Before
the next recession strikes and valuations reset, who around the world
will be the next bag holder? The Chinese have understood in the last
several years, it could be them. Their recent acquisitions of foreign
companies were paid at hefty premiums, and now, it seems that with an
imminent global trade recession, these folks are ready to dump.
次の景気後退とバリュエーション見直し前に、世界中の bag holder (無用資産持ち手)となるのは誰だろう?ここ数年それは中国がそうかもと思われていた。ここ数年の彼らの海外企業買収には巨額なプレミアムが盛り込まれていた、今になり、世界貿易景気後退が差し迫り、彼らは投げ出そうとしている。
Bloomberg
outlines a significant problem. Since the Chinese overpaid for many
foreign companies in the last several years, volatile markets across the
world have made it impossible at the moment to sell for the right
price.
Since the ability to offload some of these companies through public
markets has shut in 2019, one needs to look at the IPO implosion in the
US, as these companies are now trying to reduce their debt piles, which
is an acknowledgment that bad times are ahead.
Ferretti SpA, an Italian superyacht maker, owned by China's
SHIG–Weichai Group, shelved its IPO last week. Ferretti blamed
macroeconomic headwinds for the dealy, as the IPO was seen as a way for
SHIG–Weichai Group's to cash out of its position in the company.
Since the trade war began a little over 15 months ago between the US
and China, the Chinese have been selling assets across the world to
build liquidity as domestic capital controls become tighter.
The global IPO and M&A markets are slowing,
something we recently highlighted, has made it much more difficult for
Chinese firms to sell foreign companies and assets in 2H19.
"It's a big process of adjustment," Mark Webster, managing director
at BDA Partners in Shanghai, told Bloomberg in a phone interview. "Some
Chinese companies made overseas acquisitions at the top of the cycle and
ended up overpaying for assets that did not make a lot of strategic
sense. They are now finding it challenging to offload those businesses
at fair values."
「今はまさに調整時期だ、」と上海のBDA Partnersの取締役 Mark Websterはブルームバーグに告げた。「中国企業の中にはサイクルの天井で海外資産を買い取ったところもある、とても戦略的とは思えないような価格で支払い過ぎた。彼らは今になってフェアバリューでそういうビジネスを手放そうとしている。」
Another example of Chinese firms attempting to liquidate companies is
PizzaExpress Ltd., a UK casual dining chain acquired by Chinese private
equity firm Hony Capital in 2014.
Sources told Bloomberg that PizzaExpress had hired a financial
adviser to prepare debt talks with creditors. There's also a possibility
that advisors are preparing the company for a sale.
Data compiled by Bloomberg shows the volume of Chinese outbound deals
dropped to $59 billion so far this year, down 13% over last year, and
well off 2016 high.
It's only a matter of time before Chinese firms become forced sellers
of Western companies, only to realize that there will be no buyers at
the valuations they paid several years ago, as forced selling will then
crush valuations.
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