DealZone

Deals wrap: BHP Billiton’s CEO confronts shareholders

A man walks past the head office of BHP Billiton in central Melbourne October 18, 2010.  REUTERS/Mick Tsikas BHP Billiton’s boss is likely to face calls next week for a massive share buyback when he faces shareholders in Australia after his third straight failure to pull off a major acquisition.

Investment bankers are pitching to advise Symantec on strategic options as some shareholders push to break up the company, but the software maker has not made a decision to hire bankers and remains on track with its own strategy, sources said.

General Motors is in the final stage of talks to sell equity to Chinese partner SAIC as part of its landmark initial public offering, two people familiar with the matter said.

Sanofi-Aventis’ $18.5 billion pursuit of Genzyme may be a foregone conclusion for many healthcare industry executives and bankers, but few rivals likely will copy the hostile bid. Read more industry news at the Reuters Health Summit runs which runs from November 8-11.

Private equity firms are using dividend recaps as protection against deals going bad, just stop dressing them up as something they are not, writes Dan Primack for Fortune.com.

Deals wrap: Potash Corp repercussions

The Cory Potash Corp mine site west of Saskatoon is pictured on November 3, 1010.   REUTERS/David StobbeAustralia’s farm sector would have too much of an advantage if BHP Billiton was allowed to buy Potash Corp, argued Canada’s farm minister. While Canada’s decision to block the deal stunned many, most Potash Corp investors seem unperturbed, eying its long-term growth prospects.

Alastair Sharp looks at what Ottawa’s market-rattling decision could mean for Canadian tech giant Research In Motion.

The terms of GM’s upcoming share sale show that, once public, the stock will have to as much as double before its biggest shareholder, the U.S. government, gets close to breaking even, writes columnist Antony Currie.

from Breakingviews:

Canada may have shot itself in the foot on Potash

Canada may have just shot itself in the foot. The Ottawa government said BHP's $39 billion takeover bid for Potash Corp provided no net benefit to the nation. There's some basis for this in the specific instance. But what the decision fails to reflect is the long-term damage such a politicized rejection does to Canada's ability to attract capital.

While BHP still has 30 days to plead its case, the decision by the conservative government of Stephen Harper will be regarded as a major victory in Saskatchewan. The provincial government opposed the takeover of Potash, an asset that it used to own. It clearly marshaled some persuasive arguments for its resistance, though Minister of Industry Tony Clement said he was prohibited from sharing them.

However, the province had earlier estimated the takeover could reduce tax revenue by C$3 billion over a decade. Two-thirds of the hit would arise if BHP used tax credits from developing its own potash assets to shelter its target's income. The rest would be the result of piling acquisition debt onto its target.

from Breakingviews:

Blocking BHP’s Potash bid could damage Canada

Blocking BHP's move on Potash Corp could be damaging for Canada. The government will decide by Wednesday whether to allow the $39 billion deal to proceed. A BHP takeover might squeeze the tax the fertilizer giant pays its home province. But those costs are outweighed by the discount that the country's companies would suffer if Canada was deemed to have turned protectionist.

Under the Investment Canada Act's broad remit, foreign investments must be a net benefit to the country. The government must weigh factors like the impact on jobs, competition, productivity, the ongoing participation of Canadians in the business, and the country's ability to compete in world markets.

In BHP's case, there is no impact on competition. While the Anglo-Australian miner plans to run the business differently if it takes control, its proposals are not that radical. Even if Potash Corp remained independent, a different management team could follow a similar path to BHP.

Deals wrap: Cutting the deal in half

A Wall St. sign is seen outside the New York Stock Exchange, September 30, 2008.  REUTERS/Lucas Jackson Wal-Mart may scale back its bid for Massmart and take a 50 percent stake, rather than a full buyout, Massmart said in a statement. Wal-Mart has been under increasing fire from shareholders to revive its ailing U.S. stores, and some analysts have said it should concentrate on fixing its business at home before spending big on expansion. *View article

Private equity firm Blackstone Group reported a rise in quarterly earnings and said the value of its investment funds grew. *View article

With the U.S. car industry in a slow, fragile recovery from a punishing downturn, auto parts makers are reluctant to pull the trigger on deals, delaying a long-predicted wave of consolidation in the sector, write Soyoung Kim and Deepa Seetharaman. *View article

Deals wrap: On the road to a GM IPO

A Chevrolet vehicle is seen at a GM dealership in Miami, Florida August 12, 2010. REUTERS/Carlos Barria GM is on track for a mid-November IPO, sources told Reuters. China’s top automaker SAIC has not ruled out taking a stake in the company. *View article *View SAIC article *View WSJ blog which extracts some nuggets from GM’s SEC filing

China’s Sinochem will no longer launch a counterbid for Potash, sources said. “It’s finished,” Reuters was told. *View article

“BAE Systems could be poised for a major buying spree in the U.S. defense sector as Europe’s top defense contractor chases new growth in the face of looming spending cuts,” writes Soyoung Kim and Andrea Shalal-Esa. *View article

Deals wrap: Pfizer mixing medicines

People walk past the Pfizer World headquaters in New York, February 3, 2010. REUTERS/Brendan McDermidPfizer has agreed to buy King Pharmaceuticals for $3.6 billion. *View article *View WSJ blog on who’s benefiting from the deal *View Forbes blog on why the deal seems bad for Genzyme

L’Oreal may be bidding for Avon, the Daily Mail reported. Avon shares jumped 6 percent on the news. *View article

The Australia dollar’s surge to 28-year highs could cause  a headache for Foster’s wine business bidders. *View article

Deals wrap: Oil sensitivities

A security officer keeps watch outside the headquarters of China National Offshore Oil Corp (CNOOC), China's top offshore oil producer, in Beijing in this February 19, 2008 file picture.   REUTERS/Claro Cortes IV/Files    CNOOC agreed to pay $1.1 billion for a stake in a U.S. shale oil and gas field, testing the U.S. political climate with a deal for assets once deemed off limits to the Chinese due to protectionist sentiment. *View article *View factbox on China M&A activity

Rival bids for Potash look unwieldy, analysts say, which leaves Potash alone to defend itself from BHP’s $39 billion offer. *View article *View timeline

The private equity industry is bouncing back and has a strong presence in UK mergers and acquisitions, according to the FT. *View article

Deals wrap: Viewing Potash through the media

Rocanville Potash Corp underground production supervisor Dave Esslinger displays a sample of potash 3280 feet below surface at the potash mine in Saskatchewan September 30, 2010. REUTERS/David StobbeReuters blogger Felix Salmon looks at how the media covered a report of the effects of a takeover of Potash Corp. Felix finds the coverage often differed from the actual report. *View blog *View Reuters article

“The biggest merger in Australian business history is dead. The board of Rio Tinto is preparing to abandon a $120 billion iron ore deal with the rival mining giant BHP Billiton in the Pilbara,” reports The Sydney Morning Herald *View article

Doing the math on the AIG bailout and repayment isn’t all that hard, reports Andrew Ross Sorkin from the NYT. *View article

Deals wrap: Avis ups the ante in bidding war

Car rental company Avis has agreed to pay a $20-million break-up fee in its offer for Dollar Thrifty if rival Hertz walks away from its own takeover bid. Dollar Thrifty shareholders were due to vote on the Hertz offer on Thursday in Chicago, but announced they have delayed that vote, citing additional voting activity. *View article*

Hertz and Avis have been going back-and-forth in their bid to wrest control of Dollar Thrifty since Hertz initially announced its takeover bid last April. Hertz and Dollar Thrifty agreed to a sweetened deal earlier this month, currently worth about $50.95 a share or roughly $1.5 billion. The Wall Street Journal said the Avis deal isn’t likely to help Dollar Thrifty shareholders that much, as Avis’s additional $20 million break-up fee was just “45 percent of the $44.6 million break-up fee that would be due to Hertz immediately upon signing an Avis deal.” *View WSJ blog*

China’s Sinochem is working feverishly to put together a rival bid for Potash Corp to counter BHP Billiton’s $39-billion hostile takeover offer, sources told Reuters. Although BHP’s bid deadline isn’t until November 18, “sources close to the firm” told Reuters a decision could come soon. *View article*