Japan Airlines said it would keep its partnership with American Airlines in the Oneworld alliance, ending an attempt by Delta Air Lines to entice the bankrupt carrier to its rival SkyTeam group. JAL, Asia’s largest carrier by revenues, said it would file with American Airlines for regulatory approval for closer cooperation on transpacific routes under a recently signed “open skies” treaty between the United States and Japan.
Delta had been courting the Japanese carrier for months with an offer of $1 billion in financial aid. A nice offer, but hardly enough to put a dent in JAL’s $25 billion debt load. Of more value was access to Delta’s larger route network, which could have saved it some costs.
Walt Disney is leading a group effort to buy into China’s largest bus-based digital media and advertising company, Bus Online. The investment would be peanuts for Disney, but the headache could wind up being jumbo sized because one of their investors in the bus deal, sources tell us, is Google.
Google threatened to quit China only a few weeks ago and the internet search giant is finalizing a deal that will let the U.S. National Security Agency (NSA) help it investigate the corporate espionage attack it thinks originated in the People’s Republic. China has warned the U.S. not to make politics out of the Google issue, but it may be too far into the saber-jangling season for that, with Barack Obama having announced fresh U.S. weapons sales to Taiwan in his State of the Union address.
As tech spending stages a comeback, watch for industry giants like Hewlett-Packard and IBM to start scouring the security software market for acquisitions that will boost their share of corporate IT budgets, Anupreeta Das reports. Security software is a critical component of the “stack” of applications used by companies to store and manage networks and data, making software makers from McAfee to upstart Sourcefire attractive targets.
“There is a clear trend toward convergence of technologies in the data center, and security is front and center,” said Daniel Ives, an analyst at FBR Capital Markets. He and other analysts said security spending by companies held up well during the recession even as overall IT budgets shrank — a mark of resilience that only adds to the lure of security companies. “Security really has the attention of CIOs (chief information officers),” Ives said in an interview. Read more, click here.
Global staffing firm Manpower reported higher-than-expected quarterly profit amid improved demand for temps. Based on trends it sees in the employment business, it is growing more and more confident that economic recovery has traction.
How confident? It is also buying professional staffing firm Comsys IT Partners, a provider of technology staff, for $17.65 per share, or $431 million including debt. Rival Spherion said late on Monday it would buy Tatum LLC, a provider of interim executives, for $46 million. In its quarterly results, Manpower also forecast its first quarterly sales increase in more than a year.
A wee while ago, DealZone posited that bonus-hungry bankers who had gravitated to bank prop desks might return to the once-glorified M&A desks after the Obama administration targeted banks’ proprietary trading as a business too risky for banks. A logical argument, but one that ignored an aspect of the M&A game that is becoming starkly obvious: deals putting trading operations into banks are clearly at risk.
A source tells us that JPMorgan is rethinking its planned $4 billion purchase of RBS Sempra with an eye to let the U.S. power and gas businesses be bought by Sempra Energy, which jointly owns RBS Sempra with Royal Bank of Scotland. This would leave the U.S. bank with the joint venture’s oil operations and all of the non-U.S. businesses, a source familiar with the matter said.
Perhaps the most shocking thing about Tishman Speyer Properties’ decision to sign over its Peter Cooper Village and Stuyvesant Town apartment complex in Manhattan to creditors is that it comes this late in the real estate down cycle.
The acquisition of the property in 2006 was one of the largest of the real estate boom at $5.4 billion. The venture finally defaulted on its mortgage this month. The value of the complex is believed to have fallen to $2 billion or less.
President Barack Obama’s plan to limit financial risk-taking could drive eager bankers, who had seen the juiciest business at the prop desks, to return to Mergers and Acquisitions — the former darling desk of Wall Street.
Picking a fight with the financial titans (that just last week sent their top executives to offer platitudes to Congress about the financial disaster they created), the administration unveiled a plan that would stop banks from playing with their own money to take risky positions – the so-called proprietary trading operations.
Oracle has won unconditional European Union approval for its $7 billion takeover of Sun Microsystems, a month after offering public pledges to sooth regulatory concerns. The Commission’s decision averts a split with the U.S. Department of Justice, which approved the deal in August. While authorities in China and Russia have yet to approve the deal, it is still seen reshaping the high-tech landscape, with Oracle, the world’s No. 2 business software maker, moving into the hardware business. Sun is the top player in the $17 billion high-end computer-server market.
Oracle’s play-nice promise in December to keep the market open for others to make storage engine software for Sun’s MySQL database and to boost investment in the unit came after the European Commission launched an in-depth investigation of the deal. Oracle also pledged to set up a separate customer advisory board of MySQL users.
Kraft was always expected to raise its bid for Cadbury, even with no real rival to its initial overture and grumblings from top shareholder Warren Buffett about Kraft possibly overpaying with its stock. The only question was how much. But if it did overpay, it did so with credit. Just in case shareholders were thinking of making a stink, CEO Irene Rosenfeld ratcheted up the cash component to a level that negates the need for shareholder approval.
Dealmakers said the agreement was struck after all-night negotiations in London. It values Cadbury at 840 pence per share. Shareholders will also get a special dividend of 10p per share, bringing the total to 850p per share. That far exceeds scaled-back expectations and was a big jump from the sub-800p levels that had so soured earlier negotiations.
While Cadbury shares saw some life on hopes for a rival bid from Hershey — boosted by reporting from the FT that a rival offer was further along than much of the market had assumed — naysaying analysts and pundits have been quick to point out that the financials of a Hershey bid are hard to stomach.
Hershey is only half the size of Cadbury, and a big share issue would dilute the stake of the controlling Hershey Trust, which has been every bit as crucial to defining the company as the kiss. The FT report says Hershey is working on a private equity element with none other than Byron Trott, Warren Buffett’s banker of choice. The idea that Buffett, who is Kraft’s biggest shareholder, could play both sides of a bidding war is, if not new, certainly intriguing, particularly given his apparent distaste for Kraft selling its own shares to keep its bid attractive.