Inversions start to spin out of control

July 30, 2014

A quest for tax savings has made digestible overseas targets attractive to U.S. buyers. Hospira’s potential $5 bln deal for a Danone unit highlights a fresh supply, for so-called “spinversions.” The odd combination also reflects the perverse incentives distorting corporate decisions.

Discounters’ $20 bln deal may spark M&A price war

July 28, 2014

Dollar Tree has found more than enough savings to cover the 23 pct premium to be paid to Carl Icahn and other Family Dollar investors. As a percentage of revenue, though, the synergies are relatively low. That may leave room for sector giant Dollar General to lob in a bid.

Murdoch calls on European outposts for Time Warner

July 24, 2014

The mogul’s Fox empire is poised to sell pay-TV arms in Italy and Germany to BSkyB, his UK satellite affiliate. There’s strategic logic to the asset shuffle and proceeds could help sweeten the $80 bln U.S. bid. How Murdoch treats many non-Murdoch owners involved is the linchpin.

Allergan bosses put money where their mouths are

July 24, 2014

The drugmaker says it’s worth more on its own than the $52 bln Valeant is offering. That’s straight from the empty-promise, takeover-defense playbook. Allergan, however, is linking stock and option grants to lofty profit goals. It’s a bolder gambit that should become an M&A norm.

Goldman chums return John Thain to semi-importance

July 22, 2014

Merrill Lynch’s last boss has been doing penance running lending minnow CIT for four years. Now he’s spending $3.4 bln to buy OneWest, the remains of a bust bank revived by fellow Goldman alums. It’s a smart deal that restores Thain’s membership in the SIFI club, if only just.

Listen to Murdoch’s muzzled minorities

By Rob Cox
July 22, 2014

Most Fox believers are relegated to owning non-voting stock, the same second-tier paper on offer to Time Warner shareholders. While there’s broad investor overlap in the two companies, the record shows a clear distaste for the imperialistic ways of media mogul Rupert Murdoch.

Time Warner can justifiably hold out for more

July 18, 2014

Though Rupert Murdoch’s $80 bln bid includes a 20 pct premium, his quarry may have been on track to achieve the offer price on its own. Time Warner also should be able to get more credit from the market for its growth. That gives boss Jeff Bewkes some negotiating power with Fox.

Murdoch may be heading for Pyrrhic Time Warner win

July 17, 2014

The media mogul’s rebuffed $80 bln bid for his rival already looks a stretch. He’d need more than twice the $1 bln of expected synergies to cover that premium – and a ton of debt. History suggests the octogenarian won’t give up – and may destroy value by offering more.

Dual-share inequity to figure in Time Warner fight

By Rob Cox
July 16, 2014

If Rupert Murdoch wants to own the HBO-to-Looney Tunes conglomerate he needs to be willing to convert Fox into a one- share, one-vote company. The combo would be too big for a takeover anyway. The irony is that Fox’s super-votes are what give Murdoch the chutzpah to attempt a deal.

Portugal Telecom pays the price for weak controls

July 16, 2014

An Espirito Santo group company failed to repay a $1 bln loan to PT. That means the telco’s shareholders will own a smaller stake in the group it planned to form with Brazil’s Oi. It’s not a good start for a complex merger. The combined entity looks financially weaker.