DealZone

M & A wrap: SEC explores Groupon memo

Among the series of distractions ahead of Groupon’s IPO last month was the Mason Memo, WSJ’s Deal Journal reported late Wednesday. Newly disclosed documents shed light on how Groupon was forced to explain the memo to the SEC.

Alibaba Group has hired a Washington lobbying firm in a sign that the Chinese e-commerce company would be willing to make a bid for all of Yahoo in the event that talks to unwind their Asian partnership fail.

The value of global takeovers dropped to the lowest level in more than a year this quarter, Bloomberg.com reports. A recovery in 2012 looks to be muted because cash-rich companies are weighing Europe’s economic crisis before making big purchases.

The colossal collapse of Sears Holdings this week was ugly for stockholders. But if you think Sears was the no-brainer short of the century, here are three stocks likely to crash even harder, writes Jeff Reeves at The Trading Deck.

When Ind-Barath Power Infra dropped plans for a $200 million IPO earlier this year, it not only thwarted the fundraising plans of its controlling shareholder, but blocked an exit route for a clutch of private equity investors, Reuters reports.

Krypton, Helix of Giraffe? It’s all in the code name

M&A reporter Quentin Webb has just taken a look at 2010′s crop of M&A code names, the latest in a long cloak-and-dagger tradition that dates back at least to the “Barbarians at the Gate” era of the 1980s buyout barons. Click here for the full article –  just who was Mercury, Giraffe or Krypton, and why don’t Russian composers make the cut?

Links:

A post on code names from DealBook, back at the height of the merger boom, complete with code names for takeovers involving Morgan Stanley and others.

The FSA’s 2007 newsletter admonishing UK firms for “poorly chosen”  code names.

Google’s buying binge

GOOGLE/One small acquisition a month, Google chief Eric Schmidt projected last fall when announcing the internet giant was back on the hunt for privately owned firms after a short recession-induced break from buying.

“There may be larger acquisitions, but they really are unpredictable,” he told Reuters at the time.

Google has mostly stuck to its plan and even made of few of those riskier big buys. Since Schmidt’s revelations, the Web search giant has scooped up everything from small start-ups to much-larger industry rivals such as mobile advertising firm AdMob, a $750 million acquisition that many thought would land Google in an antitrust court battle. Indeed, the company has outpaced itself, buying more than just one firm a month in a few instances.

DealZone Daily

U.S. coal miner Peabody Energy raises its offer for Australia’s Macarthur Coal to $3.3 billion, but the new offer is below Macarthur’s market price, suggesting the bidding could go higher.

Billionaire U.S. investor Wilbur Ross pays 100 million pounds to take a 21 percent stake in new UK bank Virgin Money, and could commit up to 500 million pounds to support a bid to buy the branch network of the Royal Bank of Scotland and other deals, he tells Reuters.

Loss-making Japanese electronics firm Hitachi will seek more alliances and acquisitions, as well as introduce a new governance system to help accelerate decision-making, its new president says.

DealZone Daily

Top stories:

Schlumberger Ltd agrees to buy Smith International in a $11.34 billion all-stock deal that will boost the oilfield services leader’s revenue to double that of its nearest rival.

Dai-ichi Mutual Life Insurance, Japan’s second-largest life insurer, will sell about 1.07 trillion yen ($11.7 billion) of shares in Japan’s largest initial public offering in more than a decade.

EMI wants to keep ownership of the Abbey Road recording studios, immortalized by the Beatles album of the same name, though it is talking to other parties about revitalizing the site, the Terra Firma-owned music company says.

Noted: 1 in 3 on acquisition trail, E&Y says

ey-capital-matters-graphA large Ernst & Young (E&Y) survey finds plenty of appetite for acquisitions, but also finds many companies feel constrained in their dealmaking, and one in 25 is simply “focused on survival”:

“Most companies believe the time is ripe for deals, but only one third have the strength and agility to snap up “once-in-a-lifetime” acquisition opportunities in the wake of the credit crisis, according to a global survey.

Ernst & Young, which quizzed 490 top executives from “major industry players” across 32 countries, said 33 percent were likely or highly likely to buy firms in the next 12 months, with 25 percent expecting to bid in the next six months. There were no data on the size of possible targets.”

DealZone Daily

Dutch bancassurer ING says it will split itself in two as part of a restructuring deal with the European Commission, transforming itself over the next four years into a smaller Europe-focused bank.

It is also launching a 7.5 billion euro rights issue to pay back 50 percent of its aid from the Dutch state early.

Also in the Netherlands, brewer Heineken has held discussions to buy the brewing operations of Mexican conglomerate Femsa, the Financial Times reports.

DealZone Daily

Insurance companies are the focus of many deals pages on Thursday, with Prudential eyeing a listing in Asia, AXA moving to sell a stake in China’s Taikang and Aviva detailing its restructuring now the Delta Lloyd IPO is moving.

Other deal news today includes:

* South Korea’s Korea National Oil Corp (KNOC) has agreed to buy Canada’s Harvest Energy Trust for C$1.8 billion, the Canadian company said.

* Brazilian telecoms company GVT hired the local investment banking units of Credit Suisse and Goldman Sachs to help it respond to takeover attempts by two global rivals.

DealZone Daily

With just over two months to the end of the year, there is a sense that time is running out for getting deals done in 2009. Many of the long-running deal sagas are coming to a close, or are getting done. Overnight, news emerged that BAA has finally agreed a 1.5 billion pound sale of British airport Gatwick.

Other deal news in the papers on Wednesday include:

* U.S. Bancorp is eyeing FBOP Corp, an owner of eight banks that may be put up for sale by the Federal Deposit Insurance Corp (FDIC), the Wall Street Journal reported on Tuesday, citing people familiar with the situation.

* National Express’s largest shareholder, Spain’s Jorge Cosmen, supports a merger proposal by British bus and rail operator Stagecoach, the Financial Times reported.

Bank of America’s Chalice: Poison or Red Bull?

For months, as he endured hearings on Capitol Hill and fought off a series of lawsuits, Bank of America CEO Ken Lewis trudged through a post-apocalyptic financial landscape against a steady drumbeat of questions about his future. The deal he had called “the strategic opportunity of a lifetime” — his purchase/salvage of Merrill Lynch — had swung from an act of patriotism, keeping the American way of banking from utter ruin, to a scandal over Merrill losses and bonuses.

Perhaps he should have seen the writing on the walls of the vacant houses financed by Countrywide, the mortgage lender Lewis purchased/salvaged just six months before the Merrill deal. The two transactions may have been strategic gems, but they were laced with political poison as the economy floundered toward its dramatic deleveraging and taxpayers pumped $20 billion into Bank of America to fund the Merrill deal.

“It was only a matter of time,” Campbell Harvey, a professor at Duke University’s business school, told Jon Stempel. “There is too much collateral damage.” As Stempel reports, Lewis spent north of $130 billion on acquisitions, including FleetBoston Financial Corp, the credit card issuer MBNA Corp, LaSalle Bank Corp, Countrywide, Charles Schwab Corp’s U.S. Trust private banking unit, and Merrill. In buying Merrill, he added a giant investment bank to what was already the largest U.S. retail bank, credit card issuer and mortgage provider. (Wells Fargo & Co has since become No. 1 in mortgages.)