The $50bn consumer giant piling into insurance

One Miami trip to start: DD’s Maria Heeter flew down to Miami last night for Bank of America’s mining conference, where we’re bracing for high drama. Have a tip on BHP’s most recent bid for Anglo American? Write to maria.heeter@ft.com.

And another thing to start: Shareholders of Hess should abstain from voting on its $53bn takeover by Chevron, proxy adviser Institutional Shareholder Services has recommended in a potential blow to the US oil companies’ efforts to wrap up the deal quickly.

In today’s newsletter:

• Pret’s owner pivots to insurance

• Saudis grumble over foreign consultants

• Takeover interest for UK groups jumps

Pret’s parent makes a hard pivot into insurance

Last time we heard from Anant Bhalla, he told DD’s Sujeet Indap about plans to raise $1bn to launch a “merchant bank” for the insurance industry.

But while courting JAB Holding as a potential investor for the scheme, Bhalla wound up with a job instead.

The longtime insurance executive will soon be the new chief investment officer and a senior partner for the food and consumer empire, which is the biggest investor in household-name brands such as Krispy Kreme, Pret A Manger and Coty.

Bhalla will be charged with ushering the conglomerate through an investment strategy overhaul. The firm, which manages $50bn worth of assets, wants to lean into insurance after a shaky time in the consumer sector recently.

Joachim Creus, who replaced Olivier Goudet as chief executive in November, said: “We believe that this is for us fundamentally a much better fit because we are long-term patient capital, where private equity, by definition, they are thinking five, six, seven years, and that doesn’t really fit with the insurance idea.”

JAB’s not like other conglomerates. It’s essentially a family office, managing the permanent capital of Germany’s billionaire and intensely private Reimann family. (Some $33bn of the group’s total assets are attributed to them.)

The pivot will certainly be a challenge. Although JAB has some exposure to the insurance business already — namely, through a stable of pet insurance companies — it’s limited.

And then there’s the problem of regulators, who have started to warn about the dangers of investment houses pushing into the insurance business.

DD will be keeping an eye on the potential synergies between doughnuts and the insurance business.

Saudi locals aren’t happy about all the consultants

There used to be a common scene on early-morning flights from Dubai to Riyadh at the start of each week: armies of management consultants, dressed in dark suits and schlepping Tumi carry-ons, would descend on the Saudi capital.

They were there to work on a myriad of government projects, launched as part of an ambitious plan to diversify the country’s economy away from its dependence on oil revenues.

That weekly commute is less frequent these days. More and more consultants have relocated to Riyadh after authorities said international companies must move their regional headquarters to Saudi Arabia or risk missing out on lucrative government contracts.

The message was clear: set up a regional HQ in the country, or get out.

But the role and cost of these consultants are being debated amid questions over how the country can fund all the mega-projects outside experts have worked on in recent years, the FT’s Ahmed Al Omran and Chloe Cornish report.

Many Saudis privately grumble about the spending on foreign consultants from firms such as McKinsey, Boston Consulting Group and Bain.

They complain that ministries and authorities are simply “RFP machines”, a reference to the requests for proposals sent to consulting firms, which then bid for the work.

They also grumble that many government bodies established since the economic reform plan was launched in 2016 were designed to specifically function with consultants in mind — rather than more full-time employees on staff.

Consultants push back on the idea that they’re being overpaid with little to show for it (big surprise there). They argue that the government needs them to help rationalise its massive expenditure on projects such as the futuristic city of Neom.

But in reality, they need Saudi Arabia too. With the consulting market growing by just 3.5 per cent globally last year, according to Source Global, places like the kingdom with its 18.2 per cent growth rate are more important than ever.

Mining for UK takeovers in Miami

Australian mining company BHP’s £34bn takeover bid for its UK-listed rival Anglo American is understandably in the spotlight. (A revised bid was rejected by Anglo’s board Monday).

But London’s market is full of takeover targets — and Anglo is just the latest one.

Takeover interest for London-listed companies has swelled this year, with the value of bids reaching their highest level since 2018, thanks largely to foreign trade buyers seizing on discounted UK companies.

In all, London-listed firms have received more than $78bn worth of bids this year, with the majority coming from overseas buyers, according to data from Dealogic.

The UK had previously lagged behind US dealmakers. But beaten-up share prices and hopes the Bank of England might soon start cutting interest rates have helped boost takeover interest for London-listed groups.

“The corporate bid wasn’t really there,” in the last couple of years, said Nimesh Khiroya, co-head of UK investment banking at Goldman Sachs. “That really has come back very aggressively in terms of volumes you see in the market.”

Outside of Anglo, other deals have included US private equity firm Thoma Bravo’s acquisition of cyber security company Darktrace for £4.3bn, and International Paper’s purchase of packaging group DS Smith for £7.8bn.

International Distributions Services, the owner of Royal Mail, is another recent target that DD is keeping tabs on.

Nevertheless, BHP’s bid for Anglo is comfortably the biggest takeover approach for a London-listed company this year. And we want to know what BHP’s next move will be.

DD’s Maria Heeter is in Miami for Bank of America’s mining conference this week, where we’re closely watching for the next twist in the saga.

Job moves

• Jimmy Dunne, the vice chairman of Piper Sandler, has resigned from the PGA Tour’s policy board as talks between the golf tour and Saudi Arabia’s Public Investment Fund hit an impasse. Dunne cited “no meaningful progress” in the talks and his “utterly superfluous vote” in his resignation letter.

• Barclays has appointed Enrico Chiapparoli as the co-head of industrials in Emea. He was previously country chief executive in Italy.

• RBC has appointed Matthew Stopnik as head of global investment banking.

• Jimmy Bastock has resigned from Goldman Sachs, where he was co-head of corporate broking, said two people familiar with the matter. He plans to join Morgan Stanley.

• Cleary Gottlieb has hired Rachel (Grand) Gerwin as a counsel in New York, focusing on regulatory matters related to private investment funds. She previously worked for Managed Funds Association.

• Paul Weiss has hired Chelsea Darnell as a partner in its mergers and acquisitions group. She previously worked for Kirkland & Ellis.

Smart reads

SBF in prison Sam Bankman-Fried sat down with Puck’s William D. Cohan in his first in-person interview since landing in Brooklyn’s Metropolitan Detention Center. They talked about prison arbitrage opportunities, Caroline Ellison and regrets about FTX.

Bank mergers Emmanuel Macron, president of France, has big ideas for how Europe can be transformed into a financial powerhouse. French bank M&A is part of his equation, Bloomberg reports.

Musk diplomacy What do Argentina’s President Javier Milei and India’s Prime Minister Narendra Modi have in common? They’re both key figures in Elon Musk’s plans to boost his business empire, the New York Times reports.

News round-up

Apollo and Intel enter talks to finance $11bn chip plant in Ireland (FT)

Permira to take website builder Squarespace private in $6.9bn deal (FT)

Bill Hwang wanted to be a ‘legend on Wall Street’, say prosecutors (FT)

OpenAI rolls out AI updates to GPT-4 as it seeks to get ahead of Google (FT)

GameStop soars in meme stock flashback as ‘Roaring Kitty’ reappears (FT)