M & A wrap: Saudi prince buys Twitter stake
Saudi billionaire Prince Alwaleed bin Talal, an investor in some of the world’s top companies, has bought a stake in Twitter for $300 million, gaining another foothold in the global media industry. Alwaleed, a nephew of Saudi Arabia’s king estimated by Forbes magazine in March to have a fortune of $19.6 billion, already owns a 7 percent stake in News Corp and plans to start a cable news channel. The Twitter stake, bought jointly by Alwaleed and his Kingdom Holding Co investment firm, resulted from “months of negotiations,” Kingdom said.
Explorer Gulf Keystone Petroleum is not in talks with U.S. oil major Exxon Mobil Corp about a 7 billion pounds ($10.9 billion) bid, a source familiar with the Kurdistan-focused group’s thinking said on Monday. The Independent on Sunday newspaper reported that Exxon was considering making an estimated 800 pence per share bid – five times Gulf Keystone’s closing share price on Friday. The report, which drove Gulf Keystone’s shares up as much as 24 percent on Monday, said the company’s board had discussed Exxon’s interest a fortnight ago. But a source familiar with Gulf Keystone’s thinking said there were no talks with Exxon.
European Goldfields, which has agreed to a C$2.5 billion ($2.4 billion) takeover by Canadian group Eldorado Gold, is hoping to keep an investment deal with Qatar’s sovereign wealth fund as a fall back option. Qatar Holdings agreed in October to provide a $600 million project financing loan to European Goldfields, which has development stage assets in Greece and Romania, in its first investment in a gold miner. It also provided a $150 million loan note and a related warrant issue, and became a major shareholder, with a 9.9 percent stake. Eldorado’s strong balance sheet means European Goldfields is unlikely to need the cash from Qatar if the takeover goes through — but it does need two-thirds of shareholders to back the deal when they vote in February.
Etihad Airways is taking a stake of almost 30 percent in Germany’s Air Berlin, becoming the first Gulf carrier to challenge European legacy airlines by putting cash on the table to gain scale. Abu Dhabi-based Etihad will spend about 73 million euros ($95 million) to buy new shares of Air Berlin, raising its stake to 29.21 percent from just below 3 percent, and will lend the German carrier $255 million, the two companies said on Monday.
Deals wrap: Copycats sure to follow LinkedIn
A day after LinkedIn’s shares more than doubled in their public trading debut, analysts are scrambling to explain why the stock exploded and figure out what happens next.
The professional networking site’s IPO was being closely watched by Facebook, Groupon, Twitter and Zynga to gauge investors’ appetite for Internet companies.
Facebook COO Sheryl Sandberg described a public offering of Facebook shares as “inevitable,” while Evelyn M. Rusli over on DealBook predicts a surge in Internet IPO’s but doesn’t think the market is setting itself up for another tech bubble burst.
It wasn’t just the big four social media sites waiting to go public that were salivating at LinkedIn’s record day, would-be rivals to LinkedIn were also giddy with excitement.
As for future opportunities for investors, Shira Ovide of WSJ.com gives her three reasons to be wary going forward. Nigam Arora of Seeking Alpha also advises investors to be cautious but gives four low risk ways to make money from LinkedIn.
One of the more interesting comparisons to LinkedIn’s meteoric rise in its debut comes from WSJ.com. At one point yesterday LinkedIn’s valuation was roughly $10 billion, trading at nearly 41 times its 2010 net revenue. If Apple were trading at the same multiple, it would have a market value of $2.7 trillion.
In other news John Malone’s Liberty Media Corp has proposed to buy Barnes & Noble for $1.02 billion, nine months after the largest U.S. bookstore chain put itself up for sale.
Deals wrap: Glencore debuts while markets await LinkedIn
Commodities trader Glencore made a steady market debut with shares trading just above the widely expected launch price of 530 pence, giving it solid currency for potential acquisitions.
There was heavy interest in the stock on both the London and Hong Kong exchanges, due in part to the relatively small amount of shares being sold. Glencore’s Chief Executive and largest shareholder Ivan Glasenberg said demand for the shares “significantly” exceeded the amount available.
Analysts on Thursday said the 530 pence per share level was realistic and should mean strong aftermarket support. “Obviously everything is priced to do well. I don’t know whether five to ten percent upside is in the bag or not, but certainly they are trying to please investors with the price,” analyst Tim Dudley at Collins Stewart said.
In other news, internet companies that expect to go public in the future are eagerly awaiting market reaction to LinkedIn’s debut. The professional networking site sold shares at the top of an already raised price range in its initial public offering on Wednesday, signaling that stock investors are eager to buy shares of social networking companies even if valuations are lofty.
Although companies like Facebook, Groupon, Twitter and Zynga have significantly different business models than LinkedIn, they each tap social networks and the valuations for each are skyrocketing.
According to data provider Capital IQ and posted on WSJ.com the amount of money LinkedIn is raising makes it the fifth-biggest-ever U.S. internet IPO, but still well off Google’s 2004 IPO that raised $1.67 billion.
Yesterday we told you that Takeda Pharmaceutical was on the verge of acquiring privately held Swiss rival Nycomed.
Deals wrap: Nasdaq and ICE take NYSE bid hostile
Nasdaq OMX and IntercontinentalExchange will take their takeover bid for NYSE Euronext straight to the Big Board’s shareholders as they try to corner the company into talks. NYSE has already rejected Nasdaq and ICE’s $11 billion unsolicited offer twice in favor of a lower bid from Deutsche Boerse.
In this Reuters Dealtalk article, the reporters suggest that as deal volume and CEO confidence picks up, companies will become more daring and willing to take risks in their fight for assets. The case of Nasdaq and ICE taking their bid for NYSE hostile is a prime example of this attitude.
Investment firm Onex and its affiliates said they will sell their Husky International business to private equity firms Berkshire Partners and Omers Private Equity for $2.1 billion. Husky is one of the world’s largest suppliers of injection molding equipment and services to the plastics industry.
There has been a flurry of acquisitions in the technology industry. TechCrunch reports Twitter is set to buy TweetDeck for $40 to $50 million, and an announcement of the transaction is expected over the next few days. Group buying site BuyWithMe acquired Chicago-based daily deals site DealADayOnline to expand its regional offerings and TrueCar, a site which helps people research new and used car prices, struck a deal to buy automotive social media company Honk.com.
Deals wrap: Goldman buys a Chinese life insurance policy
Goldman Sachs is betting big on the word’s largest insurance market with its purchase of a 12 percent stake in China’s Taikang Life Insurance Co Ltd. Goldman’s deal could pave the way for Taikang’s planned initial public offering next year. Credit Suisse estimates China’s life insurance market –which generated $124 billion premium income in 2009 — will grow more than 20 percent per annum for the next decade.
BP’s proposed $16 billion share swap with Rosneft received a stay of execution when an arbitration panel gave it time to try to extend its April 14 deadline for the deal. The co-owners of BP’s Russian venture TNK-BP are trying to block the deal with Rosneft arguing that it violates TNK-BP’s shareholder agreement. By not killing the deal outright, the panel has given BP time to either persuade TNK-BP to drop its case or cut them in on the deal.
U.S. securities regulators may ease constraints on share issues by private companies, making it easier for start-ups like Facebook, Twitter and Zynga to raise money, the Wall Street Journal reported.
The Wall Street Journal’s Mike Spector provides an inside look at the intense bidding that took place for the Blockbuster chain on Wednesday night. A person who was at the auction says it “was at times like a ‘cage match’.”
Deals wrap: A status update from Twitter
Cross Twitter off your IPO watch-list, at least for now. Co-founder Biz Stone told Reuters in an exclusive interview that the social networking service has no plans to go public or raise funds any time in the immediate future, saying his company is making enough money on its own at the moment.
Stone also flat-out rejected a Financial Times report earlier this week that said a J.P. Morgan technology fund was in talks to take a 10-percent stake in the social networking message service. “(The report is) made up,” he said.
News Corp CEO Rupert Murdoch’s media empire is about to get a little bit bigger. The British government gave a green light to the company’s planned $14-billion buyout of satellite pay-TV company British Sky Broadcasting after Murdoch and co agreed to spin off a chunk of his Sky News channel into a separate company.
Taxpayers should celebrate that AIG is a step closer today to paying off its bailout debt to the U.S. government. The insurer sold $9.6 billion worth of MetLife shares on Wednesday, which should give it about $6.3 billion in gross proceeds to send back into the Treasury’s coffers.
Expect to see more mega-deals in the mining sector this year. A new report that shows a surge in global mining M&A last year also points out that deal valuations in the sector are set to increase this year as mining companies continue to reap the benefits of rising metal prices. The survey by PricewaterhouseCoopers tracked 2,693 global mining deals in 2010 worth a total of $113 billion.
Deals wrap: Blackstone expands property empire
Blackstone has struck a deal to buy nearly 600 U.S. shopping malls and other properties from Australia’s Centro Property Group for about $9.4 billion, a person with direct knowledge of the transaction told Reuters on Monday.
Large financial institutions may need to make significant and potentially costly structural modifications to comply with new rules, bank regulator Sheila Bair told the Reuters Future Face of Finance Summit on Monday.
A new J.P. Morgan investment fund that targets privately held Internet and digital media firms is in talks to acquire a hefty stake in social networking and micro-blogging service Twitter, people familiar with the matter told the Financial Times. According to the report, the fund hopes to acquire 10 percent of the Internet messaging service for $450 million, which would value the company at about $4.5 billion.
“Glencore is priming analysts with in-depth briefings on its business ahead of a possible mega-float which could involve Qatar taking a stake in the world’s largest commodities trader,” write Reuters correspondents Kylie MacLellan and Regan Doherty. If it goes ahead, an IPO of privately held Glencore could value the company at as much as $60 billion according to Liberum Capital estimates, making it one of Europe’s biggest listings ever.
Ventas said it will buy Nationwide Health Properties for about $7.4 billion in stock, creating the largest healthcare real estate investment trust in the United States.
Imprisoned fraudster Bernard Madoff has been in a talkative mood lately. First came his headline-grabbing interview with the New York Times last month, in which Madoff claimed many of his biggest victims – banks and hedge funds – were complicit in his crimes, saying they “had to know” about his massive Ponzi scheme. In a new interview with New York magazine’s Steve Fishman, Madoff discusses in more detail how his massive fraud was a “nightmare” for him and that “even the regulators felt sorry for me”.
Deals wrap: Merger mania
Deutsche Boerse and NYSE Euronext’s plan to create the world’s largest exchange has sent competitors around the world scurrying to find partners, accelerating an industry shake-up. The Wall Street Journal looks at the how stock exchanges make money and what it means for investors.
Google and Facebook, plus others, have held low level takeover talks with Twitter that give the Internet sensation a value as high as $10 billion, the Wall Street Journal reported.
Deals du Jour
Kraft’s bid for UK confectionary company Cadbury continues to generate headlines. And given the personalities involved, this should not be a surprise. Some of London’s top rainmakers are set to square up against a superstar of the 1980s merger era, Reuters’ Victoria Howley notes.
And here’s a round-up of deal-related stories from Thursday’s press:
* Volkswagen is considering overhauling its trucks business in a move that could herald a tie-up with German truckmaking and engineering group MAN AG, the Financial Times said. Reuters story here.
* Twitter is closing a round of funding that will value the company known for its 140-character, stream-of-consciousness blogs at $1 billion, technology news site TechCrunch said.
* British Airways is interested in rival UK airline bmi and has spoken with bmi’s German owner Lufthansa, BA’s chief executive told the London Evening Standard.
* Steel-to-property conglomerate CITIC Pacific Ltd aims to list in China, joining other Hong Kong-listed top Chinese firms that would like to list in their home market, media reports said.
For the latest Reuters deals news, click here.
Live blogging the GM bankruptcy hearing
General Motors is back in bankruptcy court on Wednesday, seeking approval to sell its choice assets to a “New GM” in a plan to reinvigorate the automaker under U.S. government ownership.
Reuters reporters Emily Chasan and Phil Wahba will be filing updates from the hearing in the live headline box below and on the DealZone Twitter feed.
Has anyone seen this site for GM car and truck parts ? Will they still be open?
