Mergers & Acquisitions

Savings make Vodafone’s Kabel deal palatable

24 Jun 2013

The mobile giant has offered 10.7 bln euros, with debt, for Kabel Deutschland - a pricey 12.4 times EBITDA. Critics think Vodafone is ponderous and profligate in M&A. But this looks acceptable provided the huge promised savings with a present value of 3 bln euros can be achieved.

Resistance to Kazakh mining stitch-up looks futile

24 Jun 2013

ENRC minority holders are in a bad place, now the Kazakhmys board has accepted the low-ball bid from oligarchs and government. Unless Kazakhmys shareholders overrule their board, any ENRC holdouts could end up with unlisted, illiquid shares. Better to admit defeat and cut losses.

Norway triumphs over tycoon in strange M&A saga

21 Jun 2013

Shipping mogul John Fredriksen wanted to combine his seafood group, Marine Harvest, with smaller rival Cermaq. But Norway thwarted the $1.7 bln hostile bid. Consolidating key national industries is always tricky. Doubly so if you’re up against one of the world’s richest states.

EQT compromises to get Springer Science sold

19 Jun 2013

The Swedish buyout firm is selling the publisher for a decent-looking 3.3 bln euros to rival BC Partners. But it’s been a slog. A fallback IPO was imminent and a compromise forged through an “earn-out” clause implies BC still doesn’t quite believe the sellers’ rosy forecasts.

Super-yachts: the new symbol of China’s excess

19 Jun 2013

The chairman of Dalian Wanda, a Chinese conglomerate, liked Sunseeker’s yachts so much he bought the company. Liquidity is ample and China’s super-rich are doing fine. But as the economy slows, showy displays of inequality and flashy deployment of capital are disconcerting.

China milk deal leaves small investors whey-faced

19 Jun 2013

Mengniu’s $1.6 billion bid for Yashili gives the target’s founding clan the chance to cozy up to a national champion, and buyout firm Carlyle a good return. Other investors are less fortunate - they will be selling for less than Yashili’s IPO price just three years ago.

Vodafone remains best bet for Kabel Deutschland

18 Jun 2013

The mobile giant has stronger finances than U.S. challenger Liberty Global. It would reap more savings from the German cable company and irk regulators less. But it is Liberty’s last chance to get national coverage in a vital market. And Vodafone investors may balk at the price.

Brazilian oil troubles stay all in the family

18 Jun 2013

First, BTG Pactual extended credit to Eike Batista’s struggling empire. Now, the investment bank led by Andre Esteves has emerged as the unlikely buyer of assets from state-controlled Petrobras. The sketchy details on both deals only add to the unhealthy aura of crony capitalism.

Cinven goes weak at the knees for Rockwood unit

17 Jun 2013

The private equity firm is paying a hefty $2 bln for Rockwood’s CeramTec unit. But at least this is a corporate selloff, rather than yet another “secondary” deal between two PE houses. And there is sound demographic logic in buying one of the leaders in artificial joints.

Sensible M&A rules airwaves in Gannett deal

13 Jun 2013

The newspaper chain’s shares surged on the back of its $2.2 bln plan to buy broadcaster Belo. That’s the reward when synergies cover nearly the entire equity value of a transaction. Boldness doesn’t always pay off so well, though, as the Indian takeover of Cooper Tire suggests.

Dole buyout harvests fresh Delaware fruit

12 Jun 2013

The CEO’s offer to take the produce purveyor private requires approval from independent directors and minority shareholders. These low-hanging provisions ensure a degree of fairness in such deals. The extra legal protection just afforded by a Delaware judge is the cherry on top.

Vodafone vs Malone clash looms in German cable

12 Jun 2013

The UK mobile giant finally admitted it wants to buy Kabel Deutschland, Germany’s biggest cable operator. With debt, a deal would top 10 bln euros. But cable magnate John Malone must be thinking hard about a counter-bid. At the very least, he could make life tricky for Vodafone.

Bidders’ drip-drip approach sunk Severn Trent deal

12 Jun 2013

The 5.3 bln pound purchase of the British water company is dead. The bidders, LongRiver, say Severn was too cold about a takeover. But they were too rigid on price. The board did the right thing. Starting serious talks without a strong offer is a poor defence strategy.

Megabank mastermind sort of counts small blessings

11 Jun 2013

Hugh McColl, an architect of today’s Bank of America, is selling his advisory firm to Deloitte. The sprawling lender he helped build is still paying the price of his M&A ethos that protégé Ken Lewis also adopted. McColl’s scope may have shrunk but scale apparently still matters.

SoftBank’s bump for Sprint isn’t a knock-out

11 Jun 2013

The Japanese group’s new $22 bln offer for a controlling stake in the U.S. telco gives shareholders more value. But investors would retain exposure to a Sprint that has $3 bln more debt than first envisaged. That erodes SoftBank’s key advantage over leveraged rival bidder Dish.

Google gets premium accident insurance with Waze

10 Jun 2013

Maps are critical to the search giant’s local commerce ambitions. Paying $1.3 bln for the crowd-sourced traffic app should make Google’s offerings even more effective. The price reflects Google’s desire to keep data out of the clutches of hard-driving rivals Apple and Facebook.

AstraZeneca lung deal puts wind behind turnaround

10 Jun 2013

The troubled pharma group’s acquisition of Pearl, its second deal in a month, should protect the key respiratory business. New Chief Executive Pascal Soriot is using prudent M&A to flesh out his strategy. Still, the company has a way to go to close its valuation discount.

Outcomes diverge in Severn Trent spat

10 Jun 2013

The UK utility rightly snubbed a third approach at 5.3 bln stg after suitor LongRiver added a small sweetener. Its shares are pricing in a higher chance of deal failure. While LongRiver’s hardball tactics are risky, an agreement is possible. A compromise on dividends could help.

SAP fixes e-commerce weakness at hubristic price

6 Jun 2013

Europe’s largest software company is swallowing Hybris, a Swiss maker of business-to-consumer e-commerce platforms. The deal makes strategic sense, as it addresses a big weakness in SAP’s product line. But it may require overwhelming arrogance to defend the price.

Asian tycoons give LBOs an eastern twist

5 Jun 2013

Shuanghui’s takeover of U.S. pork group Smithfield combines hefty leverage and limited cost savings. Recent deals in Thailand and Singapore have also been quasi-buyouts. As long as local banks remain flush, Asian groups will give private equity firms a run for their money.