Mergers & Acquisitions

Alibaba and Yahoo could live unhappily ever after

15 Feb 2012

Talks on Alibaba buying back Yahoo’s stake in the Chinese tech giant may have hit an impasse. The deal’s valuation, structure and its financing are key roadblocks. This adds more strain to their relationship. They may want to rebuild trust before going back to the table.

Fed’s Capital One/ING deal delay raises questions

14 Feb 2012

The watchdog has finally approved the bank’s proposed $9 bln marriage to ING Direct. The largest post-crisis bank deal warranted added parental concern. But they are a good match and pose little threat. Keeping them waiting at the altar seemed borderline heartless.

Carlyle makes a mint in $1 bln cash-handling sale

14 Feb 2012

The buyout firm may make a near-40 pct annual return on Talaris, a maker of money-counting kit. Carlyle nurtured a corporate castoff, and bet against the supposedly rapid trend to a “cashless” society. The big win also alleviates the same fund’s embarrassing Greek blow-up.

Why the league-table bonanza at Glencore-Xstrata?

14 Feb 2012

Seven banks is a pretty full roster for a long-awaited, friendly, all-share merger. Fortunately there are still some other banks out there that can write unconflicted research or advise interlopers. But if more advisers means a bigger bill for fees, investors won’t be chuffed.

Complexity caps allure of Yahoo’s Alibaba solution

13 Feb 2012

A mostly cash split-off promises a tax-efficient way for the troubled U.S. Internet firm to cut its stake in a Chinese rival. Yahoo also would accept a group of assets as part of the deal being discussed. But the more elaborate it gets, the more diluted the benefits may be for Yahoo.

Glencore-Xstrata gatecrashers in short supply

10 Feb 2012

A merger backlash could put Xstrata in play. Vale tried to buy it in 2008. And Xstrata’s copper business could tempt Rio or BHP to launch a breakup bid. But such moves look unlikely. Xstrata investors shouldn’t expect outside help in pushing Glencore to sweeten its offer.

Goldman conflict a tough sell for El Paso moaners

8 Feb 2012

Some of the oil pipeline’s shareholders are taking the bank to court, alleging foul play in advising both Kinder Morgan and El Paso in their $38 bln tie-up. Questioning such conflicts is right, but proving investors were short-changed by a 37 pct premium will be a struggle.

Itaú’s $6.8 bln Redecard bid may depend on Lazard

7 Feb 2012

The big Brazilian bank’s offer for the 49.9 pct of the card processor it doesn’t own looks fair - but it’s no knockout. Minority shareholders may push for a sweetened price. With its money manager owning almost a tenth of Redecard, Lazard could make or break any deal.

How does a $31 bln mega-LBO become an $18 mln IPO?

7 Feb 2012

What sounds like a gambling tragedy is the perplexing, yet true, story of the buyout of Caesars Entertainment by TPG and Apollo. The deal, struck at the height of the bubble, has been a tough one. Co-investors are in such a hurry to get out, they’re actually paying to exit.

Glenstrata deal needs rejig

7 Feb 2012

Some Xstrata investors say they will vote no to the mining merger with Glencore. But a deal may still be possible if both sides can agree a proper board and a sweeter premium for Xstrata. There’s a big incentive to talk: given the mess, neither can go back to the status quo.

Don’t bet against Glenstrata antitrust roadblock

7 Feb 2012

Many customers see Glencore and Xstrata as one, even before their all-share merger. But that won’t stop regulators everywhere poking into Glencore’s secretive business. Market share in copper and zinc isn’t the only concern: bigger miners exert pressure on governments too.

April Fool’s comes early to comical M&A market

6 Feb 2012

It’s hard not to smirk at America’s largest title insurer buying steak chain O’Charley’s. Not only does it sound like a bad joke, it defies conventional wisdom both on conglomerates and the use of premium proceeds. But for idle bankers, even oddball deals are no laughing matter.

Mexico looks out of step with world on antitrust

6 Feb 2012

As Europe and the United States block deals that threaten competition, Mexico last week gave Carlos Slim a free pass by stopping two TV barons uniting to challenge his telecoms dominance. The country’s feeble and captured competition authorities are squelching free markets.

Xstrata holders right to fret over Mick’s rewards

6 Feb 2012

CEO Mick Davis’s contract promises millions from any takeover, even if he doesn’t hold out for the best price. True, Davis’s existing shares help align his interests with outside shareholders’. But investors should still examine any Glencore deal closely.

Glenstrata board faces huge credibility challenge

3 Feb 2012

A look at the business mix of a merged miner-trader suggests Xstrata’s Mick Davis would be CEO with Glencore counterpart Ivan Glasenberg as deputy. Whatever the two decide, investors will take some convincing that the pair will still be snuggled up come Valentine’s Day 2013.

Glenstrata is sideshow to mining’s epic challenges

3 Feb 2012

A merger of already closely tied Glencore and Xstrata would slightly change the balance of large and mid-sized operators. But however much scale the Western miners amass, they can do little about the really big issues: the super-cycle, the shift to Asia and resource nationalism.

Glencore-Xstrata would be big, and perhaps better

2 Feb 2012

There’s industrial logic to a tie-up: Glencore’s production assets would move Xstrata to mining’s top league; Xstrata’s would give Glencore’s trading arm an edge. But the cultural combination is risky. If Glencore didn’t already own 34 pct of Xstrata, a deal would be less likely.

Glencore can’t afford to overpay for Xstrata

2 Feb 2012

The commodity trader is closing in on an all-share tie-up with its mining sister worth nearly $90 bln. Glencore could reap about $5 bln of synergies. But an immediate rise in Xstrata stock has already transferred much of this value to outside shareholders.

NYSE/DB execs deserve spanking for merger failure

1 Feb 2012

Duncan Niederauer and Reto Francioni spent a year pursuing a transatlantic tie-up that the EU never favored. While not as egregious as AT&T’s bid for T-Mobile USA, their ambitions have proven a costly distraction. At the very least, the two should forfeit their bonuses.

ABB’s $4bln low-voltage charge stacks up

30 Jan 2012

Buying Thomas & Betts, a U.S. maker of low-voltage kit, boosts the Swiss group’s most profitable business in the world’s biggest market. The deal looks decently priced, despite a run-up in T&B stock. And it’s grounded in good opportunities to cross-sell and cut costs.