DealZone

DealZone Daily

Australia’s competition watchdog blocked National Australia Bank’s $13 billion agreed deal for wealth manager Axa Asia Pacific Holdings, opening the door for rival bidder AMP to make a comeback. Australia’s competition regulator defied expectations it would give conditional approval for a deal, instead issuing a flat rejection on the grounds a tie-up would hurt competition for retail investors.

British train and bus operator Arriva said it is in advanced talks with Deutsche Bahn about the German state rail company’s 775 pence a share bid, valuing the company at 2.7 billion euros including debt.

European consumer goods group Unilever will kick off the sale of its frozen food arm Findus next week, expecting to draw bids from private equity groups including Permira, Lion Capital and BC Partners.

For other deals news, click here.

More M&A and corporate finance news from other media:

U.S. government controlled insurer AIG is considering pursuing Goldman Sachs over losses incurred on $6bln on mortgage-backed securities. The move follows the SEC’s decision to file civil fraud charges against Goldman and could spark actions from other investors who have lost money, the FT writes.

Guy Hands’s Terra Firma may ask investors for 360 million pounds – three times the amount previously suggested — to see troubled music group EMI through its debt obligations until 2015, Bloomberg reports.

Keeping score: Food and drink M&A, sovereign debt

Highlights from the Thomson Reuters Investment Banking Scorecard:

“Food and beverage accounts for 10% of M&A

Coca Cola’s $12.1 billion offer to purchase Coca Cola Enterprises, an Atlanta-based producer and wholesaler of bottled beverages, brings the total of M&A activity in the food and beverage sector to $32.4 billion, an increase of 257% compared to the same period in 2009.

Deals in the food and beverage industry account for nearly 10% of all global activity this year and are second only to activity in the oil and gas sector.  Credit Suisse, an advisor to Coca Cola Enterprises, ranks as the top advisor in the food and beverage industry with $26.7 billion from 11 deals for year-to-date 2010.

European issuers power agency and sovereign debt market

This week’s $6.2 billion sovereign debt offering from the United Kingdom bolsters Europe’s stronghold in this market.  For year-to-date 2010, European countries have issued nearly 78% of all sovereign and supranational debt with 285 issues and proceeds of $206.5 billion.  The Americas region follows in second place with $23.3 billion from 52 issues. This week’s offering is the largest debt issue in the United Kingdom this year and the seventh largest agency and sovereign offering in Europe.

DealZone Daily

Kraft’s acquisition of Cadbury is expected to trigger the next blockbuster sale in the global corporate bond market as the company refinances an $11.5 billion bridge loan used to temporarily fund the deal.  The world’s second largest food group Kraft is expected to have no trouble drawing demand for a bond sale, thanks to its investment grade ratings. Read the Reuters story here.

Private equity giant KKR is to launch a partnership to invest in consumer services, education and media businesses, a source familiar with the situation said on Monday. It will launch the business with Jonathan Grayer, former chairman and CEO of Kaplan, a unit of Washington Post Co.  Grayer was CEO of Kaplan for 14 years in 2008.

And in other media:

American International Group has decided not to sell its aircraft leasing unit International Lease Finance Corp, the Financial Times said, citing people close to the situation.  AIG has realised that it will not reap a big profit from the divestment of the business, ptompting it to scrap the sale plans.

Kraft unwraps bid

Kraft Foods posted its offer to Cadbury shareholders with terms unchanged on Friday, triggering a two-month, 10.1 billion pound takeover fight for the British chocolate company.
Read the story here

The formal bid matches its indicative offer, worth 300 pence in cash and 0.2589 new Kraft shares for each Cadbury share, which the U.S. food giant said valued Cadbury at 713 pence.
For the full prospectus, go to Kraft’s transaction website. Link here

A rival bidder could reveal its hand any time within the next 60 days, under UK takeover rules. Italy’s Ferrero and U.S.-based Hershey are considering making a bid. Analysts say the two could team up.

Kraft’s anti-climax?

North American food giant Kraft is due to post its offer documents to Cadbury shareholders by Dec. 7, but this latest milestone in the 10 billion pound takeover saga may turn out to be more damp squib than giant Toblerone.

Kraft could indeed post the documents ahead of time as the Times reported this week. With no significant changes to the structure or value of the offer anticipated, the event is unlikely to captivate or move the markets, however.

Keeping the terms exactly the same would be typical behaviour for Kraft, as we said last month here. The company formalised its indicative offer in the hope that no rival bidders would emerge to pressure it to up its bid. Despite Wispas — sorry, whispers — about Hershey, Nestle, and Ferrero, no rival has come forward yet.

Irene prepares to tough it out

It looks like Kraft CEO Irene Rosenfeld is getting ready to play hardball with her reluctant target, British chocolate maker Cadbury.

Cadbury investor Mario Gabelli will be disappointed in the short term – he wanted a small kiss from Irene after all - but a formal offer from the North American food group sets in motion an 88-day process under UK takeover rules.

That should give Kraft plenty of time to sweeten its offer to something starting with an eight – the 800p per share bar regarded by many as the minimum price needed to tempt Cadbury to the negotiating table.

Deals du Jour

U.S. network equipment maker Cisco systems offers to buy Norwegian video-conferencing equipment maker Tandberg ASA for $3 billion in cash. The offer price of NOK 153.5 per share represents a premium of 11 percent to Tandberg’s closing price on Wednesday.

Sanofi-Aventis (SASY.PA) says it has acquired privately-held Fovea, a privately-held firm specialised in eye diseases, for up to 370 million euros.

For these stories and more deals-related news from Reuters, click here.

And here’s what we found in Thursday’s papers: 

* ViaSat Inc (VSAT.O), which provides satellite and other wireless networking systems, has agreed to buy Wild Blue Communications Inc for more than $565 million, the Wall Street Journal reports. The deal is a combination of $440 million in cash and $125 million in new Viasat shares. Wild Blue is owned by Liberty Media Corp (LINTA.O).

Deals du Jour

French food group Danone has agreed to sell its 51 percent stake in its joint ventures with China’s Wahaha group, putting an end to legal proceedings related to the disputes between the two. In 2007, Danone accused Wahaha of illegally setting up parallel business outside their ventures. 

McGraw-Hill Cos is leaning toward selling its money-losing BusinessWeek magazine to Bloomberg LP, a person familiar with the matter tells Reuters. Bloomberg Markets, a financial news magazine that produces feature stories, and the 80-year-old BusinessWeek could be blended to make a title that would expand Bloomberg’s presence beyond its financial data clients and reach a mainstream audience.

For more on these stories and the rest of the latest deals news from Reuters, click here .

Deals du Jour

Belgium’s Solvay is selling its drugs unit to U.S. partner Abbott Laboratories for 4.5 billion euros ($6.6 billion) in cash and reinvest in chemicals and plastics. Sources familiar with the deal have earlier told Reuters Abbott had agreed to buy the unit to bloster its flagging prescription drug business.

Australia’s biggest department store chain Myer plans to raise up to $2 billion in a share offering that will test investor appetite for retail stocks.

In M&A news reported by Reuters and elsewhere on Monday: 

* A Saudi prince is set to spend up to 350 million pounds ($558 million) to buy a 50 percent stake in English soccer club Liverpool, al-Riyadh newspaper quoted him as saying on Sunday. 

Everybody Likes Cake

More big consumer brands are being dealt across the Atlantic. With Kraft’s bid for Cadbury churning, consumer goods giant Unilever plans to pay 1.275 billion euros ($1.87 billion) for a chunk of Sara Lee’s personal care brands, helping the cake maker sheds non-core businesses to focus on food. Sara Lee shareholders are sweet on the deal – bidding the stock up more than 9 percent in early trade. In a space reserved for winners and losers, this deal looks like it has natural benefits for both parties.

The asset sale is quite a bit less rich than the chocolate deal, which is for the whole of Cadbury rather than just its brands, the soap business brings with it a fresh scent of a recovery in deals activity. It is the first major acquisition for the Anglo-Dutch company’s new Chief Executive Paul Polman, and Sara Lee’s CEO Brenda Barnes is still only half-way through her business-shedding exercise.

Credit Suisse analyst Charlie Mills said the price Unilever is paying of 10 times core operating profit, or EBITDA, is not huge by industry standards, reflecting the fairly disparate collection of assets. Brylcream hair gel is part of the mix.