Mergers & Acquisitions

Target shortage feeds desperate Mideast telco M&A

26 Mar 2013

Bahrain’s incumbent telco is eyeing a stake in part of India’s Reliance after agreeing to buy assets from Cable & Wireless. Stiff competition at home is forcing tiny Batelco further afield. The snag is that there are too many big telcos in the region chasing too few assets.

Blackstone, Icahn likely to stub toe on Dell

25 Mar 2013

Both are offering more for the computer maker than its eponymous founder. But the new bids rely on existing investors keeping a small public stake. In theory that obviates the need to get Michael Dell’s support. In practice, the downsides of such stub equity make it a long shot.

M&A practitioners deliver verdict on snarky judges

22 Mar 2013

The spectacle of Delaware jurists bashing the clever bromides and impertinent opinions of colleagues prompted hoots of delight from dealmakers attending their annual New Orleans jamboree. The criticism is on target. To avoid confusion, courts should stick to facts and the law.

Greece finally does something helpful for Cyprus

22 Mar 2013

Piraeus has snapped up the Greek branches of Cypriot banks. Athens’ default last year is one of the reasons why Nicosia’s banks are in trouble. Greece has proved more accommodating with the island’s departing banks than it was last year with French lenders.

Dell counter-offer better in theory than practice

21 Mar 2013

Though backers of the $24 bln buyout are, oddly, talking down Dell’s prospects, investors rightly think the price is low - and Blackstone is kicking the tires. Still, the buyout firm’s losses on its last big tech LBO and Michael Dell’s role in the deal weigh against a higher bid.

Forget a flood of telco deals after EU thaw

21 Mar 2013

The EU is rightly easing up on the sickly sector. But competition concerns seem likely to prevent an M&A bonanza. Until the “single market” Brussels wants becomes a reality, many local deals will consolidate markets too much. And cross-border ones will lack financial sense.

Mining saga highlights pitfalls of Chinese M&A

21 Mar 2013

The $1.4 bln takeover of Australia’s Sundance is under pressure after the apparent arrest of its suitor’s chairman. Chinese bidders must grapple with demanding regulators, fickle financiers, and shifting patronage. For their targets, it’s a reminder to treat offers sceptically.

Optimism over M&A may be deserved – at a discount

20 Mar 2013

Bankers and lawyers telling a PR firm that specializes in deals they expect to see more merger activity makes for sweet echo-chamber music. Even pessimism expressed in the same survey in past years has proven too rosy. Maybe factor a typical premium of 30 pct into the answers.

Billionaire Batista’s X factor becoming big loser

20 Mar 2013

The Brazilian entrepreneur needs to sell part of MPX, a $3 bln electricity firm, to calm creditors. He borrowed against ventures that went public too early and have slumped 70 pct in value. The prospect of more margin calls is a gloomy one for his creations’ battered investors.

Hostile $5.7 bln real estate bid is a long shot

20 Mar 2013

American Realty’s offer for Cole Credit III is a better deal than the target’s plan to buy its adviser and go public. But Cole’s investors don’t get a vote. So American Realty’s only leverage is to dangle the prospect of reputational damage to appeal to insiders’ long-term greed.

John Malone establishes new tyrannical minority

19 Mar 2013

The U.S. cable magnate is buying a 27 pct stake in Charter from buyout firms for $2.6 bln. He’s no garden-variety minority owner, though. Even heavyweights like Rupert Murdoch and Barry Diller can attest to Malone’s cunning use of smaller stakes. Charter should keep its guard up.

Walgreen-Boots deal adds helping to full plate

19 Mar 2013

The American and European drug chains haven’t finished merging their cross-border operations. They’re adding distributor Amerisource to the mix by taking a minority stake. Cost savings and negotiating heft may follow, but the combined firms’ management could be stretched thin.

Busted sale shows sports not immune to gravity

14 Mar 2013

A ballyhooed effort to sell billionaire Philip Anschutz’s entertainment empire collapsed after the price tag implausibly stretched toward $10 bln. The exuberance followed lofty valuations for the L.A. Dodgers and soccer’s Man U. Even celebrity-driven markets have breaking points.

Glencore/Xstrata results herald tense integration

5 Mar 2013

Last year’s profit fell less at commodity trader Glencore than at mining merger partner Xstrata. Glencore’s trading arm provided a cushion as the metals cycle turned, while ambitious Xstrata had to take big writedowns. Expect a brutal “Glencorisation” of Xstrata’s culture.

Bertelsmann’s new BMG tune strikes the right chord

4 Mar 2013

The German media group is buying out KKR, its co-owner of music rights venture BMG. Having sold its music business five years ago, the deal appears to suggest strategic confusion. The truth is more subtle - and appealing. Bertelsmann could yet show greater boldness, though.

CME-DB deal is both justifiable and unlikely

26 Feb 2013

The U.S. exchange reportedly made merger overtures to its German rival. Creating a $32 bln powerhouse would mean real savings, and antitrust problems could be solved. But resistance elsewhere could be stiff. And Deutsche Boerse has no pressing reason to give up its independence.

$6.6 bln won’t be enough to end Elan’s rash dreams

25 Feb 2013

The biotech has grand M&A plans after selling rights to a blockbuster drug for $3.25 bln. Royalty Pharma’s indicative offer is based on the notion that it will invest more wisely than Elan’s current bosses. It’s a credible premise, but a 4 percent premium won’t seal the deal.

Heinz deal suggests Big Food deserves a fresh look

22 Feb 2013

Strong brands and steady margins give food-makers’ strong finances a very long shelf-life. So makers of sauces, spreads and cereals may offer hidden value for patient investors. Warren Buffett-style bid or not, ConAgra, Danone, General Mills and others look cheap.

New breed of jewel thief stalks M&A world

21 Feb 2013

Deals like the $8.2 bln sale of NYSE include so-called “crown jewel” lockups, which hand over valuable assets even if a transaction fails. Courts have looked askance at such side agreements, but they’re creeping back. The potential benefits may rob shareholders of a higher bid.

Market renaissance dethrones would-be debt kings

21 Feb 2013

The crisis in Europe put top-rated U.S. corporate debt on something of a safe-haven par with sovereign issuers. The return of big buyouts like Heinz and Dell and rising U.S. Treasury yields leave these bondholders vulnerable to big losses. Risk-free is now and forever a myth.