M & A wrap: Glencore and Xstrata in mega merger talks
Xstrata and Glencore are in talks over an all-share merger that could create a combined group worth more than $80 billion, shaking up the industry with its biggest deal to date.
Glencore, the world’s largest diversified commodities trader, already owns 34 percent of mining group Xstrata and a tie-up between the two Swiss-based companies — in a deal which would trump Rio Tinto’s $38 billion acquisition of Alcan in 2007 — has long been expected, as Glencore aims to add more mines to its trading clout.
Now that Facebook has filed its hotly anticipated initial public offerings, analysts told Reuters correspondents Alexei Oreskovic and Alistair Barr that the social networking company’s honeymoon with investors may already be over.
Despite the massive IPO, CEO Mark Zuckerberg will exercise almost complete control over Facebook. Here is Zuckerberg’s letter to investors.
The graffiti artist who took Facebook stock instead of cash for painting the walls of the social network’s first headquarters made a smart bet, The New York Times says.
Venture capitalists are flocking to to China, leaving Europe behind, Deal Journal says.
M&A wrap: Banks vie for Facebook IPO role
With the prized Facebook IPO on the horizon for 2012, the lead investment-banking role is still up for grabs and long-time rivals Goldman Sachs and Morgan Stanley are considered front runners, the Wall Street Journal reports.
In this Deal Pipeline video, Paul Hastings corporate department partner Barry Brooks predicts that mergers and acquisitions in financial services will jump in 2012.
Banco Bradesco, Brazil’s second-biggest private sector bank, pulled out of talks to buy HSBC Holdings‘ consumer finance unit Losango on concern about potential charges related to labor disputes, a local newspaper reported on Friday.
The settlement between the Trust Company of the West and Jeffrey E. Gundlach caps a bitter and protracted dispute that turned the normally anodyne mutual fund world into a heated legal battleground, reports DealBook.
Swiss Petroplus struggles to keep its refineries across Europe running after aggressive acquisitions by former chairman Thomas O’Malley up to 2007 have given way to the current credit crunch, economic slowdown and financial crisis.
M & A wrap: SEC explores Groupon memo
Among the series of distractions ahead of Groupon’s IPO last month was the Mason Memo, WSJ’s Deal Journal reported late Wednesday. Newly disclosed documents shed light on how Groupon was forced to explain the memo to the SEC.
Alibaba Group has hired a Washington lobbying firm in a sign that the Chinese e-commerce company would be willing to make a bid for all of Yahoo in the event that talks to unwind their Asian partnership fail.
The value of global takeovers dropped to the lowest level in more than a year this quarter, Bloomberg.com reports. A recovery in 2012 looks to be muted because cash-rich companies are weighing Europe’s economic crisis before making big purchases.
The colossal collapse of Sears Holdings this week was ugly for stockholders. But if you think Sears was the no-brainer short of the century, here are three stocks likely to crash even harder, writes Jeff Reeves at The Trading Deck.
When Ind-Barath Power Infra dropped plans for a $200 million IPO earlier this year, it not only thwarted the fundraising plans of its controlling shareholder, but blocked an exit route for a clutch of private equity investors, Reuters reports.
M & A wrap: Icahn bids for Commercial Metals
“Billionaire investor Carl Icahn has launched his $1.73 billion unsolicited buyout offer for Commercial Metals Co., threatening to take the company’s board of directors to court if it does not allow the purchase,” the Washington Post reports.
Meanwhile, Reuters is reporting Commercial Metals has changed its mind and will review Carl Icahn’s $1.73 billion buyout offer after all, just days after dismissing it as “substantially undervalued” and “opportunistic.”
“The SEC served notice that it will likely sue billionaire Phil Falcone and other people affiliated with his Harbinger hedge fund,” the Wall Street Journal’s Deal Journal reports, while the impetus is yet to be revealed.
The U.S. Justice Department said on Friday it would seek to stay or dismiss its lawsuit to stop AT&T Inc’s purchase of T-Mobile USA because AT&T withdrew its application with the Federal Communications Commission, which must approve the deal.
Two of Canada’s largest telecom and media companies will take control of the lucrative Toronto sports empire that owns the NHL’s Maple Leafs in a $1.30 billion deal that brings more premium content to their competing sports channels, Reuters reports.
Deals wrap: Nasdaq, ICE drop NYSE bid
Nasdaq OMX and IntercontinentalExchange (ICE) dropped their $11.1 billion bid for rival exchange NYSE Euronext after it became clear the deal would not gain approval from U.S. antitrust regulators. The companies first offered to buy the New York Stock Exchange parent on April 1, aiming to curb a proposed friendly merger with Deutsche Boerse that was worth $10.2 billion when first announced in February. Deutsche Boerse responded to the news of the dropped bid by saying it plans to continue to pursue a merger with the Big Board parent.
In other exchange merger news, a consortium of Canadian banks and pension funds launched a $3.7 billion bid for TMX Group in the hopes of keeping Canada’s largest stock exchange from falling under foreign ownership. The bid tops a $3 billion offer for the exchange operator from the London Stock Exchange (LSE). The LSE said it remains committed to its own merger proposal with the TMX despite the higher rival offer, but should its bid fail it could find itself to be a takeover target, analysts said.
U.S. chemicals group DuPont won its takeover battle for Danish food ingredients company Danisco. The $6.4 billion acquisition is a part of DuPont’s push into the food technology business that CEO Ellen Kullman says will “create an industry leader in industrial biosciences and nutrition and health.”
BP is in talks aimed at buying out its Russian partners in its TNK-BP joint venture and other options to help secure passage of a stalled share swap and Arctic exploration deal, sources close to the matter told Reuters.
Yahoo and Alibaba Group will have a tough time resolving their feud over the Chinese company’s transfer of a major Internet asset despite a joint statement from both companies that said they were working towards a resolution, writes Reuters correspondent Melanie Lee.
Krypton, Helix of Giraffe? It’s all in the code name
M&A reporter Quentin Webb has just taken a look at 2010′s crop of M&A code names, the latest in a long cloak-and-dagger tradition that dates back at least to the “Barbarians at the Gate” era of the 1980s buyout barons. Click here for the full article – just who was Mercury, Giraffe or Krypton, and why don’t Russian composers make the cut?
Links:
A post on code names from DealBook, back at the height of the merger boom, complete with code names for takeovers involving Morgan Stanley and others.
The FSA’s 2007 newsletter admonishing UK firms for “poorly chosen” code names.
Or see Alphaville on how the FSA itself dubbed Northern Rock, er, ”Elvis”.”
M&A uptick expected – survey
A survey of top dealmakers found that merger activity will increase during the balance of 2010, a sharp contrast in sentiment from last year.
A survey conducted by Brunswick Group LLC found that 78 percent of respondents expect M&A activity will continue to rise, while 22 percent said it would stay at the same pace seen in the first quarter.
Mergers and acquisitions topped more than $520 billion in the first quarter, up 19 percent from the first quarter of 2009, according to Thomson Reuters. Emerging markets and energy-focused takeovers made up a growing slice of the activity in the first quarter. Still, merger volume dropped 16 percent from the fourth quarter of 2009.
No advisors predicted a drop in deal activity for the remainder of 2010, according to the Brunswick survey. That’s in contrast to the 69 percent of respondents last year who said it would would take up to five years to return to the level of M&A activity seen in 2007.
The third annual survey polled 48 market participants in the M&A community, including bankers, lawyers and other advisors. Results were released on the eve of the 22nd Annual Tulane University Law School Corporate Law Institute, a top M&A conference.
Rising boardroom and CEO confidence in deal market conditions was the most significant factor driving the renewed activity, above the greater availability of credit and the low interest rate environment or an improving equity market and buoyant stock prices.
Among the top sectors seen as ripe for consolidation in 2010 are healthcare, energy, financial services, and technology and telecommunications, according to the survey.
DealZone Daily
U.S. coal miner Peabody Energy raises its offer for Australia’s Macarthur Coal to $3.3 billion, but the new offer is below Macarthur’s market price, suggesting the bidding could go higher.
Billionaire U.S. investor Wilbur Ross pays 100 million pounds to take a 21 percent stake in new UK bank Virgin Money, and could commit up to 500 million pounds to support a bid to buy the branch network of the Royal Bank of Scotland and other deals, he tells Reuters.
Loss-making Japanese electronics firm Hitachi will seek more alliances and acquisitions, as well as introduce a new governance system to help accelerate decision-making, its new president says.
And in M&A and corporate finance news reported by other media on Tuesday:
Four parties are interested in General Electric’s 21 percent stake in Garanti Bank, including National Bank of Kuwait and sovereign wealth fund Qatar Investment Authority, a Turkish newspaper says. Click here for the Reuters story.
Robert Maguire III, founder and former chief executive of Maguire Properties, is offering to buy three of the company’s buildings he believes are at risk of default, according to the Wall Street Journal.
DealZone Daily
Auto partners Renault and Nissan are in the final stages of talks with Daimler to obtain symbolic stakes in each other as they look to share technology amid intensify competition, according to reports. For the Reuters story click here.
Canada’s largest pension plan, the Ontario Teachers’ Pension Plan, is buying Camelot, the British national lottery operator, for 389 million pounds. It saw off rival bidder CVC.
In other M&A and corporate finance news reported by Reuters and other media:
South Korea’s top insurer Samsung Life is expected to raise an estimated $4.7 billion in its upcoming initial public offering, the country’s biggest share float, after a major shareholder group agreed to sell the bulk of their holdings in the offering.
U.S. private equity firm The Gores Group is mulling a merger between its unit Siemens Enterprise Communications and videoconferencing company Polycom Inc, the Financial Times says, citing people familiar with the situation.
UK hedge fund Man Group sounds out investors in U.S. about deals to expand there, the FT says.
DealZone Daily
Swiss commodity trader Glencore buys back its prized Prodeco coal operations in Colombia from mining group Xstrata. Analysts reckon the deal is worth around $2.5 billion to $2.7 billion — making it an easy decision for Glencore to exercise its option to buy as it values the mines at $4-$5 billion, a source says.
China Life Insurance Co, the world’s biggest life insurer by market value, is looking to buy a bank, its chairman says. It would be following peers as China relaxes restrictions on banks and insurance companies investing in each other.
In other M&A and corporate finance news reported by Reuters and other media on Friday:
Brookfield Asset Management is looking at a $3.6 billion listing of its Australian office portfolio to take advantage of improving tenancy levels, the Australian Financial Review says.
British fund firm Jupiter Asset Management is renegotiating its loans with investors, ahead of a possible listing, the Financial Times reports.
Vivendi, Europe’s largest entertainment group, is scouting for opportunities to invest in Brazil’s mobile phone market, the FT says.
