M&A wrap: Total merges solar units
U.S. solar panel maker SunPower, a unit of French oil major Total, said it had agreed to buy Total-owned Tenesol for $165.4 million in cash in an expected deal that will regroup the French group’s solar business under one umbrella. Total announced the $1.3 billion takeover of SunPower in June.
Concurrently with the closing of the acquisition, Total has agreed to purchase 18.6 million shares of SunPower common stock in a private placement at $8.80 per share, a 50 percent premium to SunPower’s Dec 22 closing price. After the sale of Tenesol, Total will own about 66 percent of SunPower shares.
Deutsche Boerse won U.S. antitrust approval to buy NYSE Euronext in a $9 billion deal to create the world’s No. 1 exchange operator, but the transaction still faces serious regulatory headwinds in Europe. In Europe, there have been weeks of negotiations with antitrust regulators, in which staff made clear their reservations about approving a combination of Deutsche Boerse’s Eurex and NYSE Euronext’s Liffe on concerns that the merged entity would have a monopoly over European listed derivatives trading. A formal decision by the European Commission is not expected until January or early February.
ConvergEx Group, a software provider for brokerage and investment technology firms, said it terminated its merger agreement with private equity firm CVC Capital, partly because of probes by U.S. regulators. CVC Capital was looking to buy ConvergEx, which is partly owned by Bank of New York Mellon (BK.N), for $1.9 billion, Bloomberg had reported in July.
China Three Gorges Corp’s $3.5 billion acquisition of the Portuguese government’s stake in utility EDP highlights China’s appetite for physical assets in troubled economies and its ability to make its bids attractive with the promise of financial support. China is looking to pick up assets such as infrastructure and utilities in places like Europe at a bargain, rather than only buying the bonds of countries facing economic difficulties.
M&A wrap: EU crisis hits bank advisory fees
Europe’s debt woes dragged worldwide investment banking income down this year, data showed, with fees on the continent slumping to the lowest quarterly level ever recorded and company listings and acquisitions grinding to a near halt. In Europe, fees raised since October from bonds, flotations and mergers and acquisitions stand at the lowest quarterly level ever recorded by the data providers. A stronger start to the year in areas such as mergers and acquisitions fizzled out, leaving investment banks’ overall haul of fees at $72.6 billion — down 8 percent on 2010.
Yahoo is considering a plan to unload most of its prized Asian assets in a complex deal valued at roughly $17 billion, sources familiar with the matter said on Wednesday, winning nods of approval from Wall Street and driving its shares higher. The offer – the latest among proposals put forth in recent months to resuscitate the once high-flying Internet company – is expected to be considered by Yahoo’s board on Thursday, sources said. The board was uninterested in entertaining offers for the entire company at this point, said one of the sources, who spoke on condition of anonymity.
Oshkosh Corp has sent a proxy card to shareholders recommending they ignore an effort by billionaire investor Carl Icahn to install his own board members as he pushes for a merger with one of the company’s key rivals. Icahn recently nominated six associates to be on the board of the Wisconsin maker of trucks, construction lifts and defense vehicles. In a letter to the company’s shareholders last week asking for support for his nominations, he also voiced strong support of a merger between Oshkosh and Navistar International Corp. Icahn owns nearly 10 percent stakes in both companies.
Vulcan Materials Co rejected Martin Marietta Materials Inc’s $5 billion takeover bid, and said the offer undervalued the company and would not increase shareholder value in the future. Vulcan Materials, the world’s largest producer of sand, gravel and other construction materials, said the premium offered was significantly lower compared with previous transactions in the construction materials industry.
European Commission antitrust officials on Wednesday showed no sign of being swayed by Deutsche Boerse and NYSE Euronext’s last-ditch arguments to save their $9 billion deal, sources said, making it increasingly likely the exchange operators will have to take their campaign directly to the commissioners.
M & A wrap: Saudi prince buys Twitter stake
Saudi billionaire Prince Alwaleed bin Talal, an investor in some of the world’s top companies, has bought a stake in Twitter for $300 million, gaining another foothold in the global media industry. Alwaleed, a nephew of Saudi Arabia’s king estimated by Forbes magazine in March to have a fortune of $19.6 billion, already owns a 7 percent stake in News Corp and plans to start a cable news channel. The Twitter stake, bought jointly by Alwaleed and his Kingdom Holding Co investment firm, resulted from “months of negotiations,” Kingdom said.
Explorer Gulf Keystone Petroleum is not in talks with U.S. oil major Exxon Mobil Corp about a 7 billion pounds ($10.9 billion) bid, a source familiar with the Kurdistan-focused group’s thinking said on Monday. The Independent on Sunday newspaper reported that Exxon was considering making an estimated 800 pence per share bid – five times Gulf Keystone’s closing share price on Friday. The report, which drove Gulf Keystone’s shares up as much as 24 percent on Monday, said the company’s board had discussed Exxon’s interest a fortnight ago. But a source familiar with Gulf Keystone’s thinking said there were no talks with Exxon.
European Goldfields, which has agreed to a C$2.5 billion ($2.4 billion) takeover by Canadian group Eldorado Gold, is hoping to keep an investment deal with Qatar’s sovereign wealth fund as a fall back option. Qatar Holdings agreed in October to provide a $600 million project financing loan to European Goldfields, which has development stage assets in Greece and Romania, in its first investment in a gold miner. It also provided a $150 million loan note and a related warrant issue, and became a major shareholder, with a 9.9 percent stake. Eldorado’s strong balance sheet means European Goldfields is unlikely to need the cash from Qatar if the takeover goes through — but it does need two-thirds of shareholders to back the deal when they vote in February.
Etihad Airways is taking a stake of almost 30 percent in Germany’s Air Berlin, becoming the first Gulf carrier to challenge European legacy airlines by putting cash on the table to gain scale. Abu Dhabi-based Etihad will spend about 73 million euros ($95 million) to buy new shares of Air Berlin, raising its stake to 29.21 percent from just below 3 percent, and will lend the German carrier $255 million, the two companies said on Monday.
Deals wrap: M&A not immune to Euro crisis
Shadows that started to fall over the pitch books of European dealmakers in the second quarter are darkening, threatening to rob banks of a few billion dollars in potential M&A fees.
After a robust first quarter boosted by mega transactions like Deutsche Telekom’s $39 billion exit from the U.S., fears about stuttering growth and Europe’s mounting debt crisis slowed the rise to only 24 percent in the second quarter, reversing hopes of a robust rebound and several years of rising M&A.
Analysts are pointing toward September as a key time frame if M&A’s have any hope of rebounding, with SABMiller’s expected renewed assault on Australian bid target Foster’s coming later this month.
In other news, Bank of America Corp has held exploratory talks with the principal investment funds of Kuwait and Qatar about selling part of its $17 billion stake in China Construction Bank, three sources with direct knowledge of the talks told Reuters.
BofA, the largest U.S. bank by assets, is likely to sell half its stake to shore up its Tier 1 capital, one of the sources said. Analysts believe Bank of America needs about $50 billion to meet new capital requirements.
Finally, from the WSJ.com comes a report that Wal-Mart is exploring a potential acquisition of the Brazilian unit of French retailer Carrefour SA, two years after a previous attempt to strike a deal ended over a disagreement on price.
Investment bank UBS AG is advising Wal-Mart on the possibility of making an offer for Carrefour’s Brazilian stores, which could be valued at between $6 billion and $8 billion, they added
Deals wrap: BHP shrugs off green fears
BHP Billiton will buy U.S. gas producer Petrohawk Energy for $12.1 billion, ramping up its bets on the booming but environmentally controversial shale gas industry. The FT also takes a look at the deal.
Carl Icahn offered to buy Clorox in a $10.2 billion deal, but also invited the household products maker to solicit rival bids, which he said would yield much higher offers for the company.
They were just a few brief comments at an investor conference but they were enough to set the health insurance industry abuzz: Could Aetna buy Cigna?
Almost every company eventually dies. With that in mind The Big Picture asks if Facebook has missed its IPO window.
PEHub finds out what the mob can teach you about the startup industry.
Some execs are looking for an iPad to be included in their golden handshake. Daily Ticker gets the scoop on company perks.
Deals wrap: M&A pace set to slow
M&A deals declined in the second quarter from the previous three months, casting gloom on hopes of a reviving world economy that will prompt executives to put their cash-rich balance sheets to work. Get full coverage on the state of M&A here.
China Everbright Bank has delayed meetings with investors to promote its planned $6 billion Hong Kong share listing, three sources with direct knowledge of the deal said, underscoring shaky sentiment in global markets and weak IPO performances in Asia.
At the Rebuilding Japan Summit, three veteran M&A advisers provide insight into corporate consolidation in Japan and what role this may play in the wake of the March 11 disaster.
Prada posted slim gains in its $2.14 billion IPO debut in Hong Kong, defying expectations for a weak start as investors who couldn’t buy into the IPO snapped up the stock in a buoyant market.
Divorced from someone convicted of a Ponzi scheme? Your money may be safer than you think, writes The New York Times.
Another wave of Chinese IPOs is hitting the US equity market, but this time many US investors are staying dry, according to a report from Renaissance Capital.
Deals wrap: Cooling off on IPOs
Samsonite, the world’s biggest luggage maker, dropped 7.7 percent in its Hong Kong trading debut on Thursday, underscoring tepid investor appetite for initial public offerings as global markets struggle.
Pipeline operator Energy Transfer will buy smaller rival Southern Union for about $4.11 billion to bolster its natural gas gathering and transportation capacity amid burgeoning production from U.S. shale fields.
Alibaba Group said it has reorganized Taobao, China’s largest e-commerce website, into three separate companies, squashing any chance of a Taobao public offering.
Investors learned a hard lesson on Wednesday about red-hot Internet companies: they can go cold very quickly. The Lonely Value Investor writes about loving Pandora’s product, but hating the stock.
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: Blockbuster year for M&A?
Despite upheaval in the Middle East and Japan, worldwide M&A have risen 58 percent to $717 billion so far this year, according to preliminary data from Thomson Reuters, marking the best start to a year since 2007 and building on last year’s tentative recovery. Analysts expect to see continued strong activity in mining and energy, but some warned it’s still too early to see the full implications of the recent crises.
Deal-making in Asia got off to a strong start in 2011, with cashed-up companies tapping investment opportunities in sectors from energy to industrials, and bankers say the transaction pipeline for the rest of the year looks healthy.
Executives at boutique investment banks see an increasing number of clients wanting their advice after a Delaware ruling last month accused large investment bank Barclays Capital of conflicts of interest.
Wall Street’s most powerful bank, Goldman Sachs Group, is making its worst showing in U.S. deal advisory rankings in more than two decades, sliding to 10th place in the first quarter of this year. The drop is mainly because the firm did not advise on two mega deals: AT&T’s $39 billion deal for T-Mobile USA and the $59 billion restructuring of insurer American International Group.
Signs of firms testing investor demand for new listings only a week after volatility derailed two of Europe’s largest offerings so far this year will embolden Glencore as the commodities giant presses ahead with its own mega-float, intended for early next month.
Even with Barnes & Noble selling for 60 cents on the dollar, the cheapest retailer in the U.S. isn’t cheap enough to entice private equity buyers looking for cash, writes Bloomberg’s Tara Lachapelle and Matt Townsend. The chain is the only U.S. retailer with a value of more than $500 million trading at a discount to its net assets, according to data compiled by Bloomberg.
Deals wrap: An all-Japan exchange?
Call it the survival instinct. The flurry of mergers and alliances underway in the global exchanges industry has served as a call to action for the Tokyo Stock Exchange, which may begin merger talks with its main Japanese rival Osaka Securities Exchange as it seeks out ways to survive consolidation sweeping the sector.
Meanwhile, some of Canada’s big banks are protesting the London Stock Exchange’s proposed $3.2 billion takeover of Toronto Stock Exchange parent, TMX Group. Bank executives told a hearing that the deal threatens Toronto’s status as a global financial hub and could harm the prospects of Canadian companies looking to raise funds on public markets.
HCA, the biggest U.S. for-profit hospital chain, made history on Wednesday when it pulled off the largest private-equity backed initial public offering ever. Investors snapped up more shares than expected in the $3.79 billion IPO, shrugging off the hospital operator’s high debt levels as the market for newly traded shares heats up. Check out our list of the ten largest U.S. private equity-backed IPOs.
“Since Groupon declined a Google $6 billion buyout offer, hundreds of companies have launched, trying to emulate its business model by targeting narrow slices of the market,” writes Jessica Bruder of the NYT’s DealBook.
Starbucks is teaming up with Green Mountain Coffee Roasters to break into the fast-growing single-serve coffee market.
