Deals wrap: Hynix may finally have new owner
Shareholders of Hynix Semiconductor will take final bids for a controlling stake in the South Korean memory chipmaker, said a leading shareholder. The $2.3 billion stake sale is the third attempt by creditors-turned-shareholders to find a new owner for the company.
Dutch bancassurer ING will sell most of its Latin American operation to Colombia’s GrupoSura for $3.7 billion in a deal resulting from its state rescue in 2008. This sale now paves the way for the sale of ING’s U.S., European and Asian businesses, which are worth about 18-19 billion euros.
Internet radio service Pandora debuted last month well above its offer price but fears of the company’s chances of turning profit quickly dragged shares down. Deal Journal writes why two stock-research firms are telling investors to “scoop up” Pandora stocks, while one other notable firm is advising against it.
Reinsurer Validus Holdings has taken its $3.2 billion bid for Transatlantic Holdings hostile after merger talks came to a standstill.
Deals wrap: Bid for ING Direct USA
General Electric and Capital One have submitted bids for ING’s U.S. online banking operations in a deal worth about $9 billion, Bloomberg reports.
The frothy market for Internet IPOs is raising the specter of a bubble, underscoring how little has changed despite lawsuits and investigations in the wake of the 1990s dot-com craze.
Maple Group Acquisition Corp, which has gone hostile with its $3.7 billion offer for Toronto Stock Exchange operator TMX Group , is in talks to add at least three other financial-services companies to its consortium, the Wall Street Journal reports, citing sources.
BP is preparing to sell half of its 50 percent stake in TNK-BP to state-controlled Rosneft, the Wall Street Journal reports. The move represents an attempt to salvage a planned tie-up between BP and Rosneft, announced in January, and could be a negotiating tactic with AAR, the group of billionaires which owns the other half of TNK-BP, the Journal reports.
Chinese companies have stepped up acquisitions in Europe and the trend is expected to continue, reports the WSJ.
“In its quest to win approval of its $39 billion takeover of T-Mobile USA, AT&T just got a lot of help from its friends,” reports the New York Times.
Deals wrap: ING Direct USA up for sale
Dutch 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.
HCA, the biggest U.S. for-profit hospital chain, plans to go public on Wednesday in a deal that could renew investor interest in hospital operators. Analysts expect strong demand even though its private equity owners saddled it with a massive amount of debt.
While a public stock market listing is an attractive option for Switzerland’s Glencore, it is only one of the many avenues open to the world’s largest commodity trader, explains Reuters correspondent Julie Crust.
Coffee wars: Peet’s, Green Mountain battle over Diedrich
There’s a big war brewing over single-serve coffee brand Diedrich Coffee Inc.
Green Mountain Coffee Roasters Inc on Tuesday raised its bid for Diedrich to $265 million, or $32 a share in cash, to challenge a sweetened offer from Peet’s Coffee & Tea Inc on Monday. Peet’s cash-and-stock offer is valued at $30.41 per share. Diedrich, which makes and sells K-Cup refills for Green Mountain Coffee’s single-cup Keurig brewer system, said its board is “continuing to analyze the two offers” to determine whether Green Mountain’s offer “continues to be a superior proposal.” Peet’s, of course, said it thinks its cash-and-stock proposal is superior “given the greater certainty of an faster closing and the potential upside for Diedrich’s shareholders through the Peet’s stock component.” It has until Friday to make a revised offer. Meanwhile, Green Mountain said its all-cash offer is better than Peet’s because Peet’s proposal is subject to market fluctuations in its stock price.
Earlier this month, Peet’s had agreed to buy Diedrich for $26 per share, in a bid to cash in on Diedrich’s status as a licensee of Green Mountain’s fast-growing single-cup coffee brewing systems. Green Mountain emerged as an interloper with a competing offer.
“Peet’s does have a sense of urgency to enter the fast-growing single cup market, and Diedrich probably is its only reasonable opportunity,” Anton Brenner of Roth Capital Partners said.
Noted: Should Tesco stop & shop for Ahold?
Could buying the undervalued Dutch retailer Ahold, which operates U.S. brands including Stop & Shop, make sense for Tesco?
ING analysts Peter Brockwell and John David Roeg think there is a “compelling strategic logic” for a deal.
The pair say buying Ahold’s established U.S. business would be a way of quickly turning round Tesco’s fledgling, and loss-making, business Fresh & Easy, with Tesco funding a deal with cash, shares and disposals.
A tie-up with Ahold would also make sense for domestic rival Delhaize, although given that Ahold is twice its size, any transaction would have to be a stock-based merger, they add. Most other potential predators lack the necessary financing, a strategic rationale to do a deal, or synergies, the ING team reckons.
From the note:
“Ahold’s substantial undervaluation could trigger a takeover.
“We see three possible scenarios: (1) nothing happens, the undervaluation persists; (2) management tries to reduce the gap through more ambitious growth targets/capital restructuring; or (3) predators could eye Ahold’s quality assets.
BoNY refocuses on Europe
As head of the world’s largest custodian of financial assets, Robert Kelly is paid to be alert to buying opportunities. So it’s interesting to hear Kelly, chairman and chief executive of Bank of New York Mellon, tell reporters in Beijing that financial assets in Europe are more attractive than those in Asia and that, as a consequence, the bank is refocusing its businesses.
European financial institutions were hit harder by the global economic crisis than their global peers, and U.S. banks are in a better position to mount takeovers in Europe after going through a government-led process of consolidation and capital-raising, he said. “What you will see in coming quarters is that U.S. financial markets and banks are stronger than the European banks now,” he said.
If some European banks were to sell businesses to raise capital, BoNY would be interested in buying, he said. If timing counts for anything, Kelly’s interest has probably been piqued by Dutch bancassurer ING, which said on Monday it would split in two, transforming itself into a smaller European lender.
DealZone Daily
Mining group Xstrata did not support hopes of a more general M&A rebound on Thursday, announcing it had no intention of offering for rival Anglo American and that it continued to assess a range of alternative growth options. Read the Reuters report here.
OCBC , the smallest of Singapore’s three local banks, has agreed to buy ING‘s private banking unit in Asia for $1.5 billion, a surprise outcome in a complex drawn-out auction.
CIT Group is getting closer to finalizing the terms of a new loan that would give the commercial lender, trying to avoid bankruptcy, $3 billion to $6.5 billion, two sources familiar with the matter told Reuters.
In other news on Thursday:
The British government will not underwrite a planned rights issue by Lloyds Banking Group, the Financial Times said on Thursday.
Japan’s securities regulator is probing allegations of market manipulation in share trading by BNP Paribas, the Asahi newspaper reported.
The founder and other senior officers of hedge fund Cadogan Management LLC, who quit the firm two weeks ago, have now agreed to buy back the business from Fortis Bank, the Wall Street Journal said, citing people familiar with the matter.
Deals du Jour
Julius Baer will buy ING‘s private bank in Switzerland, the two have said (Reuters has long been reporting that Baer was the frontrunner to seal the deal).
The battle for Dutch retailer Super de Boer heats up, with Ahold now showing interest to buy 30 to 50 of its supermarkets. For these and other stories about deals, click here.
And two deal stories in other media:
Citigroup is working on a sale of its commodities unit Phibro in a move that could raise hundreds of millions of dollars, according to the Financial Times.
HSBC would be forced to delay raising its dividend if new capital rules are applied too heavily or too quickly, The Times reports the bank’s head of investment banking as saying.
Deals du Jour
Japan’s Toshiba Corp (6502.T) is lining up a bid for French nuclear group Areva’s (CEPFi.PA) power grid that could be worth over $5 billion according to Reuters sources.
The private banking assets of Dutch bank ING (ING.AS) are the subject of up to five bids which may reach $2 billion, sources familiar with the deal said. Swiss firm Julius Baer (BAER.VX) and Singapore’s DBS (DBSM.SI) have been identified to Reuters as definite bidders in the process.
For more from Reuters on the latest deals, click here.
Below is a round-up of all the market chatter from the press on Friday:
* AIG (AIG.N) will likely now announce the buyer of its Taiwan Nan Shan Life unit at the end of September instead of on Friday, Chinese-language newspaper Commercial Times reported, after potential buyers bid below the $2 billion the insurer had hoped for.
* UK specialist insurer Pension Corporation is eyeing a third capital-raising round of up to 400 million pounds ($652.7 million) from new and existing investors, the Financial Times reported.
* French carmaker Peugeot Citroen (PEUP.PA) is mulling an alliance with Japan’s Mitsubishi Motors Corp (7211.T), French daily La Tribune reports.
Deals du Jour
Dutch bank ING has hired JPMorgan to advise on the sale of ING’s private banking business in Europe and Asia, which could fetch over $1 billion, sources tell Reuters.
The sale of the units may may take a few months and could draw interest from global and Asian players, one source with knowledge of the deal said.
In other deals reported by Reuters and other media:
Amazon.com will pay about $928 million for booming online shoe retailer Zappos.com, expanding aggressively into the apparel arena with a well-known name after trying unsuccessfully to go it alone.
U.S. drugmaker Bristol-Myers Squibb said it will pay $2.4 billion to acquire Medarex, a biotechnology company that has been helping it develop a promising treatment for melanoma since 2005.
British bus and train operator National Express said it was approached by an unnamed suitor after rival FirstGroup ruled out a formal takeover offer for the company.
French utility group Veolia and state bank Caisse des Depots agreed to start talks about merging their transport businesses to create a new company with 8 billion euros in proforma revenues.
