These Breakups and Makeups Could Make Billionaires Big Bucks in 2015
2015 is shaping up to be a big year in the M&A department.
Major deals are in the works in the mergers arena (ahem, Family Dollar), and some huge breakups are on the horizon as well (we’re looking at you, eBay).
If and when these deals go through, billionaire hedge fund managers are poised to make major bank. A handful of big breakups and makeups could make Wall Street magnates like Ray Dalio, John Paulson, George Soros and even the Oracle of Omaha himself a nice chunk of change in 2015.
The Breakups
PayPal’s split from eBay (NASDAQ:EBAY) is one of the most highly anticipated spinoffs of the year. Billionaires are pretty excited about it as well — and not just Carl Icahn, the original advocate of the offshoot.
The list of big-name investors slated to benefit from the eBay-PayPal divorce includes Julian Robertson, Dan Loeb, Leon Cooperman, Larry Robbins, George Soros, Ray Dalio and Richard Chilton — as well as, of course, Mr. Icahn. Dan Loeb has posited that eBay could eventually be worth more than double its pre-split value, and Larry Robbins has implied that the separation could position both entities for a “beneficial takeover relationship” later down the line.
Also headed toward a split this year is Hewlett-Packard (NYSE:HPQ), which in October announced plans to separate its personal computer and printer businesses from its corporate hardware and services operations.
The billionaire beneficiary on this one (assuming all goes well) will be Ray Dalio, whose Bridgewater Associates holds 265,000 shares as of the fund’s most recent regulatory filing.
The Makeups
There’s been chatter about Yahoo (NASDAQ:YHOO) and AOL (NYSE:AOL) taking the plunge together, but now, it looks as though Verizon (NYSE:VZ) is stepping in. Bloomberg reports the communications giant is exploring a potential acquisition or joint venture with AOL to help it expand mobile video offer.
While the ball is just getting rolling on this one, should an agreement be reached, it would be a biggie. On the Verizon side, Warren Buffett stands to benefit (as of the third quarter of last year, he holds 15 million VZ shares). And with Verizon having a 1.5% allocation in his public equity portfolio, John Paulson would make money as well — as would Ray Dalio and Richard Chilton.
As for AOL, Dalio who would reap the profits on it as well — albeit a rather small one, given that Bridgewater holds just 6,000 of the company’s shares.
A Verizon-AOL deal could prove meaningful for another (and even bigger) potential 2015 merger between Comcast (NASDAQ:CMCSA) and Time Warner Cable (NYSE:TWC). As a recent Washington Post article points out, Comcast could claim other combined companies would keep it from gaining too much control over broadband and programming.
With the FCC slated to pick up its review Comcast’s $45 billion bid for Time Warner Cable on January 12th, investors, consumers, policymakers and corporations will be playing close attention to how this one turns out.
As to which billionaires have a direct stake in the deal, the answer is Steve Mandel and George Soros on the Comcast side, and John Paulson, Larry Robbins, Leon Cooperman and, again, Soros with Time Warner.
Jumping from communications to oil, 2015 will also put the spotlight on the $35 billion bid Halliburton (NYSE:HAL) has made for Baker Hughes (NYSE:BHI).
The transaction is expected to close during the second half of the year, though it’s got some hurdles to clear first. Halliburton must placate antitrust concerns, meaning potentially unloading businesses that generate billions in revenues. It also has to pay Baker Hughes $3.5 billion should regulatory issues block the deal from going through. And, of course, plunging oil prices aren’t making things any easier.
Should the merger prevail, David Tepper will score a win, as Halliburton comprises nearly 5% of his public equity portfolio. Richard Chilton has a position in both HAL and BHI, rendering the goings-on intriguing for him as well.
Psst! Did you know both Halliburton and Comcast are part of the iBillionaire Index? Find out more here.
