Unstructured Finance

M & A wrap: S&P chief downgraded

The chief of Standard & Poor’s will step down next month, to be replaced by a senior Citibank executive, in a move announced a few weeks after the credit rating agency downgraded U.S. government debt and sparked a row with Washington.

Australian brewer Foster’s Group put pressure on SABMiller to raise its $10 billion hostile takeover offer on Tuesday, unveiling a $521 million capital return to shareholders.

Deutsche Bank AG knew in 2006 that a mortgage company it was preparing to buy lied to the U.S. government about its mortgages, yet went ahead with the purchase and should be held financially responsible, the Justice Department said on Monday.

Mortgage-backed securities are also at the center of another investigation of a prominent bank, as Goldman Sachs CEO Lloyd Blankfein has hired high-profile Washington defense attorney Reid Weingarten to represent him as the Justice Department looks further into Goldman’s role in the financial crisis.

NYT’s DealBook contributor Peter Henning called the Goldman investigation an “overreaction,” adding that until subpoenas are issued, the news that “Mr. Blankfein has hired his own lawyer does not tell us much, other than that he did what every other corporate executive involved in an investigation would do.”

Deals wrap: M&A not immune to Euro crisis

Shadows that started to fall over the pitch books of European dealmakers in the second quarter are darkening, threatening to rob banks of a few billion dollars in potential M&A fees.

After a robust first quarter boosted by mega transactions like Deutsche Telekom’s $39 billion exit from the U.S., fears about stuttering growth and Europe’s mounting debt crisis slowed the rise to only 24 percent in the second quarter, reversing hopes of a robust rebound and several years of rising M&A.

Analysts are pointing toward September as a key time frame if M&A’s have any hope of rebounding, with SABMiller’s  expected renewed assault on Australian bid target Foster’s  coming later this month.

Deals wrap: Yahoo, Softbank reach pact over Alibaba’s Alipay

After months of intense negotiations, China’s Alibaba Group said it has reached an agreement with Yahoo and Softbank that promises the e-commerce giant could receive up to $6 billion from an IPO or liquidation of its e-payment unit, Alipay.

Alipay is an Alibaba subsidiary that was transferred to a separate entity controlled by founder Jack Ma in order to meet Chinese regulations relating to foreign ownership. Yahoo owns 43 percent of Alibaba, which it acquired for $1 billion in 2005.

Australian brewer and takeover target Foster’s said it did not rule out takeover talks with SABMiller, but the company’s new CEO John Pollaers said “the value put on the table was so far away from reality that it wasn’t worth engaging (with SABMiller).” SABMiller, the world’s number two brewer had offered $10.4 billion for Foster’s last month.

Deals wrap: SABMiller ready for another round?

SAB Miller said it would keep talking to Foster’s Group after Australia’s largest brewer rejected the global giant’s $10.1 billion cash takeover offer as too low.

Research In Motion has lost so much value that an acquirer could pay a 50 percent premium and still buy the BlackBerry maker for a lower multiple than any company in the industry, Bloomberg reports.

Rather than moan about Groupon’s inability to say anything in the quiet period, CEO Andrew Mason should enjoy it while it lasts, writes Felix Salmon.

Deals wrap: Groupon’s new deal, a $25 billion IPO

An online coupon sent via email from Groupon is pictured on a laptop screen November 29, 2010 in Los Angeles. REUTERS/Fred Prouser

Daily deals website Groupon, which last year turned down a $6 billion bid from Google, has held talks with banks about an initial public offering that would value the company as high as $25 billion, according to Bloomberg.

The Chicago-based company ballooned to 50 million users in 2010 and is available in 500 cities in 40 countries. Not bad considering the two-year-old start-up was valued at $1.3 billion just last April.

Shira Ovide of the WSJ.com wonders if Groupon’s massive valuation, coupled with the reported $75 billion worth for Facebook, has the makings of another 1990′s tech bubble.

Deals wrap: Pfizer mixing medicines

People walk past the Pfizer World headquaters in New York, February 3, 2010. REUTERS/Brendan McDermidPfizer has agreed to buy King Pharmaceuticals for $3.6 billion. *View article *View WSJ blog on who’s benefiting from the deal *View Forbes blog on why the deal seems bad for Genzyme

L’Oreal may be bidding for Avon, the Daily Mail reported. Avon shares jumped 6 percent on the news. *View article

The Australia dollar’s surge to 28-year highs could cause  a headache for Foster’s wine business bidders. *View article

Deal wrap: Talking defense

Israeli Air Force F-15 fighter jets fly in formation with a Boeing 707–320 aerial refueling tanker during a ceremony for newly graduated pilots at the Hatzerim Air Base, June 28, 2010.  REUTERS/Baz Ratner Boeing defense chief Dennis Muilenburg startled many this week when he told the Reuters Aerospace and Defense Summit he would not rule out the possibility of a large-scale merger. Is he sending up a trial balloon to gauge the Pentagon’s reaction? *View article *Read more at the Aerospace and Defense Summit

Two of the world’s biggest private equity firms, KKR and TPG, are potentially interested in Foster’s wine business, but they are not currently working on rival bids, sources told Reuters.  Earlier this week Foster’s rejected a $2.5 billion offer for its wine business as too cheap. *View article

The SEC is investigating investment advisory firms that channel investors’ money into hedge funds, the Wall Street Journal reported. *View WSJ article

Check Out Line: Mixed ruling in eBay vs Craigslist case

Check out the latest twist in the eBay – Craigslist saga.

RTR2AWXU

A judge reinstated eBay’s 28.4 percent stake in Craigslist, but allowed the classifieds site to keep eBay off its board.

The mixed ruling meant no clear victory for either of the companies, whose relationship turned from cozy to competitive and ended up in court in 2008.

“More fortunate than Goliath, eBay leaves this field with only a gash across its forehead; less fortunate than David, Craigslist leaves this field with something less than total victory,” wrote Chancellor William Chandler III of Delaware’s Court of Chancery in his opinion.

Deals wrap: Reaching for the wine

Red wine made by Fosters is displayed on the shelf of a liquor store in Melbourne September 8, 2010. REUTERS/Mick Tsikas Foster’s beer business has been getting all the limelight recently but the company has now rejected a private equity offer worth up to $2.5 billion for its wine business. The news raised speculation that suitors for the combined group, which has a market value of about $11 billion, might now step forward. *View article *View article on Foster’s CEO

BA-Iberia has earmarked Asia as a key region for expansion once their own merger solidifies, though restrictions on foreign investment could narrow their range of acquisition targets.*View article

The defense world is bracing for a whirlwind of dealmaking as tighter budgets and new security threats prompt the Pentagon’s large contractors to move resources to cybersecurity and unmanned defense. *View article *View graphic *View full coverage of the Reuters Aerospace and Defense Summit

Deals wrap: Deal talk gets frothy

A judge views samples of beer in west London August 3, 2010.  REUTERS/Toby MelvilleFoster’s said the split of its beer and wine divisions was on track for next year, but was silent on growing takeover talk for its profitable beer unit. Foster’s share price has been on a roller coaster ride on the takeover talk, surging 7 percent on Monday and sliding 4.5 percent on Tuesday. *View article

BHP Billiton’s monster earnings expected on Wednesday could strengthen its hand in its bid for Potash Corp and intimidate any rival bidders. *View article

*View analysis on China’s reaction to a possible BHP deal

*View Bloomberg article on the downside of mining mergers

The recent rush of M&A activity is a result of idle cash and not a sign of a stable rising market. *View Barron’s article *View NYT blog pouring more cold water on the boom in deals.

  •