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: Facebook investors look for exits
A group of Facebook shareholders is seeking to offload $1 billion worth of shares on the secondary market, a sale that would value the company at more than $70 billion, according to sources. It would represent one of the largest transactions of Facebook shares to date and points to a growing wariness among early-stage investors and employees who fear the social networking service’s growth cannot keep pace with its market valuation.
The sellers have lowered their price after previously trying to offload shares at a price that valued the company at $90 billion, but buyers balked.
Power company Exelon Corp is set to buy rival Constellation Energy Group for $7.9 billion, which will add 1.2 million customers to its existing 5.4 million. The Exelon-Constellation deal is the latest in a series of acquisition in a fragmented U.S. utility industry that faces new costs to upgrade power grids and meet environmental controls.
NYSE Euronext stepped up calls for investors to back an offer worth about $10 billion from Deutsche Boerse as it unveiled strong first-quarter results. The exchange is currently facing an aggressive counterbid from Nasdaq OMX, worth around $1 billion more, which it has repeatedly rejected, but some investors are calling on NYSE to at least talk to its cross-town arch-rival. All eyes are on a NYSE shareholder meeting which began at 8 a.m. EDT.
Tech blog TechCrunch is reporting Apple may have purchased the domain name icloud.com for $4.5 million from a Swedish company called Xcerion. The company recently changed its name from iCould to CloudMe. The blog said GigaOM also received a similar tip regarding Apple’s possible purchase. TechCrunch comes to its own conclusions as to why they believe this deal may be a possibility.
Deals wrap: Lactalis Parmalat bid leaving sour taste in Italy
French dairy giant Lactalis launched a $4.9 billion offer to take over Italy’s Parmalat, prompting intervention by Italy and France to defuse a row over control of the Italian company. The bid comes just hours ahead of a meeting between Italy’s Prime Minister Silvio Berlusconi and French president Nicolas Sarkozy where the Italian government has expressed worries about French moves on Italian companies. Europe’s biggest dairy group bought 29 percent of Parmalat in March which sparked alarm in Rome.
China’s Minmetals Resources said it has dropped out of the battle for copper miner Equinox Minerals, saying Barrick Gold’s $7.7 billion bid was too rich to justify a counter-offer. “Competing with Barrick at these prices would, in our view, be value destructive for (our) shareholders,” Andrew Michelmore, Minmetals’ chief executive, said in a statement.
The Wall Street Journal paints a picture of Nasdaq’s hardships thus far in a bid for NYSE Euronext. The exchange has sweeten their offer with more money but was still turned down and now hope to win over NYSE shareholders. Ronald Barusch sees a four-step program to Nasdaq’s victory.
Yum Brands, the parent of fast-food chains KFC and Taco Bell, said it has made a preliminary offer to buy most of the shares in China’s Little Sheep restaurant chain. Yum currently owns 27.2 percent of Little Sheep and said it will wait for approval from regulators before making a formal offer for the remaining stock in the company.
Deals wrap: Barrick strikes deal for Equinox
Barrick Gold said it will acquire Australia’s Equinox Minerals for more than C$7 billion ($7.36 billion), topping an offer by China’s Minmetals Resources. Barrick said it has committed cash and financing in place for the transaction.
NYSE Euronext sees higher savings of almost 400 million euros ($584 million) in its $9.8 billion deal with Deutsche Boerse, up by about a third from its initial estimates, according to a Big Board spokesman. The new savings estimate, along with 100 million euros in benefits coming from cross-selling and distribution opportunities, would bring the total savings and benefits from the deal to about $725 million.
All eyes will be on Warren Buffett at Berkshire Hathaway’s annual shareholder’s meeting next weekend, as he will undoubtedly face questions regarding the resignation of his presumed successor David Sokol. This piece in the New York Times examines Buffett’s hands-off management style, which may come under scrutiny after Sokol’s resignation following news of his dealings in Lubrizol prior to Berkshire’s acquisition of the chemicals company.
A Reuters special coverage piece on Buffett also questions whether it is time for the 80-year old business manager to take a bow and exit the stage.
Deals wrap: Fiat speeds toward control of Chrysler
Fiat will pump another $1.3 billion into Chrysler this quarter as it moves closer to its target of owning a controlling stake in the U.S. automaker. The deal will take Fiat’s holding in the company to 46 percent, just 5 percent shy of the 51 percent it needs to assume full control.
Read the politically charged, behind-the-scenes story of how the Singapore Exchange failed in its bid for a full takeover of Australian stock exchange operator ASX.
The prosecution amped up the tone of its attacks on Raj Rajaratnam in closing arguments at the insider trading trial of the hedge fund manager on Wednesday, saying the Galleon Group founder wanted to “conquer the stock market at the expense of the law.” The jury is expected to begin deliberations once the defense wraps up its closing arguments either Thursday or next Monday.
In an interview with CNBC, NYSE Euronext chief Duncan Niederauer explains why a merger with Deutsche Boerse would better suit his company’s expansion strategy than one with competing bidders Nasdaq OMX and IntercontinentalExchange.
Deals wrap: Nasdaq and ICE sweeten bid for NYSE Euronext
Nasdaq OMX and Intercontinental Exchange (ICE) said they have lined up a commitment to finance their rival bid for NYSE Euronext and have offered to pay a breakup fee if the deal fails to go through. This article from The Wall Street Journal lists the details of how Nasdaq and ICE is plan to sweeten their offer for the exchange even more.
Samsung Electronics is selling its hard-disk-drive (HDD) business to Seagate Technologies for 1.4 billion in cash and stock as Samsung looks to back out from the industry and focus on its core money-making memory-chip business. The acquisition will help Seagate, the world’s largest maker of hard drives better compete with rival Western Digital, which has plans to buy Hitachi’s HDD unit for $4.3 billion.
Leading corporate governance body PIRC is telling Xstrata shareholders ahead of their board vote they should reject the election of three directors nominated by its top shareholder Glencore because it does not perceive them as independent. The world’s top commodities trader is in the process of completing a $12.1 billion duel-listing in London and Hong Kong.
Wal-Mart Stores will buy social media company Kosmix for an undisclosed sum, as the world’s top retailer looks to gain a footing in e-commerce and win over more tech-savvy consumers. Wal-Mart said Kosmix’s founders and team will operate as part of a newly formed group called @WalmartLabs that will create technologies and businesses around shopping online or with smart phones.
Deals wrap: Why does J&J want to buy Synthes?
Another multi-billion dollar international healthcare deal could be coming if Johnson & Johnson has its way. Synthes, a Swiss medical device maker, confirmed it is in takeover talks with J&J after reports the U.S. health giant is keen to buy it for about $20 billion.
What does J&J want from a Swiss company many have never heard of before? The acquisition, which would be J&J’s biggest ever, would give the company a leading edge in equipment used to treat trauma patients. Synthes makes nails, screws and plates to fix broken bones, as well as artificial spine discs.
But a deal is far from certain at this stage. As the WSJ’s Katharina Bart points out, key to any deal is the agreement of Synthes Chairman Hansjoerg Wyss, a “secretive billionaire” who owns 48 percent of the company directly and through family trusts.
In other health deals news, Community Health Systems, a U.S. hospital operator, sweetened its offer for smaller rival Tenet Healthcare by converting its existing $3.3 billion bid to an all-cash proposal. The new offer has changed to $6 a share in cash from $5 a share and $1 in Community Health stock. Tenet’s board of directors is reviewing the new offer.
NYSE Euronext would likely want a hefty financial guarantee from Nasdaq OMX to ensure its takeover bid will make it past antitrust regulators before it’s willing to take part in deal talks, two sources with knowledge of the matter told Reuters correspondents Jonathan Spicer and Paritosh Bansal.
Global commodities trader Glencore is worth up to $69 billion and its earnings are set to double in two years, according to two banks involved in underwriting the company’s potentially record-breaking listing.
Deals wrap: Glencore’s $12.1 billion IPO
Glencore is looking to raise up to $12.1 billion for its initial public offering in a duel listing that will boost firepower for deals at the height of the resource boom. The long-awaited details of the offer, set to be the largest ever in London, were outlined in an intention-to-float that confirmed an earlier Reuters story. However, the company did not name a new non-executive chairman, a requirement for its listing.
NYSE Euronext and Deutsche Boerse are looking at several options to win support for their $10.2 billion deal, including paying special dividends to shareholders, according to sources briefed on the matter. The idea of paying the special dividends is to win shareholders support over an unsolicited higher offer from Nasdaq OMX and IntercontinentalExchange Inc (ICE). While NYSE Euronext and Deutsche Boerse currently pay dividends, Nasdaq and ICE do not.
BP and Rosneft agreed to extend the deadline for their swap agreement by one month as the British oil producer tries to salvage the $7.8 billion deal. BP’s tie-up with Rosneft is already blocked by a court injunction secured by the company’s Russian partners in its TNK-BP venture.
Car-sharing service ZipCar is expected to go public later this week. In this interview, a Fortune.com reporter asked what ZipCar’s IPO would mean for the burgeoning car-sharing industry.
Deals wrap: BP’s Rosneft deal on the rocks?
The planned $18 billion deal between BP and Rosneft was left even more uncertain after its chief backer Igor Sechin stepped down as Rosneft’s chairman. Sechin, who is also Russia’s deputy prime minster quit after President Dmitry Medvedev ordered the removal of ministers from the board of state companies. BP’s tie-up with Rosneft is already blocked by a court injunction secured by the company’s Russian partners in its TNK-BP venture.
HP held talks with software company Tibco about a possible acquisition until about two weeks ago, according to sources familiar with the matter. The talks come as new CEO Leo Apotheker is expected to revitalize the company’s software division via acquisitions, which only accounts for 3 percent of its revenue. It is not clear if the talks will resume. (more…)
Deals wrap: Nasdaq says offer superior despite NYSE snub
Nasdaq OMX Group responded to NYSE Euronext’s snub by reaffirming their cash and stock offer for the exchange was superior to that of the bid submitted by German rival Deutsche Boerse AG. Nasdaq’s CEO, Robert Greifeld said in a statement they have received positive feedback from NYSE Euronext shareholders and expects, at the very least a meeting with NYSE Euronext to discuss further details. Shares of Deutsche Boerse rose 1 percent after NYSE Euronext’s rejection of Nasdaq’s offer.
Endo Pharmaceuticals Holding Inc. will buy American Medical Systems for $2.6 billion in cash to boost its key urology franchise. The deal is expected to immediately add to Endo’s adjusted earnings for 2011 and to boost 2012 adjusted earnings. (more…)
