DealZone

Deals wrap: Investors cheer as Alpha’s Massey takeover sinks in

MINING-MASSEY/ACCIDENTShares of coal miner Massey Energy surged in trading on Monday, the first trading day after rival Alpha Natural Resources agreed to buy it in a $7 billion deal.

AMB Property Corp has struck a deal to buy rival ProLogis for $5.7 billion in stock, combining the two largest U.S. owners of warehouse and distribution centers around the world in one of the biggest real-estate deals since the financial crisis.

U.S. biotechnology company Genzyme Corp and French drugmaker Sanofi-Aventis SA have reached an agreement in principle on the outlines of a merger deal, sources familiar with the situation said on Monday. Earlier in the day, the two companies said they had entered into a nondisclosure agreement, allowing Genzyme to open its books to Sanofi.

Investors have written to BHP Billiton and Rio Tinto to say the miners should ditch ambitions for mega deals in favor of multi-billion pound share buyback schemes, The Sunday Telegraph reported.

Chrysler Group LLC forecast a return to profit for 2011 as it gears up for an initial public offering in the second half of the year and launches an array of new and revamped vehicle models to stimulate its recovery.


(Photo credit: A 2010 U.S. Geological Survey aerial photograph shows Massey Energy’s Upper Big Branch Coal Mine in Montcoal, West Virginia. REUTERS/U.S. Geological Survey photograph via Microsoft Bing Maps/Handout)

A parting shot by Duquesne?

coalDuquesne Capital Management, Alpha Natural Resources largest shareholder, has been working to scuttle the company’s takeover of Foundation Coal for the past two weeks. In perhaps its last at shot at swaying shareholders before tomorrow morning’s vote on the deal, Duquesne released its latest reason investors should oppose the deal on Thursday: the payout Alpha Chairman and CEO Michael Quillen will receive if the deal goes through.

Duquesne, which is run by financier Stanley Druckenmiller, has already said it believes the proposed deal will hurt Alpha shareholders financially. It believes the merged company would lower Alpha’s relative exposure to more profitable metallurgical coal and international thermal coal markets.

Now, it raises the issueof the payout and the fact that Quillen , who will be staying on as chairman of the merged company, would be treated as if he had been terminated without cause.

A-courtin’ we will go

Wedding ornamentLike a bad soap opera, the Internet storyline is getting more and more convoluted. The tale so far: Microsoft Corp, spurned by Yahoo Inc, is courting Time Warner Inc to allow a union with Internet division AOL. But Yahoo, which turned its back on Microsoft’s $47.5 billion bid, also wants AOL’s hand. These talks have taken on a new urgency ahead of Yahoo’s Aug. 1 shareholders meeting, a source familiar with discussions told Reuters on Tuesday. How either marriage will work is not immediately clear, but any combination will likely redraw the landscape for advertising on the Internet. So why is AOL so attractive? Both Yahoo and Microsoft view it as beneficial to leverage their positions in the Internet marketplace, where search giant Google Inc dominates. Stay tuned.

But good soaps are not only made in America. It seems the Germans are good at them, too. Tires-to-brakes maker Continental rejected Schaeffler Group’s surprise 11.2 billion euro ($17.8 billion) bid, saying only the family owned firm stood to gain from the offer which was too low. Late on Tuesday, the ball-bearing maker announced the terms of its proposed takeover after winning control of more than a third of Continental’s shares through a web of options organized for it discretely by banks. Schaeffler’s bearings are found in London’s landmark Ferris wheel, the London Eye and it also makes high-precision bearing supports for the U.S. space shuttle and the European launch vehicle Ariane, not that that has any bearing on a deal.

Some suitors, however, do get lucky. Mining company Cleveland-Cliffs Inc said on Wednesday it would acquire Alpha Natural Resources Inc for about $10 billion in cash and stock to expand its coal assets. Stockholders of Alpha, an Appalachian coal producer, will receive 0.95 of a Cleveland-Cliffs common share and $22.23 in cash for each of their common shares when the union is completed. Based on closing stock prices on Tuesday, the deal values Alpha at $128.12 per share, a premium of 35 percent, the companies said in a statement. The combined company will be renamed Cliffs Natural Resources and will include nine iron ore facilities and more than 60 coal mines located across North America, South America and Australia.