DealZone

Deals wrap: Why does J&J want to buy Synthes?

Doctors discuss medical treatment as they look at an X-Ray image on a monitor in this Reuters file photo. REUTERS/Fabrizio BenschAnother multi-billion dollar international healthcare deal could be coming if Johnson & Johnson has its way. Synthes, a Swiss medical device maker, confirmed it is in takeover talks with J&J after reports the U.S. health giant is keen to buy it for about $20 billion.

What does J&J want from a Swiss company many have never heard of before? The acquisition, which would be J&J’s biggest ever, would give the company a leading edge in equipment used to treat trauma patients. Synthes makes nails, screws and plates to fix broken bones, as well as artificial spine discs.

But a deal is far from certain at this stage. As the WSJ’s Katharina Bart points out, key to any deal is the agreement of Synthes Chairman Hansjoerg Wyss, a “secretive billionaire” who owns 48 percent of the company directly and through family trusts.

In other health deals news, Community Health Systems, a U.S. hospital operator, sweetened its offer for smaller rival Tenet Healthcare by converting its existing $3.3 billion bid to an all-cash proposal. The new offer has changed to $6 a share in cash from $5 a share and $1 in Community Health stock. Tenet’s board of directors is reviewing the new offer.

NYSE Euronext would likely want a hefty financial guarantee from Nasdaq OMX to ensure its takeover bid will make it past antitrust regulators before it’s willing to take part in deal talks, two sources with knowledge of the matter told Reuters correspondents Jonathan Spicer and Paritosh Bansal.

Deals wrap: The value of Groupon

An online coupon sent via email from Groupon is pictured on a laptop screen November 29, 2010 in Los Angeles. REUTERS/Fred Prouser Groupon is likely to pick Goldman Sachs and Morgan Stanley to lead a second-half initial public offering that could value the fast-growing daily deals site at $15 billion to $20 billion, according to a source.

Commodity trader Glencore’s planned $12 billion London listing has long been seen as the first step to merging with Xstrata, in what could be the biggest mining takeover in history. The question for most analysts and investors since the IPO was confirmed is not if the deal happens but when — and how.

BP’s partners in its Russian venture TNK-BP rejected the UK oil major’s offer to settle a dispute caused by its $18 billion tie-up with Rosneft, casting further doubt on the deal.

Deals wrap: Glencore’s $12.1 billion IPO

GLENCORE/Glencore is looking to raise up to $12.1 billion for its initial public offering in a duel listing that will boost firepower for deals at the height of the resource boom. The long-awaited details of the offer, set to be the largest ever in London, were outlined in an intention-to-float that confirmed an earlier Reuters story. However, the company did not name a new non-executive chairman, a requirement for its listing.

NYSE Euronext and Deutsche Boerse are looking at several options to win support for their $10.2 billion deal, including paying special dividends to shareholders, according to sources briefed on the matter. The idea of paying the special dividends is to win shareholders support over an unsolicited higher offer from Nasdaq OMX and IntercontinentalExchange Inc (ICE). While NYSE Euronext and Deutsche Boerse currently pay dividends, Nasdaq and ICE do not.

BP and Rosneft agreed to extend the deadline for their swap agreement by one month as the British oil producer tries to salvage the $7.8 billion deal. BP’s tie-up with Rosneft is already blocked by a court injunction secured by the company’s Russian partners in its TNK-BP venture.

Deals wrap: What drives insider trading culprits?

Paul J. Fishman (C), United States Attorney for the District of New Jersey, announces insider trading charges against Garrett Bauer and Matthew Kluger during a news conference at the U.S. Attorney's office in Newark, New Jersey April 6, 2011. Bauer and Kluger were charged Wednesday with running a 17-year conspiracy to trade on corporate merger secrets stolen from three of the nation's most prominent law firms, in one of the largest U.S. insider trading cases on record. REUTERS/Mark Dye The U.S. government’s crackdown on insider trading continues. On Wednesday, two men were accused by federal prosecutors of carrying out a 17-year conspiracy to trade on corporate merger secrets stolen from three major U.S. law firms.

As this latest case makes clear, non-disclosure rules and clever systems of checks and balances are only so helpful in preventing insider trading.

“You can’t legislate human behavior. People will act as people will do,” David Lazarus, senior managing director, co-founder, EdgeRock Realty Advisors, said at the Reuters Global M&A Summit in New York, adding there’s always people whose greed will push them over the line.

Deals wrap: Blockbuster year for M&A?

A man and child look out over destroyed homes after a tsunami and earthquake in Sendai, northeastern Japan March 12, 2011. REUTERS/KyodoDespite upheaval in the Middle East and Japan, worldwide M&A have risen 58 percent to $717 billion so far this year, according to preliminary data from Thomson Reuters, marking the best start to a year since 2007 and building on last year’s tentative recovery. Analysts expect to see continued strong activity in mining and energy, but some warned it’s still too early to see the full implications of the recent crises.

Deal-making in Asia got off to a strong start in 2011, with cashed-up companies tapping investment opportunities in sectors from energy to industrials, and bankers say the transaction pipeline for the rest of the year looks healthy.

Executives at boutique investment banks see an increasing number of clients wanting their advice after a Delaware ruling last month accused large investment bank Barclays Capital of conflicts of interest.

Deals wrap: Yoplait to split a yogurt with General Mills

General Mills cereals are displayed on a kitchen counter in Golden, Colorado December 17, 2009. REUTERS/Rick Wilking

After months of tense negotiations that involved members of the French government, management disputes and influence from an agricultural lobby General Mills is set to pay $1.12 billion for private equity fund PAI Partners half of the Yoplait yogurt brand.

The General Mills bid was attractive for several reasons. It has a long standing relationship with Yoplait, holding the license for the companies yogurt in the United States since 1977. General Mills was also able to pay for the transaction off its balance sheet. Sodiaal, which controls the other half of Yoplait, was also attracted to the idea that General Mills could use its international reach to boost sales in emerging markets, particularly India and China.

For its part General Mills protects its U.S. distribution rights and eliminates the risk of a competitor edging in on that business. The Deal Journal has some early market reaction.

Deals wrap: Japan crisis may delay some IPOs

  The Glencore logo is seen on a sign in front of Swiss commodities trader Glencore building in Baar near Zurich January 5, 2010.

Extreme market volatility tends to make investors a jittery bunch. The deadly earthquakes and nuclear crisis in Japan will obviously have an immediate impact there, but the fallout from the catastrophe is expected to spread across the globe where it could delay or even cancel a slew of new share offerings and debt deals.

According to IFR, a Thomson Reuters publication, one major deal in the pipeline that’s at risk of cancellation is the planned $6-$8 billion London-Hong Kong IPO of Swiss commodity trading group, Glencore, a deal expected in May.

Institutional investors will be demanding a higher return on their investments, forcing stock and bond deals to expect lower valuations, or face being pulled all together. Glencore’s IPO may be the victim of bad timing.

Deals wrap: ING Direct USA up for sale

CIT Group CEO John Thain is shown in New York in this November 17, 2009 file photo. REUTERS/Brendan McDermidDutch financial group ING has kickstarted an auction to find a buyer for its U.S. online banking operation ING Direct as part of an effort to raise funds to pay back state aid it received during the financial crisis in 2008.

A report in the New York Post said the sale could raise as much as $10 billion and that several institutions had expressed an interest in buying the unit, including U.S. consumer lender CIT Group, which is now run by former Merrill Lynch CEO John Thain (right).

Prosecutors present opening arguments in their insider trading case against Galleon Group founder Raj Rajaratnam, who they say built an elaborate network of stock tippers who helped him gain $45 million in illicit profits between 2003 and 2009.  NYT’s DealBook connects the dots in the complex Galleon network with a helpful visual graphic.

DealZone Daily

Wednesday’s highlights:

Ford Motor Co (F.N) and China’s Geely are set to report progress as soon as Wednesday in talks to sell Ford’s Volvo unit to the Chinese automaker, two people with direct knowledge of the matter say.

Spyker Cars presses ahead with efforts to cut a deal for Saab with General Motors, with talk of possible backing from a Dutch billionaire fanning the Swedish carmaker’s faint hopes of an eleventh-hour reprieve.

Chinese Internet firms are eyeing more spin-off offerings after raising nearly $1.5 billion this year as they bank on strong foreign interest in high growth China plays.