Mergers & Acquisitions

Wall Street plays pass the biotech parcel

13 May 2013

Finance firm Royalty Pharma is offering $5.7 bln to buy Elan, which just announced a $1 bln deal to buy a chunk of royalties that Theravance receives from Glaxo. Confused yet? Blame low rates and Big Pharma’s risk aversion for fertilizing M&A bankers’ creative schemes.

Could Silver Lake quietly be rooting for Icahn?

13 May 2013

A half-baked leveraged recap plan is the latest salvo from the uppity billionaire in the Dell fight. If the buyout firm backing company founder Michael Dell is spooked by the swoon in PC sales, it can’t easily bail on its $24 bln bid. But Carl Icahn could bail it out instead.

Dish’s pay-TV pain signals trouble for Sprint bid

9 May 2013

Weak quarterly results show why the company covets the telecom operator. But the poor earnings also show why Sprint shareholders should be skeptical of the $25.5 bln offer. Rival bidder SoftBank, which has just raised synergy estimates, now looks like an even better option.

TPG’s Asian bank triumphs will be hard to repeat

9 May 2013

The buyout firm is selling part of its stake in Indonesia’s BTPN at a valuation many times its 2007 purchase price. Previous investments in Chinese and Korean banks have also been lucrative. But rising protectionism and abundant liquidity mean future home runs will be scarce.

E.ON will struggle to attract a new linchpin

8 May 2013

After years of a declining share price, the German utility’s second largest shareholder has had enough. Statkraft, a Norwegian peer, sold its 4.2 percent stake in E.ON, realising a huge loss. Its willingness to take such pain highlights the bleak prospects for European utilities.

BMC deal shows how activist playbook brings profit

6 May 2013

Elliott Management has pushed another tech firm into a sale - this time BMC for $6.9 bln. The 2 pct headline premium seems tiny. But the stock is up more than 30 pct since Elliott began agitating. Success followed careful target selection and persistence with Plan A - and Plan B.

Welcome to the era of perpetual private equity

3 May 2013

The $1.3 billion sale of Allflex, an animal-ID firm, is just the latest “secondary” deal between two private equity firms. No wonder: private ownership makes sense for many businesses. And this asset class is so big now that alternative owners are not always available.

Salmon mega-deal is hard to swallow at this price

2 May 2013

M&A is reshaping the seafood industry. Fresh from another deal, the world’s largest fish farmer wants to gobble up a second smaller rival. At $1.7 billion, however, Marine Harvest’s hostile bid for Cermaq looks low. The Norwegian predator may need to offer more.

Carphone Warehouse gets better of Best Buy deal

30 Apr 2013

The mobile phone retailer is buying the U.S. consumer chain out of their European joint venture. The $730 mln price looks cheap, and promises a big boost to the UK group’s earnings. With full control of the JV, Carphone Warehouse may also appeal to a wider range of investors.

SoftBank beating all comers in race for Sprint

30 Apr 2013

Dish’s $25.5 bln bid may look better on paper, but it actually falls short of SoftBank’s $20.1 bln proposal. The Dish pitch would pump up Sprint debt to levels so high that they could weaken the combined company - and leave investors holding a pay TV business poised for decline.

Alibaba spots pricey treasure in Weibo’s network

30 Apr 2013

The e-commerce giant has paid a punchy price for an 18 pct stake in the Chinese microblogging phenomenon. A $3 bln valuation is a lot for a business without much in the way of revenue. Alibaba may lure some Weibo users to its stores, but its thinking looks mainly defensive.

Chrysler value spat may offer Fiat silver lining

29 Apr 2013

The Italian automaker and a union trust are $3 bln apart on the value of the 41.5 pct of the Motown manufacturer Fiat doesn’t already own. Yet the outcome – full integration – isn’t in doubt. In the end, an urgent need to raise equity may hasten Fiat’s move from Italy to America.

Pressure builds on Vodafone to make U.S. exit

25 Apr 2013

Verizon has hired advisers to help it buy Vodafone out of the duo’s mobile JV, Reuters says. Vodafone shares rose, although the mooted $100 bln price looks low. Vodafone is staying silent, but with the markets lapping up a string of stories, momentum is building for a deal.

Etihad bets on India in pricey Jet Airways deal

24 Apr 2013

The Abu Dhabi carrier is throwing indebted Jet Airways a $600 mln lifeline for a 24 pct stake and control of its loyalty programme. But the generous 32 pct premium suggests Etihad will expect more than a minority role at the Indian airline.

Thai tycoon rediscovers joy of debt in $6.6 bln bid

23 Apr 2013

Fresh from the leveraged purchase of a stake in insurer Ping An, Dhanin Chearavanont is borrowing $6 billion to buy cash-and-carry group Siam Makro. For Thailand’s richest man, a combination with his convenience stores makes sense – as long as Asia’s boom keeps the cash flowing.

ABB takes a shine to solar

22 Apr 2013

The Swiss engineer is buying Nasdaq-listed Power-One for $1 bln. The solar glut has spelt financial misery for many, although ABB says its target is in a sweet spot. ABB is being unusually acquisitive for a European blue-chip. It needs to show investors its M&A strategy makes sense.

This time the ENRC board has to show real mettle

19 Apr 2013

A possible bid led by one or more of the troubled Kazakh miner’s dominant shareholders could offer minorities a welcome exit. But there’s a serious information gap to cross. The cleanest way for the board to secure a robust asset valuation is to get an auction going.

Hostile drug deal gets too clever for its own good

18 Apr 2013

Finance firm Royalty Pharma tried to use Elan’s $1 bln stock buyback to swoop up the entire company. But it devised a puzzlingly complex tender offer that ended up replacing a solid long-term shareholder with investors much more likely to demand a chunkier premium.

Crackdowns only make M&A leaks more tempting

17 Apr 2013

Dealmakers say tougher rules and enforcement are behind new data showing news is trickling out less often about companies for sale. Loose lips come with less chance of deals closing, but they also coincide with higher premiums. Some bankers will always fancy that risk-reward mix.

Gunsmith finds cold shoulders on Wall Street

17 Apr 2013

Financiers typically turn away fees as willingly as dogs give up steaks. But major banks are leery of financing bids for Freedom Group for fear of damaging their reputations. Making assault rifles has joined pornography on the list of activities with risks that money can’t hide.