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AT&T and activist investor Elliott Management yesterday reached a ceasefire, six weeks after Elliott disclosed a $3 billion stake and pushed for major management and strategy changes.
- The big surprise is that Elliott signed onto a truce that keeps Randall Stephenson as chairman and CEO through the end of next year.
- Elliott and Stephenson have held numerous meetings in Dallas over the past month, according to sources, with Stephenson convincing the activist investor that he wants a legacy of leaving with a higher share price than where he started.
- That magic number would be $39.75. AT&T last hit that mark in 2017, an opened trading today at $38.46 per share.
What did Elliott get? A lot, even though AT&T suggested most of the changes were already on its drawing-board. Big stock buybacks, a pledge to stop making major acquisitions, two new directors, splitting the chair/CEO role (post-Stephenson), a strategic review that's designed to result in at least $10 billion of new divestitures in 2020, retiring all debt from the Time Warner purchase, ambitious earnings targets, and a new CEO for WarnerMedia.
- That last part is important, as Elliott had felt Stephenson and AT&T president/COO John Stankey were telecom vets without requisite media experience. A formal search process is already underway, and current CNN boss Jeff Zucker is thought to be a long-shot.
What we hear: Stephenson convinced his antagonists that AT&T's telecom business remains king, and that even big new initiatives like HBO Max can be cost-contained.
The bottom line is that Elliott once again got what it wanted. In so doing, what happens next will be as much about its reputation as its returns.
🎯 Robinhood, the commission-free stock-trading app, tells Axios that it's raised $50 million in new Series E funding from DST Global.
- This closes out a $373 million Series E round at a $7.6 billion valuation, which was announced in July as a $323 million round led by DST.
• Three Chinese tech companies filed for U.S. IPOs in the past 24 hours, despite last month's buzz that the U.S. Treasury Department would seek to de-list Chinese companies from U.S. exchanges and block new ones from coming aboard.
🎧 Pro Rata Podcast digs into Microsoft's surprise win over Amazon for the giant Department of Defense cloud computing contract, nicknamed JEDI. Listen here.
Alphabet (Nasdaq: GOOG), the parent company of Google, offered to buy connected fitness device maker Fitbit (NYSE: FIT), as first reported by Reuters. No word yet on financial terms.
- Why it's the BFD: This would be Alphabet's first foray into the wearables market, and a sign of surrender for market trailblazer Fitbit, whose stock price had fallen over 90% since 2015.
- Market reax: Fitbit shares jumped 18% on the news, were halted, and then finished the day up 30.5%. Its market cap is now around $1.5 billion.
- Bottom line: "Google has described its hardware strategy as 'ambient computing,' meaning users should be able to access its services wherever they are. Buying Fitbit could be a play to make Google services a greater part of customers’ lives and measure up to Apple in the health and fitness space." — Lauren Feiner & Alex Sherman, CNBC
Venture Capital Deals
• Greensill, a UK-based provider of working capital and supply chain finance, raised $655 million in new funding from existing backer SoftBank Vision Fund. http://axios.link/x1p9
• Vacasa, a Portland, Ore.-based vacation rental management company, raised $319 million led by Silver Lake at a post-money valuation north of $1 billion. http://axios.link/RpOu
🚑 Nuvation, a New York-based cancer drug startup led by ex-Axovant CEO David Hung, raised $275 million in Series A funding. Omega Funds led, and was joined by Aisling Capital, Altitude Life Science Ventures, Baupost Group, Boxer Capital, EDBI, ECOR1 Capital, Fidelity, Pavilion Capital, Perceptive Advisors, Redmile Group, and Surveyor Capital. http://axios.link/SUtD
• Scopely, a Los Angeles-based mobile gaming company, raised $200 million in Series D funding at a $1.7 billion valuation. NewView Capital led, and was joined by CPPIB, Baillie Gifford, and return backers Greycroft, Revolution Growth and Sands Capital Ventures. http://axios.link/xk4d
• PeerStreet, a Los Angeles-based platform for investing in real estate-backed loans, raised $60 million in Series C funding. Colchis Capital led, and was joined by return backers A16Z, World Innovation Lab, and Thomvest Ventures. http://axios.link/pVJL
• Tiqets, an Amsterdam-based booking platform for museum tickets, raised $60 million in Series C funding. Airbnb led, and was joined by return backers HPE Growth and Investion. http://axios.link/xlVR
• IDNow, a German identity verification company focused on the financial and business service markets, raised $40 million from Corsair Capital. http://axios.link/Axgd
• Choco, a mobile ordering platform for restaurant kitchen ingredients, raised $33.5 million in Series A funding led by Bessemer Venture Partners. http://axios.link/qir4
🚑 PierianDx, a St. Louis-based clinical genomics informatics startup, raised $27 million in Series B funding. ATW Partners and SJF Ventures co-led, and were joined by return backers Health Catalyst Capital, Inova Health Systems, RTI International, and ARUP Labs. http://axios.link/zkd8
• Fountain, a San Francisco-based automated gig and hourly hiring platform, raised $23 million in Series B funding led by DCM. www.fountain.com
• CelLink, a San Carlos, Calif.-based maker of flexible electric circuit tech for auto and energy applications, raised $22.5 million in Series B funding from RBVC, Ford Motor Co., and BMW i-Ventures. www.cellinkcircuits.com
🚑 Burst Oral Care, a Los Angeles-based maker of sonic toothbrushes, raised over $20 million led by Volition Capital. http://axios.link/sy5H
🚑 Twistle, a Seattle-based healthcare process automation startup, raised $16 million in Series A funding co-led by Health Enterprise Partners and MemorialCare Innocation Fund. www.twistle.com
• Scratchpay, a Los Angeles-based provider of payment plans for veterinary care, raised $15 million in Series B funding. Companion Fund led, and was joined by TTV Capita,, FJ Labs, and Struck Capital. The company also secured a $50 million warehouse debt facility from Credit Suisse. http://axios.link/LdHr
🚑 Sensely, a San Francisco-based developer of chatbots for health insurers, raised $15 million. Aflac led, and was joined by NMC, Nippon Life Insurance, SIG, Sojitz Corp., Zuellig Pharma, SVB and return backers Mojo Partners, Chengwei Capital, and Pegasus Tech Ventures. http://axios.link/k8Ae
• Become, an Israeli online funding platform for SMBs, raised $10 million in Series A funding. Benson Oak Ventures and Magenta Ventures co-led, and were joined by RIO Ventures Holdings, iAngels, and Entrée Capital. www.become.co
🚑 Socially Determined, a Washington, D.C.-based healthcare data analytics startup, raised $7.3 million in Series A funding from Ziegler Link-Age Funds, ProMedica, 3M, OSF HealthCare, and LRVHealth. http://axios.link/xv9o
• mPower Technology, an Albuquerque-based solar cell startup, raised $2.5 million in Series A funding from Sun Mountain Capital. http://axios.link/EWoX
• Searchable.ai, an enterprise search startup, raised $2 million in seed funding led by Defy Partners. http://axios.link/4kzJ
Private Equity Deals
⛽ Blue Water Energy and Nixon Energy Investments agreed to buy the drilling and completions unit of metal-cutting tools maker Sandvik (ST: SAND) for $93 million. http://axios.link/YBci
• Hillhouse Capital agreed to invest $7.5 billion for a 15% stake in China’s Gree Electric Appliances. http://axios.link/zVNA
• Quadrant Private Equity agreed to buy Australian outdoor advertising company QMS Media (ASX: QMS) for A$421 million. http://axios.link/nQTR
• Petco, the pet retailer owned by CVC Capital Partners, reportedly is in talks to buy Wag, the dog-walking startup controlled by SoftBank Vision Fund, per Recode. Wag has raised over $350 million from SVF, Battery Ventures, CSC Upshot, Tenaya Capital, Sherpa Ventures, and Sand Hill Angels. http://axios.link/ophb
• Regional Rail, a Kennett Square, Penn.-based portfolio company of 3i, agreed to buy Pinsley’s Florida operations, which includes 208 miles of track along three short-line railroads. www.regional-rail.com
• Vitruvian Partners bought Sykes, a holiday home provider in the UK, Ireland, and New Zealand, from Livingbridge. www.sykescottages.co.uk
• 36KR Holdings, a Chinese online publisher of tech news, set IPO terms to 3.6 million shares at $14.50-$17.50. It would have a fully-diluted market value of $676 million, were it to price in the middle, and plans to list on the Nasdaq (KRKR) with Credit Suisse and CICC as lead underwriters. The company reports a $6.6 million net loss on $29 million in revenue for the first half of 2019. http://axios.link/sjcJ
• ByteDance, owner of TikTok, denied an FT report that it is prepping an IPO for Q1 2020, although said nothing about Q2 or beyond. http://axios.link/RdcN
• Canaan, a Chinese cryptocurrency mining equipment maker, filed for a $400 million U.S. IPO. This comes about a year after it pulled plans for a Hong Kong float. Canaan plans to trade on the Nasdaq (CAN) with Credit Suisse as lead underwriter, and reports a $48 million net loss on $42 million in revenue for the first half of 2019. http://axios.link/o0Qb
🚑 Centogene, a German rare disease diagnostics startup, set IPO terms to 4 million shares at $14-$16. It would have an initial market cap of $298 million, were it to price in the middle, and plans to trade on the Nasdaq (CNTG) with SVB Leerink and Evercore ISI as lead underwriters. Backers include TVM Capital Life Science. http://axios.link/ATB7
• LIZHI, a Chinese podcasting platform, filed for a $100 million IPO. It plans to trade under ticker LIZI, with Credit Suisse and Citi as lead underwriters, and reports an $8 million net loss on $71 million in revenue for the first nine months of 2019. Backers include Matrix Partners China and Morningside Ventures. http://axios.link/DmYd
• MLU, the Russian ride-hail JV between Yandex and Uber, is in talks with Morgan Stanley and Goldman Sachs about an IPO that would be dual-listed in Russia and the U.S., per Bloomberg. http://axios.link/MmKF
• Phoenix Tree Holdings, a Chinese online marketplace for apartment rentals, filed for a $100 million IPO. It plans to trade on the NYSE (DNK) with Citi as lead underwriter, and reports a $352 million net loss on $700 million in revenue for the first nine months of 2019. Backers include Tiger Global and Joy Capital. http://axios.link/irNc
• Arcus and Jose de Mello are seeking a buyer for their combined 80% stake in Portuguese motorway operator Brisa, at a possible enterprise value of €5 billion, per Reuters. http://axios.link/1vO6
• Fortinet (Nasdaq: FTNT) acquired enSilo, a San Francisco-based endpoint cybersecurity company that had raised over $50 million from firms like Lightspeed Venture Partners, Viola Ventures, Rembrandt Venture Partners and O.G. Tech Ventures. www.ensilo.com
🍔 Everstone Capital is seeking a buyer for Indonesia’s master franchiser of Burger King restaurants (Sari Burger Indonesia), per DealStreetAsia. http://axios.link/koLT
• Atlas Tower agreed to sell its South African mobile towers unit to SBA Communications (Nasdaq: SBAC) for $140 million. http://axios.link/pYCp
• IAC/Interactive (Nasdaq: IAC) is seeking a buyer for the parent company of CollegeHumor and a portfolio of other digital brands, per Bloomberg. http://axios.link/UGxF
🎲 Vici Properties (NYSE: VICI) will pay $843 million to acquire the Jack Cleveland Casino and Jack Thistledown Racino from Dan Gilbert’s Jack Entertainment, via a sale-leaseback transaction. http://axios.link/Fy8T
• Big Bang Angels, a South Korea-based VC firm, is raising $20 million for a fund focused on early-stage, “deep tech” startups in Southeast Asia, per DealStreetAsia. http://axios.link/hNKy
• Crestline Investors, a Texas-based credit investor, raised $360 million for its third Europe-focused opportunities fund. www.crestlineinvestors.com
• KKR raised more than $2 billion for its second tech-focused growth equity fund. http://axios.link/YA4F
• Rise of the Rest raised $150 million for its second seed fund. http://axios.link/sUiJ
• Angus Davis, founder of both TellMe and Upserve, joined Foundation Capital as a partner. http://axios.link/elYF
🚑 NEA promoted Ed Mathers to general partner and Blake Wu to partner. Both focus on healthcare investments. http://axios.link/UPI5
🚑 Sridhar Ramaswamy, former SVP and head of research at Tesaro, joined GV as a healthcare-focused entrepreneur-in-residence. http://axios.link/TVjQ