M&A wrap: Buffett trades off his reputation
Warren Buffett showed again that his name and money is enough to give a struggling company instant credibility in the market. But the legendary investor also demonstrated his canny command of that reputation means that deals such as the $5 billion investment in Bank of America can immediately generate profits.
Anglo-Irish bank has chosen preferred bidders for its $9.5 billion U.S. commercial real estate loan portfolio and aims to have completed that sale, the largest in the United States in recent years, before the end of the year.
Glencore, the world’s largest commodities trader, stood on the verge of its largest takeover bid since its May stock market listing, after South Africa’s Optimum Coal confirmed it had received approaches.
The New York Times’ Dealbook is reporting that Rio Tinto and the Mitsubishi Corporation have raised their offer for Coal & Allied to approximately $131 a share , valuing the company at about $11.6 billion.
The blogging service Tumblr is close to raising $75-$100 million in venture capital, implying a market value of $800 million, the Wall Street Journal reported, citing people familiar with the matter.
M & A wrap: A Buffett bailout for BofA
Warren Buffett’s Berkshire Hathaway will invest $5 billion in Bank of America, stepping in to shore up the company in the same way he helped prop up Goldman Sachs during the financial crisis.
Bank of America shares rose 20 percent in pre-market trading on the news. Shares for the largest U.S. bank by assets have lost roughly a third of their value in August, and half their value since the beginning of the year.
The news of Steve Jobs’s resignation had many of his peers weighing in on the Apple co-founder’s legacy. Former Google CEO Eric Schmidt said Jobs is the “most successful CEO in the U.S. of the last 25 years,” while former eBay CEO Meg Whitman said his contributions are “unparalleled in the business world.”
Samsung Electronics Co reiterated on Thursday it is not interested in buying Hewlett-Packard Co’s PC business, shooting down persistent market talk the South Korean firm may snap up the unit to become the world’s top PC maker.
The deadline for initial bids in the auction for Hulu was extended until the end of the week to allow interested parties more time to examine the online video site’s financial information, according to people familiar with the situation. Yahoo, Google Inc, DirecTV and Amazon.com were among the parties preparing to submit an offer for the U.S. online company, the people said.
Is there a future for Morgan Stanley and Goldman Sachs? That’s the question WSJ’s Dennis Berman tackles on Mean Street.
Deals wrap: Buffett makes a bid for Transatlantic Holdings
Shares in reinsurer Transatlantic Holdings rose more than 8 percent on Monday despite broad and deep market declines, after Warren Buffett’s Berkshire Hathaway made an unsolicited offer over the weekend to buy the company. The NYT looks at the chances of the deal getting done.
As broad economic worries pound the markets, a growing number of IPOs are being delayed or pulled. Tech IPOs, whose multibillion valuations recall the heady days of the dotcom boom of the late 90s and early 2000s, might fall the furthest.
Telmex, once the cornerstone of tycoon Carlos Slim’s empire, is set to delist from public markets as the world’s richest man, true to his style, shows his eye for a cheap deal, reports Cyntia Barrera Diaz and Tomas Sarmiento.
Deals wrap: Poised to go hostile
Nasdaq OMX and IntercontinentalExchange are poised to go hostile in their bid for NYSE Euronext after shareholders ratcheted up pressure on the Big Board parent to get a better deal.
Hong Kong’s first yuan-denominated IPO plunged as much as 11 percent on its Friday debut as investors turned their noses up at the low yields offered by billionaire Li Ka-shing’s Hui Xian real estate investment trust.
Berkshire Hathaway shareholders are descending on Omaha for the conglomerate’s annual meeting, but there appears to be only one topic of conversation in town — Berkshire’s extraordinary claims about former Buffett lieutenant David Sokol. The New York Times looks for Warren Buffett’s next deal.
Can you compare the royal wedding with Warren Buffett’s annual meeting? The Wall Street Journal gives it try.
Deals wrap: Barrick strikes deal for Equinox
Barrick Gold said it will acquire Australia’s Equinox Minerals for more than C$7 billion ($7.36 billion), topping an offer by China’s Minmetals Resources. Barrick said it has committed cash and financing in place for the transaction.
NYSE Euronext sees higher savings of almost 400 million euros ($584 million) in its $9.8 billion deal with Deutsche Boerse, up by about a third from its initial estimates, according to a Big Board spokesman. The new savings estimate, along with 100 million euros in benefits coming from cross-selling and distribution opportunities, would bring the total savings and benefits from the deal to about $725 million.
All eyes will be on Warren Buffett at Berkshire Hathaway’s annual shareholder’s meeting next weekend, as he will undoubtedly face questions regarding the resignation of his presumed successor David Sokol. This piece in the New York Times examines Buffett’s hands-off management style, which may come under scrutiny after Sokol’s resignation following news of his dealings in Lubrizol prior to Berkshire’s acquisition of the chemicals company.
A Reuters special coverage piece on Buffett also questions whether it is time for the 80-year old business manager to take a bow and exit the stage.
Deals wrap: Singapore Exchange’s ASX bid in trouble
Consolidation in the Asian exchanges industry hit a roadblock on Tuesday when Australia said it intends to reject Singapore Exchange’s proposed $7.8 billion bid for Australia’s ASX on “national interest” grounds.
Although a final decision has yet to be made, share moves hinted that the market doubts the deal can be salvaged. All eyes will now be on other major exchange deals awaiting approval from regulators and politicians.
Texas Instruments is buying National Semiconductor for $6.5 billion, paying a hefty 78 percent premium to merge two of the industry’s oldest firms into a dominant force in analog microchips.
It’s another spotlight-grabbing win for veteran deal advisor Frank Quattrone, whose boutique investment bank advised National Semiconductor on the sale.
Google’s M&A machine may be slowing down after years of going full throttle as it finds itself in antitrust limbo, argues Reuters Breakingviews columnist Rob Cox
Senior dealmakers at the Reuters Global M&A Summit said Chinese firms are facing a series of regulatory and political challenges in buying U.S. companies, which is driving them to other countries that are seen as friendlier.
DealBook editor Andrew Ross Sorkin wonders why typically outspoken Berkshire Hathaway chief Warren Buffett has been so quiet about the speculations of insider trading that continue to spin around his former heir apparent David Sokol and draws up a list of questions that deserve answers from Buffett.
Deals wrap: Nasdaq triumphant?
Nasdaq OMX and IntercontinentalExchange unveiled a rival bid to buy NYSE Euronext for about $11.3 billion in cash and stock, a 19 percent premium to the offer made by German competitor Deutsche Boerse. The move could raise new antitrust questions as it would combine the two largest U.S. stock exchanges. The new offer is valued at $42.50 per share, Nasdaq and IntercontinentalExchange said. The offer represents a 19 percent premium to NYSE’s closing price on Thursday and is 27 percent above the company’s valuation before Deutsche Boerse’s $10.2 billion bid in February. Analysts were skeptical about whether Deutsche Boerse would launch a counterbid.
Citigroup might be uncomfortable sitting on information needed to determine whether the onetime successor to Berkshire Hathaway Chairman Warren Buffett violated securities laws when he personally traded in shares of Lubrizol, which Berkshire acquired for $9 billion, but it doesn’t have to be damaging territory for Citi, writes Rob Cox.
No.1 concert promoter and ticketing company Live Nation Entertainment is in the running to buy the recorded music assets of Warner Music Group, the world’s third largest music company, according to a person familiar with the talks. Bids have come in valuing Warner Music Group at around $3 billion on an enterprise value basis, which includes both debt and equity.
Canadian satellite company Telesat Holdings is weighing takeover offers from EchoStar and Carlyle Group, and may decide on a possible sale in the coming days, according to Bloomberg. EchoStar agreed to buy Hughes Communications for $2 billion including debt in February.
Huffington Post columnist and non-executive board chair of the Mobius Life Science Fund Lucy Marcus compiled a list of the 100 Most Influential VCs, Angels and Investors for the new, social decade, writes PE Hub’s Mark Boslet. Union Square Ventures’ Fred Wilson at number 3 and blogger investor Paul Kedrosky at number 4 might not come as a surprise. But Kevin Rose, Digg founder, at the top of the chart and Twitter investor Chris Sacca number 2 are questionable, according to Boslet.
Deals wrap: Buffett pulls the trigger
Warren Buffett’s Berkshire Hathaway struck a deal to buy lubricants maker Lubrizol for $9 billion in cash to tap rising demand for chemicals used to operate engines and machinery. Shira Ovide of the Wall Street Journal takes a spin through Lubrizol’s fundamentals and businesses.
The Ontario Teachers’ Pension Plan is shopping around its 66 percent stake in Maple Leaf Sports and Entertainment, the owner of the Toronto Maple Leafs hockey team and the Toronto Raptors basketball team.
Venture capital investment in U.S. clean technology companies rose 46 percent to $5.1 billion last year after a big decline in 2009, according to a report by research firm Clean Edge.
Could Los Angeles-based Leonard Green & Partners do better than team up with owner-managers to buy discount chain 99 Cents Only? Bloomberg’s Tara Lachapelle and Rita Nazareth make a case for why a leveraged buyout of Dollar Tree may offer the biggest bang for the buck, citing Bloomberg data that Dollar Tree holds three times as much cash as Family Dollar, is more than twice as profitable as 99 Cents and generates 55 percent more income per dollar of sales than Big Lots.
Deals wrap: Warren Buffett’s zoo
Elephants. Zebras. Berkshire Hathaway CEO Warren Buffett rolled out the animal metaphors in an interview on CNBC on Wednesday to explain that his company remains on the prowl for big acquisitions, which he calls “elephants”.
Buffett said they were hard to find, though, noting he’d lost a sizable one – a “zebra” – in recent days. “There aren’t many elephants out there, and not all of the elephants want to be in my zoo,” he said.
Yahoo is in talks to leave its Japanese joint venture, hoping to transfer its 35 percent stake to partner Softbank. If successful, the divesture could free up nearly $8 billion for the once-mighty Internet firm to compete with Google and Facebook.
“Wall Street’s titans aren’t paid to sweat the details. That’s become painfully obvious from the foreclosure and mortgage mess that may cost big banks like JPMorgan and Bank of America billions of dollars. The past two decades of bank merger mania brought big cost savings, and temporarily higher stock prices, but left a massive muddle,” write Reuters Breakingviews columnists Agnes Crane and Rob Coz in a new piece on the dark side of American bank consolidation.
Lightning-fast, high-volume trading and the handling of private stock offerings, or quasi IPOs, have left U.S. financial regulators scrambling to keep up, officials told the Reuters Future Face of Finance Summit.
Deals wrap: Consolidation wave to grow for exchanges
“The mergers of exchanges have only just begun as growing competition and even new regulation drive them closer together, irrespective of national borders,” write correspondents Luke Jeffs and Rachelle Younglai from the Reuters Future Face of Finance Summit.
As talk of future exchange deals swells, the CEO of the Singapore Exchange said he’s not planning any more concessions to Australian officials to win approval for his exchange’s $7.7 billion bid late last year for that country’s bourse operator ASX.
J. Crew will once again be a private company after shareholders approved a $2.86 billion deal for the retailer to be acquired by TPG Capital and Leonard Green & Partners.
Chrysler has taken the first step to re-enter the U.S. capital markets through filings with the Securities and Exchange Commission, the automaker’s boss, Sergio Marchionne, told Reuters Insider TV on the sidelines of the Geneva Motor Show on Tuesday.
Who will succeed Warren Buffett at the helm of Berkshire Hathaway? That’s still anybody’s guess, but according to Dealbook the company’s board has identified four managers it says could fill his shoes as CEO when the investment titan, now 80, retires.
France’s Carrefour, the world’s second-largest retailer, plans to spin-off its discount unit and a portion of its property business in a bid to revive its share price after a recent spate of profit warnings from the company.
