Mergers & Acquisitions

Anglo finds satisfactory end to Chilean quarrel

23 Aug 2012

The London-listed miner has buried the hatchet with Codelco, selling Chile’s copper producer 25 pct of a disputed mine for $1.9 bln. Anglo American’s other problems will be harder to solve, but here CEO Cynthia Carroll can reasonably claim she’s protected shareholder value.

Carl Icahn gets a dose of his own tart medicine

22 Aug 2012

The uppity investor yanked his failed bid to buy the rest of CVR Energy. That leaves Icahn controlling a public company he can’t take private and wanted to sell - but couldn’t find a buyer. Now he has to deal with a group in some ways a bit like him: a stubborn minority.

Glencore’s stiffening resolve leaves bid on skids

21 Aug 2012

Resistance to improving the terms of the $30 bln merger with Xstrata appears to be hardening at Glencore HQ. A last-minute sweetener can’t be ruled out, but a decent half-year performance by the commodity trader makes it less likely.

China’s oil giant may need pricey Canadian boost

21 Aug 2012

CNOOC’s $15 bln tilt at Canada’s Nexen seems an expensive distraction, especially since the Chinese oil major has cut its dividend, has flat output and rising costs. Yet CNOOC needs a booster. Nexen’s drilling expertise could help it squeeze more out of its domestic business.

Thais have done well in APB bluff against Heineken

20 Aug 2012

The Dutch brewer blinked after a Bangkok beer family threatened to block it from full ownership of the Singapore brewery. Heineken raised its bid to $4.46 bln. The Thais could try for still more, but risk a devastating loss if Heineken balks. They’d be savvy to cash in now.

Electronic Arts LBO would make tricky video game

16 Aug 2012

A private equity firm considering a $6 bln takeout would battle the twin evils of erratic, film-studio-like cash flows and the secular decline of the game console business. EA’s balance sheet offers weapons for the fight, as do buoyant debt markets. But victory will be elusive.

Share price mystery clouds Focus Media buyout

15 Aug 2012

The Chinese media group’s U.S. shares ran up 8 percent the day before it announced a $3.5 billion management buyout. Regulators are already twitchy after alleged insider trading around CNOOC’s $15 billion bid for Nexen. This may fuel fears that China has a problem with insiders.

Focus Media insider buyout gives investors relief

14 Aug 2012

Some of the people who brought the Chinese advertising firm public now want to take it private. Focus has suffered from a short seller’s allegation, but the suggested value of $3.5 billion doesn’t look like a steal. Worriers about Chinese accounting should take some comfort.

Google searches for local edge with guidebook deal

13 Aug 2012

Frommer’s may be better known among frugal travelers with comfortable shoes than digital kids. Yet Google’s purchase of the publisher looks like a smart way to further its push into the booming local online ad market, building on last year’s purchase of Zagat.

Julius Baer reinvention not as cheap as it looks

13 Aug 2012

The Swiss bank is paying a skinny 1.2 pct of assets for Bank of America’s non-U.S. private banking operations. Throw in restructuring costs and extra capital, though, and the $1.5 bln tag looks richer - especially for a business that’s unprofitable and hardly growing.

Market geniuses don’t even get milk

9 Aug 2012

When the most pedestrian of groceries can surprise investors, something is clearly awry. Along with an unexpected profit, Dean Foods unveiled a corporate split - of one sort of milk from another. By unlocking 40 pct of value, the dairy engineering exposed glaring inefficiencies.

John Malone counts his lucky Starz, Siriusly

8 Aug 2012

Liberty Media’s spinoff of premium cable channel Starz fits nicely into Malone’s Sirius XM ambitions. The transaction should boost his firepower to increase Liberty’s already sizable 46 percent stake in the satellite radio operator. The plan isn’t bad for shareholders either.

Heineken should call Thai bluff for Tiger beer

8 Aug 2012

A Thai mogul has pipped the Dutch brewer’s S$50 a share bid for Asia Pacific Breweries with a higher offer, but only for a minority stake. Heineken shouldn’t bite. It loses little even if its bid fails. It may just end up with a debt-laden partner it can buy out cheaply later.

Merger boost looks short-lived for China’s Youku

7 Aug 2012

Revenues at the leader in the Chinese internet video market almost doubled in the last quarter, but losses widened even more. The planned merger with smaller rival Tudou should help lower costs, but deep-pocketed diversified players are catching up. The pair looks vulnerable.

Itaú’s aims would be badly served by Citizens

6 Aug 2012

The Brazilian bank has been tipped as a possible buyer for the U.S. retail arm of RBS. While Citizens might come cheap relative to Itaú’s own valuation, competing in a saturated country with the likes of Wells Fargo and BofA would be unwise. Better to stick with emerging markets.

M&A discretion will come with a price of its own

2 Aug 2012

Martin Marietta forfeited a hostile bid after rival Vulcan successfully sued it for a confidentiality breach. Now, a Blackstone-owned firm is accusing a suitor of illegal blabbing. Leaks can be harmful, but dealmakers and their clients may also find they miss the chatter.

The $10 bln LBO may again be within reach

1 Aug 2012

Even if private equity firms don’t scoop up $8.5 bln LabCorp, a buyout on that scale looks possible. Big funds collectively have some $500 bln of purchasing power, lenders are hungry for yield and terms are easing. But it would also mean a return to the dreaded club deal.

Partners’ noise can’t mask value for BP in Russia

1 Aug 2012

BP’s partners are playing hardball over their Russian joint venture. But a nixed dividend and legal noise are mostly distractions. TNK-BP’s core business shouldn’t be affected, and its valuation has become clearer. With Rosneft circling, BP should have a strong position.

Lowe’s Canadian target can’t build solid defense

31 Jul 2012

Quebec home-improvement chain Rona missed the domestic housing boom. That makes a $1.8 bln bid from Lowe’s a nice upgrade. The board can’t be blamed for putting the screws on its U.S. rival for a higher bid. But protectionist cries à la Potash and TMX don’t have much foundation.

Vivendi may be out of pocket on EMI by salving EU

30 Jul 2012

The French group’s Universal Music arm could sell over a quarter of its British target’s business to appease European trustbusters. Yet Vivendi still must pay 90 pct of the $1.9 bln purchase price. Lost profit and synergies could cost it much more than if the EU nixed the deal.