Deal Dispatch: TD Bank To Sell Charles Schwab Stake? - Constellation Energy (NASDAQ:CEG), Walt Disney (NYSE:DIS)

New On The Block

TD Bank, or Toronto-Dominion Bank TD, will consider selling its 10.1% stake in Charles Schwab Corp. The sale is part of a strategic review stemming from the Canadian bank’s U.S. money-laundering scandal.

Incoming TD Bank CEO Raymond Chun confirmed the process to Bloomberg.

Meanwhile, Eyenovia Inc EYEN hired New York-based investment bank Chardan to explore either a reverse merger or sale. The ophthalmic technology company is keen on conserving cash while continuing to develop its Gen-2 Optejet device.

By cutting spending by 60%, Eyenovia is stretching its financial resources to give itself more time to consider potential opportunities. Whether that turns out to be a deal remains to be seen.

Smart Share Global Ltd EM is also considering buyout offers. So far, only Trustar Capital offered to take the company private at 62 cents per share. That’s a tempting 74.8% premium.

Smart Share boasted a financial war chest of $440.9 million as of mid-2024.

Lastly, Warburg Pincus is exploring a sale of Boca Raton, Florida-based medical software firm Modernizing Medicine. Reuters reports that the auction could attract bids north of $5 billion.

Off The Block

Revelyst, the former Vista Outdoor Inc. VSTO unit that includes bicycle-related brands, is officially owned by investment firm Strategic Value Partners as part of a $1.125 billion deal.

True Religion, the jeans brand that’s as resilient as its famously chunky stitching, has a new owner. After surviving two bankruptcies, the brand began collecting offers from apparel companies and private equity firms, CNBC reported last year. Acon Investments, teaming up with a fund led by American Eagle CEO Jay Schottenstein, emerged as a winning bidder.

Updates From The Block

Houston-based gas power producer Calpine received a $30-billion offer from Constellation Energy CEG, a nuclear power giant known for its “emissions-free” messaging. The deal marks a significant pivot for Constellation, which spun off from Exelon in 2022 and has since doubled its share price. Calpine, previously taken private in 2018 for $17 billion by Energy Capital Partners, Access Industries and CPP Investments, would bring a major gas-fired portfolio under Constellation’s umbrella, forcing a rethinking of its green-energy branding.

Walt Disney Co DIS and Fubotv Inc FUBO have agreed to merge their live TV streaming businesses. Disney will take a 70% ownership stake in Fubo and the combined entity will become the second-largest live TV streamer in North America, with 6.2 million subscribers — trailing YouTube TV. Hulu + Live TV is included in the deal, while the rest of Hulu remains independent. As part of the agreement, Fubo will drop its lawsuit against Disney-backed Venu Sports. Disney and its partners will pay Fubo $220 million and Disney will provide a $145 million term loan due in 2026. The deal also includes a $130 million termination fee if it fails to close due to regulatory issues.

KKR & Co. Inc. KKR is extending its offer period to FUJI SOFT shareholders from Jan. 9 to Jan. 24, seemingly hoping patience will outlast Bain Capital's aggressive courtship. Bain Capital, meanwhile, has gone full “hostile partial takeover” mode. But KKR, as the largest shareholder, is reportedly confident that Bain Capital's offer will not gain traction.

Paychex, Inc. PAYX is acquiring Paycor HCM, Inc. PYCR in an all-cash deal valued at $4.1 billion, offering $22.50 per share — a 19% premium over Paycor's recent trading average. The acquisition, unanimously approved by both companies’ boards, is set to close in the first half of 2025, pending regulatory approvals.

The Goodyear Tire & Rubber Company GT entered a deal to sell its Dunlop brand to Sumitomo Rubber Industries (SRI) for cash proceeds of around $701 million. The purchase amount covers the brand transfer across Europe, North America and Oceania, a transition support fee and Dunlop tire inventory purchase. The deal also includes ongoing offtake, licensing and other commercial arrangements. Dunlop brand includes trademarks and related intangible assets for consumer, commercial and specialty tires across Europe, North America and Oceania. As per the deal, Goodyear will continue producing and distributing Dunlop consumer tires in Europe until at least Dec. 31, 2025, paying royalties to SRI while retaining all profits.

Italy’s Banca Ifis on Wednesday made a 298 million euro ($309 million) offer in shares and cash for its competitor, specialty lender Illimity Bank S.p.A.

Bankruptcy Block

Prospect Medical Holdings is working with law firm Sidley Austin and consulting firm Alvarez & Marsal to restructure three Connecticut hospitals that are under financial strain, according to The Wall Street Journal. Prospect purchased the hospitals (located in Waterbury, Manchester and Vernon) in 2016. Yale New Haven Health System intended to buy the hospitals for $435 million in 2022, but an agreement never came to fruition. As of Friday, the hospitals have not yet filed for bankruptcy.

Corsa Coal Corp. CSO filed for voluntary chapter 11 relief in the U.S. Bankruptcy Court for the Western District of Pennsylvania on Jan. 6. It intends to conduct a sale of its assets. The company committed $15 million in debtor-in-possession financing to support operations during the bankruptcy and sale process.

Notes From The Block

At least 686 U.S. companies filed for bankruptcy in 2024, according to the Financial Times.
That’s up about 8% from 2023. It’s also higher than any year since the 828 filings in 2010. Recall how companies were still reeling from the financial crisis at the time.
At least 30 of last year's bankruptcy filers had at least $1 billion in liabilities at the time of filing, the publication noted, citing data from S&P Global Market Intelligence.
Some of the major bankruptcies from 2024 included Party City, Tupperware, Red Lobster, Spirit Airlines and Avon Products.
It’s worth noting that liability management exercises are becoming increasingly common. These out-of-court sessions are meant to serve as a workaround or alternative to bankruptcy.
Joshua Clark, a senior director at Fitch Ratings, notes that many of the companies that go through those types of ordeals go bankrupt anyway if a debt agreement falls apart.