M & A wrap: Citi scores big with EMI deals
The music industry may have a bit of life left in it after all. At least that’s the impression one is left with this week after Citigroup scored a better-than-expected $4.1 billion from two deals that mark the end of a months-long auction to sell off the parts of 114-year-old British music company EMI Group.
Vivendi’s Universal Music Group and Sony won the auction for EMI’s recorded music and music publishing operations, trumping bids by archrivals Warner Music Group and BMG Music Publishing at the 11th hour, reports Peter Lauria, editor-in-charge of Technology, Media and Telecommunications at Reuters. Universal plans to buy EMI’s recorded-music unit for $1.9 billion, according to a source involved in the process, snagging the rights to music by artists such as Coldplay, the Beatles and Katy Perry in the deal. A consortia led by Sony is expected to buy EMI’s publishing operation for $2.2 billion.
MF Global’s liquidators are struggling to sell the Asian business as one concern because of problems unwinding trading positions, so they may now sell the various country units separately, report Reuters correspondents Rachel Armstrong and Bruce Hextall. The provisional liquidators for the business in Hong Kong said on Friday there had been a number of encouraging bids for the regional business as a whole but the exercise has proved increasingly complex and the focus is now on selling off the various Asian business units individually.
U.S. coal giant Peabody Energy extended its $5 billion bid for Australia’s Macarthur Coal by two weeks after failing to reach the 90 percent threshold for acceptances by its Friday deadline, reports Sydney-based correspondent Lincoln Feast. Peabody’s acquisition of Macarthur will give it control of the world’s top producer of pulverized coal, just at a time when demand for steel-making materials holds up in Australia’s key coal market, China.
Companies in Greater China are lining up to sell shares in initial public offerings in coming months, braving jittery markets with $11.2 billion in deals, reports Hong Kong-based Elzio Barreto. Issuers are betting the steep rebound in Hong Kong and Chinese markets in the past month might signal renewed appetite for offerings that would provide funding for expansion and takeovers.
M & A wrap: A bid for all of Yahoo?
“Alibaba Group Holding Ltd. and Softbank Corp. are talking with private-equity funds about making a bid for all of Yahoo! Inc. without the company’s blessing,” Bloomberg reports.
“If Yahoo! had its own personal profile on Facebook, its relationship status on the social network would read ‘It’s complicated‘,” according to a blog in The Economist.
Goldman Sachs is seeking to raise up to $1.54 billion by selling 2.4 billion shares in Industrial and Commercial Bank of China, sources said.
“Asia will emerge as the counterweight to the United States as opposed to Europe,” said David M. Rubenstein, co-founder of buyout firm Carlyle. “Similarly I think China and the United States will be the two most important fundraising markets and the two most important investment markets.”
“With the successful public offering of deals site Groupon Inc. last week, Yelp tapped Goldman Sachs Group Inc. and Citigroup Inc. to lead an initial public offering as soon as early next year,” the WSJ reports.
M & A wrap: Olympus hid losses
Japan’s Olympus admitted it hid losses on securities investments dating back two decades, bowing to weeks of pressure to explain a series of baffling transactions that have put the future of the firm in doubt.
The dark and sometimes dangerous triad of ties among gangsters, businesses and politicians has a long tradition in Japan, which helps explain why a scandal engulfing Olympus has stirred up media and market talk of possible yakuza links, despite company denials and a lack of evidence.
When is a merger-of-equals really a takeover? One easy way to tell is when the top brass get rich and undeserved paydays. There’s probably no better live example than the just-delayed sale of Massachusetts electric utility NSTAR, reports Breakingviews columnist Rob Cox.
Groupon is not necessarily doomed, but it does carry a lot of risk — risk that resides in the details and that grows more daunting as Groupon’s stock price rises, writes Kevin Kelleher.
“Zynga Inc. plans to proceed with its initial public offering after the Thanksgiving holiday on Nov. 24,” Bloomberg reports.
The WSJ digs into Yahoo’s quarterly financial report to discover some potential risk factors the company is disclosing. Forbes looks at the potential value of Yahoo’s patents.
Hewlett-Packard payed $81 million to investment bankers for questionable advice, Andrew Ross Sorkin writes.
M & A wrap: Best Buy focuses on U.S.
Best Buy is buying its British partner out of a fast-growing U.S. mobile phone joint venture for $1.3 billion and scrapping plans for a chain of European megastores. The moves are the latest sign Best Buy is scaling back its overseas ambitions to focus on its main U.S. business.
Reuters interviewed dozens of people involved in Groupon’s IPO — including bankers, investors, current and former employees — and they paint a picture of the excruciating path the company took to go public.
Groupon reignites Chicago’s SiliconPrairie dream, Bloomberg reports.
The NYT’s profiles Reid G. Hoffman, the start-up whisperer of Silicon Valley.
M & A wrap: Buying Groupon today?
Groupon raised $700 million after increasing the size of its initial public offering, becoming the largest IPO by an Internet company since Google raised $1.7 billion in 2004. The Daily Beast lays out the case for not buying Groupon shares today.
Olympus replaced its auditor in 2009 after a disagreement over how to account for several acquisitions, but it decided not to reveal the dispute to investors, an internal document shows.
“The private equity firm TPG Capital has signed a nondisclosure agreement with Yahoo, making it one of the first potential suitors to begin formal due diligence work on the company, which is weighing a sale,” DealBook reports.
M & A wrap: Looking at MF Global’s accounting
Although the size of MF Global’s wager on European sovereign debt has received a great deal of scrutiny, the accounting and the disclosure surrounding it have not–and may have played a role in the firm’s demise, writes Vanity Fair’s contributing editor Bethany McLean.
“The tragic element of Corzine’s MF Global is that Monday’s bankruptcy filing could have easily been avoided if Corzine’s ego and ambition had been held in check by someone — anyone — willing to stand up to the former New Jersey governor, senator and senior partner at Goldman Sachs,” reports Bloomberg.
The ex-CEO of Japan’s Olympus Corp said he wanted to meet investigators appointed to probe a scandal engulfing the firm, but added it would not be safe for him to travel to Japan.
Groupon’s IPO may be the biggest test yet for the nascent private stock exchanges that allow investors to trade the shares of hot start-ups like Facebook Inc before they go public.
New directors nominated by an activist investor are leading a push to break up Visteon, even though the auto parts supplier’s management has argued against such a move, people familiar with the situation said.
M & A wrap: The man at war with Olympus
Michael Woodford asked too many questions. That’s the reason the 51-year-old Englishman gives for why he lost his job as the first-ever foreign-born CEO at Japanese camera maker Olympus a mere two weeks after he was given the role in early October.
Woodford tells Reuters investigative reporters Kirstin Ridley and Alexander Smith in a new special report that it was his inquiries into a series of questionable takeover deals and advisor payouts the company made over the past half decade, including the biggest mergers and acquisitions fee ever, that led to his ouster. Board members insist instead it was Woodford’s failure to grasp the company’s management style and Japanese culture that cost him the job, but Woodford says allegations of a “power grab” by him are not the “real story”. Now, Woodford is on a one-man campaign to “cleanse” Olympus with the goal of removing its entire board.
Giving in to pressure from many corners, Olympus on Tuesday named six men, including a former Japanese supreme court justice, to investigate the past M&A deals at the core of the scandal in a bid to stem an exodus of irate investors. The all-Japanese committee will look into $687 million in payments made to a financial adviser for the $2 billion purchase of British medical equipment maker Gyrus in 2008 and the acquisition of three companies in Japan that Olympus, under chairman Tsuyoshi Kikukawa’s decade-long reign at the company, later largely wrote off.
Who can get to market first? That’s the question some may be asking today after Lashou Group, China’s leading daily-deals website, filed for an initial public offering on the Nasdaq. The firm’s business model is similar to that of U.S. deals site Groupon, which is also currently in the process of filing its books for an IPO. Lashou plans to raise up to $100 million in the offering, most of which it plans to use for expanding its marketing efforts and delivery systems.
Meanwhile, Groupon has once again amended its prospectus just days before the company is expected to price its intitial public offering. As DealBook reports, the updated filing notes that the company had completed a 2-for-1 split of its voting common stock. The firm did not increase the price range of its offering from the current $16 to $18 a share, despite strong investor demand.
MF Global Holdings Ltd (MF.N), the futures broker that filed for bankruptcy protection on Monday, failed to keep its customers’ accounts separate from the firm’s funds, its main exchange regulator said on Tuesday. Mixing customer funds with company money violates a key tenet of futures brokerage. Donohue’s statement on Tuesday raises questions about statements from CME and other exchanges as recently as Friday that MF Global was a clearing member “in good standing.”
M & A wrap: MF Global files for bankruptcy
MF Global files for bankruptcy, according to a court filing.
Did Corzine’s risk taking cripple MF Global?
Charlie Gasparino sets the stage for MF Global’s current situation.
Australia’s Qantas Airways has seen its share of suitors knocking on the company’s cabin doors before, and with the stock trading at record lows, now may seem to be a good time to welcome a white knight.
Chinese groups Pang Da and Youngman will pump more than half a billion euros ($709 million) into Swedish carmaker Saab, aiming to return the struggling carmaker to profit by 2014.
M & A wrap: Who’s buying EMI?
EMI, once the glamorous monarch of the British music industry, is about to be sold by Citigroup. Reuters lays out EMI’s future and who is likely to walk away with the company’s recorded music and song catalog.
Despite all the rumored interest in Yahoo, progress on a deal has hit a brick wall mainly due to the company’s lack of strategy and restrictive confidentiality agreement, people familiar with the situation said.
“Yahoo has been exploring a potentially tax-free way to dispose of its roughly 40% stake in the Chinese e-commerce company Alibaba, according to people familiar with the matter,” reports WSJ.
Hewlett-Packard ditched a plan to spin off its personal computers unit, a month after the ouster of CEO Leo Apotheker whose idea would have cost billions of dollars in expenses and lost business.
“HP has been a comedy of errors, and selling a third of their revenue right now is probably not sound,” analyst Brian Marshall told Bloomberg.
Is Groupon a buy at a $10 billion market cap? Felix Salmon finds justification for the price, “if the business goes according to plan.”
M & A wrap: Sony looks to integrate
Sony is to take over its mobile phone joint venture with Ericsson for 1.05 billion euros ($1.5 billion), as it seeks to exploit its music and video to help it catch smartphone leaders such as Apple.
U.S. patent records point to a possible conflict of interest in an Olympus investment in a cookware company, raising more questions for investors demanding a full explanation from the Japanese company of acquisitions that made heavy losses.
“With 57 completed deals under its belt this year, Google has already smashed its 2010 record of 48 acquisitions — and it is only October,” reports DealBook.
Groupon is on its fourth day of its U.S.-only roadshow. Here’s the scoop:
“What’s to prevent Facebook, Amazon and Google from going to merchants and offering better terms. How does Groupon keep margins and pricing intact?” portfolio manager Charlie Toole told Reuters after attending Groupon’s roadshow.
Groupon is replacing the worst 10 percent of its sales staff as it pushes to win stronger deals from merchants and ensure it can keep growing.
Groupon sued two former sales managers who held confidential information before they quit the daily deal company to join Google’s competing daily deals site, a court filing showed.
