M&A wrap: Amazon, Nokia, Microsoft weighed RIM bids
Research In Motion has turned down takeover overtures from Amazon.com and other potential buyers because the BlackBerry maker prefers to fix its problems on its own, according to people with knowledge of the situation. Amazon hired an investment bank this summer to review a potential merger with RIM, but it did not make a formal offer, said one of the sources. It is not clear whether informal discussions between Amazon and RIM ever led to specific price talk.
The Wall Street Journal reports that Microsoft and Nokia have discussed the idea of a joint bid for RIM, but the status of those talks remains unclear.
HSBC, Europe’s biggest bank, is retreating from Japan’s private banking market, selling a business that serves the wealthy to Credit Suisse, which is raising its profile in the world’s second-largest market for millionaires.
Tokio Marine said it will buy U.S. insurer Delphi Financial Group for $2.7 billion and is eying other acquisition targets, as Japan’s No.2 property-casualty insurer looks to expand outside its mature home market and diversify geographic risks.
Dozens of black-suited investigators, marching double-file, raided the office building of three small Olympus Corp subsidiaries Wednesday, one of 20 sites searched in a probe of a $1.7 billion accounting scandal that threatens the once-proud Japanese medical device maker’s survival.
Shareholders of Medco Health Solutions on Wednesday overwhelmingly approved its $29 billion acquisition by rival pharmacy benefit manager Express Scripts, although the massive deal still faces an uncertain regulatory review.
from Breakingviews:
Forget the IPO, Facebook could reverse into Yahoo
By Rob Cox The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Now that Yahoo has fired its chief executive, anything could happen to the rudderless Internet hodgepodge. Private equity firms, one of Yahoo's founders and even AOL are said to be mulling bids. But consider a more radical option: a takeover by the rival most responsible for Yahoo's fall from grace -- Facebook.
It's of course easy to marshal arguments why Facebook's creator, Mark Zuckerberg, should avoid staining his company Yahoo purple. The social network is already growing rapidly. Revenue doubled in the first half to $1.6 billion with profit of nearly half a billion.
Moreover, Facebook is a private company without the $20 billion or so of cash needed to buy Yahoo. Since Facebook is just starting to profitably harvest its audience of 750 million users, the firm should stick to its knitting, or so the argument goes.
But Facebook has the ingredients to make Yahoo succeed, starting with a clear mission. Yahoo has struggled to articulate a vision beyond being the first page people see when they open a browser. Beyond that, nothing binds Yahoo's pieces -- news, photo albums, stock quotes, email, job listings and entertainment -- together. They look like orphaned applications for a social network.
What unifies Yahoo's bits and bobs is a relatively robust display advertising platform. In an overall crummy second quarter, display revenue increased 5 percent to $467 million. Facebook is still building out its capacity to sell such ads. A combination would make a compelling pitch to advertisers.
In search, both have a common nemesis in Google. They also have a shared partner in Microsoft, which owns a piece of Facebook and whose Bing search engine collaborates with Yahoo.
Deals wrap: Zynga files for IPO
Zynga Inc filed paperwork for an initial public offering on Friday, the latest in a series of hot social media companies to seek capital in the U.S. public markets. The company, which is behind a series of popular games on Facebook, said it hoped to raise up to $1 billion. It did not specify the number of shares it plans to sell or give an expected price range.
A group including Apple, Research In Motion and Microsoft will pay $4.5 billion to snatch Nortel Networks’ patents from under the noses of Google and Intel, stealing a march on their rivals in a litigious market. Bankrupt Nortel had put up for sale 6,000 patents and patent applications in the largest public sale of its kind, a potential treasure trove for latecomers to the market such as Apple, Google and Intel.
Belgium’s KBC Group is expecting around eight to 10 first-round offers for its private banking arm KBL, people familiar with the matter said, after attempts to sell the business for $1.9 billion failed in March. Bidders are expected to include corporate suitors and private equity firms from across the globe, the person said, and a shortlist for the next round will be drawn up in about a week.
Investors are asking for more of their money back from hedge funds in June than in any other month in 2011 as fund returns hit by May’s commodity rout shake client confidence, according to data by hedge fund services firm GlobeOp.
Can a sports franchise be run like a hedge fund? That’s what Tom Gores, head of Los Angeles-based private equity fund Platinum Equity, is attempting to do with the Detroit Pistons after firing the NBA team’s chief executive and filling the job with a pair of Platinum Equity partners. According to NYT’s DealBook these moves “are straight out of the private equity playbook.”
Deals wrap: Glencore disappoints while Yandex confirms price
Even though sources close to Glencore felt the commodities trader had left “money on the table” with an offer price of 530 pence that valued the company at $59.15 billion, the company’s shares were stuck under water on their first day of official trade, dashing hopes of a strong start.
While some analysts still expressed concern over Glencore’s valuation, several analysts and bankers brushed aside worries about the stock trading below the offer price. They said the market debut should be seen as a success given its size and the continued uncertainty in both commodity and equity markets.
In other news Yandex’s initial public offering, the Internet sector’s biggest U.S. float since Google, was 17 times oversubscribed, a source said, with demand boosted by a blow-out float of LinkedIn.
Yandex priced the offer at $25 per share, it said in a statement on Tuesday, confirming an earlier Reuters report.
The float on the Nasdaq raised $1.3 billion, or 19 percent more than initially expected for Yandex, the leading internet search site in Russia.
Seeking Alpha takes an in depth look at how Yandex went from the creation of two entrepreneurs 20 years ago, to the Google of Russia today.
Finally Shira Ovide of WSJ.com has in interesting look at the merry-go-round between eBay, Skype and Microsoft.
Deals wrap: AIG’s $9 billion stock offer less than half of what was expected
American International Group and the Treasury will sell nearly $9 billion in stock as the bailed-out insurer begins its return to public control. This offering is less than half of what had been expected when Wall Street banks offered their services to manage the stock sale in January. The company was rescued in September 2008, receiving $182 billion in bailouts and managed to restructure while preserving two core businesses. At the time, few expected AIG would even exist today.
Professional networking service website LinkedIn is looking to go public, a move that could value the company at more than $3 billion. In this article, NYT’s Steven M. Davidoff explains why certain plans LinkedIn has for its IPO would “not only disenfranchise its future shareholders, but contains elements that have been heavily criticized by corporate governance advocates.”
The impact of AT&T’s proposed acquisition of T-Mobile on competition, pricing and consumer choice will be examined at a congressional hearing, where top executives are scheduled to appear to defend the deal. A successful merger would concentrate 80 percent of U.S. wireless contract customers in just two companies — AT&T/T-Mobile and Verizon Wireless.
Microsoft’s decision to acquire internet phone service Skype for a hefty $8.5 billion was immediately slammed by analysts, who questioned the logic of the deal and suggested the software giant paid too much. Reuters Breakingviews columnist Richard Beales thinks that, in theory, there are potential advantages to the deal but points out how Microsoft’s poor M&A track record and the high price means the transaction is unlikely to ever connect with investors.
Medco Health Solutions CEO David Snow says no biotech company is too big to be bought. He told the Reuters Health Summit he sees major drugmakers needing the growth potential of biotech more than ever.
Deals wrap: Microsoft acquires Skype for $8.5 billion
Microsoft plans to buy internet telephone network Skype for $8.5 billion, the biggest purchase ever for the world’s largest software company as it seeks to regain ground on growing rivals. The money-losing Skype has 145 million users on average each month and has gained favor among small business users. The deal would also give Microsoft a foothold in the potentially lucrative video-conferencing market. Skype, which is minority owned by eBay, allows people to make calls at no charge but also offers some paid features.
This article in the Guardian by Graeme Wearden asked telecoms analysts what they think about the Microsoft-Skype deal.
Reuters columnist Felix Salmon gives his opinion on how being public eases acquisitions for companies, using the Microsoft-Skype deal and Facebook’s earlier interest in Skype as an example. Salmon writes that had Facebook been public, it could have snapped up Skype itself instead of having Microsoft buy it to keep it out of Google’s hands.
Deutsche Boerse’s works council is refusing to back a merger proposal with NYSE Euronext, according to two people familiar with the company’s thinking. The exchange is close to releasing a formal statement on behalf of the management and supervisory board, a formal part of German corporate governance in a takeover situation.
Buyout firms Blackstone and KKR are weighing up offers for France Telecom’s stake in Mobistar, sources familiar with the situation said. The deal could value Belgium-based Mobistar at more than 3 billion euros ($4.3 billion).
Chemicals group DuPont said it was confident its increased $6.4 billion offer for Danisco would succeed, after a hedge fund stoked uncertainty over the takeover. DuPont affirmed that its revised bid of 700 Danish crowns ($135) per share for Danisco was its “best and final” offer.
Upscale handbag maker Coach is planning to list shares on the Hong Kong Stock Exchange, a move the New York-based company said reflected the importance of China’s luxury market. Last month, Coach said sales at its Chinese stores open a year had risen by a double-digit percentage.
Deals wrap: Novell deal a Microsoft maneuver?
Attachmate, a privately held provider of technology services, said it’s buying software provider Novell in a $2.2 billion deal. The deal marks the end of a drawn-out auction process the Novell board began back in March after rejecting an unsolicited proposal from Elliott Associates.
A chunk of the deal’s value also includes the concurrent sale of some Novell intellectual property assets for $450 million to a consortium led by Microsoft. Novell and Microsoft have crossed each others’ paths before when they struck a copyright deal over certain Novell assets in 2006. One theory is that this could be Microsoft’s way of maintaining control over the details of that agreement and out of the hands of rivals.
Bailed-out insurer AIG is still shopping around some of its larger assets, restarting its earlier campaign to sell its Taiwan unit Nan Shan Life. A source close to the process told Reuters on Monday that first-round bids for the unit are likely in early December, shortly after due diligence ends. In August, Taiwan regulators rejected AIG’s plan to sell the unit for $2.15 billion to a Hong Kong-based buyer group. The insurance giant is still struggling to repay its bailout debts to the U.S. government.
A day earlier, oil and gas exploration company Energy XXI agreed to buy nine Exxon Mobil oil and gas fields in the Gulf of Mexico for $1.01 billion, an acquisition that will boost the company’s reserves and production by more than 70 percent.
Federal authorities are on the cusp of filing a raft of insider trading cases against the likes of hedge fund traders, consultants and Wall Street bankers that could be among the biggest ever, several lawyers familiar with the matter told Reuters. The Wall Street Journal reported on Monday that the FBI has raided two hedge funds in connection with the probe. The Journal, which first broke news of the three-year investigation, also has a piece on what tactics the FBI likely used in building its case.
Deals wrap: Standard Chartered’s call for cash
Standard Chartered launched a $5.3 billion rights issue to bolster its finances in response to Basel regulations and to take advantage of growth opportunities. The cash is not however a war chest for acquisitions, Chief Executive Peter Sands said. *View article *View analysis on the stringent new rules for banks *View article on other banks following Standard Chartered’s lead
China has the world’s largest IPO market this year and next year could be even busier if the government allows foreign companies to sell shares on its stock markets, an executive at Credit Suisse said. *View article
Matt Rosoff at Business Insider predicts a deal is still coming from Microsoft and Adobe. *View article
Deals wrap: No timeline for Facebook IPO
Facebook CEO Mark Zuckerberg did not tip his hand about when the social networking giant would go public, when he sat down recently for an exclusive interview with ABC News’ Diane Sawyer.
“When it makes sense, right,” Zuckerberg told Sawyer, adding: “I mean, what we’re most focused on is just building these tools that help people stay connected with the people that they care about. And at some point along the path, I think it’ll make sense to have an IPO. But we’re not running the company to do that.”
************ General Motors has announced it intends to purchase auto finance company AmeriCredit Corp for $3.5 billion. According to the Reuters story the deal “removes an uncertainty for GM as it prepares for a stock offering intended to reduce the U.S. government’s nearly 61 percent ownership stake.”
************ Analysts expect good news when Microsoft reports its fiscal fourth-quarter earnings today, but that may not be enough to cheer some stakeholders, who are apparently displeased with CEO Steve Ballmer, according to a Daily Beast report. Citing unnamed sources, the Daily Beast said “there is growing resentment among a faction of certain executives inside the company who blame Ballmer for the years-long stagnation in Microsoft’s stock price.”
************ Heavyweight private equity firm Blackstone Group announced it has closed its latest $13.5-billion buyout fund, which it started raising nearly three years ago. The company’s sixth fund was initially targeted to be $20 billion, close to Blackstone’s previous buyout fund total of $21.7-billion. According to PE Hub editor Dan Primack, “this close does put a bit of pressure on rival firm KKR, which plans to begin marketing its new fund later this year.”
Bunch of Yahoos
A string of Yahoo sales, engineering and product executives took the stage on Wednesday in the company’s first full-day briefing with analysts since May 2006, all with a mantra that came down from on high: “Today is the beginning of a journey back to respect,” said CEO Carol Bartz.
With page views increasing, Carl Icahn having drawn in his horns, and the company extending a deadline for finalizing a search agreement with Microsoft, the time was right for a love-in.
Finance Chief Tim Morse said Yahoo expects to achieve operating margins between 15 percent and 20 percent by 2012. After the third quarter’s “pathetic” 6 percent, shareholders would certainly consider that a more respectful performance.
Another way to show their respect would have been to give specific details on the engineering involved in the promised prestige. Executives said Yahoo would achieve the new margin targets by accelerating its revenue in the next few years, but demurred from providing a specific revenue growth target.
The company said it would invest in editorial staff to produce more original features, and tweak its online products to keep users on the site longer and boost advertising revenue.
Hiring more staff and investing in ad search wizardry will certainly add to costs, so the need for a little more Internet alchemy could require a leap of faith to engineer the recovery in esteem Yahoo hopes to achieve.
Yahoo’s plan is to go the monopolization route of MS and have themselves bundled into Windows. Market infiltration by forcing people to accept them as their default homepage will be their key to further saturation from Yahoo. Much like they did by tricking people into accepting their Yahoo toolbar in the past. As when kids clicked on an online game ad and didn’t notice they deeply installed the Yahoo toolbar in exchange to play. Then the track folks like a creepy stalker to spy on and record their online movement trends. If you can’t get the public to love you naturally, force yourself upon them the MS way. Real nice!
