Autumn Crush
I have just returned from a week in London. Mary Claire joined me over the first weekend and we spent several days exploring our favorite London neighborhoods. Our most memorable dinner was at Gordon Ramsay’s Maze Grill, in Grosvenor Square. The steaks were wonderful and complimented by an excellent wine list.
I also had an outstanding lunch with some colleagues from Quadrangle on Savile Row, at Sartoria, in the Mayfair section of London. The restaurant is very near their London office, which was opened by Gordon Holmes over one year ago. The cuisine is Italian.
In London, the private equity community is focused on the latest rejection by Informa PLC (INF:L) of an offer by Providence Equity Partners, the Carlyle Group and the Blackstone Group to take it private for 450 pence per share. In July there was an initial offer of 506 pence per share by a group that included Providence, Carlyle and Hellman & Friedman. During due diligence, Hellman & Friedman dropped out and was replaced by Blackstone. If the deal is completed, it will be the largest media deal since the start of the credit crunch. The value will exceed $3.5B. There is speculation that a bid of 475 pence will receive the endorsement of the Informa board. The United Kingdom Takeover Panel has given the consortium until September 26th to submit a revised offer. If they do not meet this deadline they will not be able to submit another offer for at least six months.
Informa, which has over 2,000 trade publications and produces more than 10,000 conferences, was first put into play by United Business Media, which proposed a merger of equals with no premium. Their best-known property is Lloyd’s List Maritime Newspaper.
The title of this blog entry, Autumn Crush, was chosen with the fall harvest and crush in mind, which will take place during the month of September in the wine-producing regions in the northern hemisphere. We will take a slight detour, though, and first address the continued volatility in the U.S. financial markets. We have witnessed the bailing out of Fannie & Freddie over the past two weeks. The shareholders were left with very little value in the end, but the bondholders cheered the government’s direct intervention. We have now moved on to the venerable Lehman Brothers. As I write this on Saturday morning, we wait to see if there will be a deal before the world markets open on Monday morning. It is starting to sound more like a club deal, reminiscent of the deal to save Long Term Capital in the late ’90s, than the spring deal for Bear Stearns by JPMorgan Chase (JPM). After watching the Bear rescue, why did Lehman CEO Dick Fuld wait so long to raise more capital? Have we reached the point where one of these investment banks will be allowed to fail, or will a deal be struck at the 11th hour? Are Merrill Lynch & AIG next “in the barrel,” or will this be the last meltdown by a major financial institution?
Since I opened with restaurant recommendations in London, I will recommend several wines from Italian wineries. Several of you have mentioned to me that you would like some recommendations from beyond Napa & Sonoma Valleys in northern California.
Le Macchiole Paleo is from a small, high-end winery in the Bolgheri section of Tuscany. The 2005 Paleo is a Cabernet Franc, and their Scrio is a world-class Syrah. I have collected wines from this winery for over 10 years and I am always impressed by their quality.
My other recommendation is the Ca’Marcanda wines from the venerable Angelo Gaja, Italy’s best-known vinter. These wines are not from his home in the Piedmont, but are from the Maremma section of Tuscany. They are made from new world grapes and done in a style more reminiscent of a Bordeaux blend. Two of their best-known releases are Promis and Magari.