Mergers & Acquisitions

Blocking a deal isn’t always best antitrust answer

30 Sep 2011

When Live Nation merged with TicketMaster, the prognosis for competition in the live music and ticketing business wasn’t good. Concessions extracted by U.S. regulators seemed bitty. But nearly two years on, rivals are flourishing. Live Nation doesn’t look so dominant any more.

It’s FTSE or bust for Russian miners in London

30 Sep 2011

Polymetal has become the latest to seek a full premium listing in London. The precious metals miner is upping its free float to get into the FTSE 100, expanding the universe of investors and boosting liquidity. It’s a reminder that the attractions of just listing GDRs are fading.

LSE-SGX move on metals exchange would make sense

30 Sep 2011

Joint bids tend to be hard. But the London and Singapore bourses may benefit by partnering in a possible $1.6 bln bid for London’s metals exchange. LSE gets a partner that already handles metals futures; SGX gets local know-how. That matters in a potentially hot auction.

P&G’s Pringles partner warrants careful taste test

26 Sep 2011

The consumer giant wants investors to swap P&G stock for shares in Diamond Foods as part of a $2.4 bln deal to offload the chips brand. But financial wrinkles and angry walnut growers are among possible concerns. P&G holders may want to check the contents of the package closely.

United Tech’s $16.5 bln buy relies on debt markets

22 Sep 2011

The nearly 50 pct premium it’s paying for Goodrich might have been lower if United Tech’s intentions hadn’t been leaked. But low interest rates, strong demand for blue-chip debt and a good fit should make the deal easier for shareholders to swallow despite the jet-fueled price.

Foster’s gets full measure from SABMiller

21 Sep 2011

Boozy rows between the Australian and UK brewers are history. Like most hostile M&A, this has turned friendly with a sweetener from SAB. Torrid markets and the absence of rival bidders mean Foster’s has done especially well to extract a punchy $10 bln-plus cash offer.

Masters of synergies create few for themselves

16 Sep 2011

To support the M&A ambitions of their clients, investment bankers routinely claim 1+1=3. Yet since JPMorgan, BofA and Barclays bought Bear, Merrill and Lehman, respectively, each has shed, not gained, market share. These numbers, at least, undermine Wall Street’s deal math.

Rivals may learn from McGraw-Hill’s education spin

12 Sep 2011

The carve-up is long overdue as Standard & Poor’s never fit well with textbooks and teaching materials. Spinning off education could make it easier to sell. It should also turn up the heat at the likes of Pearson and Washington Post to consider similar breakups.

Broadcom chip deal has tech rarity: logical price

12 Sep 2011

The network chip maker is paying a huge 57 pct premium for NetLogic. But the $3.7 bln deal’s rationale is sound, and the price is reasonable considering NetLogic’s prospects. With tech valuations subdued, other companies with cash hoards may find it’s a good time to go shopping.

Google’s Zagat purchase looks cheap and cheerful

9 Sep 2011

The restaurant reviewer’s brand is well regarded, but its model of selling user-generated content had little future in a post-Yelp world. Google can integrate Zagat reviews with its maps, social network, and other services and sell related ads. This deal should score highly.

Interest in Spanish airports sale is deceptive

9 Sep 2011

The $7.5 bln privatisation of Madrid and Barcelona airports has attracted considerable attention. Six groups are lining up to bid for each. But the timetable is tight, the concessions short, and the prices steep. An auction will struggle to get off the ground.

Ohio oil promises new bonanza for Texas bankers

7 Sep 2011

The first takeover deal in the Utica shale may be modest, but it’s only a start. Some $38 bln of shale-related deals this year account for 80 pct of U.S. exploration M&A. If Ohio’s rock formation yields even half its touted oil trove, energy financiers should be sitting pretty.

Tony Hayward joins risky Kurdish oil rush

7 Sep 2011

The ex-BP boss’s M&A vehicle has landed its first target, a $4 bln merger with Kurdistan’s top oil producer. The deal is part regulatory arbitrage, and part a bet that Iraqi politics will turn good for oil firms. On conventional metrics, it’s a bargain. But it brings major risks.

Abu Dhabi’s Mubadala humbled in Carlyle IPO

7 Sep 2011

The Abu Dhabi fund may have lost up to half the value of its $1.85 bln signature investment in the U.S. private equity firm. Mubadala looks to have clawed back some of its losses on its original 2007 punt in 2010, but it’s unlikely to be enough to spare the emirate’s blushes.

AT&T bet on T-Mobile puts CEO, board in crosshairs

6 Sep 2011

The U.S. telco has wagered $6 bln that it can beat regulatory opposition and buy T-Mobile USA. The net benefit of the $39 bln purchase could be in the same ballpark. But few experts thought the odds were better than 50-50. The AT&T boss and directors may have made a poor call.

UK bank upstart seeks two-step path to Lloyds deal

6 Sep 2011

NBNK is mulling an offer for the UK assets of National Australia Bank. A successful deal could give the bid vehicle an advantage in acquiring the branches Lloyds is being forced to sell. But in tough markets, convincing investors to cough up the cash looks a challenge.

Beijing’s role in CCB share sale is troubling

5 Sep 2011

China’s main foreign reserve fund has reportedly bought shares sold by Bank of America in the Chinese lender. The price looks low, and the shares yield more than US Treasuries. But increasing state exposure to banks, and using reserves to stabilise their share prices, isn’t wise.

LSE’s pricey LCH tilt anticipates boom in clearing

2 Sep 2011

So the London Stock Exchange is interested in LCH.Clearnet after all – and seems ready to pay a big price for the clearing house. Synergies appear limited. LSE CEO Xavier Rolet may be banking on an explosion of clearing in products that previously changed hands privately.

More winners than losers if AT&T deal fails

1 Sep 2011

The operator’s top brass and lawyers will obviously look awful if the $39 bln deal collapses. It’s not yet obvious how T-Mobile and Verizon would fare. But telecom equipment and handset firms, as well as the likes of Sprint, LightSquared and Crown Castle all stand to gain.

Irene should blow U.S. utility deal off course

1 Sep 2011

The $4.2 bln merger of Northeast Utilities and NSTAR is up for approval. But blackouts following the hurricane have exposed NU’s deficiencies serving customers despite charging America’s highest rates. Regulators should ensure service is on a better track before they OK any deal.