Deals wrap: Takeda offers $12 billion for rival Nycomed
Takeda Pharmaceutical is in talks to buy privately-held Swiss rival Nycomed for more than $12 billion, said sources with direct knowledge of the matter. Japan’s largest drugmaker is seeking to boost its presence in Europe and emerging markets, as well, the acquisition would help them gain a lung disease drug from Nycomed which has just been approved in the U.S. Japanese drugmakers have been actively pursuing acquisitions to boost growth as they face the loss of patent protection on key medicines.
A planned rescue deal involving Saab and China’s Hawtai Motor Group collapsed after it failed to get necessary approvals, leaving Saab’s owner, Spyker, chasing new funding alternatives to restart production at the Swedish automaker. Spyker said it was continuing talks with Hawtai, while a Reuters exclusive reported the Dutch sportscar-maker was also talking to another Chinese company, Great Wall Motor about a possible tie-up.
Glencore’s CEO Ivan Glasenberg said recent falls in commodity prices were due to “froth” in the market and had not affected strong demand for the company’s IPO. Commodity price volatility in the past week has prompted worries over Glencore’s planned $11 billion IPO, with fund managers sensing an opportunity to drive down prices. The commodities giant recently unveiled the prospectus for their IPO, detailing plans to raise funds in a dual listing in London and Hong Kong.
Hedge fund manager Raj Rajaratnam was found guilty on all 14 counts of insider trading, and could face at least 15 years in prison. The Galleon founder was at the center of the biggest insider trading investigation in decades and the use of phone taps in his conviction may have marked a turning point in prosecution of Wall Street crimes. This piece in the New York Times by Peter Lattman and Azam Ahmed takes a look inside Rajaratnam’s circle of friends and business associates, and how they played a crucial role in his scheme.
Deals wrap: Blavatnik’s Access Industries wins bid for Warner Music
Russian-born billionaire Len Blavatnik’s Access Industries has won control of Warner Music Group with an offer of $8.25 a share, according to a source familiar with the matter. The agreement would set the world’s third-largest music company’s enterprise value at approximately $3.3 billion.
The NYTimes’s Ben Protess shines a light on Len Blavatnik, chairman of Access Industries and the new controlling stakeholder of Warner Music Group. Well-known for his investing prowess, he came to America as a penniless teenager and after building a fortune on oil and metal companies, he’s worth roughly $10 billion.
In this analysis by Jennifer Saba, she argues that as Internet giants Google and Facebook slug it out to seal a deal with Web video conferencing service Skype, Facebook looks likely to be the more aggressive suitor, not to mention a better fit.
Investors frustrated in their attempts to buy some of the hundreds of failing U.S. banks are testing a new approach. Rather than wait for an ailing bank to be seized by regulators and sold off to a rival, dealmakers are touting a $6.5 million bankruptcy sale as a way to attract new investors able to infuse banks with life-saving capital.
Ailing carmaker Saab has asked Sweden’s debt office to approve a change in ownership so Chinese group Hawtai and U.S. investment fund Gemini can help get production restarted. Saab owner Spyker Cars said this week that the privately-owned Hawtai was eyeing an investment of 150 million euros ($210 million).
In a recent post, Breakingviews’ Robert Cyran sets out why he believes the merger between drugstore chain CVS and pharmacy benefit manager Caremark never made sense, and why the $50 billion company could be worth $13 billion more if it were carved up.
Battered car-makers rounding blind corner
(Update: This piece was written, as several commenters have pointed out, before GM clinched a sale of Saab to Spyker on January 26.)
By Quentin Carruthers
(Acquisitions Monthly) Automakers face a demand slump in Europe and the longer-term challenge of addressing climate change. Both pressures are expected to lead to further restructuring, consolidation and M&A activity.
The North American International Auto Show, held each January in Detroit, Michigan, is just coming to an end. Detroit is the hometown of America’s “Big Three” automobile makers – Ford, General Motors, and Chrysler – and the show constitutes one of the most important events in the industry’s calendar.
Touring the floor with a group of her fellow Congressmen was Nancy Pelosi, Speaker of the House of Representatives, who told reporters: “We came to listen, to learn, to observe, to measure, to judge what has happened to the investment that we made.”
US state investment includes US$60bn of government loans to support automotive assemblers, in return for control of GM and a minority stake in Chrysler, both of which came out of Chapter 11 bankruptcy proceedings in mid-2009. A further US$3.5bn has been used to support parts suppliers, and US$3bn to support car retailers.
Total state support equates to a loan of more than US$50,000 for each job in the manufacturing side of the industry, as calculated by Philip Wylie, director and automotives leader at restructuring adviser Houlihan Lokey.
Saab WILL survive. Spyker purchased Saab from GM last month…. come on guys GET WITH IT!!! Embarrassing.
The afternoon deal: Tiny Spyker wins a car
It’s been an auto-fueled day with investors on tenterhooks awaiting the now announced $400 million Spyker/Saab deal. Although Saab kept the spotlight, there is news from Chrysler, Opel, Porsche, Mitsubishi, Peugeot and Geely’s Volvo.
From Reuters, get the Saab deal wrap up here, along with a Saab factbox, timeline and profile of Spyker’s CEO Victor Muller. Find some additional facts about Spyker from The Swedish Wire here.
The Guardian has a great story on the mystique around the car brand called, “How did it all go wrong for Saab?”, and in a warning before the deal was announced, Fiat and Chrysler Chief Executive Sergio Marchionne said: “Marginal players will continue to be marginalized.”
Other auto news:
DealZone Daily
Hershey is still working on a bid for Cadbury that would top Kraft’s 10.5 billion pound bid for the British confectioner. As the clock ticks down for rivals to enter the fray, Hershey — the one remaining party to declare its hand — has still not decided if it will table a formal offer, but has authorized the drawing up of a bid. At the same, Kraft has stepped up the charm offensive with Chief Executive Irene Rosenfeld visiting Cadbury shareholders in London. She has found some doors shut, however, indicating that investors find the bid too low.
First round bids for debt-ridden film studio MGM are due on Friday, with 12 companies having expressed an interest in the business, including rivals Time Warner and Lions Gate Entertainment, as well as Liberty Media, News Corp and private equity firms. Non-binding bids for the studio, controlled by a consortium of private equity and media firms, are expected to come in at $1.5 billion to $2 billion, way below $3.7 billion it owes its lenders.
Telecoms billionaire Carlos Slim has launched a $21 billion bid to unite Telmex and Telmex Internacional with Latin America’s top mobile phone provider America Movil. Slim, who controls all three companies, wants to create a leading fixed-line, mobile and internet services company to stave off competition from rivals.
Luxembourg-based investment firm Genii Capital, in cahoots with Formula One tycoon Bernie Ecclestone, over a bid for Swedish carmaker Saab said it has submitted a revised offer. It hopes the new bid will show owner General Motors it has the financial clout to run Saab and encourage the U.S. car giant to reverse its plan to wind up the business.
For more deals news from Reuters, click here.
In other media:
Private equity firm BC Partners has dropped out of the race to acquire budget fashion and homewares retailer Matalan, the FT writes, leaving rivals TPG, Advent International and Warburg Pincus in the race to acquire the business, ambitiously priced at around 1.5 billion pounds.
DealZone Daily
The pursuit of Cadbury is rapidly becoming a one horse race after Italy’s Ferrero ruled itself out of the fight and cut off talks with potential bid partner Hershey, leaving only the U.S. chocolate maker to declare its hand in the battle for the British confectioner. Cadbury, meanwhile, yesterday put the finishing touches to its defence against U.S. food giant Kraft’s 10.5 billion pound hostile bid by promising an improved performance and a raised dividend.
Luxembourg-based investment firm Genii Capital intends to improve its bid for Swedish carmaker Saab in order to catch the eye of seller General Motors. Bids from Genii, which is working with Formula One supremo Bernie Ecclestone, and Dutch carmaker Spyker have failed to prevent GM from appointing advisers to oversee the wind-up of the business.
India telecoms group Bharti Airtel has created a new unit to pursue emerging markets acquisitions after failing to reach a deal with South Africa’s MTN last year.
For other Reuters deals news, click here.
And in other media:
Kraft’s hostile bid for Cadbury will be used a case study in a meeting between Business Secretary Peter Mandelson and influential institutional investors, The Times writes, as he urges them to take a longer term view in their investments.
DealZone Daily
Cadbury posts its final defence against Kraft’s hostile takeover, but a muted share price reaction shows it is not changing market views about the deal much. Ferrero, the Italian chocolate maker, is “very close” to taking a decision on whether to launch a counterbid together with U.S. group Hershey, a source close to the operation tells Reuters. Italy’s Il Messagero reported earlier Ferrero was securing a $4.5 billion syndicated loan.
General Motors repeats it is closing down Saab, because it has not yet received a credible bid. Dutch group Spyker meanwhile, says it remains hopeful that a deal can be reached.
And in other media:
Ford remains open to talks with potential bidders for its Volvo cars unit, despite a commercial agreement on a sale with China’s Zhejiang Geely, Sweden’s Dagens Industri says.
Fortis Holding’s special purpose vehicle Royal Park Investments — set up to hold the toxic assets of Fortis Bank, has raised 4.3 billion euros, according to Belgian newspaper De Tijd.
Corus Entertainment Inc, Shaw Communications Inc, Fairfax Financial Holdings Ltd, and Jim Pattison Group are considering investing in debt-laden media company Canwest global Communications Group, the Globe and Mail newspaper reports late on Monday.
Bank of America is in talks with New York attorney general Andrew Cuomo’s office to settle a probe on bonuses paid to Merrill Lynch executives, the New York Times reports.
On Wind Down Avenue, Saab Sees More Signs of Interest
Good thing for Saab that shutting down a car business is a lengthy process. There are orders to fill, inventories to clear and various other contracts to conclude. Bidders for Saab know this, so even as the deadlines come and go, signs of life for a deal are going to have plenty of room to grow.
So now, even as General Motors starts turning off the lights, new bidders are emerging. Formula One motor racing boss Bernie Ecclestone (pictured left) has, according to the BBC, joined forces with Luxembourg-based private investment company Genii Capital to pitch a rival proposal, and of course Dutch luxury carmaker Spyker has come through with an improved bid for the struggling maker of the 9-3 and 9-5 sedans, as promised.
Swedish media reports on Friday named Jan Nygren, formerly a Saab aerospace executive and senior defence ministry official, as the head of a group of Swedish investors submitting a last-minute bid for the ailing carmaker. Nygren confirmed the group’s interest but declined to give details.
Swedish government officials plan to meet with GM’s board early next week in Detroit to clarify what loan guarantees are available to potential bidders, but also to ask for details about the winding-down process if no sale materializes.
Saab rolls into 2010
Saab workers are probably reminding themselves it is always darkest just before the dawn, which takes a lot longer to arrive in the Scandinavian winter than anywhere else. With the lights set to start going out at Saab plants, word surfaced that parent General Motors’ Dec. 31 deadline for bids was being extended into early January.
GM had given itself to the end of this month to consider bids for loss-making Saab while continuing a process to wind down the company, which has drawn interest from Dutch luxury carmaker Spyker and others. Spyker Cars Chief Executive Victor Muller said in a text message GM had extended the deadline for a final offer from Spyker Cars until Jan. 7, and added he believed there are multiple bidders for Saab.
As we’ve noted previously in DealZone, having emerged from bankruptcy means GM doesn’t have to manage deadlines for asset sales with creditors breathing down its neck. Sure, they have to keep an eye on Congress, which holds a majority stake of the company. But with healthcare, the financial overhaul and terrorism to worry about, GM could well keep extending the deadline for a few months. Plus, its worth keeping in mind what kind of exposure GM is running here, and what a week or two really means for GM to keep the lights on at Saab.
The operation costs about a million dollars a day to run, and sales of Saab cars account for 1 percent of overall sales. Any prospective buyer will want to get hold of the operations while they are still warm, rather than have to pay to restart shuttered machines. While GM may be serious about getting out of Saab quickly, the deadline could turn out to be something a lot less morbid than it sounds if GM smells a palatable deal out there.
Volvo’s Chinese journey
News that Ford expects to finalize the sale of Volvo to China’s Geely in the first half of 2010 caps a year that saw China overtake the United States as the world’s biggest auto market, something that would have been unthinkable only a few years ago. With Geely rival BAIC announcing its intention to harvest intellectual property from Saab, Chinese automakers are going into high gear in both their short-term goal of serving the high-octane domestic market and their longer-term ambition of retooling their manufacturing base to better serve the global automotive market.
Geely is China’s largest private automaker. Its charismatic founder, Li Shu Fu, is known as the Chinese Henry Ford. He has shown global ambitions and has pushed for Geely to become a global brand.
It’s a road well traveled, the highway from Asia’s industrial heartlands to the world’s garages. Japan and South Korea have blazed the trail thoroughly. Rather than ponder the significance for lumbering Western automakers who are shedding assets to stay alive, it’s worth wondering what Toyota and Hyundai make of their Chinese cousins.
