M & A wrap: Glencore and Xstrata in mega merger talks
Xstrata and Glencore are in talks over an all-share merger that could create a combined group worth more than $80 billion, shaking up the industry with its biggest deal to date.
Glencore, the world’s largest diversified commodities trader, already owns 34 percent of mining group Xstrata and a tie-up between the two Swiss-based companies — in a deal which would trump Rio Tinto’s $38 billion acquisition of Alcan in 2007 — has long been expected, as Glencore aims to add more mines to its trading clout.
Now that Facebook has filed its hotly anticipated initial public offerings, analysts told Reuters correspondents Alexei Oreskovic and Alistair Barr that the social networking company’s honeymoon with investors may already be over.
Despite the massive IPO, CEO Mark Zuckerberg will exercise almost complete control over Facebook. Here is Zuckerberg’s letter to investors.
The graffiti artist who took Facebook stock instead of cash for painting the walls of the social network’s first headquarters made a smart bet, The New York Times says.
Venture capitalists are flocking to to China, leaving Europe behind, Deal Journal says.
M&A wrap: Buffett trades off his reputation
Warren Buffett showed again that his name and money is enough to give a struggling company instant credibility in the market. But the legendary investor also demonstrated his canny command of that reputation means that deals such as the $5 billion investment in Bank of America can immediately generate profits.
Anglo-Irish bank has chosen preferred bidders for its $9.5 billion U.S. commercial real estate loan portfolio and aims to have completed that sale, the largest in the United States in recent years, before the end of the year.
Glencore, the world’s largest commodities trader, stood on the verge of its largest takeover bid since its May stock market listing, after South Africa’s Optimum Coal confirmed it had received approaches.
The New York Times’ Dealbook is reporting that Rio Tinto and the Mitsubishi Corporation have raised their offer for Coal & Allied to approximately $131 a share , valuing the company at about $11.6 billion.
The blogging service Tumblr is close to raising $75-$100 million in venture capital, implying a market value of $800 million, the Wall Street Journal reported, citing people familiar with the matter.
Deals wrap: Glencore disappoints while Yandex confirms price
Even though sources close to Glencore felt the commodities trader had left “money on the table” with an offer price of 530 pence that valued the company at $59.15 billion, the company’s shares were stuck under water on their first day of official trade, dashing hopes of a strong start.
While some analysts still expressed concern over Glencore’s valuation, several analysts and bankers brushed aside worries about the stock trading below the offer price. They said the market debut should be seen as a success given its size and the continued uncertainty in both commodity and equity markets.
In other news Yandex’s initial public offering, the Internet sector’s biggest U.S. float since Google, was 17 times oversubscribed, a source said, with demand boosted by a blow-out float of LinkedIn.
Yandex priced the offer at $25 per share, it said in a statement on Tuesday, confirming an earlier Reuters report.
The float on the Nasdaq raised $1.3 billion, or 19 percent more than initially expected for Yandex, the leading internet search site in Russia.
Seeking Alpha takes an in depth look at how Yandex went from the creation of two entrepreneurs 20 years ago, to the Google of Russia today.
Finally Shira Ovide of WSJ.com has in interesting look at the merry-go-round between eBay, Skype and Microsoft.
Deals wrap: Copycats sure to follow LinkedIn
A day after LinkedIn’s shares more than doubled in their public trading debut, analysts are scrambling to explain why the stock exploded and figure out what happens next.
The professional networking site’s IPO was being closely watched by Facebook, Groupon, Twitter and Zynga to gauge investors’ appetite for Internet companies.
Facebook COO Sheryl Sandberg described a public offering of Facebook shares as “inevitable,” while Evelyn M. Rusli over on DealBook predicts a surge in Internet IPO’s but doesn’t think the market is setting itself up for another tech bubble burst.
It wasn’t just the big four social media sites waiting to go public that were salivating at LinkedIn’s record day, would-be rivals to LinkedIn were also giddy with excitement.
As for future opportunities for investors, Shira Ovide of WSJ.com gives her three reasons to be wary going forward. Nigam Arora of Seeking Alpha also advises investors to be cautious but gives four low risk ways to make money from LinkedIn.
One of the more interesting comparisons to LinkedIn’s meteoric rise in its debut comes from WSJ.com. At one point yesterday LinkedIn’s valuation was roughly $10 billion, trading at nearly 41 times its 2010 net revenue. If Apple were trading at the same multiple, it would have a market value of $2.7 trillion.
In other news John Malone’s Liberty Media Corp has proposed to buy Barnes & Noble for $1.02 billion, nine months after the largest U.S. bookstore chain put itself up for sale.
Deals wrap: Glencore debuts while markets await LinkedIn
Commodities trader Glencore made a steady market debut with shares trading just above the widely expected launch price of 530 pence, giving it solid currency for potential acquisitions.
There was heavy interest in the stock on both the London and Hong Kong exchanges, due in part to the relatively small amount of shares being sold. Glencore’s Chief Executive and largest shareholder Ivan Glasenberg said demand for the shares “significantly” exceeded the amount available.
Analysts on Thursday said the 530 pence per share level was realistic and should mean strong aftermarket support. “Obviously everything is priced to do well. I don’t know whether five to ten percent upside is in the bag or not, but certainly they are trying to please investors with the price,” analyst Tim Dudley at Collins Stewart said.
In other news, internet companies that expect to go public in the future are eagerly awaiting market reaction to LinkedIn’s debut. The professional networking site sold shares at the top of an already raised price range in its initial public offering on Wednesday, signaling that stock investors are eager to buy shares of social networking companies even if valuations are lofty.
Although companies like Facebook, Groupon, Twitter and Zynga have significantly different business models than LinkedIn, they each tap social networks and the valuations for each are skyrocketing.
According to data provider Capital IQ and posted on WSJ.com the amount of money LinkedIn is raising makes it the fifth-biggest-ever U.S. internet IPO, but still well off Google’s 2004 IPO that raised $1.67 billion.
Yesterday we told you that Takeda Pharmaceutical was on the verge of acquiring privately held Swiss rival Nycomed.
Deals wrap: Big appetite for Glencore’s IPO
Commodities trader Glencore will close the books for its planned $11 billion initial public offering a day ahead of schedule, underscoring strong investor demand for its shares despite volatile commodity markets. A source told Reuters on Friday the offer was already “multiple times covered” across the price range, but part of that success is due to the relatively small stake in the company being placed with funds and to Glencore’s size, which makes it a must-buy for many.
Takeda, Japan’s largest drugmaker, said on Friday it has not agreed to buy Swiss rival Nycomed, following reports it was in talks to buy the privately held company for more than $12 billion. “Takeda is constantly seeking and evaluating opportunities to increase shareholder value and enhance our business through strategic investment; however, there is nothing that needs to be announced at this point,” Takeda said on its website.
Yum Brands is adding Chinese hot pot to its menu of fast-food restaurants with an offer to buy out China’s Little Sheep for $586 million, paying a premium to introduce the popular chain to a global audience and sending the restaurant’s shares to a record. Analysts said the deal was positive for both Yum Brands, the parent of KFC, Taco Bell and Pizza Hut, as it expands in China and for Little Sheep, which has more than 300 restaurants, primarily in China, as it would help save costs.
Perspective investors of the company Glencore International will, for all intents and purposes, credit a fraudster operation, the purpose of which is transferring criminal assets, which the Kazakhstan dictator has illegally acquired, into cash, and sending it abroad.
http://kazakhstanvoice.blogspot.com/2011 /05/rakhat-aliyev-former-ambassador-of. html
Deals wrap: Takeda offers $12 billion for rival Nycomed
Takeda Pharmaceutical is in talks to buy privately-held Swiss rival Nycomed for more than $12 billion, said sources with direct knowledge of the matter. Japan’s largest drugmaker is seeking to boost its presence in Europe and emerging markets, as well, the acquisition would help them gain a lung disease drug from Nycomed which has just been approved in the U.S. Japanese drugmakers have been actively pursuing acquisitions to boost growth as they face the loss of patent protection on key medicines.
A planned rescue deal involving Saab and China’s Hawtai Motor Group collapsed after it failed to get necessary approvals, leaving Saab’s owner, Spyker, chasing new funding alternatives to restart production at the Swedish automaker. Spyker said it was continuing talks with Hawtai, while a Reuters exclusive reported the Dutch sportscar-maker was also talking to another Chinese company, Great Wall Motor about a possible tie-up.
Glencore’s CEO Ivan Glasenberg said recent falls in commodity prices were due to “froth” in the market and had not affected strong demand for the company’s IPO. Commodity price volatility in the past week has prompted worries over Glencore’s planned $11 billion IPO, with fund managers sensing an opportunity to drive down prices. The commodities giant recently unveiled the prospectus for their IPO, detailing plans to raise funds in a dual listing in London and Hong Kong.
Hedge fund manager Raj Rajaratnam was found guilty on all 14 counts of insider trading, and could face at least 15 years in prison. The Galleon founder was at the center of the biggest insider trading investigation in decades and the use of phone taps in his conviction may have marked a turning point in prosecution of Wall Street crimes. This piece in the New York Times by Peter Lattman and Azam Ahmed takes a look inside Rajaratnam’s circle of friends and business associates, and how they played a crucial role in his scheme.
Deals wrap: Facebook, Google dueling suitors for Skype
Internet giants Facebook and Google are separately considering a tie-up with Skype after the Web video conferencing service delayed its initial public offering, two sources with direct knowledge told Reuters. A Skype deal could be valued at $3 billion to $4 billion, according to one of the sources.
Swiss commodity trader Glencore’s planned $11 billion listing was fully covered on its first day as investors rushed to take part in the mega-float, two sources close to the deal said on Thursday. Investors placed orders for all the shares on offer, including a 10 percent overallotment option, sources said, adding it was too soon to say where in the indicated 480-580 pence ($0.79-0.95) range the shares would be priced.
Warner Music Group could reach a deal to sell itself as soon as close of business on Thursday when the board meets to make a final decision, according to two sources. The world’s third largest music company is expected to be sold for over $3 billion and leading the bidding is Russian-American industrialist Len Blavatnik’s Access Industries.
Shareholders in Actelion threw their weight behind the management of Europe’s largest biotech company, rejecting proposals by activist investor Elliott Advisors as a battle for control came to a head. New York-based hedge fund Elliott has urged the Swiss biotech group to seek a buyer after a string of product setbacks and has accused Actelion of pursuing a high-risk strategy that has eroded shareholder value.
Looking back over April, a month that has seen 31 companies file to go public in the U.S., this piece by Gwen Robinson for FT.com’s Alphaville explains the significance of the bumper crop of IPOs filed this month, including RenRen, Dunkin’ Donuts and Glencore, and why the recent IPO mania seems to be a global trend.
Deals wrap: Glencore IPO draws key investors
Glencore kept a lid on its aspirations for a much-hyped market debut, targeting proceeds of $11 billion after securing record commitments from investors. The commodities trader set a price range of 480 to 580 pence per share for the London IPO, confirming an earlier Reuters report. That values it at $61 billion at the mid-point, in line with early forecasts. Glencore is planning a dual-listing in London and Hong Kong.
Chip equipment maker Applied Materials will buy Varian Semiconductor for $4.9 billion, as it looks to maintain its edge in new chipmaking technology to meet rising demands. Applied expects to fund the transaction with a combination of cash on hand and debt.
ConAgra Foods said it raised its offer for private-label food maker Ralcorp Holdings by 5 percent to about $4.9 billion in cash. The company, one of North America’s largest packaged food companies is looking to gain access to more U.S. store brands that have been attracting people looking to cut spending on food. ConAgra’s proposal comes after Ralcorp said late on Sunday that its board rejected an unsolicited offer it received from a third party in March.
German engineering conglomerate Siemens is looking for acquisitions of up to 3 billion euros ($4.5 billion) to boost core areas after raising its full-year outlook on strong demand from emerging markets. The company makes products ranging from lights bulbs to trains and power plants to name a few.
When Nasdaq and InterContinentalExchange first unveiled their spoiler takeover offer for NYSE Euronext, it was valued at $11.1 billion – or $1.78 billion more than the bid from rival Deutsche Boerse. Within a month, that gap has narrowed by 55 percent. In this Wall Street Journal piece, Shira Ovide explains what has happened in the past month to change the price-gap of the offers.
Deals wrap: Nasdaq and ICE sweeten bid for NYSE Euronext
Nasdaq OMX and Intercontinental Exchange (ICE) said they have lined up a commitment to finance their rival bid for NYSE Euronext and have offered to pay a breakup fee if the deal fails to go through. This article from The Wall Street Journal lists the details of how Nasdaq and ICE is plan to sweeten their offer for the exchange even more.
Samsung Electronics is selling its hard-disk-drive (HDD) business to Seagate Technologies for 1.4 billion in cash and stock as Samsung looks to back out from the industry and focus on its core money-making memory-chip business. The acquisition will help Seagate, the world’s largest maker of hard drives better compete with rival Western Digital, which has plans to buy Hitachi’s HDD unit for $4.3 billion.
Leading corporate governance body PIRC is telling Xstrata shareholders ahead of their board vote they should reject the election of three directors nominated by its top shareholder Glencore because it does not perceive them as independent. The world’s top commodities trader is in the process of completing a $12.1 billion duel-listing in London and Hong Kong.
Wal-Mart Stores will buy social media company Kosmix for an undisclosed sum, as the world’s top retailer looks to gain a footing in e-commerce and win over more tech-savvy consumers. Wal-Mart said Kosmix’s founders and team will operate as part of a newly formed group called @WalmartLabs that will create technologies and businesses around shopping online or with smart phones.
