M & A wrap: SEC explores Groupon memo
Among the series of distractions ahead of Groupon’s IPO last month was the Mason Memo, WSJ’s Deal Journal reported late Wednesday. Newly disclosed documents shed light on how Groupon was forced to explain the memo to the SEC.
Alibaba Group has hired a Washington lobbying firm in a sign that the Chinese e-commerce company would be willing to make a bid for all of Yahoo in the event that talks to unwind their Asian partnership fail.
The value of global takeovers dropped to the lowest level in more than a year this quarter, Bloomberg.com reports. A recovery in 2012 looks to be muted because cash-rich companies are weighing Europe’s economic crisis before making big purchases.
The colossal collapse of Sears Holdings this week was ugly for stockholders. But if you think Sears was the no-brainer short of the century, here are three stocks likely to crash even harder, writes Jeff Reeves at The Trading Deck.
When Ind-Barath Power Infra dropped plans for a $200 million IPO earlier this year, it not only thwarted the fundraising plans of its controlling shareholder, but blocked an exit route for a clutch of private equity investors, Reuters reports.
M & A wrap: Plan B for ING
Dutch financial services group ING Group has scrapped plans for a separate trade sale of its Belgian insurance business, worth 500 to 750 million euros, a person familiar with the deal said on Wednesday.
Sears “has been a mismanaged asset,” Gregory Melich, an analyst at International Strategy & Investment, said in a Bloomberg Television interview yesterday. “A lot of traditional department stores have reinvigorated themselves through merchandising, through changing their locations; you think of Macy’s. You haven’t seen that from Sears.” Yesterday the largest U.S. department store chain reported that it would close as many as 120 locations after same-store sales fell 5.2 percent in the eight weeks ended Dec. 25.
Whirlpool investors–already burned by a sagging stock in 2011–aren’t spending time trying to figure out what the impact of Sears’ planned store closings will be. They’re just bailing out, reports the Wall Street Journal. As Whirlpool has seen weak demand of its own this year, investors are seemingly done for now in waiting for turnaround signs. Shares are off 7 percent today to $47.57, pushing Whirlpool’s stock price down more than 46 percent for 2011.
Deutsche Boerse and NYSE Euronext have extended the deadline for completion of their planned merger to March 31 next year as they seek to convince European regulators to back the $9 billion deal.
Deal Book asks, how do you go from being one of the country’s most-renowned and respected business leaders to landing on the list of the Worst C.E.O.’s of 2011? Sydney Finkelstein, professor of strategy and leadership at the Tuck School of Business at Dartmouth College and author of “Why Smart Executives Fail” presents his list of the worst C.E.O.’s of 2011.
M&A wrap: Total merges solar units
U.S. solar panel maker SunPower, a unit of French oil major Total, said it had agreed to buy Total-owned Tenesol for $165.4 million in cash in an expected deal that will regroup the French group’s solar business under one umbrella. Total announced the $1.3 billion takeover of SunPower in June.
Concurrently with the closing of the acquisition, Total has agreed to purchase 18.6 million shares of SunPower common stock in a private placement at $8.80 per share, a 50 percent premium to SunPower’s Dec 22 closing price. After the sale of Tenesol, Total will own about 66 percent of SunPower shares.
Deutsche Boerse won U.S. antitrust approval to buy NYSE Euronext in a $9 billion deal to create the world’s No. 1 exchange operator, but the transaction still faces serious regulatory headwinds in Europe. In Europe, there have been weeks of negotiations with antitrust regulators, in which staff made clear their reservations about approving a combination of Deutsche Boerse’s Eurex and NYSE Euronext’s Liffe on concerns that the merged entity would have a monopoly over European listed derivatives trading. A formal decision by the European Commission is not expected until January or early February.
ConvergEx Group, a software provider for brokerage and investment technology firms, said it terminated its merger agreement with private equity firm CVC Capital, partly because of probes by U.S. regulators. CVC Capital was looking to buy ConvergEx, which is partly owned by Bank of New York Mellon (BK.N), for $1.9 billion, Bloomberg had reported in July.
China Three Gorges Corp’s $3.5 billion acquisition of the Portuguese government’s stake in utility EDP highlights China’s appetite for physical assets in troubled economies and its ability to make its bids attractive with the promise of financial support. China is looking to pick up assets such as infrastructure and utilities in places like Europe at a bargain, rather than only buying the bonds of countries facing economic difficulties.
M&A wrap: EU crisis hits bank advisory fees
Europe’s debt woes dragged worldwide investment banking income down this year, data showed, with fees on the continent slumping to the lowest quarterly level ever recorded and company listings and acquisitions grinding to a near halt. In Europe, fees raised since October from bonds, flotations and mergers and acquisitions stand at the lowest quarterly level ever recorded by the data providers. A stronger start to the year in areas such as mergers and acquisitions fizzled out, leaving investment banks’ overall haul of fees at $72.6 billion — down 8 percent on 2010.
Yahoo is considering a plan to unload most of its prized Asian assets in a complex deal valued at roughly $17 billion, sources familiar with the matter said on Wednesday, winning nods of approval from Wall Street and driving its shares higher. The offer – the latest among proposals put forth in recent months to resuscitate the once high-flying Internet company – is expected to be considered by Yahoo’s board on Thursday, sources said. The board was uninterested in entertaining offers for the entire company at this point, said one of the sources, who spoke on condition of anonymity.
Oshkosh Corp has sent a proxy card to shareholders recommending they ignore an effort by billionaire investor Carl Icahn to install his own board members as he pushes for a merger with one of the company’s key rivals. Icahn recently nominated six associates to be on the board of the Wisconsin maker of trucks, construction lifts and defense vehicles. In a letter to the company’s shareholders last week asking for support for his nominations, he also voiced strong support of a merger between Oshkosh and Navistar International Corp. Icahn owns nearly 10 percent stakes in both companies.
Vulcan Materials Co rejected Martin Marietta Materials Inc’s $5 billion takeover bid, and said the offer undervalued the company and would not increase shareholder value in the future. Vulcan Materials, the world’s largest producer of sand, gravel and other construction materials, said the premium offered was significantly lower compared with previous transactions in the construction materials industry.
European Commission antitrust officials on Wednesday showed no sign of being swayed by Deutsche Boerse and NYSE Euronext’s last-ditch arguments to save their $9 billion deal, sources said, making it increasingly likely the exchange operators will have to take their campaign directly to the commissioners.
M&A wrap: Amazon, Nokia, Microsoft weighed RIM bids
Research In Motion has turned down takeover overtures from Amazon.com and other potential buyers because the BlackBerry maker prefers to fix its problems on its own, according to people with knowledge of the situation. Amazon hired an investment bank this summer to review a potential merger with RIM, but it did not make a formal offer, said one of the sources. It is not clear whether informal discussions between Amazon and RIM ever led to specific price talk.
The Wall Street Journal reports that Microsoft and Nokia have discussed the idea of a joint bid for RIM, but the status of those talks remains unclear.
HSBC, Europe’s biggest bank, is retreating from Japan’s private banking market, selling a business that serves the wealthy to Credit Suisse, which is raising its profile in the world’s second-largest market for millionaires.
Tokio Marine said it will buy U.S. insurer Delphi Financial Group for $2.7 billion and is eying other acquisition targets, as Japan’s No.2 property-casualty insurer looks to expand outside its mature home market and diversify geographic risks.
Dozens of black-suited investigators, marching double-file, raided the office building of three small Olympus Corp subsidiaries Wednesday, one of 20 sites searched in a probe of a $1.7 billion accounting scandal that threatens the once-proud Japanese medical device maker’s survival.
Shareholders of Medco Health Solutions on Wednesday overwhelmingly approved its $29 billion acquisition by rival pharmacy benefit manager Express Scripts, although the massive deal still faces an uncertain regulatory review.
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: Saudi prince buys Twitter stake
Saudi billionaire Prince Alwaleed bin Talal, an investor in some of the world’s top companies, has bought a stake in Twitter for $300 million, gaining another foothold in the global media industry. Alwaleed, a nephew of Saudi Arabia’s king estimated by Forbes magazine in March to have a fortune of $19.6 billion, already owns a 7 percent stake in News Corp and plans to start a cable news channel. The Twitter stake, bought jointly by Alwaleed and his Kingdom Holding Co investment firm, resulted from “months of negotiations,” Kingdom said.
Explorer Gulf Keystone Petroleum is not in talks with U.S. oil major Exxon Mobil Corp about a 7 billion pounds ($10.9 billion) bid, a source familiar with the Kurdistan-focused group’s thinking said on Monday. The Independent on Sunday newspaper reported that Exxon was considering making an estimated 800 pence per share bid – five times Gulf Keystone’s closing share price on Friday. The report, which drove Gulf Keystone’s shares up as much as 24 percent on Monday, said the company’s board had discussed Exxon’s interest a fortnight ago. But a source familiar with Gulf Keystone’s thinking said there were no talks with Exxon.
European Goldfields, which has agreed to a C$2.5 billion ($2.4 billion) takeover by Canadian group Eldorado Gold, is hoping to keep an investment deal with Qatar’s sovereign wealth fund as a fall back option. Qatar Holdings agreed in October to provide a $600 million project financing loan to European Goldfields, which has development stage assets in Greece and Romania, in its first investment in a gold miner. It also provided a $150 million loan note and a related warrant issue, and became a major shareholder, with a 9.9 percent stake. Eldorado’s strong balance sheet means European Goldfields is unlikely to need the cash from Qatar if the takeover goes through — but it does need two-thirds of shareholders to back the deal when they vote in February.
Etihad Airways is taking a stake of almost 30 percent in Germany’s Air Berlin, becoming the first Gulf carrier to challenge European legacy airlines by putting cash on the table to gain scale. Abu Dhabi-based Etihad will spend about 73 million euros ($95 million) to buy new shares of Air Berlin, raising its stake to 29.21 percent from just below 3 percent, and will lend the German carrier $255 million, the two companies said on Monday.
M & A wrap: Zynga IPO: Bubbleville?
As Zynga prepares for the largest technology public offering since Google, Reuters’ tech editor Peter Lauria and reporters Anthony DeRosa and Liana Baker hash it out over Zynga’s estimated $9 billion valuation.
How Zynga ultimately performs as a public company will depend in large part on its ability to break free from Facebook.
Mark Pincus makes power play with Zynga IPO.
Healthcare products and medical device maker Covidien plans to spin off its pharmaceutical business into a stand-alone public company.
The Deal Journal reports the newest member of the $1 billion club: SurveyMonkey, the online survey website.
Two of Hong Kong’s biggest recent IPOs slumped in their trading debuts, falling victim to weak investor demand that has pressured new listings in the once booming global IPO powerhouse.
Luxury lifestyle company Michael Kors raised the size of its initial public offering and priced it above the expected range, according to an underwriter.
Here’s one big thing MF Global and Jon Corzine got right, writes Bloomberg columnist Jonathan Weil.
M & A wrap: A bumpy ride for Zynga?
Online gaming firm Nexon slipped on its trading debut following a $1.2 billion IPO, Japan’s biggest this year, and may signal a bumpy ride for U.S.-based rival Zynga, which debuts on Nasdaq later this week.
The Deal Journal cautioned investors over the upcoming Internet IPOs such as Zynga and Yelp: “Buying in the open market on the first day of trading with the intent of holding the stock has not been a profitable strategy.”
Goldman Sachs, the first Wall Street firm to win an underwriting license in China, is sitting out the world’s busiest initial public offering market, Bloomberg reports.
Japan’s disgraced Olympus Corp ironed out its crooked accounts after a 13-year fraud, with a $1.1 billion dent in its balance sheet triggering speculation it will need to merge, sell assets or raise capital to repair its finances.
Third Point LLC, an activist shareholder in Yahoo Inc, expressed fresh concern that the Internet company is looking at a “sweetheart” deal with private equity that could entrench founder Jerry Yang and the current board.
Coca-Cola Co acquired about half of the equity in the beverage business of Saudi Arabia-based Aujan Industries for $980 million to expand its presence in non-alcoholic beverages in the Middle East.
M & A wrap: WaMu eyes bankruptcy exit
Washington Mutual, the biggest bank to fail in U.S. history, said it reached a settlement in a dispute between shareholders and certain creditors that had prevented the bank from emerging from Chapter 11 bankruptcy proceedings.
Three former WaMu executives have agreed to settle a civil lawsuit, marking the latest setback for the government in a high-profile, financial-crisis-related case, according to the Wall Street Journal. The Deal Journal also has a roundup of financial crisis legal settlements.
An independent arbitrator cleared the way for mining group Rio Tinto to take over Ivanhoe Mines, saying the $16 billion Canadian group’s “poison pill” defense was not valid.
Mitt Romney’s experience at Bain Capital is being searched by his critics for ammunition in the presidential campaign, and by others for clues as to how he would perform as president, NYT’s DealBook writes.
Exchange operators NYSE Euronext and Deutsche Boerse offered more divestments in a bid to assuage European authorities’ antitrust concerns over their proposed $9 billion merger.
The Wall Street Journal looks at Facebook’s $10 billion question.
