DealZone

M & A wrap: Citi scores big with EMI deals

The music industry may have a bit of life left in it after all. At least that’s the impression one is left with this week after Citigroup scored a better-than-expected $4.1 billion from two deals that mark the end of a months-long auction to sell off the parts of 114-year-old British music company EMI Group.

Vivendi’s Universal Music Group and Sony won the auction for EMI’s recorded music and music publishing operations, trumping bids by archrivals Warner Music Group and BMG Music Publishing at the 11th hour, reports Peter Lauria, editor-in-charge of Technology, Media and Telecommunications at Reuters. Universal plans to buy EMI’s recorded-music unit for $1.9 billion, according to a source involved in the process, snagging the rights to music by artists such as Coldplay, the Beatles and Katy Perry in the deal.  A consortia led by Sony is expected to buy EMI’s publishing operation for $2.2 billion.

MF Global’s liquidators are struggling to sell the Asian business as one concern because of problems unwinding trading positions, so they may now sell the various country units separately, report Reuters correspondents Rachel Armstrong and Bruce Hextall. The provisional liquidators for the business in Hong Kong said on Friday there had been a number of encouraging bids for the regional business as a whole but the exercise has proved increasingly complex and the focus is now on selling off the various Asian business units individually.

U.S. coal giant Peabody Energy extended its $5 billion bid for Australia’s Macarthur Coal by two weeks after failing to reach the 90 percent threshold for acceptances by its Friday deadline, reports Sydney-based correspondent Lincoln Feast. Peabody’s acquisition of Macarthur will give it control of the world’s top producer of pulverized coal, just at a time when demand for steel-making materials holds up in Australia’s key coal market, China.

Companies in Greater China are lining up to sell shares in initial public offerings in coming months, braving jittery markets with $11.2 billion in deals, reports Hong Kong-based Elzio Barreto. Issuers are betting the steep rebound in Hong Kong and Chinese markets in the past month might signal renewed appetite for offerings that would provide funding for expansion and takeovers.

The afternoon deal: When to go to market

GERMANYRunning the gamut from “bloodied” private equity firms to an oversubscribed Man Infra initial public offering, stories from today show the IPO market is on shaky ground and, as always, finding the right valuation is vitally important.

IPO stories from the Web:

Bloodied buyout firms sit tight for IPO return (Reuters)
“Private equity firms are putting flotation candidates back in the box after receiving knock backs from angry fund managers, and will try again in a couple of years when they hope the market will be more receptive,” reports Reuters.

Mega IPO of AIG’s AIA unit faces headwinds (Reuters)
“For handlers of AIG’s massive IPO of its Asian life insurance unit, getting investors to recognize the name and the size of the business is the easy part,” reports Reuters

Where’s the bull? Blackstone’s IPO plans

Time to reap some green shoots? Private equity firm Blackstone plans to list up to eight of its portfolio companies, aiming to make more hay from improved stock markets. Rival Kohlberg Kravis Roberts & Co’s Dollar General filed for an initial public offering of up to $750 million in August, and KKR is considering others, sources previously told Reuters.

Blackstone is positioning one company — hospital staffing firm Team Health — for an IPO and evaluating the potential for seven others, a source tells us, citing a letter sent from Blackstone to investors. The letter also says Blackstone is in the process of selling five companies outright, which it sees generating aggregate proceeds of $2.8 billion.

One of the exits is Kosmos Energy’s Ghanaian oil interests, the source who has the letter said. Sources previously told Reuters that Exxon Mobil had agreed to buy Kosmos Energy’s stake in the Jubilee field. Kosmos is backed by Blackstone and Warburg Pincus.

Window opening for clean tech IPOs?

The upcoming initial public offering of A123 Systems could help ease the way for more clean-tech stock offerings, one of the early investors in the battery maker said this week.
The company, which Chrysler has chosento produce lithium-ion batteries for its upcoming electric cars, set an IPO price range of $8 to $9.50 per share, which would raise up to $244 million, based on the 25.7 million shares it plans to sell.
“It will certainly be good for the sector just to get a real exit out there, both from a branding standpoint and from a  financing standpoint,” said Jamie Kiggen, chief investment officer for clean tech ventures at Blackstone Group, who in his previous job at Alliance Bernstein was an early investor in the Watertown, Massachusetts-based battery maker.
“If the IPO window opens up, that helps all of us,” Kiggen said at a Boston conference organized by the Cleantech Group.
A123 first filed its IPO plans with the U.S. Securities and Exchange Commission in August 2008. 
While the IPO market has picked up in recent months after a rough 2008, A123 would be the first U.S. clean tech company to go public since July 2008.