Deals wrap: Waiting for a hostile bid
The head of TMX Group said on Friday a hostile bid could come “any day now,” as a consortium of banks and pension funds prepares to take their approximately $3.7 billion offer for the Canadian exchange operator straight to its shareholders.
Live Nation Entertainment is in talks with its largest shareholder Liberty Media on taking the concert promoter and ticketing company private, the New York Post reported, citing sources familiar with the matter.
Nokia said it was still in talks with “multiple parties” about its stake in Nokia Siemens Networks, after a report that U.S. private equity firms had backed away from bidding for a majority stake.
Samsonite International, the world’s biggest luggage maker, raised $1.25 billion after pricing its Hong Kong IPO at the bottom of a revised price range as weak global markets sapped investor demand.
Japanese companies from eye shadow makers to insurers are stepping up the pace of their overseas expansion as the devastating March 11 earthquake provides another spur to escape their moribund domestic economy.
The WSJ’s Deal Journal asks, Is the IPO market hot, or not?
Muddy Waters Research is a thorn to some Chinese companies, reports the NYT’s DealBook. Reuters looks at Glencore’s chairman, Simon Murray, who is caught up in Sino-Forest saga.
Deals wrap: Nasdaq triumphant?
Nasdaq OMX and IntercontinentalExchange unveiled a rival bid to buy NYSE Euronext for about $11.3 billion in cash and stock, a 19 percent premium to the offer made by German competitor Deutsche Boerse. The move could raise new antitrust questions as it would combine the two largest U.S. stock exchanges. The new offer is valued at $42.50 per share, Nasdaq and IntercontinentalExchange said. The offer represents a 19 percent premium to NYSE’s closing price on Thursday and is 27 percent above the company’s valuation before Deutsche Boerse’s $10.2 billion bid in February. Analysts were skeptical about whether Deutsche Boerse would launch a counterbid.
Citigroup might be uncomfortable sitting on information needed to determine whether the onetime successor to Berkshire Hathaway Chairman Warren Buffett violated securities laws when he personally traded in shares of Lubrizol, which Berkshire acquired for $9 billion, but it doesn’t have to be damaging territory for Citi, writes Rob Cox.
No.1 concert promoter and ticketing company Live Nation Entertainment is in the running to buy the recorded music assets of Warner Music Group, the world’s third largest music company, according to a person familiar with the talks. Bids have come in valuing Warner Music Group at around $3 billion on an enterprise value basis, which includes both debt and equity.
Canadian satellite company Telesat Holdings is weighing takeover offers from EchoStar and Carlyle Group, and may decide on a possible sale in the coming days, according to Bloomberg. EchoStar agreed to buy Hughes Communications for $2 billion including debt in February.
Huffington Post columnist and non-executive board chair of the Mobius Life Science Fund Lucy Marcus compiled a list of the 100 Most Influential VCs, Angels and Investors for the new, social decade, writes PE Hub’s Mark Boslet. Union Square Ventures’ Fred Wilson at number 3 and blogger investor Paul Kedrosky at number 4 might not come as a surprise. But Kevin Rose, Digg founder, at the top of the chart and Twitter investor Chris Sacca number 2 are questionable, according to Boslet.
Fuzzy Logic? What’s bad for Live Nation and Ticketmaster isn’t bad for business
Britain’s Competition Commission did an about-face last night, giving its blessing to the proposed merger of live music giants Live Nation and Ticketmaster. What’s nearly as surprising as the reversal is the starkly negative reasoning behind the decision.
UK regulators had said in October they was concerned about the move to combine the world’s largest concert promoter with the leading ticketing group, saying fans could wind up paying more to see their favorite artists. Certainly artists, fans and politicians have been lined up against the deal, so the backbone to resist the merger seemed solid enough.
But on second thought, the Commission said the new entity would not have the incentive to hurt rivals, in particularly an existing partner of Live Nation’s. “We found that, in most of these cases, the merged entity would suffer significant and immediate losses, with very uncertain prospects for long-term gain … Therefore, we concluded that it was unlikely that the merged entity would harm other ticketing agencies, promoters and venues in these ways.”
So they decided to clear this unpopular merger because they don’t think it will work? I guess the logic is sound. What’s bad for the industry is probably good for consumers as ticket prices may drop. But there’s no guarantee of that. In fact, if they can’t squeeze profit out of the merger, they may have to raise prices. That could be good for the competition, but not consumers.
With a little momentum behind them, and apparently in the same vein of the absurd, the two groups said they remained optimistic there would be a similarly successful outcome in the U.S. and Canada, in line with approvals in Norway and Turkey.
from MediaFile:
Outlook grim for media and entertainment deals
Deal-making in the U.S. media and entertainment sectors is going to be down this year, says a new PricewaterhouseCoopers survey (request a copy here). Now, that's not a new or startling conclusion given the state of the economy, but it's just another piece of evidence that when consumers and advertisers get thrifty, deal makers can end up become benchwarmers as companies struggle with cost cuts and other exigencies.
Here are some industry trends for 2009 from the PWC survey:
- Declining consumer spending is hitting many media and entertainment companies. What's more, these declines were exacerbated by technological convergence, as these firms adapt to and look for ways to make money off new Internet technologies.
- Overall U.S. advertising market is going to shrink as sponsors cut ad budgets across retail, consumer goods, automotive, financial and other sectors.
- Companies will continue to divest their non-core assets, but those that don't get a good price will prefer to hold on rather than sell at bargain prices.
- Bolt-on deals will likely be popular for risk-averse companies, so deals below $1 billion -- mostly small and mid-market companies -- will be a rising trend.
- Private equity will remain quiet since the debt markets aren't really healthy yet.
- Deal structures will change this year, given the difficulty of getting debt financing. The strategic rationale for doing a deal will be more important than getting a favorable capital structure.
But all hope is not lost, according to PWC's Transaction Services Entertainment & Media Leader Thomas Rooney:
With M&A activity ingrained in the DNA of so many companies and the ever growing presence of private equity, E&M deal activity might not be as quiet as many expect in 2009... History has shown the E&M industry to be one of the more active M&A sectors irrespective of market and economic conditions.
And there have been a couple of deals already this year, although no mega-transactions, as the PWC report suggests. Live Nation wants Ticketmaster and Sumner Redstone's National Amusements theater chain is being shopped to potential buyers. Could Lions Gate be next?
(Photo: Viacom chairman Sumner Redstone/REUTERS)
The Main Event
Ticketmaster and Live Nation are reported to have approved a merger plan, but regulators may yet steal the show. The Wall Street Journal reports Ticketmaster approved the deal on Sunday and Live Nation followed suit on Monday after resolving a handful of accounting issues, described as minor.
Ticketmaster dominates the seat-selling business and has a big artist-management division. Live Nation brings a big network of concert venues, promoters and a promotional prowess in everything from T-shirts to fan clubs.
Obama administration antitrust folks just sitting down at their desks will be taking a long hard look at this deal, which would create the world’s largest concert promoter with an estimated market value of $700 million. Obama has promised to toughen up antitrust enforcement, and the enfeebled music industry is likely to mewl foul.
They won’t need a lot of help to cast this deal in a dirty light. Ticketmaster has been doing plenty of damage to itself in the public arena recently. Yesterday, the company was hit with a C$500 million ($410 million) Canadian lawsuit alleging it broke the law by reselling tickets at inflated prices. The suit mirrors complaints in the United States that people trying to buy tickets to Bruce Springsteen’s current tour were redirected to Ticketmaster’s TicketsNow site, where tickets were available at much higher prices. They ticked off The Boss. That can’t be good.
Other Deals News: * Biotechnology company Genentech urged shareholders to take no action on a hostile $42 billion bid by rival Swiss drugmaker Roche, saying its independent directors will decide formally on the surprise offer within 10 days.
* UTS Energy urged its shareholders to reject Total SA’s C$617 million ($506 million) takeover bid and it formally began wooing rival bids for its oil sands assets.
* The Kuwait Investment Authority (KIA) would consider increasing its support for Dow Chemical Co’s disputed takeover of Rohm and Haas if the terms of the deal were changed to account for the downturn, the Financial Times said, citing a person familiar with the matter.
Just the ticket
Will Ticketmaster’s new duet fend off a hot rival and help it rise above an economic climate that makes pricey concert tickets seem like an extravagance?
The ticketing giant has announced a complex deal to acquire top artist-management agency Front Line, home to artists including Christina Aguilera, the Eagles and Neil Diamond. Front Line honcho Irving Azoff will run the combined company — raising questions about how Ms. Aguilera’s manager will negotiate her ticketing fees with himself.
Ticketmaster already owns a minority stake in Front Line, and will pay $123 million to Warner Music Group for an additional 30 percent stake, as the Wall Street Journal was the first to report.
As the music industry has crumbled, the concert business has been one of the sole bright spots in recent years. But with a global recession getting top billing and upstart rival Live Nation scooping up exclusive deals with artists like Madonna, it could be a tough act for Ticketmaster to follow.
Are you less likely to go to concerts now that the economy is looking grim? Leave you answer in the comments section.
DEALS OF THE DAY
** New Zealand’s Port of Tauranga is expecting rival Ports of Auckland to bid for its container business, it said, as a declining shipping business has port operators looking at consolidation.
I went to the Bright Things AGM yesterday and have to say I am very impressed with the team they have got together as well as their energy, clear business plan and understanding of the market they work in
The deal with Widgetlaboratory mentioned in the article above looks like it’s going to be of huge benefit for the development of their network making tool website, http://www.socialgo.com
Excellent to see a microcap minnow actually doing well during these torrid market conditions
