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Visa gains approval for $5.3bn takeover of data-sharing firm Plaid

CMA gives green light after concluding the UK’s fintech scene has plenty of competition for non-card e-payments

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The UK’s Competition and Markets Authority has given the green light to Visa’s $5.3bn takeover of fintech data-sharing firm Plaid — after judging that London’s vibrant fintech scene would provide plenty of further competition, even once the pair join forces.

Visa swooped with its bid to buy Plaid, a US-based tech provider that connects new digital apps to existing bank accounts, in January.

The British competition authority began a probe in June, centring its investigation on the market for “payment initiation services” in the UK — a service offered by Plaid, which allows consumers to make payments from an app or website, providing an alternative to paying online using a credit or debit card.

UK retailers expressed concern that Visa’s proposed acquisition would thus take out one of its major rivals and reduce competition. Card costs set retailers back by £1.3bn in 2018, up £70m from the previous year.

But other fintechs, who were canvassed by the CMA, declared themselves unconcerned, and their feedback has helped convince the authority to let the deal through, it said.

In a market statement on 24 August, the CMA said that while the market for payment initiation services, or PIS, is at a “nascent stage” in the UK, “Plaid would have been an increasing competitive threat to Visa in future”.

But it added: “It is only one of a number of PIS providers already active in the UK, with several of these, such as TrueLayer, Tink, Token.io and Yapily, already possessing similar, or stronger, competitive capabilities than Plaid.

“On this basis, the CMA concluded that in the UK Visa would continue to face sufficient competition from PIS-enabled payments, and other types of services enabling consumer-to-business payments, after the merger.”

The CMA also said it had looked at whether a combined Visa-Plaid could drive Plaid’s fintech rivals out of the market with a combined offering of card-based services and PIS services. The authority decided this could happen, because “customers often use multiple suppliers for their payment options” and other PIS fintechs could equally enter into tie-ups of their own.

Speaking on 28 July at Visa’s financial results, chair and CEO Alfred Kelly told analysts that the firm was expecting the Plaid acquisition deal to close “by the end of the calendar year”.

He said: “We are doing everything we can to comply with any requests from the regulators that are looking at it. We are as excited about the Plaid acquisition today as we were back in January when we made the announcement, and we really believe we got the asset we wanted.”

This article was published by Financial News

Source: https://www.penews.com/articles/visa-gains-approval-for-5-3bn-takeover-of-data-sharing-firm-plaid-20200824

Private Equity

Alternative Investments/Real Estate: Housing Market Demand Is “Insane”

Speaking to CNBC on Power Lunch, Glenn Kelman, CEO of real estate brokerage Redfin (NASDAQ: RDFN), said he expected the current boom conditions in the housing market to last well into next year. He attributed the high demand to affluent professionals looking for remote homes as well as low interest rates. Also, he thinks some sellers will put their properties on the market only after the presidential election.

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Alternative Investments/Real Estate: Housing Market Demand Is “Insane”

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Redfin CEO Glenn Kelman says the boom could last into next year.

Speaking to CNBC on Power Lunch, Glenn Kelman, CEO of real estate brokerage Redfin (NASDAQ: RDFN), said he expected the current boom conditions in the housing market to last well into next year. He attributed the high demand to affluent professionals looking for remote homes as well as low interest rates. Also, he thinks some sellers will put their properties on the market only after the presidential election. (CNBC)

Kelman: Too good to last forever

“This level of demand is absolutely insane. I would expect it to last into 2021, at least,” Kelman said.

Recent data from the National Association of Realtors shows up the strength in the housing market.

Existing home sales shot up 9.4% in September beating expectations. Even though the median purchase price of a home rose approximately 15% year over year, there is just a 2.7-month supply of for-sale homes, showing tight market inventory conditions.

The 30-year fixed-rate mortgage averaged 2.80% for the week ending Oct. 22, down from 2.81% in the previous week and 3.75% a year ago, according to the Freddie Mac Primary Mortgage Market Survey. Therefore, mortgage rates crept even lower in the latest week.

However, “there’s no way it can last forever,” Kelman warned of the bullish conditions.

Canada: Off the charts

Meanwhile, at the northern neighbor, home sales activity in September is described as “off-the-charts.”

Housing data released by the Canadian Real Estate Association (CREA) last week showed a nationwide year-over-year increase in sales of 45.6%.

This was a new all-time monthly record for the third month in a row.

“This is starting to sound like a broken record (about records being broken), but Canadian home sales and prices set records once again in September … as they did in July and August,” said Shaun Cathcart, senior economist at CREA, in a statement.

Real Estate ETFs in the U.S.

The year-to-date performance of some real estate ETFs is shown below:

iShares U.S. Home Construction ETF (ITB)              +24.61%

SPDR S&P Homebuilders ETF (XHB)                          +20.83%

Vanguard Real Estate Index Fund ETF                      -13.91%

It may be noted that despite the boom conditions in housing, real estate ETFs and stocks have declined in recent days.

According to Barron’s, this may be due to yields on the 10-year and 30-year Treasuries moving higher in recent weeks.

Other reasons could be fears of inflation ticking up in the future amidst an improving economic situation.

Nevertheless, the view is that interest rates are likely to remain low for longer. So demand may remain strong.

“Part of what is fueling this boom is that the economy has just split into two and rich people are able to access capital almost for free, so, of course, they’re going to use that money to buy homes,” said Redfin’s Kelman.

Related Story:   Mortgage Rates Set Another Record Low; Real Estate ETFs Could Benefit

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Source: https://dailyalts.com/alternative-investments-real-estate-housing-market-demand-is-insane/

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Private Equity

Asda’s new owner EG Group seeks new leadership ahead of IPO – report

EG Group is owned by the billionaire Issa brothers and the private equity firm TDR Capital, who teamed up for a £6.8 billion takeover of Asda last month

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UK grocer Asda Group’s new owner EG Group is looking for a new chairman and independent directors as it prepares for a £10bn initial public offering, The Timesreports.

EG Group is owned by the billionaire Issa brothers and the private equity firm TDR Capital, who teamed up for a £6.8 billion takeover of Asda last month.

The move comes after Deloitte resigned last week as the company’s auditor because of concerns over the group’s governance and lack of internal controls, according to the publication.

A decision on candidates will be taken before the end of this year, although roles haven’t been finalised yet as the company is in the process of deciding whether to float in the UK or the US, The Times reports.

Write to Barcelona editors at barcelonaeditors@dowjones.com

From Dow Jones Newswires

Source: https://www.penews.com/articles/asdas-new-owner-eg-group-seeks-new-leadership-ahead-of-ipo-reports-20201023

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Private Equity

Lone Star agrees £630m deal to buy UK’s McCarthy & Stone

The American private equity firm is expected to back the strategy of Britain’s biggest retirement housebuilder to build more homes for rent

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McCarthy & Stone said Friday, 23 October, that it has agreed to a £630m all-cash takeover by Lone Star Real Estate Fund VI.

Under the offer, accepting shareholders of the London-listed retirement-community builder will get 115 pence in cash for each share held, a 39% premium to its closing share price of 83 pence on Thursday, 22 October.

“The all-cash offer represents a compelling and attractive opportunity for shareholders to realise and crystallise their investment in McCarthy & Stone in the near term and also provides a meaningful premium to the prevailing share price notwithstanding the backdrop of the wider risks posed by the political and macro-economic environment,” McCarthy Chairman Paul Lester said.

Write to Ian Walker at ian.walker@wsj.com

From Dow Jones Newswires

Source: https://www.penews.com/articles/lone-star-agrees-630m-deal-to-buy-uks-mccarthy-stone-20201023

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