Deals wrap: Microsoft acquires Skype for $8.5 billion
Microsoft plans to buy internet telephone network Skype for $8.5 billion, the biggest purchase ever for the world’s largest software company as it seeks to regain ground on growing rivals. The money-losing Skype has 145 million users on average each month and has gained favor among small business users. The deal would also give Microsoft a foothold in the potentially lucrative video-conferencing market. Skype, which is minority owned by eBay, allows people to make calls at no charge but also offers some paid features.
This article in the Guardian by Graeme Wearden asked telecoms analysts what they think about the Microsoft-Skype deal.
Reuters columnist Felix Salmon gives his opinion on how being public eases acquisitions for companies, using the Microsoft-Skype deal and Facebook’s earlier interest in Skype as an example. Salmon writes that had Facebook been public, it could have snapped up Skype itself instead of having Microsoft buy it to keep it out of Google’s hands.
Deutsche Boerse’s works council is refusing to back a merger proposal with NYSE Euronext, according to two people familiar with the company’s thinking. The exchange is close to releasing a formal statement on behalf of the management and supervisory board, a formal part of German corporate governance in a takeover situation.
Buyout firms Blackstone and KKR are weighing up offers for France Telecom’s stake in Mobistar, sources familiar with the situation said. The deal could value Belgium-based Mobistar at more than 3 billion euros ($4.3 billion).
Chemicals group DuPont said it was confident its increased $6.4 billion offer for Danisco would succeed, after a hedge fund stoked uncertainty over the takeover. DuPont affirmed that its revised bid of 700 Danish crowns ($135) per share for Danisco was its “best and final” offer.
Upscale handbag maker Coach is planning to list shares on the Hong Kong Stock Exchange, a move the New York-based company said reflected the importance of China’s luxury market. Last month, Coach said sales at its Chinese stores open a year had risen by a double-digit percentage.
Deals wrap: Dealmakers play it safe
Bankers taking part in the Reuters Global M&A Summit this week told correspondents Quentin Webb and Victoria Howley that despite a recent pickup in global dealmaking, economic fragility, natural disaster and political tumult in the Middle East are hurting corporate confidence and holding back a more robust M&A recovery.
“A new guard of private equity bosses has emerged at the top of the industry, striving to make their business more open before investors and policy makers, and alter preconceptions of this at times secretive industry,” writes Reuters private equity reporter Simon Meads.
Pfizer said it struck a deal to sell its Capsugel unit, the world’s largest maker of hard capsules, to private equity firm KKR & Co for nearly $2.38 billion.
Deutsche Boerse won’t make a decision on a higher bid for NYSE Euronext until the U.S. exchange’s board reacts to last week’s counter-offer from Nasdaq and IntercontinentalExchange, sources said.
Struggling pizza chain Sbarro said it filed for bankruptcy protection under Chapter 11, in a move aimed at eliminating about $200 million of its debt.
Minmetals Resources, China’s biggest metals trading firm, on Monday offered $6.5 billion to buy Equinox Minerals, chasing the target company’s copper assets in Zambia and Saudi Arabia.
Deals wrap: GM’s market splash
General Motors has raised billions of dollars in its IPO, but big investors still have plenty of cash on hand to plow into other new stock issues — if they have merit.
General Motors’ swift journey from dying company to blockbuster IPO is a remarkable story, which the Democrats received little political credit for.
One of the first signs General Motors was driving toward a record-setting IPO with booming demand from investors came from an unlikely indicator: a sudden shortage of chocolate mousse at an investor meeting.
Harrah’s scrapped its $500 million initial public offering. Sources told Reuters the stock listing was delayed over concerns it would have been priced too high.
KKR is in advanced talks to buy Del Monte Foods, two sources familiar with the situation said.
Read this week’s Thomson Reuters Investment Banking Scorecard here.
Fortune looks into why Dell won’t go private.
Deals wrap: Cracking down on hostile bids
“Britain’s takeover watchdog has unveiled proposals to make hostile bids harder but stopped short of endorsing the most radical proposals floated following the controversial takeover of Cadbury by Kraft Foods,” writes Quentin Webb. *View article
The Canadian province of Saskatchewan dismissed the idea that a hostile offer from BHP Billiton for Potash Corp would bring net benefits. *View article
“Kohlberg Kravis & Roberts is hiring part of Goldman Sachs Group Inc’s proprietary trading team, which is being shut down due to new restrictions on such trading,” write Steve Eder and Megan Davies. *View article
In other Goldman news, the company is considering paying back Berkshire Hathaway’s $5 billion investment, the WSJ reports. *View article
Deal wrap: Talking defense
Boeing defense chief Dennis Muilenburg startled many this week when he told the Reuters Aerospace and Defense Summit he would not rule out the possibility of a large-scale merger. Is he sending up a trial balloon to gauge the Pentagon’s reaction? *View article *Read more at the Aerospace and Defense Summit
Two of the world’s biggest private equity firms, KKR and TPG, are potentially interested in Foster’s wine business, but they are not currently working on rival bids, sources told Reuters. Earlier this week Foster’s rejected a $2.5 billion offer for its wine business as too cheap. *View article
The SEC is investigating investment advisory firms that channel investors’ money into hedge funds, the Wall Street Journal reported. *View WSJ article
The NYT’s Deal Professor blog takes a look at G3 Capital’s deal for Burger King. Apparently the investment firm wants its deal like Burger King’s customers want their meals, right now. *View NYT article
Did Oracle hire former HP CEO Mark Hurd because of his great management skills, or is there more to the story? A DailyFinance article looks into whether Oracle CEO Larry Ellison is after HP itself. *View DailyFinance article
Work hard at the market open and close and soak up the sun in the middle of the day. Is this a recipe for success? The WSJ profiles some traders who skip most of the day. *View WSJ article
Deals wrap: ICBC’s offer
Industrial and Commercial Bank of China Ltd, the world’s most valuable bank, says it will pay shareholders of its Hong Kong arm a 27 percent premium to take it private, as part of an effort to expand its presence there. *View article
GM is ratcheting up the PR in advance of an IPO, and the NYT takes a look at the mechanics of the promotion. *View NYT article
Who owns the “Sky” in “Skype”? *View paidContent article
peHUB is live-blogging KKR Earnings Call. *View peHUB article
Deals wrap: Welcome to the Big Board KKR
Will Kohlberg Kravis Roberts & Co’s listing on the Big Board bring a big yawn or release pent-up investor demand for the iconic private equity firm? It could be a bellwether for rivals looking to follow suit. * View article * View factbox
Agricultural Bank of China’s $19 billion IPO made a lackluster debut in Shanghai, weighing on the market and underscoring the difficulty other Chinese banks will face tapping investors for billions more. * View Article * View newsmaker
U.S. nutritional supplements maker NBTY said it agreed to be bought by Carlyle Group for $3.8 billion in one of the biggest private equity deals so far this year. The buyout underscores a revival in private equity deals following the credit crisis. * View article
KKR’s imagination
Nobody can question Eastman Kodak‘s intention in raising some $700 million. Getting a commitment from private equity firm Kohlberg Kravis Roberts to buy up to $400 million of its debt is also a perfectly logical step for the old-economy stalwart as it lumbers into the digital age. What KKR is thinking is another matter.
KKR says the investment reflects its belief in Kodak’s strategy. They’re also getting warrants in Kodak to purchase up to 53 million shares of its common stock. The Wall Street Journal says KKR could end up owning close to 20 percent of the company.
The 24/7 Wall St blog notes that the fall in Kodak’s share price following the news shows the market isn’t blindly convinced of KKR’s intelligence. But Kodak’s bonds got a boost, if for no other reason than there’s a buyer out there.
Nobody has offered much in the way of explanation as to why KKR sees potential in Kodak. Boosters may say most of the company’s restructuring is behind it, but that doesn’t answer the more important question of what lies ahead. Any bright ideas?
Here,imagination of getting Kodak into a very big corporate house is practicable in future.
Kodak means photography and excellent photos generation devices for many.
Very sorry to say that,this branded name is suffering for survival to this highly competitive world.
Latest digital map,digital photos, mobile photos and very attractive web cams are available and less maintenance charges for keeping it for years together.
I have observed that,many noted companies are falling like pack of cards .
Because they have not updated their research on new,more consumer friendly products.They thought that,established names will survive on new competition and carry on en cashing it for years together.
Now,this traditional way of business is over.
Kodak name is still in every body!s mind.
If any new,big business enterprise gets entire brand equity and then will be cherished by us for longer years.
Imagination will be put into practice.
Private equity asks for a top-up
A number of private equity firms in Europe are going back to investors for more money to fix over-extended balance sheets and fund add-on acquisitions for companies in their portfolio.
Private equity’s world has turned upside down since the start of the credit crisis. All the stats show that deal flow has dropped off a cliff and those deals that have got done are smaller and the equity cheques larger. At the same time, restructuring situations are mounting as firms face the uneviable choice of injecting more equity or face losing their investments to the banks.
The upshot is that buyout funds raised in rosier times are no longer suited to the current environment, if indeed they have any capital left at all.
As I have discovered, Nordic Capital, Investindustrial – the Bonomi family’s southern European buyout firm – and Graphite Capital are all asking investors for more money as they look to adapt to the new climate.
Many investors are currently over-committed to the asset class, meaning that the reaction to requests for new capital is likely to be mixed.
One investor in KKR’s second European buyout fund refused to back a planned 750 million euro annex fund because he viewed it as “a good money after bad” situation.
Other top-up fund stories have a more positive spin.
Live coverage of the KKR conference call
peHUB’s Dan Primack will be covering the KKR Private Equity Investors Q2 earnings call live at 1 pm ET.
