M & A wrap: Can Facebook live up to the hype?
As Facebook is expected to submit paperwork to regulators for its initial public offering, Reuters Social Media Editor, Anthony De Rosa, uncovers three problems standing in the way of Facebook’s future growth.
Which exchange will Facebook choose to “friend”? Bloomberg reports NYSE and Nasdaq are competing now for what may be the biggest ever by a technology company.
European Union regulators have blocked the merger of exchange operators Deutsche Boerse and NYSE Euronext to avoid giving them a stranglehold on the European futures market. “The merger between Deutsche Boerse and NYSE Euronext would have led to a near-monopoly in European financial derivatives worldwide,” EU Competition Commissioner Joaquin Almunia said in a statement.
The failure of the NYSE Euronext/Deutsche Borse tie-up is a stark reminder to dealmakers that the fate of their work often rests in government hands, Deal Journal writes.
M&A wrap: Banks vie for Facebook IPO role
With the prized Facebook IPO on the horizon for 2012, the lead investment-banking role is still up for grabs and long-time rivals Goldman Sachs and Morgan Stanley are considered front runners, the Wall Street Journal reports.
In this Deal Pipeline video, Paul Hastings corporate department partner Barry Brooks predicts that mergers and acquisitions in financial services will jump in 2012.
Banco Bradesco, Brazil’s second-biggest private sector bank, pulled out of talks to buy HSBC Holdings‘ consumer finance unit Losango on concern about potential charges related to labor disputes, a local newspaper reported on Friday.
The settlement between the Trust Company of the West and Jeffrey E. Gundlach caps a bitter and protracted dispute that turned the normally anodyne mutual fund world into a heated legal battleground, reports DealBook.
Swiss Petroplus struggles to keep its refineries across Europe running after aggressive acquisitions by former chairman Thomas O’Malley up to 2007 have given way to the current credit crunch, economic slowdown and financial crisis.
from Breakingviews:
Forget the IPO, Facebook could reverse into Yahoo
By Rob Cox The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Now that Yahoo has fired its chief executive, anything could happen to the rudderless Internet hodgepodge. Private equity firms, one of Yahoo's founders and even AOL are said to be mulling bids. But consider a more radical option: a takeover by the rival most responsible for Yahoo's fall from grace -- Facebook.
It's of course easy to marshal arguments why Facebook's creator, Mark Zuckerberg, should avoid staining his company Yahoo purple. The social network is already growing rapidly. Revenue doubled in the first half to $1.6 billion with profit of nearly half a billion.
Moreover, Facebook is a private company without the $20 billion or so of cash needed to buy Yahoo. Since Facebook is just starting to profitably harvest its audience of 750 million users, the firm should stick to its knitting, or so the argument goes.
But Facebook has the ingredients to make Yahoo succeed, starting with a clear mission. Yahoo has struggled to articulate a vision beyond being the first page people see when they open a browser. Beyond that, nothing binds Yahoo's pieces -- news, photo albums, stock quotes, email, job listings and entertainment -- together. They look like orphaned applications for a social network.
What unifies Yahoo's bits and bobs is a relatively robust display advertising platform. In an overall crummy second quarter, display revenue increased 5 percent to $467 million. Facebook is still building out its capacity to sell such ads. A combination would make a compelling pitch to advertisers.
In search, both have a common nemesis in Google. They also have a shared partner in Microsoft, which owns a piece of Facebook and whose Bing search engine collaborates with Yahoo.
Deals wrap: BHP shrugs off green fears
BHP Billiton will buy U.S. gas producer Petrohawk Energy for $12.1 billion, ramping up its bets on the booming but environmentally controversial shale gas industry. The FT also takes a look at the deal.
Carl Icahn offered to buy Clorox in a $10.2 billion deal, but also invited the household products maker to solicit rival bids, which he said would yield much higher offers for the company.
They were just a few brief comments at an investor conference but they were enough to set the health insurance industry abuzz: Could Aetna buy Cigna?
Almost every company eventually dies. With that in mind The Big Picture asks if Facebook has missed its IPO window.
PEHub finds out what the mob can teach you about the startup industry.
Some execs are looking for an iPad to be included in their golden handshake. Daily Ticker gets the scoop on company perks.
Deals wrap: Copycats sure to follow LinkedIn
A day after LinkedIn’s shares more than doubled in their public trading debut, analysts are scrambling to explain why the stock exploded and figure out what happens next.
The professional networking site’s IPO was being closely watched by Facebook, Groupon, Twitter and Zynga to gauge investors’ appetite for Internet companies.
Facebook COO Sheryl Sandberg described a public offering of Facebook shares as “inevitable,” while Evelyn M. Rusli over on DealBook predicts a surge in Internet IPO’s but doesn’t think the market is setting itself up for another tech bubble burst.
It wasn’t just the big four social media sites waiting to go public that were salivating at LinkedIn’s record day, would-be rivals to LinkedIn were also giddy with excitement.
As for future opportunities for investors, Shira Ovide of WSJ.com gives her three reasons to be wary going forward. Nigam Arora of Seeking Alpha also advises investors to be cautious but gives four low risk ways to make money from LinkedIn.
One of the more interesting comparisons to LinkedIn’s meteoric rise in its debut comes from WSJ.com. At one point yesterday LinkedIn’s valuation was roughly $10 billion, trading at nearly 41 times its 2010 net revenue. If Apple were trading at the same multiple, it would have a market value of $2.7 trillion.
In other news John Malone’s Liberty Media Corp has proposed to buy Barnes & Noble for $1.02 billion, nine months after the largest U.S. bookstore chain put itself up for sale.
Deals wrap: Glencore debuts while markets await LinkedIn
Commodities trader Glencore made a steady market debut with shares trading just above the widely expected launch price of 530 pence, giving it solid currency for potential acquisitions.
There was heavy interest in the stock on both the London and Hong Kong exchanges, due in part to the relatively small amount of shares being sold. Glencore’s Chief Executive and largest shareholder Ivan Glasenberg said demand for the shares “significantly” exceeded the amount available.
Analysts on Thursday said the 530 pence per share level was realistic and should mean strong aftermarket support. “Obviously everything is priced to do well. I don’t know whether five to ten percent upside is in the bag or not, but certainly they are trying to please investors with the price,” analyst Tim Dudley at Collins Stewart said.
In other news, internet companies that expect to go public in the future are eagerly awaiting market reaction to LinkedIn’s debut. The professional networking site sold shares at the top of an already raised price range in its initial public offering on Wednesday, signaling that stock investors are eager to buy shares of social networking companies even if valuations are lofty.
Although companies like Facebook, Groupon, Twitter and Zynga have significantly different business models than LinkedIn, they each tap social networks and the valuations for each are skyrocketing.
According to data provider Capital IQ and posted on WSJ.com the amount of money LinkedIn is raising makes it the fifth-biggest-ever U.S. internet IPO, but still well off Google’s 2004 IPO that raised $1.67 billion.
Yesterday we told you that Takeda Pharmaceutical was on the verge of acquiring privately held Swiss rival Nycomed.
Deals wrap: LinkedIn boosts IPO, pushes more air into bubble
LinkedIn, the social networking site for professionals, boosted the pricing of its initial public offering by 30 percent valuing the 9-year old company at a little over $4 billion, or about 17 times their 2010 revenue.
LinkedIn’s IPO, which is scheduled for Thursday, comes on the heels of what appears to be an unsuccessful offering Renren.
Earlier this month Renren, one of the biggest social networking sites in China, stock surged 29 percent in their debut but it has since dropped to below its IPO price.
The poor showing of Renren has not slowed investors appetite for a chance to gobble up another slice of the social networking pie. Two other Internet giants are expected to go public sometime in the near future. Groupon may be valued as high as $20 billion and Facebook could be north of $100 billion.
Is this the start of another tech bubble or will investors rue the day they passed on the social network pie?
Yesterday Deals wrap told you that BP was in talks about buying out its Russian partners in TNK-BP, in conjunction with state-controlled Rosneft, and other options to ease passage of a stalled share swap and Arctic exploration deal.
However today came news that the deal has collapsed. The tie-up unraveled because BP failed to mollify partners in its existing Russian venture TNK-BP. They argue the British company had no right to strike a new deal in the country without them.
Deals wrap: Blavatnik’s Access Industries wins bid for Warner Music
Russian-born billionaire Len Blavatnik’s Access Industries has won control of Warner Music Group with an offer of $8.25 a share, according to a source familiar with the matter. The agreement would set the world’s third-largest music company’s enterprise value at approximately $3.3 billion.
The NYTimes’s Ben Protess shines a light on Len Blavatnik, chairman of Access Industries and the new controlling stakeholder of Warner Music Group. Well-known for his investing prowess, he came to America as a penniless teenager and after building a fortune on oil and metal companies, he’s worth roughly $10 billion.
In this analysis by Jennifer Saba, she argues that as Internet giants Google and Facebook slug it out to seal a deal with Web video conferencing service Skype, Facebook looks likely to be the more aggressive suitor, not to mention a better fit.
Investors frustrated in their attempts to buy some of the hundreds of failing U.S. banks are testing a new approach. Rather than wait for an ailing bank to be seized by regulators and sold off to a rival, dealmakers are touting a $6.5 million bankruptcy sale as a way to attract new investors able to infuse banks with life-saving capital.
Ailing carmaker Saab has asked Sweden’s debt office to approve a change in ownership so Chinese group Hawtai and U.S. investment fund Gemini can help get production restarted. Saab owner Spyker Cars said this week that the privately-owned Hawtai was eyeing an investment of 150 million euros ($210 million).
In a recent post, Breakingviews’ Robert Cyran sets out why he believes the merger between drugstore chain CVS and pharmacy benefit manager Caremark never made sense, and why the $50 billion company could be worth $13 billion more if it were carved up.
Deals wrap: Facebook, Google dueling suitors for Skype
Internet giants Facebook and Google are separately considering a tie-up with Skype after the Web video conferencing service delayed its initial public offering, two sources with direct knowledge told Reuters. A Skype deal could be valued at $3 billion to $4 billion, according to one of the sources.
Swiss commodity trader Glencore’s planned $11 billion listing was fully covered on its first day as investors rushed to take part in the mega-float, two sources close to the deal said on Thursday. Investors placed orders for all the shares on offer, including a 10 percent overallotment option, sources said, adding it was too soon to say where in the indicated 480-580 pence ($0.79-0.95) range the shares would be priced.
Warner Music Group could reach a deal to sell itself as soon as close of business on Thursday when the board meets to make a final decision, according to two sources. The world’s third largest music company is expected to be sold for over $3 billion and leading the bidding is Russian-American industrialist Len Blavatnik’s Access Industries.
Shareholders in Actelion threw their weight behind the management of Europe’s largest biotech company, rejecting proposals by activist investor Elliott Advisors as a battle for control came to a head. New York-based hedge fund Elliott has urged the Swiss biotech group to seek a buyer after a string of product setbacks and has accused Actelion of pursuing a high-risk strategy that has eroded shareholder value.
Looking back over April, a month that has seen 31 companies file to go public in the U.S., this piece by Gwen Robinson for FT.com’s Alphaville explains the significance of the bumper crop of IPOs filed this month, including RenRen, Dunkin’ Donuts and Glencore, and why the recent IPO mania seems to be a global trend.
Deals wrap: Facebook investors look for exits
A group of Facebook shareholders is seeking to offload $1 billion worth of shares on the secondary market, a sale that would value the company at more than $70 billion, according to sources. It would represent one of the largest transactions of Facebook shares to date and points to a growing wariness among early-stage investors and employees who fear the social networking service’s growth cannot keep pace with its market valuation.
The sellers have lowered their price after previously trying to offload shares at a price that valued the company at $90 billion, but buyers balked.
Power company Exelon Corp is set to buy rival Constellation Energy Group for $7.9 billion, which will add 1.2 million customers to its existing 5.4 million. The Exelon-Constellation deal is the latest in a series of acquisition in a fragmented U.S. utility industry that faces new costs to upgrade power grids and meet environmental controls.
NYSE Euronext stepped up calls for investors to back an offer worth about $10 billion from Deutsche Boerse as it unveiled strong first-quarter results. The exchange is currently facing an aggressive counterbid from Nasdaq OMX, worth around $1 billion more, which it has repeatedly rejected, but some investors are calling on NYSE to at least talk to its cross-town arch-rival. All eyes are on a NYSE shareholder meeting which began at 8 a.m. EDT.
Tech blog TechCrunch is reporting Apple may have purchased the domain name icloud.com for $4.5 million from a Swedish company called Xcerion. The company recently changed its name from iCould to CloudMe. The blog said GigaOM also received a similar tip regarding Apple’s possible purchase. TechCrunch comes to its own conclusions as to why they believe this deal may be a possibility.
