DealZone

Deals wrap: Vedanta makes bid for Cairn India

India-focused miner Vedanta Resources is reportedly close to buying a 51-percent stake in oil producer Cairn India for $8 billion to $8.5 billion, a source familiar with the matter told Reuters. While neither Cairn Energy nor Vedanta would comment, the source said the deal is expected to be announced on Monday.

Cairn India was boosted by a huge oil find in Rajasthan that turned the company into a major oil producer and, according to Reuters, the deal “would be the diversified miner’s (Vedanta) first move into oil and gas.” Read the Reuters factbox on Cairn India here.

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Google has been on a spending spree lately and folks are wondering who it will buy next? After paying $182 million for Facebook-app maker Slide earlier this month and reportedly making a buyout offer to Jambool, CEO Eric Schmidt recently told Bloomberg he has doubled the pace of acquisitions after some of Google’s internal projects failed.

PE Hub replayed a nice interview with David Lawee, Google’s VP of corporate development, on what the search giant looks for in acquiring companies.

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IBM announced it will buy software company Unica Corp for about $480 million in cash, reported Reuters. IBM will pay around $21 per Unica share, which sent Unica’s share price soaring 117 to as high as $20.78 in morning trading on the Nasdaq.

Deals wrap: Aussie coal is hot

A coal excavator loading coal at one of Macarthur Coal's mines  in Queensland is seen in this undated photograph obtained April 9, 2010. REUTERS/Macarthur Coal/HandoutAround $7 billion of Australia’s coal assets are in the crosshairs of predators from Seoul to Shanghai, as Asia jostles for supplies to feed its burgeoning needs, pushing up bid valuations for Australian coal miners. *View article *View factbox

Barnes & Noble’s predicament is sounding like Blockbuster’s — meaning, unfortunately, the fading video rental chain not a successful movie. The U.S. bookseller’s cash flow is sinking and technological shifts look set to worsen that. What exactly the bookseller can do is unclear. *View column

Bernard Madoff had the big numbers attached to his crime but Kenneth Starr’s alleged Ponzi scheme has celebrities. Vanity Fair takes a look into Starr’s world. *View Vanity Fair article

from MediaFile:

Google buys into Zynga – report

zynga-pokerGoogle has invested as much as $200 million in social gaming company Zynga, as it looks to bolster its presence in the world of online gaming, according to technology blog TechCrunch.

According to TechCrunch, the investment may have been in conjunction with Softbank Capital's deal to purchase a stake in Zynga, which makes games for social networks including Facebook and MySpace and profits by selling virtual goods.  In June, Nikkei reported that Softbank bought a stake in Zynga for about 13.5 billion yen ($147.4 million) through a private placement.

The site said that The investment was made by Google itself, not Google Ventures and that Zynga will be "the cornerstone of a new Google Games to launch later this year." Zynga’s revenues for the first half of 2010 will be $350 million, half of which is operating profit, and is projecting at least $1.0 billion in revenue in 2011, according to the site.

Google’s buying binge

GOOGLE/One small acquisition a month, Google chief Eric Schmidt projected last fall when announcing the internet giant was back on the hunt for privately owned firms after a short recession-induced break from buying.

“There may be larger acquisitions, but they really are unpredictable,” he told Reuters at the time.

Google has mostly stuck to its plan and even made of few of those riskier big buys. Since Schmidt’s revelations, the Web search giant has scooped up everything from small start-ups to much-larger industry rivals such as mobile advertising firm AdMob, a $750 million acquisition that many thought would land Google in an antitrust court battle. Indeed, the company has outpaced itself, buying more than just one firm a month in a few instances.

Facebook is more than just a pretty face

The social networking website of Mark Zuckerberg (pictured) is now worth $23 billion, close to the value of online shopping website Ebay, based on the price of a recent stock purchase by private equity firm Elevation Partners. Elevation purchased $120 million in Facebook stock from private shareholders, valuing the company at $23 billion, a person familiar with the matter told Reuters on Monday.

A valuation of that amount makes Facebook larger than Yahoo, which has a market capitalisation of $20 billion, and edging closer to the size of Ebay, at $27 billion. Still, it is a fraction the size of Google ($150 billion). Facebook’s backers include Digital Sky Technologies, Microsoft Corp Corp, Hong Kong tycoon Li Ka-shing and venture capital firms Accel Partners, Greylock Partners and Meritech Capital Partners.

DealZone Daily

Rather predictably,  the probe into Goldman Sachs overshadowed the group’s first quarter results on Monday. Somewhat less predictably, Goldman’s rivals have been using the furore to elbow in front of the leading Wall Street bank. As an example, rival investment bankers have been lobbying authorities in China to drop Goldman as an underwriter for the more than $20 billion IPO of state-owned Agricultural Bank of China.

Australia and New Zealand Banking Group (ANZ) is preparing to bid for Lone Star’s $4bln controlling stake in Korea Exchange Bank, the nation’s sixth largest lender. The news of the arrival of unexpected contender for the U.S. private equity firm’s stake helped send shares in the bank 3 percent higher.

For more Reuters’ deals news, click here.

In other media:

Google is in talks to buy travel software manufacturer ITA Software Inc, Bloomberg reported. A deal could value ITA, whose programs are used by Orbitz Worldwide and Microsoft, as about $1 billion.

Could Google/China bust up be bad for Disney’s bus stop?

Walt Disney is leading a group effort to buy into China’s largest bus-based digital media and advertising company, Bus Online. The investment would be peanuts for Disney, but the headache could wind up being jumbo sized because one of their investors in the bus deal, sources tell us, is Google.

Google threatened to quit China only a few weeks ago and the internet search giant is finalizing a deal that will let the U.S. National Security Agency (NSA) help it investigate the corporate espionage attack it thinks originated in the People’s Republic. China has warned the U.S. not to make politics out of the Google issue, but it may be too far into the saber-jangling season for that, with Barack Obama having announced fresh U.S. weapons sales to Taiwan in his State of the Union address.

Though Google’s stake in the Bus Online deal is said to be small, even smaller than the tiny investment this will be for media giant Disney, it could just be big enough to cause headaches for Mickey and Co.

DealZone Daily

“Saab story ends” we wrote on these pages last week. Now it has begun again, after Dutch luxury carmaker Spyker raised a last-minute bid over the weekend. It looks as if there are other options, with General Motors saying it will look into several new expressions of interest for its Swedish unit. That’s only two days after it said it would start an orderly wind-down.

The London Stock Exchange (LSE.L) is buying 60 percent in Turquoise, its rival launched by a group of investment banks with a lot of fanfare two years ago. The centuries-old bourse will merge Turquoise with Baikal, its dark pool platform.

Kraft’s (KFT.N) hostile bid does not reflect Cadbury’s (CBRY.L) value, a significant number of big Cadbury shareholders thinks — that’s what Cadbury Chief Executive Todd Stitzer told my U.S. colleagues on Friday. ”It appears that the stand-alone value of the company has risen in the eyes of shareholders,” he said. Meanwhile, the New York Times writes that Britain is going “into an emotional tailspin” over the prospect of losing Cadbury. If that’s the case, they’re hiding it well — must be the stiff upper lip.

Yahoo redo

Microsoft and Yahoo finally tied a knot, but not the knot that Yahoo shareholders have long yearned for. The new-economy giants inked a 10-year Web search deal in a bid to take on Google. Google shares barely budged but Yahoo’s sank more than 6 percent as the deal stopped short of combining display advertising businesses.

Back when this deal was all the rage, it was a story of egos. Then Yahoo CEO Jerry Yang was ultimately thrown out for not getting a deal done. Veteran agitator Carl Icahn was in top form, blasting Yahoo from the Street. Now under the new management of Carol Bartz, expectations were slowly rising that a broader deal might get done.

The question now is whether the market that had for so long hoped for a big deal will see this one as at least a step in the right direction.

AOL then and now

Anyone want to take a shot at what’s behind Time Warner‘s repurchase of a 5 percent stake in AOL held by Google? Time Warner sold the stake in December 2005 for $1 billion. Now, it has bought it back for $238 million — a nice job of selling high and buying low. Time Warner plans to spin off AOL by the end of the year.

The 2005 deal implied a chunky price tag of $20 billion for AOL. While it may not be exactly apples to apples, the repurchase implies a value of about $5.7 billion.

Brigantine Advisors analyst Colin Gillis said the implied $5.7 billion represents a “floor valuation ” as AOL moves toward a spinoff. If that’s true, then Google not only overpaid, but undersold.