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Aim of valuation as high as $8bn may not be unreasonable

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Vegan milk maker Oatly targets $10bn IPO




Oatly, the Blackstone-backed Swedish vegan milk maker, is eyeing a valuation as high as $10bn in a US listing that would tap into both the IPO boom and consumers’ growing thirst for plant-based alternatives to animal products.

The Malmo-based group said on Tuesday that it had submitted a confidential filing for an initial public offering with the US Securities and Exchange Commission, less than a year after a funding round led by Blackstone also brought in Oprah Winfrey and Jay-Z’s Roc Nation company as investors, valuing Oatly at about $2bn.

Two people briefed on the situation said it was looking at a New York listing with a valuation as high as $10bn. Oatly declined to comment.

The offering is expected to take place following the SEC’s review, subject to market conditions, Oatly said.

The main aim of the float would be to raise money to fund growth, said one of the people, but a listing would offer a chance to cash in for investors who range from Blackstone to the Hollywood actor Natalie Portman and the Belgian family investment group Verlinvest, which bought a majority stake in Oatly five years ago.

Oatly had revenues of about $200m in 2019, roughly double the previous year, and had aimed to double sales again in 2020, though no figures have been made public.

The oat milk specialist, which also makes plant-based ice cream and yoghurt, has tapped into growing demand for plant-based equivalents to dairy, fuelled by environmental concerns — especially around emissions from cattle — and a perception of such foods as healthy.

In the US, total retail sales of non-dairy milks rose 23 per cent to an estimated $2.2bn in 2020, according to market researchers SPINS.

That was dominated by almond milk, which accounted for $1.3bn. But consumers have embraced a growing range of plant-based dairy ingredients including seeds, legumes, pulses, grains and nuts. Sales of oat-based dairy products tripled in the US in 2020, to $288m, overtaking soyamilk as the number two plant-based milk. 

Oatly’s signature oat milk was especially successful ahead of the pandemic with a “barista edition” used in cafés that produces a froth similar to that of cows’ milk for cappuccinos and macchiatos. 

Rival Chobani, a New York-based company that built its reputation on plant-based yoghurts, has also reportedly been considering a listing, while Oatly competes with companies such as France’s Danone, which has branched out from a history in dairy to produce plant-based alternatives such as the Alpro brand.

Oatly faced a customer backlash on social media over its decision to accept funding from Blackstone last year, with consumers criticising the private equity group’s sustainability credentials and a history of support for Donald Trump by its chief executive Stephen Schwarzman.

Oatly said at the time: “Our bet is that when Blackstone’s investment in our oat-based sustainability movement brings them larger returns than they would have been able to get elsewhere . . . a powerful message will be sent to the global private equity markets, one written in the only language our critics claim they will listen to: profit.”

Companies have been rushing to list in recent months and take advantage of an equity market rally that has bolstered IPOs such as that of Blackstone-backed dating app Bumble, which raised $2.15bn in a Nasdaq listing this month, and Israeli mobile games company Playtika, which raised $2.2bn in January.

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Dumped WeWork co-founder could reap $500m from Spac deal




Adam Neumann could reap almost $500m in cash from his holdings in WeWork and emerge with a stake in a public company, less than 18 months after the high-profile failure of its initial public offering cost him his job as chief executive. 

SoftBank is in advanced talks with WeWork’s co-founder and other shareholders to settle a bitter legal battle stemming from the Japanese group’s October 2019 rescue of the office group, which was needed to help it avert bankruptcy in the wake of the IPO’s collapse, people familiar with the negotiations said. 

Cleaning up the litigation brought by Neumann and a special committee of the group’s independent directors would clear the path for WeWork to be bought by a special purpose acquisition company, giving it the public listing it tried and failed to get in 2019. 

People familiar with the matter said BowX Acquisition, a blank cheque vehicle that raised $420m in an IPO in August, had approached SoftBank, WeWork’s largest shareholder, about a deal that could value WeWork at about $10bn.


The price tag SoftBank put on WeWork in its last private funding round before the failed IPO

Talks between the two groups are continuing and a deal could be reached in the weeks ahead, although the negotiations could still fall apart. Resolving the legal fight with Neumann and others has been seen as critical to completing a merger with BowX, given the new public company must attract investors to its shares.

The mooted valuation would be well below the $47bn price tag SoftBank put on the company in its last private funding round before the failed IPO, which Neumann and his Wall Street bankers once hoped would match or eclipse that level. 

But it would represent an unexpected rebound in Neumann’s fortunes, an endorsement of a business model that appeared imperilled as the Covid-19 pandemic emptied offices and another indication of how the Spac boom has transformed capital markets. 

SoftBank is said to have approached Neumann and the special committee within the past two weeks with a proposal to settle their dispute over a $3bn tender offer that formed part of its October 2019 rescue. The Japanese group had pulled out of the agreement to buy the stock from Neumann and other investors, saying conditions in the deal had not been met.

The opposing sides were due to face off in court next week over the tender offer after an earlier trial gave the special committee and Neumann standing to bring their case against SoftBank.

The settlement under discussion would result in SoftBank paying $1.5bn — half the sum under dispute — to Neumann and other investors including Benchmark Capital. Neumann would receive about $480m for 25 per cent of his holdings, rather than double that for the 50 per cent he could have tendered. He would also retain three-quarters of his current holdings in the public company. 

WeWork has retrenched staff and exited more than 100 open and planned locations since its fortunes shifted drastically last year. Under the leadership of chief executive Sandeep Mathrani, the company has dramatically reduced costs, although it continues to lose money.

The talks are continuing and the exact sum Neumann and others receive could change.

BowX is led by Vivek Ranadivé and Murray Rode, two former executives of Tibco Software and backed by Bow Capital, the venture capital fund Ranadivé founded with support from the University of California. In listing documents last year, it said it intended to scout for telecoms, media and technology companies. 

Ranadivé also owns the Sacramento Kings basketball team.

The Wall Street Journal earlier reported on the settlement talks.

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Ex-Cosmo editor teams up with ice hockey owner in Spac deal




The former editor-in-chief of Cosmopolitan and the co-owner of the New York Islanders ice hockey team are preparing to launch an obscure securities clearing and custody firm on the New York Stock Exchange, using their blank-cheque company to snap it up in a $4.7bn deal.

Northern Star Investment Corp II, a special purpose acquisition company launched 11 days ago to target opportunities in emerging markets and the consumption habits of Millennials and “Generation Z”, has agreed to merge with Apex Clearing, owned by private equity group Peak6 Investments, it said on Monday.

The deal for Apex — part of the plumbing behind digital wealth businesses like Goldman Sachs’s Marcus and broker WeBull — is the latest sign of a craze for so-called Spacs, which rank among the hottest investments in finance. Institutional funds had $82.4bn in the vehicles at the end of the fourth quarter, compared with $22.7bn a year earlier, according to Spac Research.

It also suggests that companies helping to facilitate the fast-growing amateur investing industry are in demand. Apex has ridden the boom in online trading in the past year, as young investors have flocked to tech-related options on stocks like Tesla and piled into “meme stocks” like consoles retailer GameStop and cinema operator AMC.

The company has handled thousands of these deals every day in US equities and options markets, as well as handling fractional share trading, and building a presence in cryptocurrency markets.

Apex serves around 200 financial institutions, which control more than 13m customer accounts. Of that total, 3.2m have been opened this year and more than 1m are crypto accounts.

Northern Star is run by Joanna Coles, a former journalist and magazine chief, and Jonathan Ledecky, who has co-owned the New York Islanders franchise since 2014. The deal, which includes debt, will give Apex an enterprise value of around $4.7bn. Apex is expected to hit the market in the coming three to four months, subject to regulatory approval.

Coles described Apex as being “at the nexus of the digital financial services revolution”.

“Apex is the independent, invisible architecture that has helped launch many of the most notable fintech disrupters of our time, enabling the frictionless experiences we have all come to expect when interfacing with digital investing products,” she said.

Apex handled clearing for Robinhood Financial until the broker took on the responsibility for managing its own customers’ deals in 2018.

At the height of the volatility in “meme stocks” like GameStop in January, online broker WeBull had to restrict trading in selected stocks as Apex could not afford the costs of settling the outsized volume of deals, said WeBull chief executive Anthony Denier.

Coles, who also edited Marie Claire and worked for the Times and Guardian newspapers in New York, will join the Apex board. She also sits on the board of Snap, the parent of messaging app Snapchat.

Apex is expected to raise $850m in gross proceeds from the deal, which includes a private investment of $450m, supported by Fidelity Management & Research Company and Baron Capital Group.

Citigroup was the exclusive financial and capital markets adviser to Northern Star and sole placement agent for the share offering. JPMorgan Securities was sole financial adviser to Apex. 

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