Gold Glitters but Dr. Copper Drives Dealmaking | | |
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Gold prices may be surging, but it was copper that helped drive the megadeal making headlines this week.
Gold, the ultimate “safe-haven” asset, has been on a tear this year, reaching a new record high of more than $3,600/ounce amid increased global concerns about reflation, geopolitical turmoil and “de-dollarization” trends at central reserve banks.
Not to be outdone by its shinier cousin, copper is also on the rise. Arguably the most critical metal due to its conductive properties, copper is experiencing increasing demand as a part of the auto electrification boom and the production of semiconductor chips, data centers, infrastructure and AI construction:
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Indeed, it is called “Dr. Copper” because of the view that the metal is a bellwether for economic activity and strong predictor of economic cycles. In the words of Barrick Mining CEO Mark Bristow, “copper is as strategic as gold is precious.”
The $50 billion no-premium, stock-for-stock tie-up announced this week by Anglo-American and Teck Resources is set to create a top five copper miner and reflects the ongoing consolidation in the mining sector. FT Lex speculates that other bidders, such as Rio Tinto or BHP, could look to jump in and spoil this copper “merger of equals” for their own benefits, particularly given the deal’s terms. Whether or not a third party shows up, the deal still reflects copper's rise to becoming the critical commodity powering the AI revolution.
The rise in copper prices and its strategic use was predicted in 2022 by energy guru Dan Yergin. He wrote a powerful study for S&P Global warning about copper’s supply-demand mismatch given how difficult the metal is to find, mine and deliver. He noted that copper was likely the first metal ever extracted, and alloyed with tin, ushered in the "Bronze" Age, facilitated the invention of the telegram and is now powering the technology of the 21st century.
We hope Dr. Copper is predicting good things for the fall.
Have a great weekend,
GPP Team
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Wachtell Lipton: Dealing with Activist Hedge Funds and Other Activist Investors
Wachtell’s latest report points out that despite political and economic uncertainty, shareholder activism shows no signs of rest, and activists aren’t limiting themselves to underperformers. Multi-year campaigns, wolf pack tactics, and smaller funds joining the fray underscores the importance of proactive shareholder engagement and a long-term strategy, according to the firm. Read More
Financial Times: Elliott Management Builds Stake in Payments Company Bill Holdings
Elliott has amassed a sizable stake in the payment automation firm, joining Starboard Value in targeting the company whose market cap has fallen 85% since its 2021 peak. With multiple activists circling and rivals being taken private, the FT suggests that Bill Holdings could become a takeover candidate in the payments space. Read More
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The Deal: Drinks With The Deal: Simpson's Elizabeth Cooper on Refinitiv, Lehman, Team Building
Elizabeth Cooper, global head of private equity at Simpson Thacher & Bartlett LLP, joins David Marcus’ podcast to talk about how her career, and current leadership role, was shaped by a complicated deal in which a consortium led by Blackstone acquired a controlling interest in Refinitiv in 2018, which spurred her move to private equity. Listen Here
Financial Times: Elon Musk’s SpaceX to Buy Spectrum Licenses from EchoStar for $17bn
The cash-and-stock mega-deal paves the way for SpaceX to expand its domestic Starlink satellite service by integrating its 5G network with EchoStar’s wireless spectrum licenses. Read More
The Wall Street Journal: Potbelly Sandwich Chain to Sell Itself to Convenience-Store Operator RaceTrac
In an all-cash deal, convenience-store operator RaceTrac announced that it would acquire Potbelly. After years of shareholder activists circling the sandwich chain, one of the desires of new ownership is to help Potbelly reach its goal of 2,000 stores while expanding RaceTrac’s family of convenience-driven brands. Read More
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Vanguard: Vanguard More Than Doubles Participation in Investor Choice
On Wednesday, Vanguard provided an update on the results of its pilot Investor Choice proxy voting program, which was picked up by Semafor, revealing a significant increase in investor participation across a range of different voting options. Read More
The New York Times: Elon Musk Could Become First Trillionaire Under New Tesla Pay Plan
Elon Musk’s compensation is back in the news as Tesla’s Board approved a new lucrative compensation package, which this time, if certain conditions are met, could see Musk net around $900 billion by the end of the decade. Read More
The Wall Street Journal: The Renewed Bid to End Quarterly Earnings Reports
While quarterly earnings have been a staple of publicly traded companies in the U.S., not all organizations are in favor of this practice. Corrie Driebush examines the LTSE’s efforts to shift the reporting calendar to twice a year and allow companies to share their earnings results less frequently. Read More
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CNBC: Klarna Stock Jumps 15% in NYSE Debut After Pricing IPO Above Range
Klarna became the latest high-profile technology company to IPO this year with shares jumping on listing day. Read More
The Wall Street Journal: StubHub Sets IPO Terms That Could Push Market Cap Above $9 Billion
StubHub moved one step closer to its high-profile IPO this week, announcing a 34 million share float priced in the $22-$25 range, giving it a potential market cap of $9.3 billion once it joins the NYSE. Read More
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As the GPP team continues to acclimate to fall, we wanted to highlight another shift of the season: the transition towards potential, generally more original, award-winning films from tentpole, popcorn movies. With the Toronto Internation Film Festival (TIFF) in full swing and hearing the buzz out of the Venice and Telluride Film Festivals, we are getting insights into the potential Oscar players and a roadmap for our end-of-year cinematic calendar.
From big-time, critical darling directors (Chloé Zhao with “Hamnet”, Yorgos Lanthimos with “Bugonia” and Richard Linklater with “Nouvelle Vague”) to A-list actors (Leonardo DiCaprio in Paul Thomas Anderson’s “One Battle After Another”, Daniel Day-Lewis in “Anemone”, George Clooney and Adam Sandler in “Jay Kelly”, and Jeremy Allen White as the Boss himself in “Springsteen: Deliver Me From Nowhere”), there are so many films that we are excited to see that we cannot include them here since we are running out of space.
Finally, no fall movie preview would be complete without a few horror film recommendations, led by Guillermo del Toro’s adaptation of “Frankenstein” and Jordan Peele’s “Him,” right in time for football season. But if we’re being honest, GPPers’ most eagerly awaited upcoming release is "Wicked: For Good” (the soundtrack is still on rotation).
We want to hear from you about what we missed! There is no better topic of conversation for when we get together this fall (switching our Aperol Spritzes for Hot Toddies of course!).
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The SEC picked James Moloney, former partner at Gibson, Dunn & Crutcher LLP for 25 years, as director of the Division of Corporation Finance. Read More
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Alaska Air Group has named Diana Birkett Rakow as CEO of Hawaiian Airlines as a part of planned executive change at the airline. Read More
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Irth Capital Management hired former Starboard Value director Mack Abbott as its managing director. Read More
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