M & A wrap: Can Facebook live up to the hype?
As Facebook is expected to submit paperwork to regulators for its initial public offering, Reuters Social Media Editor, Anthony De Rosa, uncovers three problems standing in the way of Facebook’s future growth.
Which exchange will Facebook choose to “friend”? Bloomberg reports NYSE and Nasdaq are competing now for what may be the biggest ever by a technology company.
European Union regulators have blocked the merger of exchange operators Deutsche Boerse and NYSE Euronext to avoid giving them a stranglehold on the European futures market. “The merger between Deutsche Boerse and NYSE Euronext would have led to a near-monopoly in European financial derivatives worldwide,” EU Competition Commissioner Joaquin Almunia said in a statement.
The failure of the NYSE Euronext/Deutsche Borse tie-up is a stark reminder to dealmakers that the fate of their work often rests in government hands, Deal Journal writes.
M&A wrap: Banks vie for Facebook IPO role
With the prized Facebook IPO on the horizon for 2012, the lead investment-banking role is still up for grabs and long-time rivals Goldman Sachs and Morgan Stanley are considered front runners, the Wall Street Journal reports.
In this Deal Pipeline video, Paul Hastings corporate department partner Barry Brooks predicts that mergers and acquisitions in financial services will jump in 2012.
Banco Bradesco, Brazil’s second-biggest private sector bank, pulled out of talks to buy HSBC Holdings‘ consumer finance unit Losango on concern about potential charges related to labor disputes, a local newspaper reported on Friday.
The settlement between the Trust Company of the West and Jeffrey E. Gundlach caps a bitter and protracted dispute that turned the normally anodyne mutual fund world into a heated legal battleground, reports DealBook.
Swiss Petroplus struggles to keep its refineries across Europe running after aggressive acquisitions by former chairman Thomas O’Malley up to 2007 have given way to the current credit crunch, economic slowdown and financial crisis.
M & A wrap: SEC explores Groupon memo
Among the series of distractions ahead of Groupon’s IPO last month was the Mason Memo, WSJ’s Deal Journal reported late Wednesday. Newly disclosed documents shed light on how Groupon was forced to explain the memo to the SEC.
Alibaba Group has hired a Washington lobbying firm in a sign that the Chinese e-commerce company would be willing to make a bid for all of Yahoo in the event that talks to unwind their Asian partnership fail.
The value of global takeovers dropped to the lowest level in more than a year this quarter, Bloomberg.com reports. A recovery in 2012 looks to be muted because cash-rich companies are weighing Europe’s economic crisis before making big purchases.
The colossal collapse of Sears Holdings this week was ugly for stockholders. But if you think Sears was the no-brainer short of the century, here are three stocks likely to crash even harder, writes Jeff Reeves at The Trading Deck.
When Ind-Barath Power Infra dropped plans for a $200 million IPO earlier this year, it not only thwarted the fundraising plans of its controlling shareholder, but blocked an exit route for a clutch of private equity investors, Reuters reports.
M & A wrap: Plan B for ING
Dutch financial services group ING Group has scrapped plans for a separate trade sale of its Belgian insurance business, worth 500 to 750 million euros, a person familiar with the deal said on Wednesday.
Sears “has been a mismanaged asset,” Gregory Melich, an analyst at International Strategy & Investment, said in a Bloomberg Television interview yesterday. “A lot of traditional department stores have reinvigorated themselves through merchandising, through changing their locations; you think of Macy’s. You haven’t seen that from Sears.” Yesterday the largest U.S. department store chain reported that it would close as many as 120 locations after same-store sales fell 5.2 percent in the eight weeks ended Dec. 25.
Whirlpool investors–already burned by a sagging stock in 2011–aren’t spending time trying to figure out what the impact of Sears’ planned store closings will be. They’re just bailing out, reports the Wall Street Journal. As Whirlpool has seen weak demand of its own this year, investors are seemingly done for now in waiting for turnaround signs. Shares are off 7 percent today to $47.57, pushing Whirlpool’s stock price down more than 46 percent for 2011.
Deutsche Boerse and NYSE Euronext have extended the deadline for completion of their planned merger to March 31 next year as they seek to convince European regulators to back the $9 billion deal.
Deal Book asks, how do you go from being one of the country’s most-renowned and respected business leaders to landing on the list of the Worst C.E.O.’s of 2011? Sydney Finkelstein, professor of strategy and leadership at the Tuck School of Business at Dartmouth College and author of “Why Smart Executives Fail” presents his list of the worst C.E.O.’s of 2011.
M&A wrap: Total merges solar units
U.S. solar panel maker SunPower, a unit of French oil major Total, said it had agreed to buy Total-owned Tenesol for $165.4 million in cash in an expected deal that will regroup the French group’s solar business under one umbrella. Total announced the $1.3 billion takeover of SunPower in June.
Concurrently with the closing of the acquisition, Total has agreed to purchase 18.6 million shares of SunPower common stock in a private placement at $8.80 per share, a 50 percent premium to SunPower’s Dec 22 closing price. After the sale of Tenesol, Total will own about 66 percent of SunPower shares.
Deutsche Boerse won U.S. antitrust approval to buy NYSE Euronext in a $9 billion deal to create the world’s No. 1 exchange operator, but the transaction still faces serious regulatory headwinds in Europe. In Europe, there have been weeks of negotiations with antitrust regulators, in which staff made clear their reservations about approving a combination of Deutsche Boerse’s Eurex and NYSE Euronext’s Liffe on concerns that the merged entity would have a monopoly over European listed derivatives trading. A formal decision by the European Commission is not expected until January or early February.
ConvergEx Group, a software provider for brokerage and investment technology firms, said it terminated its merger agreement with private equity firm CVC Capital, partly because of probes by U.S. regulators. CVC Capital was looking to buy ConvergEx, which is partly owned by Bank of New York Mellon (BK.N), for $1.9 billion, Bloomberg had reported in July.
China Three Gorges Corp’s $3.5 billion acquisition of the Portuguese government’s stake in utility EDP highlights China’s appetite for physical assets in troubled economies and its ability to make its bids attractive with the promise of financial support. China is looking to pick up assets such as infrastructure and utilities in places like Europe at a bargain, rather than only buying the bonds of countries facing economic difficulties.
M&A wrap: EU crisis hits bank advisory fees
Europe’s debt woes dragged worldwide investment banking income down this year, data showed, with fees on the continent slumping to the lowest quarterly level ever recorded and company listings and acquisitions grinding to a near halt. In Europe, fees raised since October from bonds, flotations and mergers and acquisitions stand at the lowest quarterly level ever recorded by the data providers. A stronger start to the year in areas such as mergers and acquisitions fizzled out, leaving investment banks’ overall haul of fees at $72.6 billion — down 8 percent on 2010.
Yahoo is considering a plan to unload most of its prized Asian assets in a complex deal valued at roughly $17 billion, sources familiar with the matter said on Wednesday, winning nods of approval from Wall Street and driving its shares higher. The offer – the latest among proposals put forth in recent months to resuscitate the once high-flying Internet company – is expected to be considered by Yahoo’s board on Thursday, sources said. The board was uninterested in entertaining offers for the entire company at this point, said one of the sources, who spoke on condition of anonymity.
Oshkosh Corp has sent a proxy card to shareholders recommending they ignore an effort by billionaire investor Carl Icahn to install his own board members as he pushes for a merger with one of the company’s key rivals. Icahn recently nominated six associates to be on the board of the Wisconsin maker of trucks, construction lifts and defense vehicles. In a letter to the company’s shareholders last week asking for support for his nominations, he also voiced strong support of a merger between Oshkosh and Navistar International Corp. Icahn owns nearly 10 percent stakes in both companies.
Vulcan Materials Co rejected Martin Marietta Materials Inc’s $5 billion takeover bid, and said the offer undervalued the company and would not increase shareholder value in the future. Vulcan Materials, the world’s largest producer of sand, gravel and other construction materials, said the premium offered was significantly lower compared with previous transactions in the construction materials industry.
European Commission antitrust officials on Wednesday showed no sign of being swayed by Deutsche Boerse and NYSE Euronext’s last-ditch arguments to save their $9 billion deal, sources said, making it increasingly likely the exchange operators will have to take their campaign directly to the commissioners.
M & A wrap: Saudi prince buys Twitter stake
Saudi billionaire Prince Alwaleed bin Talal, an investor in some of the world’s top companies, has bought a stake in Twitter for $300 million, gaining another foothold in the global media industry. Alwaleed, a nephew of Saudi Arabia’s king estimated by Forbes magazine in March to have a fortune of $19.6 billion, already owns a 7 percent stake in News Corp and plans to start a cable news channel. The Twitter stake, bought jointly by Alwaleed and his Kingdom Holding Co investment firm, resulted from “months of negotiations,” Kingdom said.
Explorer Gulf Keystone Petroleum is not in talks with U.S. oil major Exxon Mobil Corp about a 7 billion pounds ($10.9 billion) bid, a source familiar with the Kurdistan-focused group’s thinking said on Monday. The Independent on Sunday newspaper reported that Exxon was considering making an estimated 800 pence per share bid – five times Gulf Keystone’s closing share price on Friday. The report, which drove Gulf Keystone’s shares up as much as 24 percent on Monday, said the company’s board had discussed Exxon’s interest a fortnight ago. But a source familiar with Gulf Keystone’s thinking said there were no talks with Exxon.
European Goldfields, which has agreed to a C$2.5 billion ($2.4 billion) takeover by Canadian group Eldorado Gold, is hoping to keep an investment deal with Qatar’s sovereign wealth fund as a fall back option. Qatar Holdings agreed in October to provide a $600 million project financing loan to European Goldfields, which has development stage assets in Greece and Romania, in its first investment in a gold miner. It also provided a $150 million loan note and a related warrant issue, and became a major shareholder, with a 9.9 percent stake. Eldorado’s strong balance sheet means European Goldfields is unlikely to need the cash from Qatar if the takeover goes through — but it does need two-thirds of shareholders to back the deal when they vote in February.
Etihad Airways is taking a stake of almost 30 percent in Germany’s Air Berlin, becoming the first Gulf carrier to challenge European legacy airlines by putting cash on the table to gain scale. Abu Dhabi-based Etihad will spend about 73 million euros ($95 million) to buy new shares of Air Berlin, raising its stake to 29.21 percent from just below 3 percent, and will lend the German carrier $255 million, the two companies said on Monday.
M & A wrap: Icahn bids for Commercial Metals
“Billionaire investor Carl Icahn has launched his $1.73 billion unsolicited buyout offer for Commercial Metals Co., threatening to take the company’s board of directors to court if it does not allow the purchase,” the Washington Post reports.
Meanwhile, Reuters is reporting Commercial Metals has changed its mind and will review Carl Icahn’s $1.73 billion buyout offer after all, just days after dismissing it as “substantially undervalued” and “opportunistic.”
“The SEC served notice that it will likely sue billionaire Phil Falcone and other people affiliated with his Harbinger hedge fund,” the Wall Street Journal’s Deal Journal reports, while the impetus is yet to be revealed.
The U.S. Justice Department said on Friday it would seek to stay or dismiss its lawsuit to stop AT&T Inc’s purchase of T-Mobile USA because AT&T withdrew its application with the Federal Communications Commission, which must approve the deal.
Two of Canada’s largest telecom and media companies will take control of the lucrative Toronto sports empire that owns the NHL’s Maple Leafs in a $1.30 billion deal that brings more premium content to their competing sports channels, Reuters reports.
Deals wrap: M&A not immune to Euro crisis
Shadows that started to fall over the pitch books of European dealmakers in the second quarter are darkening, threatening to rob banks of a few billion dollars in potential M&A fees.
After a robust first quarter boosted by mega transactions like Deutsche Telekom’s $39 billion exit from the U.S., fears about stuttering growth and Europe’s mounting debt crisis slowed the rise to only 24 percent in the second quarter, reversing hopes of a robust rebound and several years of rising M&A.
Analysts are pointing toward September as a key time frame if M&A’s have any hope of rebounding, with SABMiller’s expected renewed assault on Australian bid target Foster’s coming later this month.
In other news, Bank of America Corp has held exploratory talks with the principal investment funds of Kuwait and Qatar about selling part of its $17 billion stake in China Construction Bank, three sources with direct knowledge of the talks told Reuters.
BofA, the largest U.S. bank by assets, is likely to sell half its stake to shore up its Tier 1 capital, one of the sources said. Analysts believe Bank of America needs about $50 billion to meet new capital requirements.
Finally, from the WSJ.com comes a report that Wal-Mart is exploring a potential acquisition of the Brazilian unit of French retailer Carrefour SA, two years after a previous attempt to strike a deal ended over a disagreement on price.
Investment bank UBS AG is advising Wal-Mart on the possibility of making an offer for Carrefour’s Brazilian stores, which could be valued at between $6 billion and $8 billion, they added
Deals wrap: Cooling off on IPOs
Samsonite, the world’s biggest luggage maker, dropped 7.7 percent in its Hong Kong trading debut on Thursday, underscoring tepid investor appetite for initial public offerings as global markets struggle.
Pipeline operator Energy Transfer will buy smaller rival Southern Union for about $4.11 billion to bolster its natural gas gathering and transportation capacity amid burgeoning production from U.S. shale fields.
Alibaba Group said it has reorganized Taobao, China’s largest e-commerce website, into three separate companies, squashing any chance of a Taobao public offering.
Investors learned a hard lesson on Wednesday about red-hot Internet companies: they can go cold very quickly. The Lonely Value Investor writes about loving Pandora’s product, but hating the stock.
