Unstructured Finance

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: AOL looks to Huffington Post

A sign is pictured on Wall St. near the New York Stock Exchange in New York November 25, 2008. REUTERS/Lucas Jackson AOL will buy The Huffington Post for $315 million, relying on the high-profile liberal pundit who co-founded the influential website to rescue it from the dustbin of Internet history.  The Wall Street Journal looks at the good and the bad of the deal. Felix Salmon asks if AOL is really the right parent for the unique and very valuable Huffington Post Media Group.

Danaher agreed to buy medical diagnostics company Beckman Coulter for $5.8 billion cash, moving further into its growing medical technology business.

Blackstone Group has taken a majority stake in San Diego’s historic Hotel del Coronado. The private equity firm has been active in buying U.S. commercial real estate such as hotels, retail property and warehouse space from distressed owners and others who need cash.

Deals wrap: AOL still eying Yahoo deal?

AOL Inc has tapped Bank of America to explore strategic options including a potential Yahoo Inc merger, according to people familiar with the matter. The idea of combining AOL with Yahoo is still considered in an early stage and may not materialize into a deal, the sources said.

“First of all, Yahoo has to be approached and this is nowhere close to that point,” said one of the sources.

China’s largest e-commerce company, Alibaba Group, has reportedly been approached by a group of private equity investors to gauge its interest in joining a bid to buy Yahoo. Alibaba is 40 percent held by Yahoo and it was unclear if the bid attempt was part of the AOL deal.

Deals wrap: Who’s eying Yahoo?

The headquarters of Yahoo Inc. is pictured in Sunnyvale, California, May 5, 2008. REUTERS/Robert Galbraith Yahoo shares surged after sources said private equity firms have approached News Corp and AOL to gauge interest in a buyout deal. *View article *View WSJ blog asking if a deal would make sense *NYT’s Andrew Ross Sorkin writes: “A deal is not happening anytime soon.”

Is he a loudmouth corporate raider or the investing world’s version of a Las Vegas Elvis? Reuters interviews hedge fund manager William Ackman to find out. *View article *Full coverage PDF

Private equity firms have been reaping huge dividends from companies they own. A WSJ blog asks if the feeding frenzy has gone too far. *View blog

Deals wrap: Getting hostile

A sign points the way to the headquarters of Genzyme in Cambridge, Massachusetts August 3, 2010.  REUTERS/Brian Snyder   Sanofi is getting hostile in its bid for Genzyme, after Genzyme management refused to negotiate. The $69-per-share offer will be taken directly to shareholders but will they be looking for more? *View article *View graphic on hostile deals  *View WSJ article on pharma M&A

Growth in emerging markets is aiding a global M&A boom and with large cash piles in hand, companies are finding it hard to resist the urge to acquire. *View article

Coca-Cola has completed its deal to take over North American operation of its top bottler, Coca-Cola Enterprises. Reuters interviewed Coke Chief Executive Muhtar Kent about what the deal will mean for the remaining independent bottlers. *View article

Business Insider makes the case for Yahoo and AOL merging, immediately. *View Business Insider article

No longer just a dumb pipe

Comcast’s deal to buy a majority stake in NBC Universal from General Electric should put to rest fears at the cable operator that King Content will kill its business. But even if it becomes a thoroughfare of programming genius, the new venture will still have to convince a skeptical marketplace. The train wreck of Time Warner-AOL threw the idea of new media into financial purgatory.

Just how the venture will wring savings from its disparate businesses and avoid suffocating regulatory scrutiny are issues that could also create Comcastic headaches.  Robert MacMillan points out on our Mediafile blog, with a sensible dose of skepticism, that the new venture is affirming its commitment to local news, in effect, promising to keep the garden hoses pumping even as it primes for a media gusher with big-ticket programming.

Still, while making a new media juggernaut could still turn out to be a pipe dream, Comcast CEO Brian Roberts (pictured above) cannot be faulted for allowing his company to get stuck in a dumb pipe nightmare.

AOL then and now

Anyone want to take a shot at what’s behind Time Warner‘s repurchase of a 5 percent stake in AOL held by Google? Time Warner sold the stake in December 2005 for $1 billion. Now, it has bought it back for $238 million — a nice job of selling high and buying low. Time Warner plans to spin off AOL by the end of the year.

The 2005 deal implied a chunky price tag of $20 billion for AOL. While it may not be exactly apples to apples, the repurchase implies a value of about $5.7 billion.

Brigantine Advisors analyst Colin Gillis said the implied $5.7 billion represents a “floor valuation ” as AOL moves toward a spinoff. If that’s true, then Google not only overpaid, but undersold.

“These companies make me feel secure”

Worried about the safety of your personal information? On second thought, maybe you’re not — if you shop with your American Express card, surf eBay or use an IBM system.
 
Those three companies are consumers’ picks for the top most trusted when it comes to protecting their customers’ privacy, according to a survey by TRUSTe, a consumer privacy protection organization, and the Ponemon Institute, an independent research group. 
 
Consumers reported that identity theft is the No. 1 factor influencing their view of how companies handle privacy concerns, with only 45 percent of respondents saying they felt they had control over how their personal information was used or shared. That’s down from 56 percent two years ago.
    
The worries over data security are real — companies from discount retailer TJX Cos to Bank of New York Mellon Corp have had major data breaches compromising the personal information of millions of consumers.
    
The top ten list is rounded out by Amazon.com, Johnson & Johnson, the U.S. Postal Service (which shares the No. 6 spot with Hewlett Packard), Procter & Gamble, Apple, Nationwide, and Charles Schwab.
    
The survey, now in its fifth year, polled nearly 6,500 U.S. adults to determine their view of the most trustworthy companies and brands when it comes to protecting personal information.
    
Companies including Disney, AOL and Dell made it to the top 20 list, with Yahoo, FedEx, Facebook and Verizon joining that group for the first time since 2004, when the Ponemon Institute began conducting research on the topic. It was also the first time for Apple, at No 8.

Google, whose growing dominance of the search market has prompted questions over how it uses its data, found itself ousted from the Top 20 list this year, as were Countrywide and Bank of America.

Yahoo’s deal with Google: Band-Aid

So Yahoo and Google scaled back the terms of their search advertising deal in what looks like a last-ditch, attempt — at least for Yahoo — to get it past U.S. regulators.

Some analysts called it the Band-Aid deal, while others said it smacks of desperation.

Frost & Sullivan’s digital media global director Mukul Krishna said the revised terms were “more of a Band-Aid than the extensive surgery” Yahoo needs.

A-courtin’ we will go

Wedding ornamentLike a bad soap opera, the Internet storyline is getting more and more convoluted. The tale so far: Microsoft Corp, spurned by Yahoo Inc, is courting Time Warner Inc to allow a union with Internet division AOL. But Yahoo, which turned its back on Microsoft’s $47.5 billion bid, also wants AOL’s hand. These talks have taken on a new urgency ahead of Yahoo’s Aug. 1 shareholders meeting, a source familiar with discussions told Reuters on Tuesday. How either marriage will work is not immediately clear, but any combination will likely redraw the landscape for advertising on the Internet. So why is AOL so attractive? Both Yahoo and Microsoft view it as beneficial to leverage their positions in the Internet marketplace, where search giant Google Inc dominates. Stay tuned.

But good soaps are not only made in America. It seems the Germans are good at them, too. Tires-to-brakes maker Continental rejected Schaeffler Group’s surprise 11.2 billion euro ($17.8 billion) bid, saying only the family owned firm stood to gain from the offer which was too low. Late on Tuesday, the ball-bearing maker announced the terms of its proposed takeover after winning control of more than a third of Continental’s shares through a web of options organized for it discretely by banks. Schaeffler’s bearings are found in London’s landmark Ferris wheel, the London Eye and it also makes high-precision bearing supports for the U.S. space shuttle and the European launch vehicle Ariane, not that that has any bearing on a deal.

Some suitors, however, do get lucky. Mining company Cleveland-Cliffs Inc said on Wednesday it would acquire Alpha Natural Resources Inc for about $10 billion in cash and stock to expand its coal assets. Stockholders of Alpha, an Appalachian coal producer, will receive 0.95 of a Cleveland-Cliffs common share and $22.23 in cash for each of their common shares when the union is completed. Based on closing stock prices on Tuesday, the deal values Alpha at $128.12 per share, a premium of 35 percent, the companies said in a statement. The combined company will be renamed Cliffs Natural Resources and will include nine iron ore facilities and more than 60 coal mines located across North America, South America and Australia.

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