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.
Deals wrap: Treasury sells stake of AIG
The Treasury made a small profit when it sold a portion of its shares in AIG, but it was unclear how its investment in the beleaguered insurer will ultimately fare.
Tuesday’s $8.7 billion stock offering, (being dubbed by some as AIG’s re-IPO) which included 200 million shares sold by the Treasury and 100 million sold by AIG itself, is far smaller than the $10 billion to $20 billion deal some banking sources had suggested earlier this year, hinting at a potential lack of investor interest.
With the sale, the Treasury has raised $5.8 billion of the $47.5 billion it needs to break even and now has another 1.5 billion shares to sell.
The government can claim a small victory with this sale, but the Deal Journal says the biggest beneficiary of the decision are the banks underwriting the sale.
A day after Yandex surged in its debut coupled with LinkedIn’s record IPO last week, comes the news that the maker behind a series of popular games on Facebook, Zynga, may file for a multibillion-dollar IPO as early as this week.
Can Zynga be blamed for attempting to cash in on the latest Internet IPO craze? Hardly not, but each new booming success leads to more caution of another dreaded tech bubble waiting to burst.
Finally, Fiat exercised an option to acquire a further 16 percent of Chrysler bringing its stake to 46 percent following the Detroit-based carmaker repayment of $7.6 billion in U.S. and Canadian government loans from its 2009 bailout.
“The government can claim a small victory with this sale”
Uh, no. The sale reveals that there was little real demand for AIG shares. There were more flippers than genuine buyers. That will be remembered on future sales, and buyers will require a greater discount to the current market price to get them to part with money for shares of AIG.
Deals wrap: AIG’s $9 billion stock offer less than half of what was expected
American International Group and the Treasury will sell nearly $9 billion in stock as the bailed-out insurer begins its return to public control. This offering is less than half of what had been expected when Wall Street banks offered their services to manage the stock sale in January. The company was rescued in September 2008, receiving $182 billion in bailouts and managed to restructure while preserving two core businesses. At the time, few expected AIG would even exist today.
Professional networking service website LinkedIn is looking to go public, a move that could value the company at more than $3 billion. In this article, NYT’s Steven M. Davidoff explains why certain plans LinkedIn has for its IPO would “not only disenfranchise its future shareholders, but contains elements that have been heavily criticized by corporate governance advocates.”
The impact of AT&T’s proposed acquisition of T-Mobile on competition, pricing and consumer choice will be examined at a congressional hearing, where top executives are scheduled to appear to defend the deal. A successful merger would concentrate 80 percent of U.S. wireless contract customers in just two companies — AT&T/T-Mobile and Verizon Wireless.
Microsoft’s decision to acquire internet phone service Skype for a hefty $8.5 billion was immediately slammed by analysts, who questioned the logic of the deal and suggested the software giant paid too much. Reuters Breakingviews columnist Richard Beales thinks that, in theory, there are potential advantages to the deal but points out how Microsoft’s poor M&A track record and the high price means the transaction is unlikely to ever connect with investors.
Medco Health Solutions CEO David Snow says no biotech company is too big to be bought. He told the Reuters Health Summit he sees major drugmakers needing the growth potential of biotech more than ever.
Deals wrap: Another potash miner in play?
The $1.2 billion sale by Swiss German chemical company BASF of its stake in K+S could trigger a battle amongst global mining giants for the German potash miner.
BASF sold its roughly 10 percent stake in the company as part of a shift away from the nitrogen fertilizer business in the face of competition from lower-cost producers in the Middle East. If Russian fertilizer company EuroChem sells its own K+S stake of 14% it could push the German miner into play, with majors such as BHP, Vale and Rio Tinto amongst the potential buyers.
The lagging economic recovery has made discount stores an attractive destination for pinched consumers and big investors alike. The Schiffer-Gold family, which currently owns 33% of 99 Cents Only Stores, is teaming up with buyout firm Leonard Green and Partners in a $1.34 billion bid to take the retailer private.
Leonard Green has embarked on a retail acquisition spree, having recently pitched up billion-dollar offers for J.Crew and craft products retailer Jo-Ann Stores.
Sources tell Reuters that Bain Capital is on the verge of completing the biggest private equity purchase of a company in Japanese history by buying the restaurant chain Skylark Co. from Nomura Holdings.
And finally, according to unpublished diplomatic cables, U.S. officials believe China’s insurance regulators passed on sensitive information about then-collapsing AIG to Chinese rivals to convince them to buy the troubled assets.
Deals wrap: A status update from Twitter
Cross Twitter off your IPO watch-list, at least for now. Co-founder Biz Stone told Reuters in an exclusive interview that the social networking service has no plans to go public or raise funds any time in the immediate future, saying his company is making enough money on its own at the moment.
Stone also flat-out rejected a Financial Times report earlier this week that said a J.P. Morgan technology fund was in talks to take a 10-percent stake in the social networking message service. “(The report is) made up,” he said.
News Corp CEO Rupert Murdoch’s media empire is about to get a little bit bigger. The British government gave a green light to the company’s planned $14-billion buyout of satellite pay-TV company British Sky Broadcasting after Murdoch and co agreed to spin off a chunk of his Sky News channel into a separate company.
Taxpayers should celebrate that AIG is a step closer today to paying off its bailout debt to the U.S. government. The insurer sold $9.6 billion worth of MetLife shares on Wednesday, which should give it about $6.3 billion in gross proceeds to send back into the Treasury’s coffers.
Expect to see more mega-deals in the mining sector this year. A new report that shows a surge in global mining M&A last year also points out that deal valuations in the sector are set to increase this year as mining companies continue to reap the benefits of rising metal prices. The survey by PricewaterhouseCoopers tracked 2,693 global mining deals in 2010 worth a total of $113 billion.
Deals wrap: Breaking up the conglomerates
Another breakup wave is hastening the end for some conglomerates. The financial benefits of specialization have long been in style, writes Breakingviews columnist Robert Cyran.
Banks will meet in New York City today to make their case for the right to sell the Treasury’s stake in AIG, three people familiar with the matter said.
Despite all the rhetoric about restricted lending, Chinese banks don’t seem to be listening.
Marathon Oil said it would split off its refinery and pipeline operations into a stand-alone company.
Banks should put their cash to work on acquisitions, analyst Meredith Whitney tells CNBC.
Deals wrap: AIG makes the sale, probably
AIG accepted a $2.16 billion cash offer for its Taiwan Nan Shan Life unit from a group led by local conglomerate Ruentex. Regulatory issues have dogged the sale of the unit and might yet delay it further.
Sara Lee could fetch more from an outright sale than if it were split up, but only if it can find a buyer that wants a wide array of assets, write Martinne Geller and Jessica Hall.
Asia’s private equity industry has quickly turned into a sellers’ market, as firms cash out of investments made on the back of the region’s robust economic growth. Private equity funds in China are nervously eyeing a push by the country’s top securities regulator to gain oversight of the fast-growing sector, fearing increased scrutiny and tougher new rules.
The NYT’s “Deal Professor” digs into the regulation surrounding an IPO.
Google’s employee no. 13 talks to peHUB about “sudden wealth syndrome.”
Deals wrap: Novell deal a Microsoft maneuver?
Attachmate, a privately held provider of technology services, said it’s buying software provider Novell in a $2.2 billion deal. The deal marks the end of a drawn-out auction process the Novell board began back in March after rejecting an unsolicited proposal from Elliott Associates.
A chunk of the deal’s value also includes the concurrent sale of some Novell intellectual property assets for $450 million to a consortium led by Microsoft. Novell and Microsoft have crossed each others’ paths before when they struck a copyright deal over certain Novell assets in 2006. One theory is that this could be Microsoft’s way of maintaining control over the details of that agreement and out of the hands of rivals.
Bailed-out insurer AIG is still shopping around some of its larger assets, restarting its earlier campaign to sell its Taiwan unit Nan Shan Life. A source close to the process told Reuters on Monday that first-round bids for the unit are likely in early December, shortly after due diligence ends. In August, Taiwan regulators rejected AIG’s plan to sell the unit for $2.15 billion to a Hong Kong-based buyer group. The insurance giant is still struggling to repay its bailout debts to the U.S. government.
A day earlier, oil and gas exploration company Energy XXI agreed to buy nine Exxon Mobil oil and gas fields in the Gulf of Mexico for $1.01 billion, an acquisition that will boost the company’s reserves and production by more than 70 percent.
Federal authorities are on the cusp of filing a raft of insider trading cases against the likes of hedge fund traders, consultants and Wall Street bankers that could be among the biggest ever, several lawyers familiar with the matter told Reuters. The Wall Street Journal reported on Monday that the FBI has raided two hedge funds in connection with the probe. The Journal, which first broke news of the three-year investigation, also has a piece on what tactics the FBI likely used in building its case.
Deals wrap: Viewing Potash through the media
Reuters blogger Felix Salmon looks at how the media covered a report of the effects of a takeover of Potash Corp. Felix finds the coverage often differed from the actual report. *View blog *View Reuters article
“The biggest merger in Australian business history is dead. The board of Rio Tinto is preparing to abandon a $120 billion iron ore deal with the rival mining giant BHP Billiton in the Pilbara,” reports The Sydney Morning Herald *View article
Doing the math on the AIG bailout and repayment isn’t all that hard, reports Andrew Ross Sorkin from the NYT. *View article
Dollar Thrifty shareholders rejected Hertz’s takeover bid last week. Avis continues to be interested in Dollar Thrifty. The NYT takes a look at where the three companies can go from here. *View article
Deals wrap: Exiting AIG
AIGs exit plan with the government is good for the company but taxpayers may not be getting an equally good deal, writes columnist Richard Beales. *View column *View graphic *View WSJ report on how the exit plan was formed
Chinese refiner Sinopec will buy 40 percent of Repsol’s Brazilian arm for $7.1 billion. *View article *View factbox on China’s M&A activity
“Tucked away in a basement in London’s exclusive Mayfair district is a hedge fund manager investing entirely in raw materials, one of a small band trading commodity spreads and making big money in the process,” writes Christopher Johnson and Joe Brock. *View analysis
Private equity has experienced a comeback, but some issues will need to be addressed to maintain the momentum, writes The New York Times. *View NYT article
