M&A wrap: T-Mobile “crying out” for Sprint tie-up?
Deutsche Telekom may be forced into a tie-up of its sub-scale U.S. wireless unit with Sprint Nextel after a $39 billion deal with AT&T collapsed. While Deutsche Telekom is now walking away with a $6 billion breakup package, its chief executive Rene Obermann has lost a lot of time and will now have to invest in the U.S. market or find a new way to exit the country, an option analysts regard as unlikely. T-Mobile USA “is just crying out for a merger with Sprint. That’s the only long-term solution for Deutsche Telekom,” Will Draper, head of telecoms research at Espirito Santo, said.
Goldman Sachs claimed the spot as the top U.S. M&A adviser in 2011 as rivals JP Morgan and Morgan Stanley fell in the standings due to the collapse of AT&T’s $39 billion deal to buy Deutsche Telekom’s T-Mobile USA unit. JP Morgan, which had previously been the top U.S. M&A adviser for the year, advised AT&T along with Greenhill and Evercore. Morgan Stanley, which had been No. 2 in U.S. M&A based on the dollar value of transactions on which it had advised, was working for Deutsche Telekom along with Citigroup, Credit Suisse and Deutsche Bank.
Olympus Corp is preparing to issue about $1.28 billion (100 billion yen) in new shares to bolster its depleted finances, with Japanese high-tech stalwarts Sony and Fujifilm seen as possible buyers, the Nikkei business daily reported. The report comes after a warning from one of the camera and endoscope maker’s leading shareholders that the scandal-tainted board may try to retain control by issuing new shares to dilute the power of existing shareholders.
The New York Times Co is nearing a sale of 16 regional newspapers spread across the U.S. Southeast and California to Halifax Media Holdings, it said on Monday. The possible sale, news of which comes just days after the Times Co announced the sudden retirement of its chief executive, is the latest in a series of steps the company has taken to cut costs and focus on its most important newspapers and their websites.
Qatar and Luxembourg are to buy bailed-out Dexia’s private banking arm for 730 million euros ($950 million), less than analysts had estimated, as the Franco-Belgian group is broken up.
M & A wrap: A Buffett bailout for BofA
Warren Buffett’s Berkshire Hathaway will invest $5 billion in Bank of America, stepping in to shore up the company in the same way he helped prop up Goldman Sachs during the financial crisis.
Bank of America shares rose 20 percent in pre-market trading on the news. Shares for the largest U.S. bank by assets have lost roughly a third of their value in August, and half their value since the beginning of the year.
The news of Steve Jobs’s resignation had many of his peers weighing in on the Apple co-founder’s legacy. Former Google CEO Eric Schmidt said Jobs is the “most successful CEO in the U.S. of the last 25 years,” while former eBay CEO Meg Whitman said his contributions are “unparalleled in the business world.”
Samsung Electronics Co reiterated on Thursday it is not interested in buying Hewlett-Packard Co’s PC business, shooting down persistent market talk the South Korean firm may snap up the unit to become the world’s top PC maker.
The deadline for initial bids in the auction for Hulu was extended until the end of the week to allow interested parties more time to examine the online video site’s financial information, according to people familiar with the situation. Yahoo, Google Inc, DirecTV and Amazon.com were among the parties preparing to submit an offer for the U.S. online company, the people said.
Is there a future for Morgan Stanley and Goldman Sachs? That’s the question WSJ’s Dennis Berman tackles on Mean Street.
M & A wrap: S&P chief downgraded
The chief of Standard & Poor’s will step down next month, to be replaced by a senior Citibank executive, in a move announced a few weeks after the credit rating agency downgraded U.S. government debt and sparked a row with Washington.
Australian brewer Foster’s Group put pressure on SABMiller to raise its $10 billion hostile takeover offer on Tuesday, unveiling a $521 million capital return to shareholders.
Deutsche Bank AG knew in 2006 that a mortgage company it was preparing to buy lied to the U.S. government about its mortgages, yet went ahead with the purchase and should be held financially responsible, the Justice Department said on Monday.
Mortgage-backed securities are also at the center of another investigation of a prominent bank, as Goldman Sachs CEO Lloyd Blankfein has hired high-profile Washington defense attorney Reid Weingarten to represent him as the Justice Department looks further into Goldman’s role in the financial crisis.
NYT’s DealBook contributor Peter Henning called the Goldman investigation an “overreaction,” adding that until subpoenas are issued, the news that “Mr. Blankfein has hired his own lawyer does not tell us much, other than that he did what every other corporate executive involved in an investigation would do.”
All S&P employees should be investigated and their stock portfolios revealed! Some of them must have lots of short positions set up before the U.S. downgrade!
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: The value of Groupon
Groupon is likely to pick Goldman Sachs and Morgan Stanley to lead a second-half initial public offering that could value the fast-growing daily deals site at $15 billion to $20 billion, according to a source.
Commodity trader Glencore’s planned $12 billion London listing has long been seen as the first step to merging with Xstrata, in what could be the biggest mining takeover in history. The question for most analysts and investors since the IPO was confirmed is not if the deal happens but when — and how.
BP’s partners in its Russian venture TNK-BP rejected the UK oil major’s offer to settle a dispute caused by its $18 billion tie-up with Rosneft, casting further doubt on the deal.
The New York Times reports that CVS Caremark is under pressure from consumer groups and shareholders to split up the merger of the drugstore chain and the pharmacy benefits manager. Regulators are also investigating whether the company used anticompetitive behavior.
Deals wrap: BP’s Rosneft deal on the rocks?
The planned $18 billion deal between BP and Rosneft was left even more uncertain after its chief backer Igor Sechin stepped down as Rosneft’s chairman. Sechin, who is also Russia’s deputy prime minster quit after President Dmitry Medvedev ordered the removal of ministers from the board of state companies. BP’s tie-up with Rosneft is already blocked by a court injunction secured by the company’s Russian partners in its TNK-BP venture.
HP held talks with software company Tibco about a possible acquisition until about two weeks ago, according to sources familiar with the matter. The talks come as new CEO Leo Apotheker is expected to revitalize the company’s software division via acquisitions, which only accounts for 3 percent of its revenue. It is not clear if the talks will resume. (more…)
Deals wrap: Goldman buys a Chinese life insurance policy
Goldman Sachs is betting big on the word’s largest insurance market with its purchase of a 12 percent stake in China’s Taikang Life Insurance Co Ltd. Goldman’s deal could pave the way for Taikang’s planned initial public offering next year. Credit Suisse estimates China’s life insurance market –which generated $124 billion premium income in 2009 — will grow more than 20 percent per annum for the next decade.
BP’s proposed $16 billion share swap with Rosneft received a stay of execution when an arbitration panel gave it time to try to extend its April 14 deadline for the deal. The co-owners of BP’s Russian venture TNK-BP are trying to block the deal with Rosneft arguing that it violates TNK-BP’s shareholder agreement. By not killing the deal outright, the panel has given BP time to either persuade TNK-BP to drop its case or cut them in on the deal.
U.S. securities regulators may ease constraints on share issues by private companies, making it easier for start-ups like Facebook, Twitter and Zynga to raise money, the Wall Street Journal reported.
The Wall Street Journal’s Mike Spector provides an inside look at the intense bidding that took place for the Blockbuster chain on Wednesday night. A person who was at the auction says it “was at times like a ‘cage match’.”
Deals wrap: Blockbuster year for M&A?
Despite upheaval in the Middle East and Japan, worldwide M&A have risen 58 percent to $717 billion so far this year, according to preliminary data from Thomson Reuters, marking the best start to a year since 2007 and building on last year’s tentative recovery. Analysts expect to see continued strong activity in mining and energy, but some warned it’s still too early to see the full implications of the recent crises.
Deal-making in Asia got off to a strong start in 2011, with cashed-up companies tapping investment opportunities in sectors from energy to industrials, and bankers say the transaction pipeline for the rest of the year looks healthy.
Executives at boutique investment banks see an increasing number of clients wanting their advice after a Delaware ruling last month accused large investment bank Barclays Capital of conflicts of interest.
Wall Street’s most powerful bank, Goldman Sachs Group, is making its worst showing in U.S. deal advisory rankings in more than two decades, sliding to 10th place in the first quarter of this year. The drop is mainly because the firm did not advise on two mega deals: AT&T’s $39 billion deal for T-Mobile USA and the $59 billion restructuring of insurer American International Group.
Signs of firms testing investor demand for new listings only a week after volatility derailed two of Europe’s largest offerings so far this year will embolden Glencore as the commodities giant presses ahead with its own mega-float, intended for early next month.
Even with Barnes & Noble selling for 60 cents on the dollar, the cheapest retailer in the U.S. isn’t cheap enough to entice private equity buyers looking for cash, writes Bloomberg’s Tara Lachapelle and Matt Townsend. The chain is the only U.S. retailer with a value of more than $500 million trading at a discount to its net assets, according to data compiled by Bloomberg.
Deals wrap: Goldman’s new normal?
Goldman’s decision to scale back a heavily publicized sale of shares in Facebook shows how the bank risks losing its edge as financial regulation intensifies, writes Dan Wilchins. Goldman posted a 53 percent decline in quarterly profit earlier today.
Agribusiness giant Cargill plans to spin off its $24 billion majority stake in fertilizer producer Mosaic. The move could put Mosaic in play, with global mining giants being the likely bidders.
The NYT’s Deal Professor asks, are the parts worth more than the whole?
Deals wrap: Creeping takeovers
A string of stake buys and takeover bids has shown how merger rules in the euro zone’s two biggest economies can be used to gain control of a target quietly or on the cheap.
Goldman Sachs said it will limit its private placement of shares of social networking site Facebook to investors outside the United States, citing “intense media coverage.”
Federal regulators could approve Comcast Corp’s purchase of NBC Universal as early as Tuesday, a person familiar with the matter said.
Asian hedge funds are beginning to make a tactical sojourn to markets abroad, reversing a trend of global funds setting up shop in Asia.
“The cloud of uncertainty hovering over Spain’s economy doesn’t make an ideal backdrop for mergers and acquisitions. But that hasn’t stopped many of the country’s blue-chip companies from striking big, and in some cases bold, acquisitions abroad in recent months,” reports the WSJ.
MarketWatch makes some predictions for a post-Warren Buffett world.
