By Lauren Tara LaCapra
On a conference call to discuss Goldman Sachs’ new chief financial officer yesterday, an analyst asked departing CFO David Viniar why he was leaving when the stock is at a historic low.
In the blue corner – Emirates National Oil Company (ENOC), which recently hired proxy solicitation firm Georgeson to get out the shareholder vote in favour of its $1.9 billion bid to buy out the 48 percent of Dragon Oil it doesn’t already own. (Georgeson say they are the oldest and best shareholder consultancy in the business, and helped engineer a record turnout for the HBOS AGM that approved Lloyds’s takeover of the bank.)
PepsiCo Inc’s offers to buy the remaining stakes in its two largest bottlers came as a surprise, but the biggest surprise may be the scant 17.1 percent premium in the overtures.
PepsiCo’s bid to buy the rest of the bottlers it does not already own constitutes a so-called “squeeze-out,” or a transaction in which the buyer already owned some portion of the target and was seeking to own the 100 percent.
Even given that squeeze-out premiums are typically lower than cases where a buyer did not own any part of the target and was seeking to acquire 100 percent, this one looks particularly low, according to FactSet Mergerstat.
The average 1-day premium for a squeeze-out deal was 35.77 percent versus the average 1-day premium of 44.10 percent for a full acquisition, FactSet Mergerstat said.
Put another way, the PepsiCo premium was half the normal premium for a typical squeeze-out. Both Pepsi Bottling Group and PepsiAmericas rose above PepsiCo’s offer, suggesting that shareholders expect the deal to get a little sweeter.