DealZone

Fuzzy Logic? What’s bad for Live Nation and Ticketmaster isn’t bad for business

Live Nation, Ticketmaster deal gets green light in UK

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.

DealZone Daily

HSBC (0005.HK) (HSBA.L) has resumed talks with Royal Bank of Scotland (RBS.L) over the purchase of the remaining retail and commercial units that bailed-out RBS owns in Asia, according to sources. RBS is selling its remaining retail and commercial banking units in China, India and Malaysia, worth ” a few hundred million” dollars. The talks are in early stages as Standard Chartered’s exclusive negotiations with RBS only ended within the past week or so.

For these stories and more deals-related news from Reuters, click here.

Here’s what we found in Thursday’s newspapers:

* Part-nationalised British lender Lloyds Banking Group (LLOY.L) is sounding out investors about a 15 billion pound ($23.81 billion) rights issue to help it avoid a government scheme to insure it against credit losses, The Financial Times reports.

* Chinese metals conglomerate Chinalco may be interested in acquiring a stake in UC RUSAL when the indebted Russian aluminium giant lists shares in Hong Kong, the Vedomosti business daily cites two banking sources as saying.

Deals du Jour

General Electric Co’s (GE.N) Jeffrey Immelt has just come out to say it is holding discussions on partnerships or an IPO for its NBC Universal unit. Sources familiar with the talks have told Reuters that GE and cable operator Comcast Corp (CMCSA.O) are discussing a deal.

Mexican brewer FEMSA (FMSAUBD.MX)(FMX.N) has talked with Britain’s SABMiller Plc (SAB.L) and Heineken (HEIN.AS) from the Netherlands about a possible sale of beer operations that could be worth billions of dollars, a source familiar with the situation told Reuters.

Last but not least, the UK Takeover Panel has given Xstrata PLC (XTA.L) a deadline to “put up or shut up” on its proposal to merge with rival miner Anglo American (AAL.L).

Deals du Jour

U.S. network equipment maker Cisco systems offers to buy Norwegian video-conferencing equipment maker Tandberg ASA for $3 billion in cash. The offer price of NOK 153.5 per share represents a premium of 11 percent to Tandberg’s closing price on Wednesday.

Sanofi-Aventis (SASY.PA) says it has acquired privately-held Fovea, a privately-held firm specialised in eye diseases, for up to 370 million euros.

For these stories and more deals-related news from Reuters, click here.

And here’s what we found in Thursday’s papers: 

* ViaSat Inc (VSAT.O), which provides satellite and other wireless networking systems, has agreed to buy Wild Blue Communications Inc for more than $565 million, the Wall Street Journal reports. The deal is a combination of $440 million in cash and $125 million in new Viasat shares. Wild Blue is owned by Liberty Media Corp (LINTA.O).

Keeping score: UK M&A, Asian tech and US debt

Here are the highlights from this week’s Thomson Reuters investment banking scorecard:

Cadbury deal lifts UK M&A to $168.8 billion

The $19.3 billion offer by Kraft Foods for UK confectioner Cadbury lifted UK target M&A to $168.8 billion for the year-to-date period, an increase of 19% over last year. The transaction could rank as the second largest non-government acquisition in the UK this year after Xstrata’s $42.5 billion bid for Anglo American in June.

UBS, which advised on both the Cadbury and Anglo deals as well as the UK government investments in Lloyds Banking Group and RBS, leads the year-to-date UK target league table with $124.6 billion from 21 announced deals.

The bulls and bears on equity rallies and M&A

Rising stock markets and talk of improving economic confidence have prompted a barrage of analyst notes on how the M&A market is picking up.  Check out what I wrote on the subject earlier Thursday .

Here’s a few quick points from others:

Citigroup said that as global economic indicators stabilize, financing markets reopen and equity markets recover, hostile takeovers may be poised for a sharp resurgence. “Indeed, many recent high profile M&A transactions have been unsolicited or hostile in nature,” a note said.

My colleague Quentin Webb talked about mergers and aggravation, or hostile bids,  in July.

Deals du Jour

Deals abound. This morning, Vivendi launches a bid for GVT, a Brazilian telecom operator. The deal will be worth some 2 billion euros if completed. And overnight, it became clear who are the bidders for the 46 percent-stake in Kuwaiti telecom operator Zain. A consortium of Indian telecom companies will pay some $13.7 billion for the holding, together with a Malaysian investor. For other Reuters stories on deals, click here.

And here are some deal-related stories in other media.

* China Vanadium Titano Magnetite Mining and sportswear retailer Peak Sport Products aim to launch initial public offerings in the next few weeks, a Hong Kong newspaper reported.

* China’s Yantai Wanhua Polyurethane Co (600309.SS) is seeking to buy a stake in privately owned Hungarian chemicals firm BorsodChem as a long-term strategic investor, business daily Napi Gazdasag says.

Keeping score: US leads M&A, Securitizations, National Express

An Iraqi worker adjusts an oil pipe at Nahr Al-Umran gas refinery in Al-Dier District, northern Basra July 17, 2009. REUTERS/Atef HassanHere are the highlights from this week’s Thomson Reuters Investment Banking Scorecard:

- US M&A Accounts for the Majority of Weekly Worldwide Activity

US M&A activity was worth $13.9 billion for the week, bolstered by a flurry of deal announcements ahead of Labor Day in oil and gas, media and pharmaceuticals.  Goldman Sachs and Bank of America Merrill Lynch each advised on just over $9 billion in deals this week.

 

- Government Program Lifts Weekly US ABS Volume to $16.4 billion

The weekly volume of US asset-backed securities totaled $16.4 billion, powered by $14.2 billion of offerings eligible for Term Asset-Backed Securities Loan Facility (TALF).  Multi-billion dollar securitizations from the likes of Citigroup, Bank of America and Ford brought year-to-date ABS volume to $110.5 billion, a 28% decrease from last year at this time when issuance totaled $154.1 billion.

Deals du Jour

traders1

Details emerge of the Swiss government’s disposal of 9 percent stake in UBS. Traders snapped up the 332 million shares at the top end of the expected price range in a heavily oversubscribed sale, a source told us. 

Talks over a complicated merger between telecommunications firms MTN and Bharti Airtel are extended for a second time until the end of September. As uncertainty over a successful completion drags on one shareholder we talked to said the extension showed that the deal may be too complex.

For the latest Reuters stories on M&A and investment banking, click here.

For a round-up of other stories featured in the media today take a look at our market chatter.

from Commentaries:

Cash M&A still lifeless

Bond sales are at a record, equity markets are at year-highs, private equity firms are sitting on huge cash piles -- Blackstone alone has $29 billion -- and banks are lending to each other again.

The ingredients should all be there for a resurgence of cash-driven mergers and acquisitions. But instead, the market is in hibernation.

So far the value of all M&A deals completed this year totals $990 billion. You have to go back to 2003 -- when the total for the year was $1.23 trillion -- to find a figure this low, according to Thomson Reuters data.