M&A wrap: EU crisis hits bank advisory fees
Europe’s debt woes dragged worldwide investment banking income down this year, data showed, with fees on the continent slumping to the lowest quarterly level ever recorded and company listings and acquisitions grinding to a near halt. In Europe, fees raised since October from bonds, flotations and mergers and acquisitions stand at the lowest quarterly level ever recorded by the data providers. A stronger start to the year in areas such as mergers and acquisitions fizzled out, leaving investment banks’ overall haul of fees at $72.6 billion — down 8 percent on 2010.
Yahoo is considering a plan to unload most of its prized Asian assets in a complex deal valued at roughly $17 billion, sources familiar with the matter said on Wednesday, winning nods of approval from Wall Street and driving its shares higher. The offer – the latest among proposals put forth in recent months to resuscitate the once high-flying Internet company – is expected to be considered by Yahoo’s board on Thursday, sources said. The board was uninterested in entertaining offers for the entire company at this point, said one of the sources, who spoke on condition of anonymity.
Oshkosh Corp has sent a proxy card to shareholders recommending they ignore an effort by billionaire investor Carl Icahn to install his own board members as he pushes for a merger with one of the company’s key rivals. Icahn recently nominated six associates to be on the board of the Wisconsin maker of trucks, construction lifts and defense vehicles. In a letter to the company’s shareholders last week asking for support for his nominations, he also voiced strong support of a merger between Oshkosh and Navistar International Corp. Icahn owns nearly 10 percent stakes in both companies.
Vulcan Materials Co rejected Martin Marietta Materials Inc’s $5 billion takeover bid, and said the offer undervalued the company and would not increase shareholder value in the future. Vulcan Materials, the world’s largest producer of sand, gravel and other construction materials, said the premium offered was significantly lower compared with previous transactions in the construction materials industry.
European Commission antitrust officials on Wednesday showed no sign of being swayed by Deutsche Boerse and NYSE Euronext’s last-ditch arguments to save their $9 billion deal, sources said, making it increasingly likely the exchange operators will have to take their campaign directly to the commissioners.
Deals wrap: Yahoo, Softbank reach pact over Alibaba’s Alipay
After months of intense negotiations, China’s Alibaba Group said it has reached an agreement with Yahoo and Softbank that promises the e-commerce giant could receive up to $6 billion from an IPO or liquidation of its e-payment unit, Alipay.
Alipay is an Alibaba subsidiary that was transferred to a separate entity controlled by founder Jack Ma in order to meet Chinese regulations relating to foreign ownership. Yahoo owns 43 percent of Alibaba, which it acquired for $1 billion in 2005.
Australian brewer and takeover target Foster’s said it did not rule out takeover talks with SABMiller, but the company’s new CEO John Pollaers said “the value put on the table was so far away from reality that it wasn’t worth engaging (with SABMiller).” SABMiller, the world’s number two brewer had offered $10.4 billion for Foster’s last month.
Superstar hedge fund manager George Soros announced earlier this week he was returning all captial to outsiders, citing tougher government regulations as the reason for his decision. This piece by Deal Journal’s Shira Ovide quotes a comment by Senator Richard Shelby on Soros and asks, “is George Soros a hypocrite on regulation?”
Deals wrap: Nasdaq, ICE drop NYSE bid
Nasdaq OMX and IntercontinentalExchange (ICE) dropped their $11.1 billion bid for rival exchange NYSE Euronext after it became clear the deal would not gain approval from U.S. antitrust regulators. The companies first offered to buy the New York Stock Exchange parent on April 1, aiming to curb a proposed friendly merger with Deutsche Boerse that was worth $10.2 billion when first announced in February. Deutsche Boerse responded to the news of the dropped bid by saying it plans to continue to pursue a merger with the Big Board parent.
In other exchange merger news, a consortium of Canadian banks and pension funds launched a $3.7 billion bid for TMX Group in the hopes of keeping Canada’s largest stock exchange from falling under foreign ownership. The bid tops a $3 billion offer for the exchange operator from the London Stock Exchange (LSE). The LSE said it remains committed to its own merger proposal with the TMX despite the higher rival offer, but should its bid fail it could find itself to be a takeover target, analysts said.
U.S. chemicals group DuPont won its takeover battle for Danish food ingredients company Danisco. The $6.4 billion acquisition is a part of DuPont’s push into the food technology business that CEO Ellen Kullman says will “create an industry leader in industrial biosciences and nutrition and health.”
BP is in talks aimed at buying out its Russian partners in its TNK-BP joint venture and other options to help secure passage of a stalled share swap and Arctic exploration deal, sources close to the matter told Reuters.
Yahoo and Alibaba Group will have a tough time resolving their feud over the Chinese company’s transfer of a major Internet asset despite a joint statement from both companies that said they were working towards a resolution, writes Reuters correspondent Melanie Lee.
Deals wrap: Yahoo not selling Alibaba stake
In an exclusive interview with Reuters, Yahoo CEO Carol Bartz said the Internet search company has no intention of selling its stake in Chinese e-commerce site Alibaba.
Bartz told Reuters that despite the Alibaba Group “constantly” approaching them to repurchase Yahoo’s estimated 39-percent stake, the company has no plans to accommodate those requests, adding the investment is “very strategic.” *View article*
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Another Chinese company, Sinochem, distanced itself from the possibility of making a bid for Canadian firm Potash Corp, in the wake of BHP Billiton’s $39-million hostile takeover bid for the miner. Han Gensheng, head of Sinochem’s overseas deals, told Chinese magazine Caijing that even a bid of $10 billion would be too large for Sinochem. *View article*
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Some major buyout firms have entered the bidding for mental-health specialist the Priory Group, which seller Royal Bank of Scotland hopes could fetch about $1.55 billion, people familiar with the matter told Reuters. According to Reuters, companies planning to submit non-binding bids before Wednesday’s deadline included Advent International, Blackstone, Bain Capital and Cinven. KKR and the Carlyle Group were also potential bid candidates. *View article*
