DealZone

DealZone Daily

Peabody Energy has raised its offer for Macarthur Coal by 14 percent to $3.8 billion — trumping a sweetened offer from local rival New Hope Corp.  In order for the deal to go through, Macarthur must ditch a vote on a proposed takeover of Gloucester Coal, a smaller local rival. The vote had been delayed to April 19.

R0bert Hingley — outgoing director general of the UK’s Takeover Panel — is joining Lazard’s financial advisory group, Lazard says. All the more interesting as senior Lazard banker Peter Kiernan is set to become the Panel’s new head. But his arrival has been delayed, ever since British lawmakers started probing Kraft’s takeover of British chocolatier Cadbury — a deal Kiernan was one of the main architects for.

Royal Bank of Scotland is whittling down the list of suitors for its 3 billion pound payment processing firm WorldPay, sources tell us. UK payments firm Voice Commerce and other suitors have dropped out of the running.

Read all other deals news on Reuters here. And in other media:

Australian steel producer BlueScope Steel has eased its opposition to a proposed $116 billion iron ore joint venture between BHP Billiton and Rio Tinto, newspaper The Australian says.

UBS and the UK banks shake-up

Some cheering news on an otherwise tough day for UBS - the Swiss bank has bagged key roles for both Lloyds and RBS, as the two British banks agree to a massive shake-up that involves taking 31 billion pounds more of government money. As Victoria Howley and Daisy Ku wrote earlier:

“UBS AG (UBSN.VX) has taken key roles on two landmark deals to shore up British banks — landing the Swiss bank a welcome boost in fees and prestige on the same day it shocked the market with worse-than-expected results.

“UBS is working alongside Bank of America Merrill Lynch (BAC.N) to raise 13.5 billion pounds ($22 billion) for Lloyds Banking Group Plc (LLOY.L) in the world’s largest rights issue.

HSBC’s Asia opportunism

HSBC CEO Michael Geoghegan isn’t just furniture shopping for the big move back to Hong Kong.

The Wall Street Journal reports HSBC is in “advanced discussions” to acquire Royal Bank of Scotland’s banking assets in three Asian countries. The talks concern RBS’s retail and commercial banking assets in China, India and Malaysia, according to the report, which cited a person familiar with the situation.

In late September, HSBC decided to return its CEO to the place of the bank’s birth 144 years ago, as it refocuses on Asia. Europe’s biggest bank said it would stay based in London for tax purposes and had no plans to move, and Britain’s Financial Services Authority will remain its lead regulator. After the drama of Britain’s 1997 retreat from its lucrative colony, there are clearly still limits on just how Asian HSBC wants to be.

Another deal in healthcare: what’s the magic pill?

pillsAs dealmakers everywhere struggle to get deals done, the healthcare industry seals yet another one.

Express Scripts has agreed to buy health insurer WellPoint’s prescription business for $4.68 billion in a significant expansion for the U.S. pharmacy beenfit manager. The deal will be a concoction of cash and up to $1.4 billion in common stock, and will generate more than $1 billion of incremental EBITDA.

This comes on the heels of Pfizer’s $68 billion acquisition of Wyeth, Merck’s $41.1 billion takeover of Schering Plough and Roche Holding’s $46.8 billion buyout of Genentech. Granted, this isn’t a pharma deal, but it still falls under the umbrella of the healthcare sector.

from Funds Hub:

Returns and Reckonings

 

It may be the awakening we all experience in the spring, but this month two different class actions against previous financial giants were started by a bunch of pension schemes. In both cases a small group of such previously semi-obscure institutions have de facto come under the spot light for suing companies-- and their executives-- which they say have been less than straight about their financial shape and lost them millions.

 

rtxbi7hEarlier this week five schemes, including Europe's second largest one, clubbed to become lead plaintiff in a class action over about $274 million losses incurred since Bank of America took over Merrill Lynch.

 

Earlier this month two public pension schemes in the UK, Merseyside and North Yorkshire, started a class action against Royal Bank of Scotland and former chief executive Fred Goodwin. The legal firm working on the case, Coughlin Stoia Geller Rudman & Robbins, hired Cherie Blair. One of its lawyers even told Reuters: "Never underestimate Cherie Blair," leaving a faint promise for fire works.

Herd on the Street

Men herd cows and calves belonging to the Hogan family after branding near BoulderOnce upon a time, bank analysts were uniformly upbeat on investment banks. “Sell” ratings were nearly unheard of, and potholes in balance sheets were never as big as the huge, routine earnings beats. Now, with Goldman Sachs’s sector u-turn perhaps at the apex, there is plenty of mud to go around. Today’s hit list includes Barclays, the recipient of 4.5 billion pounds in balance-sheet aid this week. Citigroup says Britain’s third-biggest bank may need to raise a further 9 billion pounds and could take more significant write-downs. Lehman Brothers analyst Roger Freeman took aim at Merrill Lynch, saying the big broker will probably see $5.4 billion of write-downs in the second quarter, mainly from its exposure to monolines. Freeman raised his write-down view by $3 billion for Merrill, making his estimate the highest among Wall Street analysts.

Merger activity in the United States dropped 29 percent in the second quarter, faring better than the 40 percent global slump, as corporations filled the void left by buyout firms and targeted big consumer brands such as Anheuser-Busch and Wrigley. “Strategic buyers see an opportunity here due to the absence of the financial buyers. For the last 24 months, prior to the downturn, strategic buyers were getting outbid by financial buyers. That’s not happening now,” said Bob Filek, a partner with PricewaterhouseCoopers’ transaction services. During the first half of the year, private equity deal volume dropped 85 percent in the U.S. and 76 percent globally, according to Thomson Reuters data.

A couple more European banks have increased their China exposure. Deutsche Bank signed a deal with Shanxi Securities to set up an investment banking venture, a source with knowledge of the deal said on Friday. Deutsche planned to take 33 percent of the envisioned Beijing venture, the most allowed. Beijing this year re-opened its coveted but shuttered securities industry to foreign firms after a hiatus of more than a year to let local players merge and strengthen. Several banks, including BNP Paribas, have since expressed an interest in setting up local ventures. Chinese stock markets have shed nearly half their value this year, but foreign banks remain keen on securing a foothold there with an eye on the longer term. Royal Bank of Scotland has won approval from Chinese regulators to buy a nearly 20 percent stake in Suzhou Trust as it expands in corporate banking and wealth management services in China, sources with direct knowledge of the situation said. Suzhou Trust is a mid-sized trust and investment firm.