M&A wrap: T-Mobile “crying out” for Sprint tie-up?
Deutsche Telekom may be forced into a tie-up of its sub-scale U.S. wireless unit with Sprint Nextel after a $39 billion deal with AT&T collapsed. While Deutsche Telekom is now walking away with a $6 billion breakup package, its chief executive Rene Obermann has lost a lot of time and will now have to invest in the U.S. market or find a new way to exit the country, an option analysts regard as unlikely. T-Mobile USA “is just crying out for a merger with Sprint. That’s the only long-term solution for Deutsche Telekom,” Will Draper, head of telecoms research at Espirito Santo, said.
Goldman Sachs claimed the spot as the top U.S. M&A adviser in 2011 as rivals JP Morgan and Morgan Stanley fell in the standings due to the collapse of AT&T’s $39 billion deal to buy Deutsche Telekom’s T-Mobile USA unit. JP Morgan, which had previously been the top U.S. M&A adviser for the year, advised AT&T along with Greenhill and Evercore. Morgan Stanley, which had been No. 2 in U.S. M&A based on the dollar value of transactions on which it had advised, was working for Deutsche Telekom along with Citigroup, Credit Suisse and Deutsche Bank.
Olympus Corp is preparing to issue about $1.28 billion (100 billion yen) in new shares to bolster its depleted finances, with Japanese high-tech stalwarts Sony and Fujifilm seen as possible buyers, the Nikkei business daily reported. The report comes after a warning from one of the camera and endoscope maker’s leading shareholders that the scandal-tainted board may try to retain control by issuing new shares to dilute the power of existing shareholders.
The New York Times Co is nearing a sale of 16 regional newspapers spread across the U.S. Southeast and California to Halifax Media Holdings, it said on Monday. The possible sale, news of which comes just days after the Times Co announced the sudden retirement of its chief executive, is the latest in a series of steps the company has taken to cut costs and focus on its most important newspapers and their websites.
Qatar and Luxembourg are to buy bailed-out Dexia’s private banking arm for 730 million euros ($950 million), less than analysts had estimated, as the Franco-Belgian group is broken up.
Deals wrap: Valuing Groupon
Groupon trimmed marketing costs in the second-quarter but its loss more than doubled as it hired new employees, the Internet daily deals company said in an update filing for its IPO.
Global brewer SABMiller is set to renew its assault on Australian bid target Foster’s later this month with a slightly higher offer likely to succeed after rival bidders fail to appear, bankers and investors told Reuters.
HSBC is selling its U.S. credit card arm to Capital One Financial Corp in a $32.7 billion deal as Europe’s top bank streamlines its mammoth operations. Capital One said it was paying a $2.6 billion premium over the value of the loans.
The NYT’s Steven M. Davidoff looks into General Maritime’s $200 million loan from Oaktree Capital Management. “When you play with the big boys, you sometimes get hurt,” reports Davidofff.
“AT&T, looking to win approval for its proposed $39 billion acquisition of T-Mobile, is facing a challenge in California where regulators have raised questions about the deal’s effect on consumers and corporate customers,” Bloomberg reports.
Deals wrap: China’s shortcut to Wall Street
A examination of a cross-section of 122 Chinese reverse mergers on U.S. markets found that between each stock’s peak trading price and July 10, 2011, those companies saw a total of $18 billion of their market capitalization vanish. Reuters is exploring the extent and impact of corporate secrecy in the United States in a series of articles.
Expect more hostile deals in resources as cashed-up miners turn desperate to snare targets, deal advisers say, following Peabody Energy and ArcelorMittal’s change of tack this week on their $5.3 billion bid for Macarthur Coal.
Private equity and venture capital-backed initial public offerings in Asia have surged 77 percent in the year to date to the highest level ever, according to the latest Thomson Reuters data, as funds look to show returns to investors ahead of new fundraisings.
Bids for EMI suggest that the British music company could fetch more than $4 billion, the Financial Times reports.
The chairman of the House of Representatives Judiciary Committee, urged the federal government to resist one-sided calls to block AT&T Inc’s $39 billion plan to buy wireless rival T-Mobile USA.
Dunkin Brands, whose shares gained 47 percent on the company’s market debut last month, expects to raise prices to counter high commodity costs.
Deals wrap: AIG’s $9 billion stock offer less than half of what was expected
American International Group and the Treasury will sell nearly $9 billion in stock as the bailed-out insurer begins its return to public control. This offering is less than half of what had been expected when Wall Street banks offered their services to manage the stock sale in January. The company was rescued in September 2008, receiving $182 billion in bailouts and managed to restructure while preserving two core businesses. At the time, few expected AIG would even exist today.
Professional networking service website LinkedIn is looking to go public, a move that could value the company at more than $3 billion. In this article, NYT’s Steven M. Davidoff explains why certain plans LinkedIn has for its IPO would “not only disenfranchise its future shareholders, but contains elements that have been heavily criticized by corporate governance advocates.”
The impact of AT&T’s proposed acquisition of T-Mobile on competition, pricing and consumer choice will be examined at a congressional hearing, where top executives are scheduled to appear to defend the deal. A successful merger would concentrate 80 percent of U.S. wireless contract customers in just two companies — AT&T/T-Mobile and Verizon Wireless.
Microsoft’s decision to acquire internet phone service Skype for a hefty $8.5 billion was immediately slammed by analysts, who questioned the logic of the deal and suggested the software giant paid too much. Reuters Breakingviews columnist Richard Beales thinks that, in theory, there are potential advantages to the deal but points out how Microsoft’s poor M&A track record and the high price means the transaction is unlikely to ever connect with investors.
Medco Health Solutions CEO David Snow says no biotech company is too big to be bought. He told the Reuters Health Summit he sees major drugmakers needing the growth potential of biotech more than ever.
Deals wrap: Who will Sprint call?
Bankers said Sprint had a handful of options after AT&T swooped in to buy T-Mobile USA for $39 billion, but none of them would give it the clout to compete in a market dominated by AT&T and Verizon Wireless, which would collectively hold an almost 80 percent market share. Verizon Wireless CEO Daniel Mead said he had no interest in buying Sprint.
Charles Schwab will buy online brokerage optionsXpress Holdings in a $1 billion deal that gives Schwab a stable of the most active retail traders, as options continue to boom.
Shutterfly said it agreed to buy privately held card design company Tiny Prints in a $333 million cash-and-stock deal, as the photo-sharing service tries to win back customers in a market increasingly dominated by social networking sites like Facebook.
Buyouts in Asia are chiefly dependent on bank loans but in a first-of-its-kind for the region, the debt portion of one deal last week was financed entirely through a bond issue, likely opening a new funding route for private equity firms, writes Stephen Aldred.
Secondary market trading has provided a valuation boost for many venture capitals’ assets, like Facebook and Twitter. Now, the expansion of startups’ market inclusion is set to generate greater short-term profit and higher expectations for investors, many of which have no affiliation to venture capital or to venture capital limited partnerships, writes peHUB’s Jonathan Marino.
Deals wrap: AT&T’s crystal ball
AT&T’s surprise $39 billion deal to buy T-Mobile USA from Deutsche Telekom will create a new leader in the U.S. mobile sector and likely draw scrutiny. The regulatory challenge will be predicting what the dominant form of communication will be 3 to 5 years from now, analyst Evan Stewart said. The deal will take a year to close, in which time customers are expected to see improved network quality, according to AT&T.
Sprint Nextel risks being further eclipsed by Verizon and the new AT&T, which together would boast 230.3 million customers in the U.S., compared to Sprint’s less than 50 million, writes Michael J. de la Merced and Jenna Wortham of The New York Times.
Citigroup plans to slash the number of common shares outstanding and reintroduce a dividend after suspending payouts two years ago, taking another step in its long recovery from the brink of failure during the financial crisis.
Warren Buffett said he believes Japan’s devastating earthquake is the kind of extraordinary event that creates a buying opportunity for shares in Japanese companies and that his Berkshire Hathway is looking for more large-scale acquisitions anywhere in the world. “The United States is most likely where we will do something,” he added.
Facebook agreed to buy Snaptu, an application developer for mobile devices that are less sophisticated than smartphones, as the world’s largest Internet social network focuses on expanding its mobile services.
The Carlyle Group acquired a majority stake in movie special effects company Foundry from Advent Venture Partners and other stakeholders, in what Advent partner Mike Chalfen called a validation of the firm’s growth investment strategy, writes VentureBeat’s Ciara Byrne.
DirecTV adds to media merger excitement
With media titans GE and Vivendi still negotiating a deal to bring cable operator Comcast into a mega-media joint venture, a management move at DirecTV is giving dealwatchers a fresh programming alternative.
Yinka Adegoke and Sinead Carew report the appointment of PepsiCo veteran Michael White (pictured below), who has no experience in pay TV, as DirecTV CEO is being read as a sign the company’s parent, Liberty Media, just wants a baby-sitter until its sells the operation in the next couple of years.
Telecom leaders Verizon and AT&T approached Liberty earlier this year, they report. Both have cross-marketing deals with DirecTV and would leapfrog the rest of the market with the addition of DirecTV’s subscriber base. But fears of insurmountable regulatory resistance put those talks on ice.
Liberty Media shareholders are set to vote this morning on a plan to split DirecTV from Liberty Entertainment — a move that Wall Street believes could pave the way for a telephone company to put in a bid for DirecTV, leading to a similar bid for smaller rival Dish Network.
If Comcast gets its content pipeline connected to NBC Universal, the pressure on the telcos to boost subscribers could get them to test the regulatory waters again.
Mobile merger report rings bells
Sprint Nextel‘s stock soared 11 percent before the market opened on a British newspaper report that T Mobile parent Deutsche Telekom had appointed Deutsche Bank to advise on a possible run at Sprint, valuing the U.S. cellular carrier at $11 billion.
Sprint certainly is a logical target for any company looking to boost its position in the very busy U.S. mobile market. It announced a large goodwill write-off in February 2008
And Deutsche Telekom is on the make. It signed a deal with France Telecom to combine the companies’ British mobile phone businesses — T-Mobile UK and Orange — last week.
A Sprint deal would make T-Mobile the top U.S. mobile company, but it would cost a bundle … and that’s just the up-front funding. Combining Sprint’s CDMA and T Mobile’s GSM technologies would take technological wizardry no less daunting than the magic the German carrier might have to employ in Washington to ensure a deal clears antitrust and other regulatory hurdles.
So while the hype could last through the day, any near-term excitement about a mega mobile merger could well be tempered by the time your next phone bill arrives.
Bye-bye cool tickers? DNA and BUD head for bin
Pity the guys who dreamt up two of Wall Street’s coolest tickers — DNA and BUD — both of which look set to be consigned to the dustbin of history.
Genentech grabbed the three letters synonymous with biotechnology by being in on the ground floor of the gene revolution. Anheuser-Busch was lucky enough to have a beer brand known everywhere by one syllable. Now both look doomed.
Genentech faces a $43.7 billion bid from Roche for the 44 percent of the Californian biotech group that it doesn’t already own. Genentech is expected to succomb, albeit after a possibly sweetened offer. Anheuser has already agreed to a $52 billion takeover by InBev.
Their demise may take some of the fun out of stock trading – but investors shouldn’t despair. The thoughtful punter still has other options.
For example:
- BID for auctioneer Sotheby’s
V for visa is one that comes to mind. It has stood for victory in the past, as well as peace.. but in this case it will be vendetta when people see their credit card bills! but seriously BUD was subpar beer abd should go oob.
