New On The Block
- Tylenol and Listerine maker Kenvue Inc. (NYSE:KVUE) just named board member Kirk Perry as interim CEO, replacing Thibaut Mongon, as part of a strategic review to boost shareholder value. The company, once a part of Johnson & Johnson (NYSE:JNJ) and now a top-five favorite in billionaire Dan Loeb‘s portfolio, aims to simplify operations, possibly via divestitures. In other words, expect Kenvue to conduct the corporate equivalent of mouthwash: rinse and possibly spit out a few underperforming assets.
- Clearside Biomedical (NASDAQ:CLSD), a $65 million biotech company specializing in eye-disease therapies, is considering a potential auction. Piper Sandler is advising on the process. Amid high cash burn and tough fundraising conditions, the company is pausing all internal R&D. Its executive team is taking consulting roles to conserve cash. Its lead asset, CLS-AX for wet AMD, recently completed Phase 2b trials and has FDA alignment for Phase 3, while its proprietary SCS Microinjector platform underpins licensing deals with the likes of Bausch + Lomb (NYSE:BLCO).
- Peraso Inc. (NASDAQ:PRSO), a player in the mmWave wireless game, announced it is officially exploring options such as a merger or asset sale. The board has tapped Craig-Hallum as its financial advisor. It has at least one offer thus far from Mobix Labs.
Updates From The Block
- OpenAI is no longer buying Windsurf for $3 billion. Instead, Google is hiring Windsurf CEO Varun Mohan, co-founder Douglas Chen, and select R&D staff to join its DeepMind team. Google will license some of Windsurf's technology but won't acquire the company or take equity, according to The Verge. Windsurf's Jeff Wang is now interim CEO. The financial terms of the Google hires were not disclosed. It remains to be seen whether Windsurf will stay on the market.
- FountainVest Partners is the only bidder for ZF Friedrichshafen‘s Lifetec unit, an airbag and seat belt maker, according to Bloomberg. Talks are ongoing. ZF has been seeking several billion euros for the business, which previously drew interest from other buyers, including Adient. So far, a significant gap in price expectations remains.
- Legendary Entertainment, the studio behind movie hits such as “Dune” and “The Dark Knight,” is exploring a potential takeover of Lionsgate Studios, Bloomberg reports. Backed by Apollo Global, Legendary initially approached Lionsgate after its split from Starz in May. The talks began as a potential film partnership to test compatibility ahead of a possible acquisition.
- Union Pacific wants to acquire rival Norfolk Southern, which could create the largest rail operator in the U.S. The discussions are still new, and other potential bidders could emerge. Union Pacific is valued at around $140 billion, while Norfolk Southern is worth about $60 billion. Following the news, Norfolk Southern's shares rose 3%, while Union Pacific's dropped 2%. A potential merger would create a vast rail network across the U.S. — something no operator currently has. Union Pacific CEO Jim Vena has expressed support for a transcontinental railroad to improve service and reduce delays. Expect intense regulatory scrutiny.
- Recall how Paramount Global (NASDAQ:PARA) (NASDAQ:PARAA) agreed to pay $16 million to settle a lawsuit with President Donald Trump. Stephen Colbert, who has hosted the "Late Show" since 2015, recently said the settlement could be a "big fat bribe." Days later, he announced to his audience that the show was ending. Members of Congress are now questioning the timing of the cancellation. Whether it’s related to Paramount’s efforts to secure Trump’s regulatory approval for a merger with Skydance is not yet known.
Off The Block
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Ferrero Group announced an agreement to acquire cereal maker WK Kellogg for around $3.1 billion. Private equity firm Cerberus Capital Management, which owns a stake in grocer Albertsons, and billionaire investor Dean Metropoulos, had initially placed a bid, but the talks turned soggy. Investment banks UBS and Macquarie Capital advised the pair on the unsuccessful attempt, according to Reuters.
- SES closed its $3.1 billion acquisition of Intelsat, creating a combined company with a fleet of 120 satellites across two orbits: 90 geostationary (GEO) satellites and nearly 30 medium Earth orbit (MEO) satellites. The company also has strategic access to low Earth orbit (LEO) satellites and a vast ground network.
Bankruptcy Block
- Del Taco franchisee Matador Restaurant Group has filed for bankruptcy. The South Carolina-based operator of 22 Del Taco outlets listed both assets and liabilities between $1 million and $10 million. What’s got its tortilla in a twist? Over $2.7 million in merchant cash advance (MCA) debt. Matador's parent company, Red Door Brands, which also runs Little Caesars and Arby's, says the financial drama is contained to Del Taco. Meanwhile, the Del Taco brand itself has been abruptly shuttering locations in Colorado.
- Joyebells, the Virginia-based gourmet pie company that once wowed “Today Show” viewers and charmed “Shark Tank” judges (but got no bites), has officially filed for Chapter 11. CEO Joye Berry-Moore, who turned her life around after once being homeless, launched the family bakery in 2019 and rose to fame. But after the sharks passed on investing in February, things took a turn: their lender sued, claiming default on a $350,000 loan. Between Joyebells and its founders, debts now top $1.27 million—the IRS wants $144,000 and a manufacturer seeks $570,000. To make matters worse, the company had to recall over 300,000 pies last year.
For the previous edition of Deal Dispatch, click here.
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