Mergers & Acquisitions

Sprint and Softbank forced into tactical warfare

9 Jan 2013

U.S. pay-TV company Dish put forward a highly conditional $2.3 bln offer for Clearwire, a spectrum owner integral to the ambitions of Sprint and its Japanese buyer. Though the Dish bid is unlikely to go far, it could pressure Sprint to pay more - or strike a deal with Dish.

Ping An flop could leave HSBC red-faced but richer

9 Jan 2013

The bank’s $9.4 billion plan to offload its stake in the Chinese insurer is in doubt. If regulators block the sale to a Thai billionaire, HSBC’s reputation will take a knock. Finding other buyers won’t be easy. But the recent market rally means the bank could end up better off.

CDB highlights China’s dysfunctional finance

8 Jan 2013

China Development Bank raised $193 billion in 2012 to fuel an unusual mix of vendor financing, M&A lending and infrastructure loans. While it has a legitimate part to play in China’s growth, the policy bank’s habit of undercutting rival lenders smacks of capital misuse.

Avis gives Zipcar a faster lane to profitability

2 Jan 2013

Selling to the mainstream car rental giant for $500 mln means a 32 pct loss for those who bought Zipcar’s shares in its 2011 IPO. But tapping into Avis’s underused fleet should boost the car-sharing company’s margins. And for Avis owners, cost savings justify the 49 pct premium.

Penguin in bondage hides real risks in media M&A

27 Dec 2012

Three tie-ups from 2012 will alter media in 2013: Penguin-Random House, Universal-EMI and Disney-Lucasfilm. In books and music, the business case for consolidation is clear. Wags will giggle about “50 Shades of Penguin”, too. But the real cultural impact may be less benign.

GE’s $4 bln swoop on Italian supplier is shrewd

21 Dec 2012

The U.S. conglomerate will buy aerospace components maker Avio for $4.3 bln, or 8.5 times EBITDA. GE simplifies its supply chain, grows in the booming civil aviation market, and should reap savings. After a bumpy ride, Avio’s private-equity owners also reap a solid return.

NYSE’s Niederauer takes ICE-cold shower

20 Dec 2012

The Big Board’s agreed $8.2 bln sale to ICE stacks up financially and strategically. But NYSE is fetching a quarter less than its new owner offered in a joint bid with Nasdaq last year. With its shares lagging the exchange sector since then, capitulation was the CEO’s best option.

Animal spirits will stir buyout barons before CEOs

18 Dec 2012

Megadeals have been in short supply for both since 2008. But corporate bosses keep getting rewarded for modest acquisitions while Glencore and HP are warnings against going big. For private equity, though, cash stockpiles and cheap money will be catalysts for a bolder 2013.

Market signals turning point in U.S. gun debate

18 Dec 2012

Private equity isn’t known for squeamishness - or for dumping promising investments. So it’s significant that Cerberus is selling firearms maker Freedom Group following the Newtown school atrocity. Gunmakers’ shares are plunging, too: big money is betting on tougher restrictions.

Singapore property spat may hinge on tax oddity

14 Dec 2012

SC Global’s controlling shareholder has offered to take the high-end apartment developer private. Large investor Wheelock is holding out for a better price. Ending the standoff may require some clarity about Singapore’s discriminatory approach to taxing foreign-owned property.

India’s Jet a better bet than Kingfisher for Etihad

14 Dec 2012

The Abu Dhabi airline is spoilt for choice in India. It can rescue and run grounded Kingfisher, or buy a smaller stake in better-managed Jet Airways. The latter offers a better fit. Besides, a low-key and passive entry into a market that is just opening up makes more sense.

Goldman gets reward for taking year-end block risk

13 Dec 2012

Renault’s sale of its 6.5 pct stake in Volvo is a boon for the French carmaker. But it was hazardous for Goldman, which stood to wear as much as 1.5 bln euros in selling the block. Any loss would hurt just as the books are about to close for 2012. The upside? League-table credit.

Sprint confronts starry-eyed activists

13 Dec 2012

The U.S. mobile operator being acquired by Japan’s Softbank is offering $2.1 bln to buy the rest of Clearwire. The 5 pct premium won’t satisfy uppity investors who want Clearwire to seek other options. Sprint’s control limits their power, but they could elicit a sweetener.

Qatar gives SocGen an honourable exit from Egypt

13 Dec 2012

Qatar National Bank is buying the French lender’s 77 pct stake in its Egyptian unit, valuing the whole at $2.6 bln. The price of 2 times book value is below pre-revolution multiples, and SocGen faces currency risk. But with few other buyers, it’s better to shrink while it can.

TripAdvisor deal excludes regular shareholders

12 Dec 2012

Barry Diller sold shares in the internet travel group to Liberty Interactive at a 63 pct premium. John Malone’s group paid up to regain voting control over its other shares. As so often where there’s supervoting stock, the moguls’ games have left ordinary owners powerless.

Swiss chocolate firm switches to junk diet for M&A

12 Dec 2012

Barry Callebaut is splurging nearly $1 bln in Asia, and enduring credit downgrades to “junk”. And all that for a business that’s having a horrid year. But there are real savings and strategic logic. For bold M&A, having patient family backers and a non-euro zone base must help.

Delta buys premium Heathrow seat for economy fare

11 Dec 2012

Being Richard Branson’s junior partner cost Singapore Airlines two-thirds of its investment in Virgin Atlantic. Delta, however, is buying the 49 pct stake at a discount to what slots at London’s premier airport usually command. That should help the new joint venture take flight.

Diageo’s M&A machine misfires with Jose Cuervo

11 Dec 2012

The spirits giant, once abstemious in M&A, has been lifted by a series of smallish takeovers. Now lengthy talks to buy the $3 bln-plus Cuervo have failed. Diageo might claim this shows it remains disciplined. But this is a meaningful setback in the United States.

How could HP find a $5bln gap in Autonomy’s value?

10 Dec 2012

Hewlett-Packard paid $11 bln for the UK software maker. Now it effectively says it would have paid $5 bln less had it known about dodgy revenue recognition and hidden hardware sales. But the U.S. tech giant won’t explain its numbers. Breakingviews does some reverse-engineering.

China Inc helps AIG streamline, at a price

10 Dec 2012

Selling its aircraft leasing arm to a Chinese consortium will raise $4.2 bln - half the value of the U.S. government’s remaining stake in the insurer. The cash could help fund a later buy-back. But the price looks mean next to similar deals, and AIG isn’t getting a clean exit.