Deals wrap: Creeping takeovers
A string of stake buys and takeover bids has shown how merger rules in the euro zone’s two biggest economies can be used to gain control of a target quietly or on the cheap.
Goldman Sachs said it will limit its private placement of shares of social networking site Facebook to investors outside the United States, citing “intense media coverage.”
Federal regulators could approve Comcast Corp’s purchase of NBC Universal as early as Tuesday, a person familiar with the matter said.
Asian hedge funds are beginning to make a tactical sojourn to markets abroad, reversing a trend of global funds setting up shop in Asia.
“The cloud of uncertainty hovering over Spain’s economy doesn’t make an ideal backdrop for mergers and acquisitions. But that hasn’t stopped many of the country’s blue-chip companies from striking big, and in some cases bold, acquisitions abroad in recent months,” reports the WSJ.
MarketWatch makes some predictions for a post-Warren Buffett world.
from Shop Talk:
Check Out Line: Duke wins, but there’s another bracket to fill
Check out a different kind of tournament bracket still underway.
The Duke Blue Devils may have won yet another college basketball title Monday night, but consumers can still make their "Sweet 16" picks in Consumerist.com's annual "Worst Company in America" tournament, which runs through April 26.
In its fifth year, the website, owned by Consumers Union, the publisher of Consumer Reports, lets consumers vote for their least favorite companies in matchups much like the NCAA tournament. Starting with 32 "teams," the tournament pairs companies in votes in which the "winner" (think about it, in a worst company vote you want to lose) advances to face the next competitor.
In the first round this year, Bank of America beat Citibank, GM beat Toyota and in an "upset" Cash4Gold beat defending "champion" AIG. Other companies that advanced included Walmart, Ticketmaster, United Airlines, Best Buy, Apple and Comcast, which has lost in the title game the last two years.
In addition to AIG, past winners have included Halliburton, Recording Industry Association of America and Countrywide. In last year's final, AIG whipped Comcast 3,528 to 1,968 as voters took their frustration over the recession out on a company that was bailed out by the U.S. government.
"They were just constantly in the headlines," Consumerist.com co-managing editor Ben Popken said of AIG. "They became a real focal point for what went wrong with the economy."
Consumers nominate companies to compete in the annual tournament, which was created as a tongue-in-cheek way for shoppers to "bite back" using social media and the Internet, according to Consumerist.com. To be considered for inclusion the website now requires that companies must regularly provide products or services to consumers.
Comcast the Barbarian?
Conan O’Brien could well be headed to Fox after making it clear to NBC that he will not go graciously into the later night. But a channel-changing question that is making the rounds has more to do with what the drama unfolding between O’Brien and former Tonight Show host Jay Leno says about NBC and its agreed joint venture with Comcast. If nothing else, the lack of replacement programming for the slot Leno is vacating, and the purported profitability NBC still enjoyed by having a cheaper, single-star variety show in a traditionally pricey prime-time slot, raise an obvious question — why the rush?
John Hudson at the AtlanticWire does a nice job of collecting some thoughts on pressure that was probably building from Comcast, from angry affiliates who wanted Leno and his show’s crummy ratings out of that vital pre-news slot, to improving PR.
“Though NBC Universal Chairman Jeff Gaspin said the Comcast deal has nothing to do with the decision, pundits say Gaspin has ‘every incentive to show improvement’ before his new bosses at Comcast takeover,” Hudson says.
NBC said local affiliates had seen a 30 percent drop in audiences for their 11 p.m. news shows because of the weak lead-in from Leno. That would certainly have been alarming to Comcast, which knows a lot more about getting content into people’s homes than it does about who is funnier, Conan or Leno.
Another reason Comcast may be the ultimate culprit here is change itself. Taking big, noisy, tough decisions before the deal with NBC gets its regulatory blessing means not having to take them when a new bunch of executives is taking charge of the remote control.
Comcast: the antitrust sequel and the M&A trilogy
If you were all twitchy with anticipation about Comcast’s NBC Universal deal, just wait for parts two and three! The gathering storm over the merger in Washington and other political power points not only promises to be more riveting, but the rights to part three are already being sold to a wave of media mergers hanging on the outcome.
As Anupreeta Das reports, media dealmaking could pick up if regulators impose minimal conditions on the NBC Universal transaction. But U.S. regulatory scrutiny is expected to be heavy, and the deal could take more than a year to be cleared. The LegalTimes blog notes that even the beauty contest among regulators hoping to oversee the process promises to have many twists and turns.
That might sound like a long wait, but it’s not likely to stop M&A lawyers from booking lunches and logging hours to get the balls in place to roll if the deal goes through. That kind or pressure could also work its way behind the scenes in Washington, where lobbyists will be armed with the argument that the merger will save capitalism as we know it by reigniting the dealmaking powderkeg of the early part of this century.
Keeping score: NBC, asset-backed bonds
Highlights from this week’s Thomson Reuters Investment Banking Scorecard:
COMCAST-NBC UNIVERSAL LIFTS MEDIA M&A The proposed combination of Comcast and NBC Universal into a 51:49 joint venture brings the announced volume of mergers in the media and entertainment sector to $79.7 billion, a 31% decrease from last year at this time. The transaction is valued at $14.4 billion, which signifies GE’s net asset contribution and ranks as the second biggest transaction in the sector this year, after DirecTV Group’s $14.5 billion merger with Liberty Entertainment in May. Overall, worldwide M&A totals $1.9 trillion, down 33% compared to 2008 levels.
SECURITIZATIONS PULL AHEAD OF 2008 LEVELS The volume of new asset-backed and mortgage backed securities total $498.9 billion for year-to-date 2009, a 3% increase over 2008 levels. After a nearly 85% decline in 2008, the market for securitizations of residential mortgages, credit card receivables and auto receivables has slowly returned aided by US government guarantee programs. Issuers in the United States account for 38% of overall activity this year, followed by UK-based issuers with 15%.
ASIA PACIFIC M&A DOWN 11% Asia Pacific M&A activity totals $367.5 billion for year-to-date 2009, an 11% decrease from 2008 levels. Consolidation in the financial, high technology and energy and power sectors accounts for 45% of announced deal volume this year. High technology merger activity has more than doubled in the region, while activity in the telecommunications and materials sectors has seen declines of 77% and 45%, respectively.
No longer just a dumb pipe
Comcast’s deal to buy a majority stake in NBC Universal from General Electric should put to rest fears at the cable operator that King Content will kill its business. But even if it becomes a thoroughfare of programming genius, the new venture will still have to convince a skeptical marketplace. The train wreck of Time Warner-AOL threw the idea of new media into financial purgatory.
Just how the venture will wring savings from its disparate businesses and avoid suffocating regulatory scrutiny are issues that could also create Comcastic headaches. Robert MacMillan points out on our Mediafile blog, with a sensible dose of skepticism, that the new venture is affirming its commitment to local news, in effect, promising to keep the garden hoses pumping even as it primes for a media gusher with big-ticket programming.
Still, while making a new media juggernaut could still turn out to be a pipe dream, Comcast CEO Brian Roberts (pictured above) cannot be faulted for allowing his company to get stuck in a dumb pipe nightmare.
from MediaFile:
Comcast, NBC Universal pledge support for local news
Comcast has finally unveiled its formal announcement that it plans to take control of NBC Universal from General Electric. Public interest groups and various U.S. government types have been tutting and clucking over whether this media mega-deal would be against the national interest, and few doubt that Congress and the administration will want to review this plan in loving detail.
To that extent, Comcast released a memo on Thursday outlining its public commitments. There are a bunch in here, but this old-school journalist wants to point out above all else that the company said it's committed to preserving and enriching "the output of local news, local public affairs and other public interest programming on NBC O&O ("owned and operated") stations."
That's a mighty strong commitment to make. Let's hope that it doesn't do what many radio and TV stations have done for years to satisfy their government-mandated public interest requirements and stick all that stuff on the air at 5 a.m. Sunday morning. Also, how much more money will they provide?
Here, meanwhile, are some of the commitments, straight from the memo. Print them out and tape them to your refrigerator so you can hold Comcast's feet to the fire later if things don't work out as planned. I marked parts in bold:
- NBC has a proud history in broadcasting with both NBC and Telemundo. Notwithstanding the turbulence in the current media marketplace and the ongoing threats to the business model of a national broadcast network, the combined company remains committed to continuing to provide free over-the-air television through its 0&0 stations and through local broadcast affiliates across the nation. As we negotiate and renew agreements with our broadcast affiliates, we will continue our cooperative dialogue with our affiliates toward a business model to sustain free over-the-air service that can be workable in the evolving economic and technological environment.
- The NBC owned-and-operated broadcast stations ("0&OS ") have a demonstrated record of quality local programming in major markets around the country. Comcast also has demonstrated its commitment to local programming, including sports and public affairs, and in providing support for public, educational, and government (PEG) access programming. We want to use the combined resources of NBC and Comcast to strengthen localism
- We intend to preserve and enrich the output of local news, local public affairs, and other public interest programming on NBC 0&0 stations.
- Since NBCU was acquired by GE in 1986, the owners have abided by a policy (summarized in a filing with the FCC) of ensuring that the content of NBC's news and public affairs programming would not be influenced by the non-media interests of General Electric. The combined company will continue these policies with respect to the news programming organizations of all NBCU networks and stations, and will extend these policies to the potential influence of each of the owners. To ensure such independence, the combined companies will continue in effect the position and authority of the NBC News ombudsman to address any issues that may arise.
- Comcast and NBCU have strong track records in children's programming and children's issues. The combined company will make an expanded commitment to meeting the viewing needs of children, and the needs of parents to better control their family's viewing.
- We reaffirm our commitment to provide clear and understandable on-screen TV Ratings information for all covered programming across all networks (broadcast and cable) of the combined company.
- We intend to expand the availability of over-the-air programming to the Hispanic community utilizing a portion of the digital broadcast spectrum of the Telemundo O&O's (as well as offering it to Telemundo affiliates) to enhance the current programming of Tel em undo and Mun2.
- As a cable operator, Comcast is committed to dealing fairly with all non-affiliated video programmers with whom we do business, and to promoting program diversity. Nearly six out of every seven channels carried by Comcast Cable systems will still be networks unaffiliated with Comcast upon the completion of this transaction.
- We plan to honor all of NBCU's collective bargaining agreements. We respect NBCU's existing labor-management relationships and expect them to continue following the closing of this transaction.
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.
Comcast, GE and Kraft await Europe’s pleasure
The defining deals of the week, Kraft’s now officially hostile bid for Cadbury and a deal to sell a majority stake in NBC Universal to Comcast, hinge on decisions of Europe Inc, so they could well drag on many more weeks.
This morning, Kraft formally bid for Cadbury with the same offer mooted two months ago, before today’s put-up-or-shut-up deadline. Cadbury has already said no to these terms, and can be expected to do so again. But the sinking expectations that Kraft might pay more, and the lack of any other buyers coming forward, don’t help to make the case for a successful hold out by Cadbury executives.
Over the weekend we learned that GE and Comcast agreed on a valuation of around $30 billion for a joint venture between NBC Universal and Comcast, ironing out what has been a key obstacle in talks so far. But French media conglomerate Vivendi, which owns 20 percent of NBC Universal, has not yet agreed to a deal, a source said.
So far as NBC is concerned, Vivendi is so far tres mum. Every year between mid-November and mid-December, Vivendi has to decide whether to exercise its option to sell its NBC Universal stake. Vivendi is believed to be eager to dispose of it, but nobody knows what they want for it.
