criticism from investors including Elliott, who derided the company’s slow turnaround and what they see as its poor share price performance.(Updates with Scout24 statement in eight paragraph, context throughout.)\--With assistance from Frank Connelly.To contact the reporters on this story: Stefan Nicola in Berlin at snicola2@bloomberg.net;Eyk Henning in Frankfurt at ehenning1@bloomberg.netTo contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Benedikt KammelFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Legg Mason's (LM) Q1 Earnings Beat Estimates, Costs Down
    Zacks

    Legg Mason's (LM) Q1 Earnings Beat Estimates, Costs Down

    Legg Mason's (LM) first-quarter fiscal 2020 (ended Jun 30) earnings reflect lower revenues, reduced expenses and rise in assets under management (AUM).