Deals wrap: Shell games
A new Reuters investigative report takes a deeper look at a niche industry of advisers who specialize in so-called “reverse merger” deals that use shell companies to give clients easy entry into U.S. capital markets. As correspondents Nanette Byrnes and Lynnley Browning report, more than 400 Chinese companies have been listed in the U.S. over the course of the last decade by way of this back-door method. But, as their investigation shows, a recent “spate of spectacular collapses of Chinese stocks listed on American exchanges has cost U.S. investors billions of dollars” and sparked multiple investigations into the practice.
Job cuts are on the way at HSBC. Europe’s biggest bank announced plans to axe 30,000 positions between now and the end of 2013 as it retreats from countries around the globe where it is struggling to compete. The first 5,000 cuts came as part of the company’s restructuring efforts across Latin America, the U.S., Britain, France and the Middle East. The bank, which posted a surprise rise in first-half profit on Monday, is reversing a strategy that had been criticized for “planting flags” around the world. CEO Stuart Gulliver’s far-reaching plan unveiled three months ago aims to slash costs and he intends to sell, shut or slim down retail banking in 39 countries. HSBC said on Sunday it would sell 195 U.S. branches to First Niagara Financial for about $1 billion in cash, and close another 13 of the 470 sites it had.
Peabody Energy and ArcelorMittal launched a hostile $5.2 billion bid for Macarthur Coal after the Australian target’s board said the approach undervalued the company and it was working on attracting a rival offer. Peabody, the largest U.S. coal company, and ArcelorMittal, the world’s top steelmaker, have been courting Macarthur to secure its resources of pulverized coal, a key steelmaking ingredient, but talks to get the backing of Macarthur’s board collapsed over the weekend.
Lansdowne Partners, one of Europe’s biggest hedge fund firms, has sold its $850 million stake in Goldman Sachs as part of a move out of investment banks burdened by regulation and into retail banks, a source close to the situation told Reuters.
A report emerged late last week on tech blog Boy Genius Report that cited an unproven source saying Apple is in talks to buy U.S. bookseller Barnes & Noble. Technologizer’s Harry McCracken takes a look back at the long list of past Apple acquisition rumors to make a point about how often they turn out to be untrue.
Deals wrap: Yahoo, Softbank reach pact over Alibaba’s Alipay
After months of intense negotiations, China’s Alibaba Group said it has reached an agreement with Yahoo and Softbank that promises the e-commerce giant could receive up to $6 billion from an IPO or liquidation of its e-payment unit, Alipay.
Alipay is an Alibaba subsidiary that was transferred to a separate entity controlled by founder Jack Ma in order to meet Chinese regulations relating to foreign ownership. Yahoo owns 43 percent of Alibaba, which it acquired for $1 billion in 2005.
Australian brewer and takeover target Foster’s said it did not rule out takeover talks with SABMiller, but the company’s new CEO John Pollaers said “the value put on the table was so far away from reality that it wasn’t worth engaging (with SABMiller).” SABMiller, the world’s number two brewer had offered $10.4 billion for Foster’s last month.
Superstar hedge fund manager George Soros announced earlier this week he was returning all captial to outsiders, citing tougher government regulations as the reason for his decision. This piece by Deal Journal’s Shira Ovide quotes a comment by Senator Richard Shelby on Soros and asks, “is George Soros a hypocrite on regulation?”
Deals wrap: Groupon, LivingSocial in buying frenzy
Group buying sites Groupon and LivingSocial are both in the process of launching multi-billion dollar IPOs, but as Deal Journal reports, the companies are also “plowing full steam ahead with deal making.”
Shares of Dunkin’ Brands shot up as much as 56 percent on its first day of trading, closing at $27.85 by the end of Wednesday’s trading session. The parent of the Dunkin’ Donuts chain said it has set a 20-year target to open 15,000 new stores in the U.S., up from its current 6,800. This would surpass rival Starbucks’ numbers.
France Telecom is looking to put its Swiss, Austrian and Portugese units up for sale. Analysts say the sell-off could raise as much as $2.9 billion and pave the way for a return to shareholders.
Private equity and real estate firm Blackstone Group is in talks to buy healthcare IT company Emdeon, in a deal that could be valued at $3 billion, a source familiar with the situation told Reuters.
Deals wrap: Dunkin’ Brands IPO prices above range
There appears to be a strong demand for this week’s biggest deal. Dunkin’ Brands, the provider of sweet treats and coffee raised $422.75 million after pricing its IPO at $19 per share, well above the range set by underwriters. This gives the parent of the Dunkin’ Donuts and Baskin Robbins chains a market value of just over $2.4 billion.
This slideshow in PEHUB shows who Dunkin’ Brands’ top shareholders are.
Sources say private equity firms Centerbridge Partners and BC Partners are pursuing Caterpillar’s logistics unit, a sale that could fetch more than $1 billion. In a Reuters exclusive, several people familiar with the matter said “two or three parties remain in the auction as the bidding process for Caterpillar’s third-party logistics business has reached the final round.”
In a letter addressed to investors, billionaire hedge fund manager George Soros announced he was returning all capital to outsiders and ending his four-decade long career. The letter also stated chief investment officer Keith Anderson would also be leaving the firm. This piece in Deal Journal examines the reasons behind Anderson’s departure.
Deals wrap: Fund manager Soros ending career
Billionaire hedge fund manager George Soros will be returning capital to outsiders and ending his nearly four-decade long career. In a letter to investors, Soros’ two sons cited tougher impending regulations on the hedge fund industry being the reason for returning the money. Soros said he will now only manage money for himself.
A study has found more than one-fourth of the 94 U.S. securities fraud lawsuits seeking class-action status and filed from January to June were related to so-called Chinese reverse mergers. Despite this surge in lawsuits, investors may have trouble recouping their losses even if they win.
Walt Disney Co., the majority shareholder of India’s UTV Software Communications, is proposing to buy most of the shares it does not already own in the company and delist them from all bourses. The deal has a market value of $826 million.
Deals wrap: Hynix may finally have new owner
Shareholders of Hynix Semiconductor will take final bids for a controlling stake in the South Korean memory chipmaker, said a leading shareholder. The $2.3 billion stake sale is the third attempt by creditors-turned-shareholders to find a new owner for the company.
Dutch bancassurer ING will sell most of its Latin American operation to Colombia’s GrupoSura for $3.7 billion in a deal resulting from its state rescue in 2008. This sale now paves the way for the sale of ING’s U.S., European and Asian businesses, which are worth about 18-19 billion euros.
Internet radio service Pandora debuted last month well above its offer price but fears of the company’s chances of turning profit quickly dragged shares down. Deal Journal writes why two stock-research firms are telling investors to “scoop up” Pandora stocks, while one other notable firm is advising against it.
Reinsurer Validus Holdings has taken its $3.2 billion bid for Transatlantic Holdings hostile after merger talks came to a standstill.
Deals wrap: Express Scripts’ CEO steps into the spotlight
For a self-described nerdy accountant who shuns attention, Express Scripts chief George Paz just thrust himself into the limelight, reports Lewis Krauskopf. The company’s planned buy of Medco Health Solutions met with swift opposition from consumer advocates and drug stores, signaling the beginning of what could be an ugly fight for antitrust approval.
Len Blavatnik’s Access Industries, Sony Music Entertainment and Vivendi SA’s Universal Music Group are among the music companies and private equity firms interested in buying EMI Group, people familiar with the situation said.
Apple is in early talks to join the bidding for Hulu, the online video site that Walt Disney Co, News Corp and its other owners have put up for sale, Bloomberg cited two unidentified sources as saying.
“A wave of multibillion-dollar deals by major oil companies has swept the North American shale oil-and-gas sector during the last few years. The rising tide is expected to continue to surge,” reports the WSJ.
Bank of Communications’ efforts to buy Shanghai Securities Co would, if successful, underline Beijing’s desire to build full-service financial giants and could trigger a wave of similar acquisitions by rival lenders.
Deals wrap: Express Scripts to buy Medco
Express Scripts will buy rival Medco Health Solutions for $29.1 billion in cash and stock to create a powerhouse in managing prescription drug benefits in the United States, the companies said on Thursday. The WSJ live blogged the companies’ conference call on the merger.
Two Chinese Internet firms have postponed their U.S. fundraising plans due to volatile global markets and after a series of accounting scandals tarnished the reputation of overseas-listed Chinese companies.
Shares of real estate site Zillow skyrocketed in their market debut on Wednesday, the latest to ride a wave of dotcom exuberance while stoking fears of lofty Internet valuations.
AT&T’s second-quarter revenue beat Wall Street expectations but the strong results could be overshadowed by growing opposition to AT&T’s controversial plan to buy T-Mobile USA. The WSJ asks readers if the merger is good for consumers and the Free Press has created some satirical videos on the topic.
Deals wrap: Bidding for Clorox
Carl Icahn raised his offer to buy household products maker Clorox to $80 a share from $76.50 after the company rejected his previous offer as too low and not credible.
Icahn’s bid for Clorox has “rekindled the long-running debate about whether investors benefit from Mr. Icahn’s presence,” writes the NYT’s Deal Professor. The London Stock Exchange has boosted its chances of avoiding the clutches of predatory rival Nasdaq OMX by reporting 14 percent growth as a standalone business. The Financial News reports the LSE is on the lookout for inorganic growth.
China’s top offshore oil producer CNOOC has agreed to buy Opti Canada for $34 million in cash and take on more than $2 billion in debt in a move that will ramp up Chinese investment in Canadian oil sands.
Deals wrap: News Corp in play?
Reuters’ blogger Felix Salmon asks the question: “Could News Corp end up in play?”
British group Aegis, one of the last independent advertising agencies, could fall prey to a larger rival if it sells its Synovate unit, with major shareholder Vincent Bollore in the role of kingmaker.
American International Group is looking to sell part of its airplane-leasing business through an initial public offering, the Wall Street Journal reported, citing people familiar with the matter.
The New Yorker profiles Bridgewater Associates founder Ray Dalio.
