DealZone

Deals wrap: Conoco may double assets sale

ConocoPhillips, the third-largest U.S. oil company, said it might double its planned sale of less-desirable assets to $20 billion, with proceeds going to buy back stock.

Conoco is executing a plan, first announced in late 2009, to increase shareholder value through debt reduction, stock buybacks and increased dividends. Conoco did not immediately specify what might be sold, but did say those assets targeted would be mature, high-cost projects.

Consumer goods group Colgate-Palmolive has agreed to pay around $940 million for Sanex, a shower gel and deodorant brand which owner Unilever had been ordered to sell. The sale comes just a week after Unilever announced it was stepping up new product launches to drive growth.

Corporate predators could find the beleaguered reinsurance sector offers attractive opportunities, provided they have the nerve to look beyond a round of bumper claims triggered by the Japanese earthquake. “The market was turning anyway, and the earthquake will shift it, which will obviously be a good entry point for private equity and for M&A activity on a wider basis,” said Barrie Cornes, insurance analyst at Panmure Gordon.

After its acquisitions of the Huffington Post and TechCrunch last year, AOL will begin the process of overhauling its family of content sites, reported All Things Digital’s Kara Swisher. AOL chief executive Tim Armstrong will reportedly issue an internal memo detailing the closing down of “dozens of its dedicated content sites — some being shuttered completely and others integrated with existing Huffington Post sites,” writes Swisher.

Deals wrap: Disentangling from AIG

A protester yells at people in the AIG office building during a rally against government bailouts in New York's financial district, April 3, 2009.     REUTERS/Brendan McDermid American International Group and the U.S. government are moving closer to a deal on how the Treasury Department would exit its investment in the bailed-out insurer, sources said. *View article *View Bloomberg article

Southwest Airlines will purchase AirTran Holdings for $1.04 billion in cash and stock in a deal that will allow Southwest to expand its presence in major East Coast markets. The move by Southwest puts pressure on all major rivals, who are trying to strengthen their eastern markets to leverage more premium-paying business travel. *View article

Consumer goods group Unilever will buy hair and skin care company Alberto Culver for $3.7 billion in the latest move to rebalance its portfolio toward higher growth lines. Analysts said the price of the deal looked high, but could be justified by cost savings and by skewing Unilever’s business to more high growth, high margin categories. *View article

DealZone Daily

Australia’s competition watchdog blocked National Australia Bank’s $13 billion agreed deal for wealth manager Axa Asia Pacific Holdings, opening the door for rival bidder AMP to make a comeback. Australia’s competition regulator defied expectations it would give conditional approval for a deal, instead issuing a flat rejection on the grounds a tie-up would hurt competition for retail investors.

British train and bus operator Arriva said it is in advanced talks with Deutsche Bahn about the German state rail company’s 775 pence a share bid, valuing the company at 2.7 billion euros including debt.

European consumer goods group Unilever will kick off the sale of its frozen food arm Findus next week, expecting to draw bids from private equity groups including Permira, Lion Capital and BC Partners.

Everybody Likes Cake

More big consumer brands are being dealt across the Atlantic. With Kraft’s bid for Cadbury churning, consumer goods giant Unilever plans to pay 1.275 billion euros ($1.87 billion) for a chunk of Sara Lee’s personal care brands, helping the cake maker sheds non-core businesses to focus on food. Sara Lee shareholders are sweet on the deal – bidding the stock up more than 9 percent in early trade. In a space reserved for winners and losers, this deal looks like it has natural benefits for both parties.

The asset sale is quite a bit less rich than the chocolate deal, which is for the whole of Cadbury rather than just its brands, the soap business brings with it a fresh scent of a recovery in deals activity. It is the first major acquisition for the Anglo-Dutch company’s new Chief Executive Paul Polman, and Sara Lee’s CEO Brenda Barnes is still only half-way through her business-shedding exercise.

Credit Suisse analyst Charlie Mills said the price Unilever is paying of 10 times core operating profit, or EBITDA, is not huge by industry standards, reflecting the fairly disparate collection of assets. Brylcream hair gel is part of the mix.

Why now, Henry?

kravis3.jpgKohlberg Kravis Roberts‘s plan to IPO is nothing new – the company filed its paperwork to do so a year ago. So why should the storied firm of private equity titan Henry Kravis (pictured) choose now to tap this battered market? Problems at its Amsterdam-listed fund are also hardly new. Shares of the fund, set to be exchanged for new NYSE-listed KKR shares as part of the offering, jumped 27 percent during morning trade. They had fallen about 30 percent since the beginning of May, and had lost more than half their value since late February last year as the credit crisis bit. It’s hard to see the deal framed as a statement of confidence that IPO investors are going to step up to the bar, given all the grim news swirling capital markets. What else might be prompting this move? Carlyle Capital Corp, an affiliate of U.S.-based buyout firm Carlyle Group and mainly invested in mortgage-backed assets, went bankrupt in March and liquidated its assets as it could not meet margin calls from its lenders. KPE said in March it had no exposure to residential real estate loans, but its net asset value dropped 3.4 percent in the second quarter amid investment losses and foreign currency transactions after a 5.4 percent drop in net assets from operations in the first quarter.

Consumer goods giant Unilever agreed to sell its North American laundry business to private equity firm Vestar Capital Partners for about $1.45 billion to complete the bulk of its sell-off program. The business makes Snuggle, Wisk and Surf products and had been looking to sell it for almost a year in its struggle to compete as a distant No. 2 behind archrival Procter and Gamble. Vestar intends to fold the business into its Huish Detergents operations and re-name it Sun Products Corp.

Other deals of the day:

* Britain’s BAE Systems said it had made a recommended offer for Detica Group, a provider of IT services to the national security sector, at 440 pence a share, valuing the business at about 538 million pounds ($1.07 billion) including assumed debt.