DealZone

Deals wrap: A white knight for Potash?

In an attempt to thwart a $39-billion hostile takeover bid by BHP Billiton, Potash Corp has turned to China to try to find a white knight, according to the Globe and Mail. The Canadian miner is hoping that China’s worries over BHP getting control over the global potash market will lead to a consortium of companies submitting a rival bid, said the Globe.

“It is a viable option,” an unnamed source close to Potash Corp told the Globe, adding the venture posed some significant challenges in finalizing a consortium’s structure. The bid being considered would include some major capital from a Chinese resource company or investment fund, with smaller contributions from international sovereign wealth funds and possibly Canadian players such as pension funds. *View article*

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Smartphone maker Motorola, looking to boost its social networking content, has acquired German software company Aloqa GmbH, according to Reuters. The privately held Aloqa, which has developed a location-based social software, has joined Motorola’s Mobility division, which comprises the company’s set-top box and cellphone businesses. Terms of the transaction were not disclosed. *View article*

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In a move that may portend well for the passage of carbon emissions legislation in the U.S., power company NRG Energy said it would buy privately held cleantech company Green Mountain Energy for $350 million in cash, according to Reuters. *View article*

Deals wrap: Factoring in China

Potash is piled into a large storage facility in Saskatoon after which it is loaded into train cars and transported in this December 2006 file photo. REUTERS/David Stobbe/Files Chinese and other investors have approached at least one big Canadian pension manager about a bid for Canada’s Potash Corp to rival BHP Billiton’s hostile offer. This is one of the first pieces of hard evidence to back up speculation that China is looking for a way to derail a takeover of Potash Corp by the powerful Anglo-Australian miner. *View article *View analysis on possible regulatory action from China *View Globe and Mail article on the concern about jobs and revenue in Saskatchewan

The recent M&A binge certainly suggests corporate treasurers are confident that whatever the near term may bring now is the time to expand. Are we headed for a recovery or is the buying spree just a case of too much money needing a place to go? *View analysis

Genzyme rejected an all-cash $18.5 billion offer from Sanofi-Aventis this week. Will the deal go hostile? Take a look at how events could unfold. *View article

Deals wrap: Lowering expectations

Marius Kloppers, BHP Billiton Chief Executive, poses for photographs in central London August 25, 2010. REUTERS/Toby Melville BHP Billiton tried to dampen expectations it would substantially raise its hostile $39 billion bid for Potash Corp as bumper results showed it has plenty of firepower. *View article *View reaction from analysts and investors *View Potash Corp deal scenarios

Dubai World believes it can raise as much as $19.4 billion from selling key assets over eight years, if creditors back its restructuring, a document obtained by Reuters showed. *View article *View reaction from analysts and investors

Dell and Hewlett-Packard are expected to raise their bids for 3PAR, but technology investors and analysts warn of valuations taking a back seat to egos. *View article

Deals wrap: Deal talk gets frothy

A judge views samples of beer in west London August 3, 2010.  REUTERS/Toby MelvilleFoster’s said the split of its beer and wine divisions was on track for next year, but was silent on growing takeover talk for its profitable beer unit. Foster’s share price has been on a roller coaster ride on the takeover talk, surging 7 percent on Monday and sliding 4.5 percent on Tuesday. *View article

BHP Billiton’s monster earnings expected on Wednesday could strengthen its hand in its bid for Potash Corp and intimidate any rival bidders. *View article

*View analysis on China’s reaction to a possible BHP deal

*View Bloomberg article on the downside of mining mergers

The recent rush of M&A activity is a result of idle cash and not a sign of a stable rising market. *View Barron’s article *View NYT blog pouring more cold water on the boom in deals.

Deals wrap: Dealing in the clouds

Dark clouds pass over downtown Miami, Florida August 15, 2010. REUTERS/Carlos Barria Hewlett-Packard launched a $1.6 billion bid for data storage company 3PAR, topping an offer by technology rival Dell by about 33 percent. The competing bids for 3PAR come as technology heavyweights have been boosting investment in cloud computing and virtualization technology. *View article

Potash Corp has held discussions with China’s Sinochem Group, said a source close to the matter, as the fertilizer producer looks for options to BHP Billiton’s $38.6 billion hostile bid. Media reports have also mentioned Brazil’s Vale and Chinese private equity fund Hopu Investment Management.  *View article
*View graphic on potash and BHP Billiton and Potash Corp.

SABMiller and Asahi Breweries are looking at Foster’s Group’s beer operations, valued at more than $10 billion, but have not yet made any formal offers, sources said. Foster’s said in May it would split the beer unit from its ailing wine business. Analysts expect suitors will only emerge after Foster’s splits its business in early 2011 when complex debt and structural issues are resolved. *View article

Deals wrap: Looking for a better deal

Potash Corp mill general superintendent Trevor Berg holds a handful of chicklet potash inside the Cory mine facilities near Saskatoon August 19, 2010.  REUTERS/David StobbePotash Corp’s search for buyers willing to top BHP Billiton’s $39 billion hostile offer may lead to China. “I am not saying that we are opposed to a sale, but what I am saying is we are opposed to a steal of the company,” said Potash Corp CEO Bill Doyle. Here’s a factbox on the current market for potash, and a graphic on BHP and Potash Corp.

“As an Intel-watcher for 30+ years, I have my doubts that this acquisition will work,” writes guest columnist Robert Cringely about Intel’s deal for McAfee. *View article

The NYT takes a look at Rio Tinto’s often troubled relationship with China, and how the mining company is working hard to patch things up. *View NYT article

Deals wrap: Going hostile on Potash

A man walks into the head offices of BHP Billiton in central Melbourne July 22, 2009.     REUTERS/Mick Tsikas BHP Billiton, the world’s biggest miner, is making its $130 a share offer for Potash Corp directly to shareholders, bypassing the Canadian company’s board which a day earlier called the bid “grossly inadequate.” *View article

Private equity firm Lone Star is scrapping plans to sell a majority stake in Korea Exchange Bank worth about $4 billion because of weak demand from potential investors, a local paper said. The decision, if confirmed, would be Lone Star’s third failure to sell KEB since buying into the bank in 2003. *View article

It doesn’t always take huge financial backing to start a company. The WSJ found some entrepreneurs who started out with little money but a lot of time and business savvy. *View WSJ article

Deals wrap: Seeking clarity on Fannie and Freddie

A foreclosed home is shown in Chicago June 29, 2010.   REUTERS/John Gress The Obama administration will pick the brains of housing finance leaders on how to fix Fannie Mae and Freddie Mac, but made one thing is clear: there is no going back to their pre-crisis structure. *View article

BHP Billiton may see potash as an ideal fit within its portfolio but today Potash Corp’s board rejected BHP’s unsolicited $38.6 billion offer, terming it as “grossly inadequate.” *View article

Energy stocks ranked among the worst performers in the second quarter on jitters about a double-dip recession. What did the top fund managers do? They staked out the sector much like they did with financial companies earlier in the year. *View article

DealZone Daily

Nomura (8604.Tis to buy Tricorn Partners, a London corporate finance boutique. The Japanese bank is making the acquisition to beef up its corporate broking business. It is currently corporate broker to eight British companies including Tesco. The value is not disclosed.

Abu Dhabi’s sovereign fund is serious about mitigating losses it faces from its purchase of securities in Citigroup (C.N) in 2007. Abu Dhabi Investment Authority has filed an arbitration claim against the US bank alleging  misrepresentation. It wants Citigroup to rescind on the investment agreement or pay more than $4 billion in damages.

In Australia, BHP Billiton (BHP.AXoffers to buy Queensland’s coal freight business. The state government of Queensland last week announced plans to float the business, a move which wasn’t popular with miners and rival rail groups who had expected the business to be separated.

Noted: Why BHP won’t revisit Rio

The year-long ban BHP Billiton has had on revisiting a takeover of rival miner Rio Tinto will soon end, but it seems as if the moment has passed. Liberum and Investec said earlier this week that most of the synergies were captured anyway by the duo’s iron-ore joint venture.  If regulators nix that deal, analysts say a full takeover could be back on — but how that would pass muster if a JV doesn’t is not clear. On Friday, Credit Suisse joined the chorus of disapproval, saying a takeover would cut BHP’s return on equity (ROE) in half. From the CS note:

“We have re-run the numbers on an all scrip BHP Billiton takeover of Rio Tinto at a 30% premium (2.3 BHP shares for each RIO share). We see such a deal as materially EPS dilutive (by 12% even after year 3) and would significantly decrease BHP’s return on equity (from 25% to 12%).

“We do not see BHP making another takeover offer for RIO because: (i) The iron ore JV should capture many of the synergy benefits expected from the possible merger. (ii) If the iron ore JV fails on account of not passing regulatory hurdles similarly then we do not see a takeover receiving regulatory passage. (iii) We do not foresee shareholder support for the deal (and any such deal would use BHP script) with the potential EPS dilution and ROE erosion significant. (iv) Non-availability of sufficient credit facilities.