Agrium CEO makes a plea for kindness
“Be kind in your article. I read this morning I wasn’t going to get the deal across,” said Agrium CEO Mike Wilson, referring to an article in Canada’s Globe and Mail about his company’s hostile bid for rival fertilizer maker CF Industries. “What the hell is that?”
Speaking on the sidelines of a BMO Capital Management agriculture, protein & fertilizer conference, Wilson said he was frustrated by CF’s unwillingness to discuss his company’s bid, but “frustration won’t make us go away.”
Agrium bumped its cash-and-stock bid for CF to around $85 a share on Monday, increasing its previous bid more than 6 percent.
“At $85, I can’t believe (CF CEO Steve WIlson is) not going to come to us and say let’s talk,” Agrium’s Wilson said. “I’d be amazed.”
First Reserve’s deal war-chest expands
First Reserve is sitting on another $9 billion of spending money for energy deals after finishing raising its latest buyout fund, Fund XII. The private equity giant, which specialises in energy investments, said the fund is the largest ever raised in the energy sector and exceeds its previous fund, Fund XI, which raised $7.8 billion in 2006.
The fund appears to be lower than target, however. London-based private equity intelligence firm Preqin said in a recent report that the fund had a $12 billion target.
“Energy remains a large, dynamic and complex industry where change creates new, attractive investment opportunities,” said William Macaulay, Chief Executive Officer of First Reserve in the press release (below).
Private equity firms have been struggling to raise new money for funds as the pension and endowment funds that invest in them have been hit by slides in the equity markets.
Some sectors and funds have been more successful than others. Secondary firms, which typically buy investors’ positions in buyout funds at a discount, have been particularly successful at raising capital.
Another deal in healthcare: what’s the magic pill?
As 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.
And in a market where deals aren’t getting done — mainly due to tight credit conditions and partly due to value gaps between buyers and sellers (due to the huge declines in stocks late last year) — you’ve gotta ask: what’s the magic pill?
Deals of the day:
* Indian mid-sized IT outsourcer Tech Mahindra won a bidding auction for a majority stake in fraud-hit Satyam Computer Services Ltd, edging out Larsen & Toubro, seen by some analysts as the favourite bidder. * India’s Larsen & Toubro, which has built up a 12 percent stake in Satyam Computer Services, plans to hold on to the stake, its chief financial officer said on television channel NDTV Profit. * Pakistan’s Habib Bank Ltd. (HBL) and MCB Bank are interested in buying the operations of Royal Bank of Scotland (RBS) in the South Asian nation, the two banks said in separate statements on Monday. * A bid by Japan’s Mitsubishi Rayon Co for unlisted British chemicals maker Lucite International has hit a hurdle in China where regulators have delayed the acquisition, two sources briefed on the matter said.
* Orascom Telecom said on Monday it was proposing to extend the deadline to April 15 for implementing a court order for the Egyptian firm to sell its shares in mobile firm Mobinil to France Telecom.
Know Your Market
The Lehman Brothers Back-To-School conference isn’t really about selling to kids, so maybe it wasn’t the worst thing to happen to UST, the tobacco company that owns Joe Camel, when CEO Murray Kessler (pictured left) lit out of the conference to try to close a deal with suitor Altria. The New York Times says the deal is worth $10 billion. Putting the maker of Copenhagen and Skoal firmly in the cheek of the cigarette giant has been talked about long enough to wear a hockey-puck sized circle in the back pocket of any banker’s jeans. (For those of you uninitiated in smokeless tobacco, that’s the mark a tin of tobacco makes in your favorite Levis). Sources said in February that a deal between the two may be only months away, but the two sides were haggling over price. The deal would be Altria’s first major purchase since it split from its international operations, now known as Philip Morris International. The FT’s Alphaville notes that UST owns Ste Michelle Wine Estates, one of the 10 largest producers of premium wines in the US. Another product that would be poorly placed at a back-to-school conference.
Other deals of the day:
* A consortium led by Japanese trading house Marubeni Corp is poised to win an auction to buy Singapore’s Temasek-owned Senoko Power, with an offer of more than S$3.5 billion ($2.4 billion), sources said.
* GDF Suez is in exclusive talks with the Dutch NAM oil venture, owned by Royal Dutch Shell and Exxon Mobil, to buy offshore assets worth 1.075 billion euros ($1.54 billion), the French utility said.
* Shanghai Zhenhua Port Machinery said it will buy operating assets worth 3.02 billion yuan ($442 million) from its parent via a private placement.
* French utility EDF has moved closer to a deal to buy nuclear generator British Energy after fruitful talks with some of the company’s biggest investors, the Financial Times said.
* Dell Inc is trying to sell computer factories around the world in efforts to cut cost and improve profitability, the Wall Street Journal said.
