DealZone Daily
Friday’s highlights:
* Giant private equity firm Blackstone Group LP (BX.N) posts better-than-expected earnings on Thursday and says that lending for deals has returned, although exiting investments by IPO has been bumpy.
* Huatai Securities’ (601688.SS) modest gains on debut fell short of expectations after it raised $2.3 billion in China’s largest IPO this year, and could set a trend of lower pricing in upcoming share listings.
Keeping score: Cross-border M&A, property, follow-ons
Highlights from the Thomson Reuters Investment Banking Scorecard:
Global Follow-On Offerings Up 81%
Global follow-on offerings total $48.7 billion for year-to-date 2010, an increase of 81% compared to the same time last year. Issuers in Japan and the United States account for nearly 47% of all year-to-date secondary offerings with $12.1 billion and $10.7 billion, respectively.
Offerings in the financial and energy & power sectors account for a combined 67% of global activity this year. European follow-on activity is up more than four times last year’s totals, bolstered by $4.3 billion in rights offerings, which account for 36% of European follow-on activity this year.
Cross Border M&A Up 79% over 2009
Cross border M&A totals $84.5 billion for year-to-date 2010, a 79% increase over the same period last year. By number of deals, cross border transactions are up just 6% for the year.
This week’s $10.7 billion bid for Zain Africa by India-based telecom provider Bharti Airtel and Norwegian fertilizer producer Yara International’s proposed acquisition of US-based Terra Industries contributed to the cross-border total, which accounts for 32% of worldwide activity, compared to 24% last year at this time.
Bonus rejig puts paid to City’s spring jobs spree
LONDON, Feb 18 (Reuters) – Britain’s one-off “supertax” and
new longer-term payout systems have put paid to London’s
traditional springtime merry-go-round of City bankers moving
firms soon after they pocket their bonuses.
Barring exceptional hires, banks may be loath to poach staff
before April 6, when Chancellor Alistair Darling’s one-off 50
percent “supertax” on all bonuses over 25,000 pounds is set to
expire. Any hire soon after that could also attract scrutiny.
Buyout firms tussle for sofa retailer DFS -sources
LONDON, Feb 16 (Reuters) – Advent International, Permira
[PERM.UL] and Cinven [CINV.UL] are in the second round of an
auction of British sofa retailer DFS, which could fetch up to
500 million pounds ($784.3 million), people familiar with the
process said.
A fourth private equity firm could also remain in the
running for the sofa chain, some of the people said.
Jefferies sets up European “event-driven” desk
LONDON, Feb 16 (Reuters) – Securities and investment banking
group Jefferies <JEF.N> has set up a European “event-driven”
desk, hoping to capitalise on a pick-up in mergers and
acquisitions (M&A) after Kraft Foods Inc’s <KFT.N> $18.4 billion
takeover of British chocolate-maker Cadbury.
The five-man London team, headed by Chris Blackburn, will
work in tandem with a six-strong New York desk, offering sales,
trading and analysis of European stocks involved in M&A,
financial distress and other so-called “special situations”.
Babcock needs to offer 700p/share to win VT
LONDON, Feb 16 (Reuters) – Babcock International <BAB.L>
will need to offer about 700 pence a share to pull off a
takeover of VT Group <VTG.L> with larger suitors watching as the
industry scouts for ways to offset cuts in defence spending.
Babcock, which operates ship-building and nuclear power
programmes, on Monday revealed a 1.14 billion pound (633.9 pence
a share) approach to buy defence services firm VT Group,
potentially scuppering VT’s own bid for support services group
Mouchel <MCHL.L>. VT quickly rejected Babcock’s approach.
[ID:nLDE61E0EO]
Keeping score: Energy M&A doubles, Asia leads IPOs
Highlights from this week’s Thomson Reuters Investment Banking Scorecard:
” ENERGY & POWER M&A MORE THAN DOUBLES
The proposed acquisition of Allegheny Energy by Ohio-based electric utility First Energy Corp, in a transaction valued at $8.9 billion, brings the volume of mergers in the energy & power sector to $50.4 billion, more than double the volume of announced deals in the sector last year at this time.
Deal activity in the oil & gas and power sub-sectors account for nearly 88% of activity in the sector this year. Targets in the United States account for 52% of activity this year, with Brazil and France accounting for 19% and 12%, respectively.
“ASIA PACIFIC DRIVES 66% OF IPO ACTIVITY
Global initial public offerings total $15.9 billion for year-to-date 2010, a marked increase over the first six weeks of 2009. Asia Pacific issuers account for 66% of overall IPO activity, bolstered by nearly $9.2 billion in new listings from Chinese companies.
Offerings from the materials, financials, energy & power, and high technology sectors comprise 70% of total IPO volume this year.
Slim helps emerging-market M&A outstrip U.S., Europe
LONDON (Reuters) – Mexican tycoon Carlos Slim’s multi-billion dollar move to consolidate his telecoms empire has helped push emerging-market mergers and acquisitions (M&A) ahead of U.S. and European dealmaking in the year to date.
Thomson Reuters data, released on Wednesday, showed M&A with targets in emerging markets totaled $93.3 billion, or 48 percent of global deals so far in 2010.
Outgoing Cadbury head calls for UK M&A re-think
LONDON, Feb 9 (Reuters) – Cadbury Plc’s <CBRY.L> outgoing
chairman joined calls for Britain to re-examine its
long-standing openness to takeovers and the role of hedge funds
in bid battles, after the chocolate maker’s $18 billion sale to
Kraft Foods Inc <KFT.N>.
Roger Carr, the veteran dealmaker who also chairs power
company Centrica Plc <CNA.L>, suggested Britain consider making
deals harder to clinch and hedge funds less pivotal.
Montagu eyes 2 bln euro BSN Medical IPO -sources
LONDON, Feb 8 (Reuters) – Private equity firm Montagu has
hired investment banks to help it weigh options for two medical
companies, sources said, seeking to build on the sale of three
other portfolio companies with fresh sales or public listings.
Two people familiar with the matter said on Monday Montagu
had brought in Morgan Stanley <MS.N> to plan a flotation of BSN
Medical, which could value the German maker of bandages at as
much as 2 billion euros ($2.7 billion).
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