The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

How Culs might ease the pain

Using convertible unsecured loan stock (Culs) along with cash could help different types of deals break the impasse between existing shareholders and bidders.

In an example like the first failed bid for Debenhams in July by Blackstone, Goldman Sachs and Permira, where a fairly full price was offered but institutional shareholders were unhappy with the decision to take the company private in principle, those shareholders could elect to receive 20% to 30% of the bid in the form of carried interest instruments.

Where a target company's share price has fallen so low that institutional shareholders are unwilling to sell despite a nominally high premium, they could elect to take a much greater proportion of carried interest instruments. An example is 3i's failed attempt to acquire Nestor Healthcare. In this case talks were broken placed their pensions in the hands of a long-only equity fund manager have done so because they want to take on only conventional risk. Clients might not want private-equity exposure. It is the job of pension fund trustees to decide if they want to allocate their money to private equity, not the job of the conventional equity portfolio manager. And if trustees do want private-equity exposure, they will probably want private-equity experts to choose the deals for them, not long-only fund managers that only dabble in the sector occasionally.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree