One thing to start: The UK government on Tuesday announced it would raise tens of billions of pounds in debt to fund a nuclear power station. Here’s how it enticed new investors back to the costly project.
The AI talent war escalates: Microsoft has recruited more than 20 artificial intelligence employees from Google’s DeepMind research division. The former head of engineering for Google’s Gemini chatbot is the latest to move.
And a scoop: The private equity owners of Shawbrook Bank are pushing ahead with plans for an initial public offering in London in 2025, after progress towards a listing was slowed by market turmoil earlier this year.
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: Due.Diligence@ft.com
In today’s newsletter:
The $200mn ‘anti-woke’ media deal in the making
PE financial engineering reaches new records
Mike Lynch’s estate set to go broke
Bari Weiss’s Maga windfall
At the Milken conference in 2021, “anti-woke” journalist Bari Weiss compared her experiences of cancel culture to the plight of Galileo, the Renaissance polymath who was forced to renounce his views on heliocentrism under threat of being burnt at the stake.
But while Galileo spent the final decade of his life under house arrest, Weiss is now in talks to sell her media start-up, The Free Press, at a valuation of more than $200mn, the FT scooped.
On the other end of a potential deal is David Ellison, media mogul in the making and scion of Oracle founder Larry Ellison. The junior Ellison’s Skydance has agreed to buy CBS owner Paramount.
It’s been a dizzying rise for Weiss, who left her role as a columnist at The New York Times in 2020, accusing the Gray Lady of “caving to the whims” of liberal critics.
Three years ago she founded Common Sense as a Substack newsletter, declaring its aim to be “the newspaper for the 21st century”.
Common Sense was later renamed The Free Press and it has since expanded into events and podcasts, accruing 1.25mn subscribers on Substack, including a sizeable following among Maga supporters. Roughly 155,000 of its subscribers are paying, according to Axios, implying a subscription revenue of about $15.5mn.
The $200mn-$250mn valuation that Weiss is seeking points to the growing heft of a bevy of new media outfits.
It’s a big jump from the $100mn figure the business was valued at in a fundraising round just 10 months ago, before Donald Trump’s presidential election win. A sale at a $250mn valuation would roughly match the price Jeff Bezos paid for The Washington Post in 2013, not accounting for inflation.
Traditional media middlemen such as Paramount and CNN owner Warner Bros Discovery have struggled. The end of The Late Night with Stephen Colbert, announced last week, underscores their pain. Meanwhile, social media stars and podcasters broadcasting directly to viewers have seen their followings and valuations soar.
But there’s another angle here too. Since Trump’s election, dealmakers have been forced to give concessions to the White House or risk deals being blocked as well as lawsuits.
Ellison’s Skydance has agreed to buy Paramount, which earlier this month paid $16mn to settle a defamation lawsuit brought by the US president against CBS News.
The deal has faced scrutiny from regulators, including Federal Communications Commission chair Brendan Carr, who in March warned that he was ready to block M&A proposals by companies with “invidious” DEI policies.
In that light, buying The Free Press sends a positive but expensive signal to Trump’s Washington.
Private equity’s continuation fund dance gets toasty
Buyout groups with backlogs of unsold companies are desperately scouting for exit strategies. This year, so-called continuation funds have become the escape hatch of choice.
In the first six months of 2025, private equity firms exited a record $41bn of investments using the strategy, DD’s Antoine Gara and Ivan Levingston reported.
Continuation vehicles accounted for a fifth of all PE industry asset sales, a staggering figure for a market that a handful of years ago was printing just a few deals annually.
It comes as buyout groups are contending with a sluggish IPO market, which has left PE firms sitting on $3tn in old deals and investors clamouring for cash.
Continuation funds are controversial because they allow PE groups to sell assets from ageing funds to newer ones they also manage. That allows investors in the older fund to roll over their investments into the new fund, or to cash out.
It can be lucrative financial engineering for PE groups allowing them to realise performance fees on assets sold and guaranteeing a steady stream of management fees from the new fund buying the investments.
In the first half of this year, Vista Equity Partners raised a $5.6bn continuation fund to sell its stake in Cloud Software Group, an IT company, to one of its newer funds.
Inflexion sold stakes in four deals, including industrial company Aspen Pumps and Rosemont Pharmaceuticals, for £2.3bn.
In both deals, the PE groups crystallised large gains from investors selling into the CV.
Scott Beckelman, global co-head of secondary advisory at Jefferies, said he expected most PE sponsors would “plan to do one or two of these out of every fund they raise”.
The strategy may be growing in popularity, with some blue-chip groups such as Warburg Pincus and Leonard Green even setting up funds to buy CVs.
DD notes that a large majority of investors in PE funds still prefer clean exits like sales to larger corporations or IPOs.
HPE wins its day in court against Mike Lynch’s estate
Just a year on from Mike Lynch’s acquittal in a US fraud trial and his subsequent death while on a yacht celebrating that win, the ex-Autonomy chief’s estate is set to be bankrupted.
London’s High Court ruled on Tuesday that Lynch’s estate and his former business partner Sushovan Hussain owed about £740mn to Hewlett Packard Enterprise.
Lynch and Hussain sold their software company Autonomy to Hewlett-Packard 14 years ago for $11.7bn. But HPE, formed in 2015 after HP split up, took an $8.8bn writedown on Autonomy and later accused Lynch of falsely inflating the company’s revenues ahead of the sale.
Lynch claimed he was used as a scapegoat for a botched acquisition and mismanagement of Autonomy. He was acquitted of criminal charges in San Francisco last year, in what had been one of Silicon Valley’s biggest fraud cases.
But celebrations on his yacht, the Bayesian, came to a tragic end after it capsized off the Sicilian coast last summer.
Lynch, his 18-year-old daughter and five other people died, while his wife and fourteen others survived.
HPE subsequently pursued a civil claim in England after that, describing it as a “difficult” decision, but “in the best interest of shareholders”.
That case came to an end this week when a judge ruled HPE was owed hundreds of millions of pounds.
Mr Justice Hildyard said executives at Autonomy had engaged in “a fraudulent acceleration of revenue at the expense of future revenue flows”. But he said HPE’s original claim of $4.55bn in damages was “substantially exaggerated”.
The Lynch family is considering whether to appeal against the ruling. The estate is estimated to be worth about £500mn and so would be bankrupted if the ruling was upheld, according to a person familiar with the matter.
What a saga. DD still questions the logic of HPE’s acquisition and the more than 10-times revenue multiple it agreed to pay.
Job moves
UBS has named Annalisa Terracina and Benjamin Crystal as Emea co-heads of its financial institutions group for global banking. Eric Martinez and Simon Thiel have joined as managing directors in the FIG Americas team.
Carlyle Group has named Alex Chi as co-deputy chief investment officer of its credit division. He was most recently co-head of Goldman Sachs Asset Management’s direct-lending business in the Americas and will join Carlyle early next year.
Paul Hastings has hired structured finance lawyer Megan Roberts as a partner in Chicago. She previously worked for Sidley Austin.
Smart reads
Trump’s tariff man Howard Lutnick was crushed when the US president passed him over for Treasury secretary. He tells The New Yorker he’s determined to be an altogether “different” commerce chief.
That’s so mid The collapse in dealmaking is turning midsized buyout firms into zombies, Bloomberg reports. They’re left chasing lifelines on the secondary market and managing ever-decreasing pools of money.
Fighting the Fed’s revamp The Fed building’s $2.5bn refurbishment has become a focal point of the White House’s attacks on Jay Powell as it seeks to oust the central bank chief, the FT writes.
News round-up
JPMorgan explores lending against clients’ crypto holdings (FT)
AstraZeneca pledges $50bn in US investment as Trump pharma tariffs loom (FT)
EU to investigate Universal’s $775mn acquisition of Downtown Music (FT)
Linklaters partners take home record £2.2mn each (FT)
Big Pharma is increasingly reliant on Chinese biotech advances (FT)
SpaceX warns investors Elon Musk could return to US politics (Bloomberg)
PNC to offer crypto trading as it expands beyond regional roots (FT)
Former SMBC Nikko bankers found guilty of market manipulation (FT)
Microsoft accuses Chinese hackers of exploiting SharePoint software (FT)
UK forex group Argentex to enter administration after hit from dollar rout (FT)
Due Diligence is written by Arash Massoudi, Ivan Levingston, Ortenca Aliaj, Alexandra Heal and Robert Smith in London, James Fontanella-Khan, Sujeet Indap, Eric Platt, Antoine Gara, Amelia Pollard, Maria Heeter, Kaye Wiggins, Oliver Barnes, Jamie John and Hannah Pedone in New York, George Hammond and Tabby Kinder in San Francisco, Arjun Neil Alim in Hong Kong. Please send feedback to due.diligence@ft.com
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