Topline: Michael Bloomberg promises to sell his multibillion-dollar financial-data and media company Bloomberg LP if he becomes president, but a potential buyer for such a deal would require very deep pockets — including stock exchanges, financial consortiums or big tech companies.
- Bloomberg LP’s closest peer, Refinitiv (the former data arm of Thomson-Reuters) was acquired by the London Stock Exchange for $27 billion last summer, at about 13 times earnings, and serves as a guide for how Bloomberg LP could be sold, according to a report from Burton-Taylor International Consulting.
- Using that same calculation, while also taking into account a slight premium for historical growth, Bloomberg LP could be worth up to $60 billion, the Burton-Taylor report estimates.
- Based on the Refinitiv deal, some obvious candidates to buy Bloomberg LP, according to the Wall Street Journal, include big stock exchanges if they can raise enough money: CME Group has a market value of $75 billion, while Intercontinental Exchange, which recently flexed its financial muscle with a $35 billion bid to buy eBay, is valued at $53 billion.
- Another option, in terms of balance sheet strength, would be one of the big tech giants like Microsoft, Amazon or Google parent Alphabet, as they increasingly look to integrate consumers’ financial data into their businesses, according to the Journal.
- The most likely option for a sale, according to Nucleus Research principal analyst Barbara Peck, is a consortium leveraged buyout deal that would be the largest in history: Private equity firms could band together to try to emulate Blackstone’s $20 billion purchase of a majority stake in Refinitiv, which occurred before the London Stock Exchange deal last year.
- Another potential buyer could be an even richer billionaire, CCN reports, like Warren Buffet and his team at Berkshire Hathaway: The Oracle of Omaha loves monopolies and has long been searching for “elephant sized acquisition” to spend his $128 billion cash pile on.
Crucial quotes: “It’s going to have to be a big player with a lot of money,” says Peck. “Private equity would be my guess,” most likely a consortium leveraged buyout, she adds. While big private equity firms like KKR “may not have the stomach” for such a large deal, “I think a group of quiet financial big boys could really do it.”
Tangent: Speaking about Buffett’s chances, Peck says: “He’s still a value player — I don’t know how well [Bloomberg LP] fits in with Berkshire Hathaway’s playbook.” Out of the big tech companies who could try to buy Bloomberg LP, she points out that Microsoft is in the best position financially with the most cash, though that doesn’t disqualify other potential players like Salesforce or Oracle. However, Bloomberg’s core business is much different than these companies, deriving revenue from subscriptions for its data and news terminal.
Crucial statistics: Bloomberg, who Forbes estimates has a net worth of $64.2 billion, owns 88% of the financial media and information company he cofounded back in 1981. Bloomberg LP brought in about $10 billion in revenue in 2019. The company provides news and data for some 325,000 customers who each pay a fixed price of $24,000 per year, the Wall Street Journal reports.
Key background: The Bloomberg campaign confirmed on Tuesday that the former New York City mayor would remove any conflict of interest by selling Bloomberg LP if he beats President Trump in November. Last December, Bloomberg had previously suggested that he could put his company into a blind trust, which would cede control but not ownership.