Unstructured Finance

Deals wrap: Microsoft acquires Skype for $8.5 billion

Microsoft plans to buy internet telephone network Skype for $8.5 billion, the biggest purchase ever for the world’s largest software company as it seeks to regain ground on growing rivals. The money-losing Skype has 145 million users on average each month and has gained favor among small business users. The deal would also give Microsoft a foothold in the potentially lucrative video-conferencing market. Skype, which is minority owned by eBay, allows people to make calls at no charge but also offers some paid features.

This article in the Guardian by Graeme Wearden asked telecoms analysts what they think about the Microsoft-Skype deal.

Reuters columnist Felix Salmon gives his opinion on how being public eases acquisitions for companies, using the Microsoft-Skype deal and Facebook’s earlier interest in Skype as an example. Salmon writes that had Facebook been public, it could have snapped up Skype itself instead of having Microsoft buy it to keep it out of Google’s hands.

Deutsche Boerse’s works council is refusing to back a merger proposal with NYSE Euronext, according to two people familiar with the company’s thinking. The exchange is close to releasing a formal statement on behalf of the management and supervisory board, a formal part of German corporate governance in a takeover situation.

Buyout firms Blackstone and KKR are weighing up offers for France Telecom’s stake in Mobistar, sources familiar with the situation said. The deal could value Belgium-based Mobistar at more than 3 billion euros ($4.3 billion).

Deals wrap: Facebook investors look for exits

A group of Facebook shareholders is seeking to offload $1 billion worth of shares on the secondary market, a sale that would value the company at more than $70 billion, according to sources. It would represent one of the largest transactions of Facebook shares to date and points to a growing wariness among early-stage investors and employees who fear the social networking service’s growth cannot keep pace with its market valuation.

The sellers have lowered their price after previously trying to offload shares at a price that valued the company at $90 billion, but buyers balked.

Power company Exelon Corp is set to buy rival Constellation Energy Group for $7.9 billion, which will add 1.2 million customers to its existing 5.4 million. The Exelon-Constellation deal is the latest in a series of acquisition in a fragmented U.S. utility industry that faces new costs to upgrade power grids and meet environmental controls.

Deals wrap: Lactalis Parmalat bid leaving sour taste in Italy

French dairy giant Lactalis launched a $4.9 billion offer to take over Italy’s Parmalat, prompting intervention by Italy and France to defuse a row over control of the Italian company. The bid comes just hours ahead of a meeting between Italy’s Prime Minister Silvio Berlusconi and French president Nicolas Sarkozy where the Italian government has expressed worries about French moves on Italian companies. Europe’s biggest dairy group bought 29 percent of Parmalat in March which sparked alarm in Rome.

China’s Minmetals Resources said it has dropped out of the battle for copper miner Equinox Minerals, saying Barrick Gold’s $7.7 billion bid was too rich to justify a counter-offer. “Competing with Barrick at these prices would, in our view, be value destructive for (our) shareholders,” Andrew Michelmore, Minmetals’ chief executive, said in a statement.

The Wall Street Journal paints a picture of Nasdaq’s hardships thus far in a bid for NYSE Euronext. The exchange has  sweeten their offer with more money but was still turned down and now hope to win over NYSE shareholders. Ronald Barusch sees a four-step program to Nasdaq’s victory.

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.

Deals wrap: Fiat speeds toward control of Chrysler

A new model of the Fiat 500 is pictured on display at the launch of Chrysler's flagship showroom in Los Angeles November 16, 2010. REUTERS/Mario Anzuoni Fiat will pump another $1.3 billion into Chrysler this quarter as it moves closer to its target of owning a controlling stake in the U.S. automaker. The deal will take Fiat’s holding in the company to 46 percent, just 5 percent shy of the 51 percent it needs to assume full control.

Read the politically charged, behind-the-scenes story of how the Singapore Exchange failed in its bid for a full takeover of Australian stock exchange operator ASX.

The prosecution amped up the tone of its attacks on Raj Rajaratnam in closing arguments at the insider trading trial of the hedge fund manager on Wednesday, saying the Galleon Group founder wanted to “conquer the stock market at the expense of the law.” The jury is expected to begin deliberations once the defense wraps up its closing arguments either Thursday or next Monday.

Deals wrap: Nasdaq and ICE sweeten bid for NYSE Euronext

NYSE/NASDAQNasdaq OMX and Intercontinental Exchange (ICE) said they have lined up a commitment to finance their rival bid for NYSE Euronext and have offered to pay a breakup fee if the deal fails to go through. This article from The Wall Street Journal lists the details of how Nasdaq and ICE is plan to sweeten their offer for the exchange even more.

Samsung Electronics is selling its hard-disk-drive (HDD) business to Seagate Technologies for 1.4 billion in cash and stock as Samsung looks to back out from the industry and focus on its core money-making memory-chip business. The acquisition will help Seagate, the world’s largest maker of hard drives better compete with rival Western Digital, which has plans to buy Hitachi’s HDD unit for $4.3 billion.

Leading corporate governance body PIRC is telling Xstrata shareholders ahead of their board vote they should reject the election of three directors nominated by its top shareholder Glencore because it does not perceive them as independent.  The world’s top commodities trader is in the process of completing a $12.1 billion duel-listing in London and Hong Kong.

Deals wrap: Why does J&J want to buy Synthes?

Doctors discuss medical treatment as they look at an X-Ray image on a monitor in this Reuters file photo. REUTERS/Fabrizio BenschAnother multi-billion dollar international healthcare deal could be coming if Johnson & Johnson has its way. Synthes, a Swiss medical device maker, confirmed it is in takeover talks with J&J after reports the U.S. health giant is keen to buy it for about $20 billion.

What does J&J want from a Swiss company many have never heard of before? The acquisition, which would be J&J’s biggest ever, would give the company a leading edge in equipment used to treat trauma patients. Synthes makes nails, screws and plates to fix broken bones, as well as artificial spine discs.

But a deal is far from certain at this stage. As the WSJ’s Katharina Bart points out, key to any deal is the agreement of Synthes Chairman Hansjoerg Wyss, a “secretive billionaire” who owns 48 percent of the company directly and through family trusts.

Deals wrap: Glencore’s $12.1 billion IPO

GLENCORE/Glencore is looking to raise up to $12.1 billion for its initial public offering in a duel listing that will boost firepower for deals at the height of the resource boom. The long-awaited details of the offer, set to be the largest ever in London, were outlined in an intention-to-float that confirmed an earlier Reuters story. However, the company did not name a new non-executive chairman, a requirement for its listing.

NYSE Euronext and Deutsche Boerse are looking at several options to win support for their $10.2 billion deal, including paying special dividends to shareholders, according to sources briefed on the matter. The idea of paying the special dividends is to win shareholders support over an unsolicited higher offer from Nasdaq OMX and IntercontinentalExchange Inc (ICE). While NYSE Euronext and Deutsche Boerse currently pay dividends, Nasdaq and ICE do not.

BP and Rosneft agreed to extend the deadline for their swap agreement by one month as the British oil producer tries to salvage the $7.8 billion deal. BP’s tie-up with Rosneft is already blocked by a court injunction secured by the company’s Russian partners in its TNK-BP venture.

Deals wrap: BP’s Rosneft deal on the rocks?

BP/The planned $18 billion deal between BP and Rosneft was left even more uncertain after its chief backer Igor Sechin stepped down as Rosneft’s chairman. Sechin, who is also Russia’s deputy prime minster quit after President Dmitry Medvedev ordered the removal of ministers from the board of state companies. BP’s tie-up with Rosneft is already blocked by a court injunction secured by the company’s Russian partners in its TNK-BP venture.

HP held talks with software company Tibco about a possible acquisition until about two weeks ago, according to sources familiar with the matter. The talks come as new CEO Leo Apotheker is expected to revitalize the company’s software division via acquisitions, which only accounts for 3 percent of its revenue. It is not clear if the talks will resume. (more…)

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