Deals wrap: LinkedIn boosts IPO, pushes more air into bubble
LinkedIn, the social networking site for professionals, boosted the pricing of its initial public offering by 30 percent valuing the 9-year old company at a little over $4 billion, or about 17 times their 2010 revenue.
LinkedIn’s IPO, which is scheduled for Thursday, comes on the heels of what appears to be an unsuccessful offering Renren.
Earlier this month Renren, one of the biggest social networking sites in China, stock surged 29 percent in their debut but it has since dropped to below its IPO price.
The poor showing of Renren has not slowed investors appetite for a chance to gobble up another slice of the social networking pie. Two other Internet giants are expected to go public sometime in the near future. Groupon may be valued as high as $20 billion and Facebook could be north of $100 billion.
Is this the start of another tech bubble or will investors rue the day they passed on the social network pie?
Yesterday Deals wrap told you that BP was in talks about buying out its Russian partners in TNK-BP, in conjunction with state-controlled Rosneft, and other options to ease passage of a stalled share swap and Arctic exploration deal.
However today came news that the deal has collapsed. The tie-up unraveled because BP failed to mollify partners in its existing Russian venture TNK-BP. They argue the British company had no right to strike a new deal in the country without them.
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.
Deals wrap: Poised to go hostile
Nasdaq OMX and IntercontinentalExchange are poised to go hostile in their bid for NYSE Euronext after shareholders ratcheted up pressure on the Big Board parent to get a better deal.
Hong Kong’s first yuan-denominated IPO plunged as much as 11 percent on its Friday debut as investors turned their noses up at the low yields offered by billionaire Li Ka-shing’s Hui Xian real estate investment trust.
Berkshire Hathaway shareholders are descending on Omaha for the conglomerate’s annual meeting, but there appears to be only one topic of conversation in town — Berkshire’s extraordinary claims about former Buffett lieutenant David Sokol. The New York Times looks for Warren Buffett’s next deal.
Can you compare the royal wedding with Warren Buffett’s annual meeting? The Wall Street Journal gives it try.
Deals wrap: Nasdaq triumphant?
Nasdaq OMX and IntercontinentalExchange unveiled a rival bid to buy NYSE Euronext for about $11.3 billion in cash and stock, a 19 percent premium to the offer made by German competitor Deutsche Boerse. The move could raise new antitrust questions as it would combine the two largest U.S. stock exchanges. The new offer is valued at $42.50 per share, Nasdaq and IntercontinentalExchange said. The offer represents a 19 percent premium to NYSE’s closing price on Thursday and is 27 percent above the company’s valuation before Deutsche Boerse’s $10.2 billion bid in February. Analysts were skeptical about whether Deutsche Boerse would launch a counterbid.
Citigroup might be uncomfortable sitting on information needed to determine whether the onetime successor to Berkshire Hathaway Chairman Warren Buffett violated securities laws when he personally traded in shares of Lubrizol, which Berkshire acquired for $9 billion, but it doesn’t have to be damaging territory for Citi, writes Rob Cox.
No.1 concert promoter and ticketing company Live Nation Entertainment is in the running to buy the recorded music assets of Warner Music Group, the world’s third largest music company, according to a person familiar with the talks. Bids have come in valuing Warner Music Group at around $3 billion on an enterprise value basis, which includes both debt and equity.
Canadian satellite company Telesat Holdings is weighing takeover offers from EchoStar and Carlyle Group, and may decide on a possible sale in the coming days, according to Bloomberg. EchoStar agreed to buy Hughes Communications for $2 billion including debt in February.
Huffington Post columnist and non-executive board chair of the Mobius Life Science Fund Lucy Marcus compiled a list of the 100 Most Influential VCs, Angels and Investors for the new, social decade, writes PE Hub’s Mark Boslet. Union Square Ventures’ Fred Wilson at number 3 and blogger investor Paul Kedrosky at number 4 might not come as a surprise. But Kevin Rose, Digg founder, at the top of the chart and Twitter investor Chris Sacca number 2 are questionable, according to Boslet.
Deals wrap: Japan crisis may delay some IPOs
Extreme market volatility tends to make investors a jittery bunch. The deadly earthquakes and nuclear crisis in Japan will obviously have an immediate impact there, but the fallout from the catastrophe is expected to spread across the globe where it could delay or even cancel a slew of new share offerings and debt deals.
According to IFR, a Thomson Reuters publication, one major deal in the pipeline that’s at risk of cancellation is the planned $6-$8 billion London-Hong Kong IPO of Swiss commodity trading group, Glencore, a deal expected in May.
Institutional investors will be demanding a higher return on their investments, forcing stock and bond deals to expect lower valuations, or face being pulled all together. Glencore’s IPO may be the victim of bad timing.
Yesterday we told you about Nasdaq OMX Group’s desire to make a counterbid for NYSE Euronext. But there are significant hurdles that it must overcome if it wants to trump the $9 billion offer Deutsche Boerse made for the Big Board.
Nasdaq must find $5 billion in debt financing, account for a relatively steep $347.5 million termination fee on the NYSE-D.Boerse deal and team up with the IntercontinentalExchange, which would look to buy NYSE Euronext’s lucrative interest-rate futures business. All of this means, the deal is far from a certainty.
Finally, Peter Mycroft Psaras of Seeking Alpha takes an in-depth look at Warren Buffett’s purchase of Lubrizol. Psaras uses his own formula, which is based on Buffett’s Owner Earnings, to see if the Berkshire Hathaway CEO overpaid for the company.
Deals wrap: Nasdaq getting hostile with NYSE
Nasdaq OMX Group Inc, not wanting to be left out in the cold of the global mergers frenzy among exchanges, is closer to making a counter-bid for NYSE Euronext, a source familiar with the situation said. Nasdaq would finance the transaction with up to $5 billion in debt and would most likely have to sell Euronext’s Liffe derivatives business to IntercontinentalExchange Inc to raise the needed capital.
If successful, such a counter-offer would redraw the global exchange map and thwart yet another merger plan by Germany’s Deutsche Boerse.
Even though the Nasdaq group has several options to go forward with a bid for NYSE, Michael J. De La Merced of The New York Times thinks Nasdaq will find itself hard pressed to stay alone as its competitors bulk up through a series of mergers.
Private equity firm Apollo Management is expected to set terms today for its long-expected initial public offering that could be up to $500 million in size, four sources familiar with the situation said.
A listing would see Apollo join Kohlberg Kravis Roberts & Co and Blackstone Group in becoming one of the few publicly-traded private equity firms.
Speaking of KKP, the buyout giant kicks off its first ever investor day and is boasting it has more than $11 billion available to buy companies.
Deals wrap: The biggest company you never heard of
Glencore is Switzerland’s top-grossing company and has been compared with investment banking giant Goldman Sachs. It’s the biggest company you never heard of.
Global listings activity has been the highest on record so far this year, with firms raising a total of $24 billion from IPOs, according to Thomson Reuters data.
A Renaissance Capital report looks at what is driving this year’s surge in U.S. IPO activity.
U.S. antitrust regulators will give a hard look at any attempt by Nasdaq OMX to acquire NYSE Euronext, experts said, with some predicting a prolonged review or “serious” snags.
Private equity firms face mounting competition from deal-hungry strategic buyers with the cash and appetite to outbid them, stealing away some of the companies they have been tracking for some time.
The investigators looking into the Bernard L. Madoff fraud could spend over $1 billion on the case and have already made some interesting discoveries, reports the New York Times.
Deals wrap: A second NYSE bidder?
Nasdaq OMX Group could launch a rival bid for NYSE Euronext to avoid being left on the sidelines, a source said.
The recent wave of exchange mergers marks an era of consolidation that will leave no more than four global trading firms in five years’ time, said Xavier Rolet, the chief executive of the London Stock Exchange.
Merger and acquisitions activity in the global mining sector is expected to accelerate in 2011, fueled by strong commodity prices and repaired balance sheets, Ernst & Young said.
Vietnam’s underperforming stock market has thrown the spotlight on investment opportunities in the country, where sectors from banking to retail to insurance are on the radar of private equity firms and fund investors with an appetite for frontier market risk.
Joseph H. Flom, a pioneering corporate lawyer who helped build Skadden, Arps, Slate, Meagher & Flom into one of the nation’s leading law firms, died on Wednesday morning in Manhattan, reports the New York Times.
Deals wrap: Pressure on exchanges
Hong Kong Exchanges and Clearing Ltd may knock on the doors of the Nasdaq or Chicago’s CBOE as the stock exchange operator eyes a partner amid the politically-sensitive merger activity engulfing the sector.
The departure of L’Oreal Chairman Lindsay Owen-Jones may bring the cosmetics giant one step closer to buying a direct sales company. Some executives and bankers have long held a view that L’Oreal should get into direct sales to boost its penetration of emerging markets where make-up and creams are still sold door-to-door.
Multi-billion dollar deals are back in the headlines and and investors are onboard, the Wall Street Journal reports.
Pipeline company Kinder Morgan sold more shares and priced them above the expected range, an underwriter said, raising about $2.86 billion in the largest U.S. energy initial public offering since 1998. The Wall Street Journal reports on who is getting rich for the deal.
“These days ‘caveat emptor’ — let the buyer beware — is staging a comeback,” reports The New York Times.
Companies in the energy and power, materials and financial sectors account for 60% of this year’s cross-border M&A activity, while targets based in the United States, Canada and Russia comprise nearly 50% of cross-border deals.
KKR’s latest listing missive
Private equity giant KKR’s latest document on its lengthy route to becoming a publicly-traded company makes the intriguing suggestion that it could list on either the Nasdaq or the NYSE.
The idea all along has been for KKR, after listing on Euronext through buying its Amsterdam-listed fund KPE, to potentially list on the NYSE, so switching to Nasdaq would be quite a suprise.
Press releases up to now have pinpointed the NYSE as KKR’s possible future home. However, today’s document is a filing to unitholders rather than a statement to the press, so it is more formal and looks at all possible eventualities (such as a long section on risk factors).
[extract] Following the consummation of the Combination Transaction, KPE and KKR will have the right to require that the other use its reasonable best efforts to cause interests in the Combined Business to be listed and traded on the New York Stock Exchange or The NASDAQ Stock Market at a future date. If such listing occurs, KPE would make an in-kind distribution of such interests to KPE unitholders, subject to applicable laws, rules and regulations, KPE units would cease to trade on Euronext Amsterdam and KPE would subsequently be dissolved and delisted from Euronext Amsterdam.
The NYSE and Nasdaq have been arch rivals for years and compete tooth and nail for listings. We’re betting this one won’t really be up for grabs though, and that KKR will settle next to rival Blackstone on the Big Board.
