Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. One thing to start: Space X and Tesla are studying a deal to unite Elon Musk's two public companies in a multitrillion-dollar combination that would be the largest merger of all time. Welcome to Due Diligence, your briefing on dealmaking, private equity and corporate finance. This article is an on-site version of the newsletter. Premium subscribers can sign up here to get the newsletter delivered every Tuesday to Friday. Standard subscribers can upgrade to Premium here, or explore all FT newsletters. Get in touch with us anytime: [email protected]
In today's newsletter: The big M&A drama in Big Law AIX's disillusioned investors Yacht marina mania The merger putting Big Law into a frenzy In the normal order of things, DD reporters ring up bankers and lawyers when we start to hear whispers of a transaction. But normalcy has been upended this week as our phones are the ones blowing up with messages from Big Law partners desperate for the answer to one question: who is Weil, Gotshal & Manges going to merge with? The saga started earlier this autumn when the FT and other publications reported that Weil's leaders were contemplating a merger after an exodus of talent. Among the high-profile departures were the firm's best-known US corporate dealmaker Michael Aiello, who announced last month he was taking five partners with him to Cravath, Swaine & Moore. At the time, Weil made it clear that its senior leaders were receptive to a tie-up, saying publicly that it was always open to opportunities. In recent days Weil told some of its partners that the firm was in serious talks over a merger, people familiar with the matter told DD. But Weil didn't say who the partner was, setting off a frenzy of rumours and denials as everyone in Big Law raced to confirm a name. The identity of the potential merger partner is a closely guarded secret at Weil, and only a small circle of leaders knows who it is. Lawyers might have to get used to the drama as firms undergo a consolidation wave. There's already been a number of transatlantic deals, and some smaller firms are starting to realise that amid expensive talent wars, they're only a few partner defections away from trouble. Smaller players also see M&A as a way to begin to close the gap with the behemoths, Kirkland & Ellis and Latham & Watkins, especially as bigger firms have the advantage of spending large sums on AI adoption. Rival firms are trying to poach whole teams out of Weil, while some of its stars say they are waiting to see how things play out. The risk for Weil is that the rumours create more turmoil and uncertainty, prompting more partners to leave -- and making the firm a less attractive merger partner.
For sky-high investment returns, look no further than an office on the 146th floor of the world's tallest skyscraper. That was the promise that AIX Investment Group made from its glamorous pad in Dubai's Burj Khalifa, attracting thousands of investors with guaranteed returns of up to 30 per cent -- and a panoramic view of the fast-growing Gulf entrepôt from its terrace. In the heady atmosphere of entrepreneurial Dubai, some investors "believe that here anything really is possible", said Steve Cronin, a financial coach and founder of Dead Simple Saving.com. But many of AIX's investors are now pursuing legal action against the company, which stopped paying coupons last year and asked clients on Monday to consider supporting a court-led restructuring of the business. To generate returns, it had placed high-risk bets on commodities, foreign currencies and digital assets, according to a company adviser and former employee. And after it stopped payments, management first blamed banking constraints, then geopolitical turmoil, asking investors for patience as they tried to...
Source: Financial Times Companies · Summarized by HeadlinesBriefing