DealZone

M&A wrap: Total merges solar units

U.S. solar panel maker SunPower, a unit of French oil major Total, said it had agreed to buy Total-owned Tenesol for $165.4 million in cash in an expected deal that will regroup the French group’s solar business under one umbrella. Total announced the $1.3 billion takeover of SunPower in June.

Concurrently with the closing of the acquisition, Total has agreed to purchase 18.6 million shares of SunPower common stock in a private placement at $8.80 per share, a 50 percent premium to SunPower’s Dec 22 closing price. After the sale of Tenesol, Total will own about 66 percent of SunPower shares.

Deutsche Boerse won U.S. antitrust approval to buy NYSE Euronext in a $9 billion deal to create the world’s No. 1 exchange operator, but the transaction still faces serious regulatory headwinds in Europe. In Europe, there have been weeks of negotiations with antitrust regulators, in which staff made clear their reservations about approving a combination of Deutsche Boerse’s Eurex and NYSE Euronext’s Liffe on concerns that the merged entity would have a monopoly over European listed derivatives trading. A formal decision by the European Commission is not expected until January or early February.

ConvergEx Group, a software provider for brokerage and investment technology firms, said it terminated its merger agreement with private equity firm CVC Capital, partly because of probes by U.S. regulators. CVC Capital was looking to buy ConvergEx, which is partly owned by Bank of New York Mellon (BK.N), for $1.9 billion, Bloomberg had reported in July.

China Three Gorges Corp’s $3.5 billion acquisition of the Portuguese government’s stake in utility EDP highlights China’s appetite for physical assets in troubled economies and its ability to make its bids attractive with the promise of financial support. China is looking to pick up assets such as infrastructure and utilities in places like Europe at a bargain, rather than only buying the bonds of countries facing economic difficulties.

DealZone Daily

Kraft Foods Inc sweetened its offer for British confectioner Cadbury, lifting the cash component of its $10 billion hostile bid by 60 pence a share. While a sweetened offer was widely expected, less anticipated was a deal by the U.S. food giant to sell its North American Pizza unit to Swiss rival Nestle for $3.7 billion. Nestle has since ruled itself out of the race for Cadbury, ending speculation about one potential rival bidder.

Nestle had fanned the flames of speculation with a deal to sell its majority stake in eye care firm Alcon to minority partner Novartis, but it’s now clear the money is not destined for Cadbury shareholders.

French oil company Total signed a $2.25 billion deal to take a 25 percent stake in Chesapeake Energy’s Barnett Shale gas fields in north Texas, following similar investments by U.S. and European rivals in North American shale gas.

from Commentaries:

Friends will find Pac-Man out of fashion

Pac-Man The 1980s revival continues. Music fans have been flocking to see the Human League and Spandau Ballet on their reunion tours. Now M&A aficionados can savour their own mini revival. Yes, it's the return of the Pac-Man bid.
Two mid-sized British insurers, Friends Provident and Resolution have revived this gambit, named after a mind-bogglingly dull computer game where the objective is to eat your pursuers rather than be eaten yourself. In M&A, this involves the target of a bid approach (in this case, Friends) turning on the bidder and launching an offer itself.
In the case of Resolution there was a certain logic in so doing. Resolution is effectively a cash shell company, which has opaque governance. Its nil premium share for share approach offered little to Friends other than the chance to hand over 10 percent of the combined company's profits to Resolution's management. The proposed nil premium counterbid made little sense (other than to eliminate the 10 percent profit share). But it did at least tease out a slightly more generous bid proposal from Resolution.
Pac-Man defences are rare in M&A -- and for good reason. They're wholly unconvincing. If you get a bid for your company, and think that the combination has merit, squabbling over who bids for whom seems to miss the point. At worst it smacks of management self interest.
This is not the only reason there have been very few Pac-Man defences. The bigger problem is that they are uniformly unsuccessful. The target never actually gets to gobble up the predator. It is 10 years since Elf Aquitaine's desperate  attempt to see off an ultimately successful bid by fellow French oil major Total. The same year, British regional brewer Marston's also used the defence against a bid from Wolverhampton and Dudley Breweries. It too failed.
That doesn't stop it from rearing its ugly head from time to time. Pac-Man defences were raised as a possibility for Rio Tinto  to turn the tables on BHP Billiton and more recently as a means for Anglo American to round on Xstrata. But generally that's all it is: talk.
The Resolution-Friends situation is an unusual one. Resolution is a cash company that is desperate to do a deal, while Friends rejected a 150 pence per share bid from J.C. Flowers last year. There are particular reasons they have ended up in a sort of death embrace. So while the Spandaus may be back in favour, the Pac-Man bid is likely to remain consigned to the archive.