Deals wrap: Merger mania

Actor Terry Crews (C) poses shirtless for photographers on the floor of the New York Stock Exchange, August 19, 2010. REUTERS/Brendan McDermid Deutsche Boerse and NYSE Euronext’s plan to create the world’s largest exchange has sent competitors around the world scurrying to find partners, accelerating an industry shake-up.     The Wall Street Journal looks at the how stock exchanges make money and what it means for investors.

Google and Facebook, plus others, have held low level takeover talks with Twitter that give the Internet sensation a value as high as $10 billion, the Wall Street Journal reported.

Deals wrap: What’s next for media?

MARKETS-CANADA-STOCKS/The London Stock Exchange is to buy the owner of the Toronto Stock Exchange, TMX Group, in an all share deal that will create a mining-dominant exchange at a time of rising commodity prices.

In a long range forecast for the media sector, investors should expect radical changes and lots of M&A, The Washington Post reports.

Porsche is about to hit the road with a 5 billion euro ($6.8 billion) capital increase, paving the way for a planned merger with Volkswagen, two people familiar with the matter said.

Deals wrap: Merging healthcare

File photo of a flu vaccine dripping out of a syringe, November 22, 2005. HEALTH REUTERS/Dylan Martinez Kindred Healthcare agreed to buy RehabCare Group for about $900 million in a cash-and-stock deal to create one of the largest post-acute healthcare services company in the United States.

Discount retailer Big Lots is exploring options, including a possible sale, Bloomberg reported, citing a person with knowledge of the situation.

Ensco’s takeover of Pride International sets the stage for cash-raising moves by struggling Gulf of Mexico drillers and deprives acquisitive giant Seadrill of its most likely prey.

from Breakingviews:

Deal machine beats PE barons to $5.8 bln deal

By Lisa Lee
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Danaher has snatched medical group Beckman Coulter for $5.8 billion, out-bidding buyout firms in the process. It shows that despite relatively easy credit, private equity isn't the only acquirer that can pay up. But the historically acquisitive Danaher isn't your typical strategic buyer, either.

With private equity for competition, Danaher wasn't going to nab Beckman on the cheap. Big name buyout consortiums were involved, according to news reports, including a Blackstone Group and TPG combo and another team of Apollo Global Management and Carlyle Group. These folks these days can borrow as much as six times a target company's EBITDA, or maybe even seven times.

from Breakingviews:

AOL takes alternative-Yahoo approach to M&A

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Robert Cyran
Reversing fading Internet brands is difficult -- especially if it isn't clear what a company stands for. Take AOL's $315 million purchase of The Huffington Post. With this, AOL still looks like a patchwork of seemingly unrelated media sites compared to Yahoo's centralized uni-brand approach. Yet both may not succeed in equal fashion.

AOL's access business still accounts for more than 40 percent of sales and a bigger chunk of profits. Yet these sales fell 26 percent in 2010. So the company is acquiring content companies in a hurry, hoping ad revenue will fill the breach.

Deals wrap: AOL looks to Huffington Post

A sign is pictured on Wall St. near the New York Stock Exchange in New York November 25, 2008. REUTERS/Lucas Jackson AOL will buy The Huffington Post for $315 million, relying on the high-profile liberal pundit who co-founded the influential website to rescue it from the dustbin of Internet history.  The Wall Street Journal looks at the good and the bad of the deal. Felix Salmon asks if AOL is really the right parent for the unique and very valuable Huffington Post Media Group.

Danaher agreed to buy medical diagnostics company Beckman Coulter for $5.8 billion cash, moving further into its growing medical technology business.

Blackstone Group has taken a majority stake in San Diego’s historic Hotel del Coronado. The private equity firm has been active in buying U.S. commercial real estate such as hotels, retail property and warehouse space from distressed owners and others who need cash.

from Felix Salmon:

Arianna’s new empire

A brash and charismatic household name is brought in to apply magical fairy dust to a struggling media franchise with declining relevance and revenues. Tina Brown has done it successfully three times -- with Tatler, Vanity Fair, and The New Yorker -- and is now trying again with Newsweek. Arianna Huffington is newer to this game, but Tim Armstrong is surely willing to throw even more money at Arianna than Si Newhouse threw at Tina. Armstrong needs this bet to succeed -- he's placed Arianna in charge of all his media properties, while telling everybody that AOL is a media company first and foremost. And that's why Arianna is so happy today.

Zach Seward made a very smart point this morning: Arianna, with this deal, is not only massively expanding the reach of her eponymous baby -- the Huffington Post is now just one part of the massive Huffington Post Media Group -- but is also regaining control of it. The Huffington Post, like any company funded by venture capitalists, always had to be moving towards a hefty exit for its shareholders: Dan Lyons reports today that one of the key backers, Softbank, was "impatient for a return" as long ago as June 2009.

Arianna never had free rein at her company: a large part of the CEO's job was to manage her flights of fancy (free buses to the Stewart/Colbert rally in Washington!) and to make the tensions between her and co-founder Kenny Lerer as productive as possible.

from Felix Salmon:

HuffPo’s future

The $315 million that AOL is paying for the Huffington Post is roughly 3X the valuation seen at its last capital raise two years ago, is 10X its 2010 revenues and is roughly 5X estimated forward 2011 revenues. Those are all big numbers, but not insanely so, for what is clearly a big strategic move on the part of AOL. After all, AOL has a market cap of $2.3 billion: right now it still dwarfs HuffPo. That might not be true in a few years' time, if HuffPo continues growing at its current rate and AOL continues to lose subscribers and revenues.

My feeling, then, is that this deal is a good one for both sides. AOL gets something it desperately needs: a voice and a clear editorial vision. It's smart, and bold, to put Arianna in charge of all AOL's editorial content, since she is one of the precious few people who has managed to create a mass-market general-interest online publication which isn't bland and which has an instantly identifiable personality. That's a rare skill and one which AOL desperately needs to apply to its broad yet inchoate suite of websites.

As for HuffPo, it gets lots of money, great tech content from Engadget and TechCrunch, hugely valuable video-production abilities, a local infrastructure in Patch, lots of money, a public stock-market listing with which to make fill-in acquisitions and incentivize employees with options, a massive leg up in terms of reaching the older and more conservative Web 1.0 audience and did I mention the lots of money? Last year at SXSW I was talking about how ambitious New York entrepreneurs in the dot-com space have often done very well for themselves in the tech space, but have signally failed to engineer massive exits in the content space. With this sale, Jonah Peretti changes all that; his minority stake in HuffPo is probably worth more than the amount of money Jason Calacanis got when he sold Weblogs Inc to AOL.

Deals wrap: Jamie Dimon wants some R-E-S-P-E-C-T

Jamie Dimon, CEO and chairman of JPMorgan Chase & Co., poses for a portrait in his office in New York, in this photo taken December 22, 2010. REUTERS/Lucas Jackson In a special report, Reuters’ Elinor Comlay and Matthew Goldstein look into Jamie Dimon’s relationship with the White House, his leadership at JPMorgan and if he lives up to his “regular guy” image.

Delaware touts itself as a business-friendly haven, but a new strategy by a well-known whistleblower takes the rules in an unexpected direction.

As Indian companies farm out across the globe chasing business where they can through a slew of M&As and joint ventures, stodgy Indian banks are following suit, as much to retain clients as to chase profits.

Deals wrap: Steel of a deal

File photo of coils of steel, May 6, 2010. REUTERS/Umit Bektas Japan’s Nippon Steel and Sumitomo Metal plan to merge to create the world’s second-largest steelmaker in an effort to fend off tough competition from Asian rivals and offset shrinking demand from domestic automakers.

Sanofi-Aventis could announce a deal to buy Genzyme early next week if final negotiations between the companies go smoothly, Le Figaro reported.

The quote of the day goes to Infineon’s CEO explaining why the chipmaker is not at risk of a hostile takeover. “We are more of a shark and the others are the goldfish,” he told reporters.