One thing is that Shein’s executive chair has argued that neither the investors or managers of fast fashion retailers raised concerns with him about the company’s valuation as they pursue London’s blockbuster list in the face of trade tariffs and tough competition.
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In today’s newsletter:
The founder of Segantii Capital Management faces a possible prison
Bankruptcy opioid companies team up
Deutsche Bank’s big income
The story of Wall Street begins in Blackpool
In April 2021, one of the biggest block transactions in history hit the market. This is a sale of almost $15 billion in Tencent shares. There was no shortage of demand. However, the hedge fund, which is under management of about $5.5 billion, has earned an eye-catching $2.2 billion chunk.
That hedge fund was Seganti’s capital management, and this episode showed it at the pinnacle of its power. A few days ago, it had played a key role in helping banks offload their exposure to the collapse of Alchegos, a family office run by investor Bill Fan since.
In a short time, Segantiy established itself as the banker’s first call port when there were blocks for sale at Goldman Sachs, Morgan Stanley and other Wall Street companies.
Today, the founders of Segantii face the possibility of imprisonment. Hong Kong authorities have charged Simon Sadler on an insider who deals with criminal cases that could lead to seven years in prison if he is convicted. (He pleaded not guilty.)
This case is about a relatively small deal in retailer Esprit, which took place in 2017.
The incredible story of Sadler, who grew up in the working-class North England seaside town of Blackpool, has come to stand in the criminal court on the other side of the world, is described in this FT magazine cover feature by Kay Wiggins, Robert Smith and Ortenka Ariaji of DD.
This is the story of the ascendance and descent of a man whose former colleagues say he has a “opposed to the world” mentality. It is a story about the grey realm of global finance and how the powers within it work.
It also about the story of football, the oath, the finance man and their nicknames, the boss who coworkers said they could reduce staff to tears, the watering holes in Blackpool called Shenanigan, and the tangerine-colored private boat.
Enjoy a weekend coffee.
Previous Pharma M&A Sensations is combined with bankruptcy exits
Ten years ago, Mallinckrodt Pharmaceuticals and Endo were toasts of M&A world to handle contracts using headquarters in low-tax jurisdictions like Ireland.
The two specialist drug sellers were among a handful of pharma companies, based on aggressive acquisitions supported by hedge fund managers Bill Ackman and John Paulson, including Allagan and Valent, now known as Bausch Health, to lower tax bills using “inversions” to lower tax bills.
Now, much after tax-burning M&A Pixie Dust wears down, Marinckrod and End are fused at $6.7 billion as the pair emerges when they emerge from the bankruptcy process associated with the US opioid crisis.
Both drugmakers initially had a sour sour taste from the heavy debts they accumulated during trading wishes. Their fate was then sealed by debt caused by the sale of highly addictive generic opioid painkillers.
The companies eventually filed for bankruptcy. Along with Purdue Pharmaceutical, they were among the drugmakers at the heart of the US opioid epidemic.
Dublin-based Mallinckrodt paid the victims $700 million in 2023 and settled thousands of lawsuits to produce a popular version of oxycodone.
In 2024, Endo agreed to pay $465 million to settle claims with the US government and $450 million to state and city trusts to fund the Opioid Recovery Program.
Endo also pleaded guilty to misdemeanors of opioid product marketing practices.
The trust established in End Bankruptcy is suing McKinsey, accusing the consulting group of masterminds who claim it is an inappropriate marketing practice for the End. McKinsey has fought the charges and denied any misconduct.
As part of the merger on Thursday, Mallinckrodt investors will win a 50.1% share in the total company, while Endo shareholders will receive $80 million in cash and 49.9% shares.
The company value of the new entity, which is roughly $6.7 billion, is far from its total market value of over $30 billion a decade ago.
Rex lays out the winners and losers of complex mergers and settlements, including many of Wall Street’s smartest credit investors and bankruptcy lawyers.
Deutsche Bank’s Mysterious Rain Maker
Typically, the highest-paid income earners in a financial company are closely aligned with how employees are ranked. It’s higher on the totem pole so you can expect a bigger payment. But apparently, not always.
Deutsche Bank’s top-wage employees in 2024 managed to win almost twice the CEO’s Christian sewing after lenders paid off top performers following the strong investment bank year.
One individual at the bank’s identity remains private – has been paid as well as 18 million euros, significantly outpacing Sewing’s preliminary 9.8 million euros.
Salaries have basically increased completely, with incomes over 1 million euros increasing by 2024, up 28% to 647.
As expected, investment banks were the biggest beneficiaries of the group’s bumper bonus season. The division has boosted its pre-tax profit by 78%, pushing the entire bonus pool to its highest level in a decade.
Deutsche is pivoting on long-term incentive plans for its employees. In other words, management wins big as banks continue to grow. In particular, board members can secure a total of 25.6 million euros in long-term bonuses if they reach all targets. That’s starting from 19.8 million euros last year.
There was a lot of champagne popping, but not everyone was doing that well. Short-term bonuses for board members were trimmed after individual targets were missing.
Chief Administrative Officer Stephen Simon’s payments have been halved to almost 1 million euros, following a 900 million litigation hit linked to the bank’s long legal battle over the bank’s acquisition.
The departing Chief Risk Officer Olivier Vignaron also cut the bonus by more than 20%. A hit came as banks struggled with loan losses and tensions with the European Central Bank over risk management.
Job movements
Groupe Bruxelles Lambert is set to appoint Johannes Huss as director, and he will also assume the role of managing director on behalf of Ian Gallienne. Huth previously worked at KKR as a partner and chair of the group’s operations at EMEA. Additionally, the company’s chairman, Paul Desmalis, is set to step down and become vice-chairman. He is replaced by Gallienne.
Georgia-born designer Demna Gvasalia becomes the creative director of Gucci and takes the reins as she tries to reinvigorate the biggest brand after the owner Kering has stagnated for a long time.
KKR has appointed Timothy Barackett to the board of directors. He is the founder and CEO of private investment firms and Family Office TRB Advisors.
Donatella Versace resigned nearly 30 years into the role as the creative director of the family’s fashion house of the same name, as it is bordered by US owner Capri Holdings, who is approaching sales for an Italian luxury company.
Smart Lead
Bloomberg writes Peace Broker Steve Witkoff started out in New York real estate because he wanted to emulate Donald Trump. Now, like the President of the United States, he is faced with questions about his ability to separate business and diplomacy.
Retaliation tariffs, Tesla, the electric car maker of Elon Musk, said tariffs could cost money to produce vehicles in the US, the FT reported.
Jess Staley’s legal team, which binds Epstein, complained that at a London trial the banker was subjected to “public humiliation” over his relationship with Jeffrey Epstein.
News Round Up
BAE in early discussions with Japanese groups will cooperate with drones for fighter jets (FT)
derriveroo turns the first annual profit as it plots the bigger grocery push (ft)
Consultant warned Aberdeen boss against Abrdn Rebrand (FT)
Intel’s shares skyrocket after troubled chipmaker appointed Lip-Bu Tan as CEO (FT)
NBC, owned by Comcast, agrees to a $3 billion deal to air the Olympics beyond 2032 (FT)
Order to review immediate reemployment of fired US government workers (FTs)
The Trump family held deal talks with Binance following the Crypto Exchange’s Guilty Plea (WSJ).
Bernard Arnaud shows he can lead LVMH until he is 85 (Bloomberg)
Due diligence was written by Arash Massoudi, Ivan Levingston, Ortenca Aliaj, Robert Smith, James Fontanella-Khan, Sujeet Indap, Eric Platt, Antoine Gara, Amelia Pollard and Maria Heeter of London. Send feedback to due.diligence@ft.com
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