DealZone

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.

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.

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.

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.

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.

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.

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.

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.

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.