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Good Morning,

McKinsey is in hot water over their China relationship, investors are growing nervous about the private credit boom, SEC accused an ex-CEO of orchestrating a meme-stock rally, the European parliament banned Amazon lobbyists, and Wendy’s will test surge pricing in 2025.

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Let’s dive in.

Before The Bell

Markets

• US stocks gained modestly yesterday as investors prepared for key inflation data later this week 

• Treasuries were mixed after a $42B auction of seven-year notes and a heavy slate of new corporate debt

• Bitcoin rallied past $57k as big buyers flocked in

  • Crypto market cap is now back to $2T

Earnings

• Macy’s beat Wall Street EPS and revenue estimates but reported another quarter of falling sales and announced plans to close 150 stores by 2026 (YH)

• Lowe’s beat Wall Street estimates but saw falling sales and forecast the decline to continue further this year (CNBC) 

• AutoZone shares hit a record high after beating on profit estimates and outlining prospects for reversing slowing sales growth (BBG)

• What we're watching this week:  

  • Today: Salesforce, AMC

  • Thursday: Birkenstock, Best Buy, Dell

• Full calendar here

Headline Roundup

• BOE may sell whole QE portfolio in divergence from US Fed (YH)

• Euro zone-US bond correlations are at a record high (RT)

• Big investors grow nervous about private credit boom (FT)

• McKinsey-led think-tank advised China on policy that fed US tensions (FT)

• US Republicans call for McKinsey to be banned from federal contracts (FT)

• European parliament banned Amazon lobbyists (FT)

• Investors poured $4T into US ETFs over past decade, with mutual funds seeing outflows (FT)

• Singapore property giants hit by high rates, global downturn (BBG)

• Apple ends quest to build its own EV (WSJ)

• Apollo co-founder Leon Black sold stock worth $173M (RT)

• Starbucks agreed to begin bargaining talks with unions (RT)

• US launched an antitrust investigation into UnitedHealth (WSJ)

• The SEC accused Alfi's ex-CEO of using burner accounts to boost its meme stock (BBG)

• Wells Fargo named M&A veteran Braunstein as vice chair in IB push (RT)

• Bumble will cut ~350 roles (RT)

• Carlyle hired Goldman's ex-head of commodities research Jeff Currie (RT)

• Wendy's will test surge pricing in 2025 (AP)

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Deal Flow

M&A / Investments

• ExxonMobil is considering a move (related to Hess’s 30% stake in Guyana’s Stabroek oil field) to break up Chevron's $53B acquisition of Hess (BBG) 

• Warner Bros. Discovery halted its merger talks with Paramount Global; Paramount has a $14B offer from media mogul Byron Allen (CNBC)  

• Philippine conglomerates Metro Pacific Investments and San Miguel began talks to explore combining their toll road businesses, which would form a combined entity worth up to $10B (BBG) 

• Swisscom is in advanced talks to acquire Vodafone Group’s Italian business, Vodafone Italy, and has been discussing an offer of ~$8.7B (BBG) 

• Hong Kong luggage maker Samsonite International, which has a $4.9B market cap, is considering options after receiving takeover interest from buyout firms (BBG) 

• PE firm CVC Asia Pacific improved its buyout bid for Australia's APM Human Services International to $1.2B (RT) 

• British electrical retailer Currys rejected an improved $951M bid from US investor Elliott (RT) 

• Thailand’s biggest bank SCB X is close to acquiring consumer lender Home Credit’s business in Vietnam in a deal worth up to $900M (BBG) 

• Buyout firm Affinity Equity Partners will begin the sale process for Penang-based Island Hospital, one of Malaysia’s largest healthcare providers likely to be valued at ~$837M (WSJ) 

• Atlas Energy Solutions agreed to buy Hi-Crush's Permian Basin proppant production assets and North American logistics operations for ~$450 (MW) 

• British Airways owner IAG offered concessions in an attempt to secure EU antitrust approval for its ~$434M bid to buy out Air Europa (RT) 

• Qualcomm’s purchase of Israeli semiconductor firm Autotalks faces a formal probe from the UK’s antitrust watchdog over competition concerns (BBG) 

• Luxury giant LVMH is in talks to buy French magazine Paris Match from media conglomerate Lagardere (BBG) 

• An existing investor group led by Art Rooney and Thomas Tull are in advanced talks to acquire Josh Harris and David Blitzer’s minority stake in the Pittsburgh Steelers (BBG)  

VC

• Glean, a startup that connects first and third party databases to answer plain-English requests from employees, raised a $200M Series D led by Kleiner Perkins and Lightspeed Venture Partners (TC)

• Alamar Biosciences, a company enabling the earliest detection of disease, raised a $128M Series C led by Sands Capital (PRN)

• Mainstay Medical, an Irish medical device company focused on treating chronic low back pain, raised $125M in financing led by Gilde Healthcare and Viking Global Investors (BW)

• Exodigo, a startup modernizing underground mapping, raised a $105M Series A led by Greenfield Partners and Zeev Ventures (PRN)

• Indian logistics startup Shadowfax raised a $100M Series E led by TPG NewQuest (TC)

• Unseenlabs, a French startup using satellite data to detect ships, raised an $92.9M funding round from Supernova Invest, ISALT, and UNEXO (BW)

• Intenseye, a workplace safety solutions startup, raised a $64M Series B led by Lightspeed (BW)

• Curve Therapeutics, a private biotechnology company, raised a $51M Series A led by Pfizer Ventures (PRN)

• AI-based photo editing app Photoroom raised a $43M round at a $500M valuation led by Balderton Capital (TC)

• Rhombus, a startup building a cloud-managed physical security platform, raised a $26M equity round co-led by Tru Arrow and Cota Capital and a $17M debt round from Silicon Valley Bank (PRN)

• AI-powered self-publishing startup Inkitt raised a $37M Series C led by Khosla Ventures (TC)

• Lapse, a startup allowing users to take pictures on their phones and see them ‘develop’ over time, raised a $30M round led by Greylock and DST Global (TC)

• Matter Neuroscience, a startup aiming to provide personalized insights into brain chemistry, raised a $26M round led by ARCH Venture Partners, Polaris Partners, and Exor Ventures (VC)

• Halo, a provider of a subscription-based bodycam and cloud-based digital asset management platform, raised a $20M round led by Volition Capital (FN)

• Vegetarian Express, a UK-based supplier of vegetarian and vegan ingredients, received an $18.3M investment from NVM Private Equity (FN)

• Regenerative medicine startup Pelage Pharmaceuticals raised a $16.8M Series A led by GV (PRN)

• Mistral AI, a Paris-based AI startup rivaling OpenAI, received a $16.3M investment from Microsoft (TC)

• Spanish fintech Embat raised a $16M Series A led by Creandum (TC)

• Tracksuit, a startup helping marketers understand and communicate what’s working to build brand health, raised a $13.5M Series A led by Altos Ventures and Footwork (PR)

• Parspec, an AI-powered software platform that streamlines the selection and sale of construction products, raised an $11.5M seed round led by Innovation Endeavors (BW)

• Collov AI, a startup building an AI design tool for cabinets, raised a $10M Series A led by GoldenHome Living (BW)

• Pronto Housing, a software solution to make complicated affordable housing processes efficient and easy for everyone, raised a $3M round from Infinity Capital Partners, MRK Partners, Icon National, and others (PR)

• Elevated Signals, a startup providing modern manufacturing software, raised a $6.7M Series A led by Yaletown Partners (BW)

• Blockchain development startup Initia raised a $7.5M seed round led by Delphi Ventures and HackVC (TC)

• Enkrypt AI, a startup enabling the adoption of Generative AI within enterprises, raised $2.4M in funding led by Boldcap (FN)

• Retention-focused startup Subsets raised a $1.65M pre-seed round led by Upfin and YC (TC)

IPO / Direct Listings / Issuances / Block Trades

• Swedish fintech Klarna, once Europe’s most valuable startup, is in discussions for a potential $20B US IPO as soon as Q3 of this year (BBG) 

• Japanese e-commerce company Rakuten Group is planning to issue up to $666M of corporate bond-type shares to improve finances (BBG) 

• China's Zhida Technology, a developer of EV charging systems, is considering a Hong Kong IPO that could raise up to $128M (BBG) 

• Dubai will sell a 25% stake in public parking operator Parkin this year (RT) 

Debt

• Booking.com plans to raise $3B via a euro-denominated bond sale that will partly be used for a share buyback (BBG) 

• Blackstone will acquire $1.1B of US credit card debt from Barclays (RT)

• Water company Severn Trent Utilities Finance is seeking to raise $543M from a 10-year sustainability bond (BBG)

Bankruptcy / Restructuring

• Peru granted troubled state-run oil producer Petroperu an $800M loan guarantee to keep its operations afloat (RT) 

• Distressed Chinese developer Country Garden received a winding up petition in Hong Kong; the firm has ~$10B in offshore debt (BBG) 

• Citgo Petroleum's parent received 12 initial bids from private investment funds and companies participating in an auction of its shares (RT)

Fundraising

• European PE group EQT raised $23.8B for its largest ever buyout fund (FT) 

• Growth investor Renovus Capital Partners raised $325M for a continuation vehicle allowing it to maintain control of four portfolio companies (WSJ)

• Goldman Sachs will raise its ninth PE fund this year (RT)

Crypto Corner

• The SEC is expected to drag its feet on new wave of crypto ETFs (RT)

• The IRS hired an ex-Binance executive to beef up its crypto expertise (BBG) 

• Michael Saylor’s MicroStrategy purchased another 3,000 Bitcoin for $155M this month (BBG) 

Exec’s Picks

• Financial Times explained how spiraling US debt could risk action from bond vigilantes.

• Bloomberg reported on Ilya Lichtenstein’s testimony on how he pulled off one of largest Bitcoin heists in history.

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