Mergers & Acquisitions

Canada gets worst of both worlds with oil verdict

10 Dec 2012

Premier Stephen Harper sent a confused signal by approving two bids by foreign state oil firms, but saying no more are welcome. By clearing CNOOC’s $15.1 bln Nexen purchase he misses out on a populist lift. Yet his rhetoric may slow crucial energy investment. It’s a no-win, eh.

Freeport deal triangle gets cozier and cozier

7 Dec 2012

The mining group’s market value has plunged $6 bln following news of its foray into energy. Yet the chairman will come out ahead. Now it seems the boss of one target, Plains Exploration, will collect $130 mln and a pay rise. Freeport’s board owes shareholders an explanation.

Bond in driving seat in Aston Martin investment

7 Dec 2012

Its high-yield bond, that is. A $240 mln injection from Investindustrial should boost research and growth at 007’s favourite carmaker and spare some of its Kuwaiti owners’ blushes. But creditors are the immediate winners. After a rough ride, the bonds have roared back towards par.

Banking union will revive pan-EU bank M&A

7 Dec 2012

The euro crisis has balkanised the continent’s banks, with national authorities protecting their own turf and forcing domestic mergers. A single regulator and central bailout fund will lift these barriers. And it might also make EU banks more attractive to non-euro competitors.

M&A combatants face their own "don’t ask" repeal

6 Dec 2012

An obscure but common provision in merger deals bans suitors from seeking to be freed from agreements not to go hostile. A U.S. judge now says such “don’t ask, don’t waive” terms are basically moot. It’s a small but significant win that should help enhance value for shareholders.

Barclays bet lives up to rich billing for Qatar

6 Dec 2012

Qatar has earned a 19 pct IRR on its complex 3.4 billion punt on Barclays at the height of the crisis. That’s a decent return for the then huge risk. But an ongoing probe into fees related to the capital-raising marks an unanticipated, non-financial cost.

Freeport’s $20 bln splurge lives down to tradition

5 Dec 2012

The miner’s complex plans to buy oil explorers Plains and McMoRan swiftly erased $5 bln of value. Freeport Chairman Jim Bob Moffett also runs and partly owns McMoRan, which gets a rich 74 pct premium. The strategic and governance bravado affirm the industry’s Wild West culture.

Baxter’s $4 bln deal is curious deja vu

4 Dec 2012

The U.S. drugs company is buying dialysis specialist Gambro. Strategically and financially the Swedish target looks a decent fit, for instance soaking up some offshore cash. But Baxter largely exited the segment in 2005, and its record of errors ups the risk of getting back in.

Abramovich peace mission rewards all at Norilsk

4 Dec 2012

The oligarch is to buy 7.3 pct of the Russian nickel miner. The deal resolves a spat between shareholders Interros and Oleg Derispaka by giving the former management say and the latter dividend security. But Abramovich won’t have broked peace for nothing.

CWC extracts royal premium from Batelco

3 Dec 2012

Bahrain’s top telco will pay $1 bln, or roughly one third more than the market expected, for the UK firm’s Monaco and Island unit. The deal will transform both buyer and seller but the rich price stretches the business logic for Batelco’s big international leap.

Glencore-Xstrata re-rating to start in boardroom

30 Nov 2012

With the Xstrata takeover done, the market has work to do to get to grips with “Glenstrata”. Valuing the miner-trader is tricky. The shares look cheap, but a big integration looms. A re-rating depends on the trading business proving itself and the board getting governance right.

Aston Martin’s Casino Royale is a long way off

29 Nov 2012

Life’s hard for niche automakers, even if James Bond’s a fan. Supercar demand has wilted. Starved of funds, vehicles can grow as stale as Brosnan-era 007. A potential $400 mln injection from a new investor would boost Aston Martin. Just don’t expect decent returns any time soon.

Siemens outsmarts market with $2.8 bln rail deal

29 Nov 2012

The German group will buy the rail arm of Invensys for a hefty $2.8 bln - surprising analysts and investors who had soured on the UK group and its pension deficit. For Siemens there’s strategic logic and synergies. For pension trustees, relief. For the Invensys chairman: déjà vu.

Lehman’s Archstone saga twists till the end

27 Nov 2012

The U.S. apartment empire that buckled the investment bank is being sold to two rivals for $6.5 bln. Accounting changes and poor disclosure muddle the valuation. Lehman creditors also will be left investing in the real estate. It’s a perfectly confounding denouement.

$5 bln of delayed gratification better than none

27 Nov 2012

Boardroom egos often hamper deals that can benefit investors. Ralcorp flipped suitor ConAgra the bird a year ago. With the formerly reluctant chairman running a spin-off, the food producer is now selling at a price it could have negotiated before. At least it got a second chance.

Conoco’s $5 bln Kazakh sale is the easy part

26 Nov 2012

The U.S. oil giant’s investors should be happy to see the costly Asian project go. The cash also will help fund lavish capex plans and the generous dividend. But Conoco’s real chore is to prove it can boost sluggish output while retreating from promising, if risky, regions.

Baseball is due to face a financial curveball

20 Nov 2012

Rupert Murdoch is buying into the New York Yankees cable network at a Ruthian EBITDA multiple. Player salaries and ticket prices have surged at triple the rate of inflation over 20 years while franchise values are at 42 times operating income. These diamonds aren’t forever.

New Glenstrata chair faces big repair job

20 Nov 2012

Xstrata chairman John Bond is going after shareholders approved Glencore’s $31 bln takeover, but snubbed the board in a complicated vote. His successor needs a forceful personality. Glencore fluffed the chance to get a strong chairman before its float. Now is the time to fix it.

Fiat Industrial unearths more value in CNH tie-up

20 Nov 2012

The Italian tractor maker’s no-premium merger bid for 88 pct-owned unit CNH was rightly rebuffed by a committee of the U.S. company’s board. FI is back with a 26 pct cash bump. The bidder’s not above some arm-twisting too. But this looks more like a fair squeeze-out premium.

Weibo has reason to “open sesame” to Alibaba

20 Nov 2012

China’s Twitter may be considering selling a stake to the country’s largest e-commerce group. It could pave the way for owner Sina to spin Weibo off, and create revenue synergies for both. Minority stakes have limits, but co-operation might ultimately make Weibo more valuable.