DealZone

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.

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.

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.

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.

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.”

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.

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.

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.

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.

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: