Deals wrap: Castel pours cold water on talk
French drinks group Castel denied SABMiller was in talks to buy its African beer business, although analysts say a deal would make strategic sense. *View article
The WSJ looks at where the Hertz-Avis-Dollar Thrifty saga can go from here. *View article
“GE, under chief executive Jeff Immelt, has overspent on takeovers in the past, and it’s hard to get a handle on whether or not it is bringing newfound discipline to its mergers and acquisitions machine,” writes columnist Rob Cox. *View column
Deals wrap: Avis ups the ante in bidding war
Car rental company Avis has agreed to pay a $20-million break-up fee in its offer for Dollar Thrifty if rival Hertz walks away from its own takeover bid. Dollar Thrifty shareholders were due to vote on the Hertz offer on Thursday in Chicago, but announced they have delayed that vote, citing additional voting activity. *View article*
Hertz and Avis have been going back-and-forth in their bid to wrest control of Dollar Thrifty since Hertz initially announced its takeover bid last April. Hertz and Dollar Thrifty agreed to a sweetened deal earlier this month, currently worth about $50.95 a share or roughly $1.5 billion. The Wall Street Journal said the Avis deal isn’t likely to help Dollar Thrifty shareholders that much, as Avis’s additional $20 million break-up fee was just “45 percent of the $44.6 million break-up fee that would be due to Hertz immediately upon signing an Avis deal.” *View WSJ blog*
China’s Sinochem is working feverishly to put together a rival bid for Potash Corp to counter BHP Billiton’s $39-billion hostile takeover offer, sources told Reuters. Although BHP’s bid deadline isn’t until November 18, “sources close to the firm” told Reuters a decision could come soon. *View article*
Is there trouble looming for the hedge fund industry? Wall Street hedge fund firm D. E. Shaw this week laid off around 150 staff, roughly 10 percent of its 1,500-person workforce, according to Reuters Breakingviews columnist Rob Cox. Cox points out the layoffs are unlikely to be an isolated event as assets under management at hedge funds are down 29 percent since 2007. *View blog*
Deals wrap: VW revving up for shopping spree?
German automaker Volkswagen has revealed it has amassed a $20-billion war chest it intends to use to finance its ambitious Strategy 2018, VW finance chief Hans Dieter Poetsch told Reuters.
Analysts expect the majority of VW’s cash reserve to be used to bid for the 70 percent of German truckmaker MAN it does not already own and to possibly buy the Porsche AG sports car business and Austria’s Porsche Holding. Even with those three purchases, VW would still have money left over.
Bernstein analyst Max Warburton told Reuters the $22.9 billion cash pile Poetsch claimed the company has accrued is “a ridiculous level of liquidity” unless VW aimed to top up its underfunded pensions or pursue M&A plans.
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Rental car rivals Avis and Hertz were also kicking the tires on their respective takeover bids for the Dollar Thrifty Rental Group, according to New York Times DealBook blog contributor Stephen Davidoff. The latest news had Avis Budget Group matching Hertz’s initial takeover offer with their own with Avis CEO Ronald L. Nelson submitting a letter to the Dollar Thrifty board requesting “removing the matching rights, eliminating the break-up fees, and increasing the commitment to secure antitrust approvals” in any future Hertz bid.
Davidoff argues the motivation behind the unusual Avis request signifies “it fears being stuck in a never-ending bidding war in which Hertz is able to outbid the company by one penny every time, safe in the assumption that Hertz still can pocket the termination fee even if it loses.”
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Antitrust traffic jam for Dollar Thrifty
Those waiting for a Dollar Thrifty deal to be consummated might be advised to remain patient — Washington has another idea for those hoping for speed.
Hertz Global — which has signed a deal to buy Dollar Thrifty — said on Tuesday it received a request for more information from the U.S. Federal Trade Commission. That comes a day after Avis — which has yet to bid, but has suggested that it would like to trump Hertz — said it received its own notice from the FTC.
Either bidder could face close antitrust scrutiny, experts told Reuters in May.
“This will be a long process (for either bidder) because the regulatory process would take nine to 12 months,” MKM Partners analyst Christopher Agnew said then.
Avis, Hertz and Dollar Thrifty, along with market leader Enterprise, control about 96 percent of the U.S. car rental market and operate eight brands among them.
Speaking of rat executives, check out the video just released at ReutersExposed.com about Thomson Reuters and their executives.
