DealZone

Next in M&A: the WordPress Hug?

Maybe it’s time to add a new weapon to the old M&A arsenal of poison pills, dawn raids, and white knights — the corporate blog. You could call it the WordPress Hug.

Late on Monday, Cisco’s Ned Hooper used the company’s blog to insist it had offered “a very good price” for Tandberg, after some shareholders of the Norwegian videoconferencing company said the price was too low. (See his full post here.)

The “Driving Conversations” blog of General Motors Europe has also been a source of news on the long-running (and now abandoned) talks to sell Opel, hosting posts from GM’s chief negotiator, John Smith. (See some of his posts on the topic here.)

So could blogging become a major channel of communication on M&A transactions? Big corporations have enthusiastically adopted it for other uses- for example, “Randy’s Journal”, a Boeing blog, has a following in the industry and among aeroplane enthusiasts.

But it is hard to believe this trend would be welcomed by some financial regulators — like the UK’s Takeover Panel, which banned advertising during takeover battles more than 20 years ago.

DealZone Daily

Mergers and acquisitions activity may be predicted to increase over the next year but in the short-term it may provide another reason for deals to be postponed. Just ask General Motors.

Other deals news in the media on Thursday:

* An investment company controlled by the Shanghai city government will own a majority stake in a planned Disney theme park that won key government approval this week, the People’s Daily reported on Thursday.

* Scripps Networks (SNI.N) is close to an agreement to acquire a majority stake in the Travel Channel from Cox Communications, the nation’s third-largest cable company, the DealBook blog reported on Wednesday.

Noted: Resources M&A to pick up, Deloitte says

Deloitte’s Energy and Resources group says M&A in these sectors could return to “pre-recession levels” by 2011. In particular, it says the rise of big state-backed rivals is putting pressure on large mining groups, in much the same way Big Oil came under pressure a decade ago. From the group’s 2010 predictions report:

“During 2009, mining M&A has been led by the junior or mid-level players, which have to consolidate if they want to stay alive and not be swallowed up by the bigger firms. Indeed, many anticipate that the mining sector will continue to consolidate until there are a handful of supermajor firms like there are in oil & gas.

“Large mining companies will increasingly need to buy rivals and subsequently sell off assets to gain synergies if they are to compete with state-owned companies, particularly those from China.

Irene prepares to tough it out

It looks like Kraft CEO Irene Rosenfeld is getting ready to play hardball with her reluctant target, British chocolate maker Cadbury.

Cadbury investor Mario Gabelli will be disappointed in the short term – he wanted a small kiss from Irene after all - but a formal offer from the North American food group sets in motion an 88-day process under UK takeover rules.

That should give Kraft plenty of time to sweeten its offer to something starting with an eight – the 800p per share bar regarded by many as the minimum price needed to tempt Cadbury to the negotiating table.

Noted: UBS sees 15% M&A rebound next year

Like SocGen before them, UBS strategists are looking forward to a pickup in M&A next year. ubs-ma-as-percentage-of-global-market-cap

From a note published on Monday:

“We expect 2009 to mark the trough in global M&A transactions and for activity to pick up in 2010 and beyond. For FY2010, globally we expect M&A activity in the region of $2.5-2.7trl, an increase of 15% on current annualised run rate for 2009 and close to levels last seen in mid 2004-05. The biggest driver of an increase in activity is likely to be the increase in risk appetite in equity markets and in the boardroom, a return to earnings growth and profitability by World Inc and a backlog of pending asset disposals.”

“Credit conditions are also supportive and we expect private equity and bank lending to pick up at some point next year.”

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.

Dealzone Daily

Royal Bank of Scotland (RBS.L) says its deal with EU regulators and the UK government could include “divestments not initially contemplated” as radical shake-up of the UK bank sector looms in the coming days.

For more on these stories, and all the rest of the latest deal-related news from Reuters, click here.

And here’s some picks from the papers (some external links may require subscriptions):

Keeping score: PGE, Stellar Megaunion and IPOs

Highlights from the Thomson Reuters Investment Banking Scorecard:

BIGGEST EUROPEAN IPO SINCE MAY 2008

As part of a government privatisation program, Polska Grupa Energetyczna SA (PGE), an electric utility, raised $2.1 billion in an IPO on the Warsaw stock exchange this week.  The offering marks the largest IPO from a Polish company on record and the biggest IPO in Europe since the $2.5 billion listing of Dutch coal miner, New World Resources NV, in May 2008.

Goldman Sachs and Unicredit led the offering, which brings year-to-date European IPO activity to $3.3 billion, a decline of 76% compared to last year at this time.

* REAL ESTATE ACCOUNTS FOR 19% OF CHINESE M&A

China’s Stellar Megaunion’s planned $2.7 billion acquisition of real estate assets from Guilherme Holdings brings the volume of Chinese M&A to $73.6 billion for year-to-date 2009, a 14% decline from last year’s levels but far outpacing the 40% downturn for worldwide mergers.

DealZone Daily

That big, candy-coated M&A bellwether, Kraft-Cadbury, remains at the forefront of many dealmakers’ thinking. Brad Dorfman examines how the clock will really start ticking on a deal to create the world’s biggest confectioner once Kraft (KFT.N) reports earnings next week. Meanwhile, a clutch of other companies are making more upbeat noises about M&A, to wit:

* Juniper Networks Inc’s (JNPR.N) chief executive says the network equipment maker is open to acquisitions, although in-house research and partnerships remain its priorities.

* Macquarie Group Ltd (MQG.AX), Australia’s largest investment bank, has grown its surplus capital by almost half to a hefty A$4.5 billion ($4.1 billion), giving it muscle to hunt for assets overseas.

DealZone Daily

Blackstone Group (BX.N) talks to lenders about cutting up to $5 billion of debt held by its Hilton Hotels chain; National Express (NEX.L) ends talks over a possible merger with rival British bus and rail group Stagecoach (SGC.L); and the U.S. IT services sector occupies a sweet spot for M&A. Plus, will Obama’s upcoming trip to China be marked by a deal between Disney and Shanghai?

For more on these stories, and all the rest of the latest deal-related news from Reuters, click here.

And here’s some picks from the papers (some external links may require subscriptions):