DealZone

The art of watching

May 27, 2008

A model waits in the backstage before the ”Nation and Fashion” show in BudapestGE CEO Jeffrey Immelt is in South Korea, where he may or may not be hawking the industrial conglomerate’s century-old appliances division. LG Electronics CEO Nam Yong said his company was “closely watching” developments surrounding the unit’s potential sale. General Electric said earlier this month it may sell or spin off the division, estimated to be worth up to $8 billion. LG, the world’s top maker of household air conditioners, has been talked about as a potential suitor, along with China’s Haier Group. Nam added he had no plans to meet with Immelt. This watching thing appears to be deeply ingrained in LG’s lexicon — the company is also “carefully watchingNokia amid talk the top-ranked mobile phone maker may cut its prices and reenter the South Korean market.

Shares in Belgian brewer InBev, the world’s second-biggest by volume, lost over three percent after a newspaper reported it could soon start takeover talks with rival Anheuser Busch. Belgian business daily De Tijd reported that InBev’s board was about to decide whether to allow its advisers to start negotiating with Bud. This follows the FT’s report on Friday that InBev was considering a $65-a-share bid and had put together $50 billion in financing. A Busch family member, Adolphus Busch IV, told the Wall Street Journal on Tuesday some family members were open to holding talks with InBev but others wanted to keep the status-quo.Germany’s embattled Hypo Real Estate has given its backing to an offer from private equity investor JC Flowers and others to buy almost one quarter of its shares, also declining to give an earnings forecast for 2008. Hypo’s stock price had been under pressure since it surprised investors with subprime-linked writedowns in January. This prompted the investment bank and property lender to look for a committed long-term shareholder to secure its future.

Blackstone Group and Apollo Management are in talks to buy chemicals company Chemtura, the Wall Street Journal reports. The negotiations could fall apart since the parties are still arranging financing and discussing the price tag on the deal, it said. Chemtura, which has a market capitalization of about $1.9 billion, said in December it was pursuing strategic alternatives. Apollo, Blackstone and Chemtura could not be immediately reached for comment.

Shares of British classified advertising directory firm Yell Group rose as much as 5.4 percent on market talk of bid interest from Microsoft. Yell declined to comment. “There is a rumour out there that Microsoft is looking at Yell. The price out there is 220 (pence per share),” a London-based trader said.

Other deals of the day:

* Baugur Group has now concluded that it is not in the best interests of stakeholders to proceed with its offer for Moss Bros and has informed the board of Moss Bros of this decision.

* British military consumables maker Chemring Group said it would buy Scot Inc for $40 million from SMS Industries to boost its presence in the U.S. pyrotechnic market.

* Bemax Resources, an Australian mineral sands producer, said it had recommended a A$301 million ($289 million) takeover offer from Saudi Arabia’s National Titanium Dioxide Company, known as Cristal.

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