Monsanto can push Bayer only so far 24 May 2016 The U.S. seed producer rejected a $62 bln offer from the German chemical giant, but said it was open to talks. Bayer’s shareholders reacted poorly to the initial bid while Monsanto investors are skeptical about chances for a deal. Negotiating power is limited on both sides.
Bayer’s synergy hopes fall on stony ground 24 May 2016 The German pharma group’s stock fell more than $14 billion as it made an approach for U.S. seed maker Monsanto. It’s almost as much as the premium Bayer is offering, and suggests shareholders expect next to no cost savings. The deal looks value destructive, but that seems harsh.
Supercell sale would mark reboot for SoftBank 24 May 2016 Chinese giants are reportedly circling the SoftBank-owned developer of mobile gaming hits like Clash of Clans. A $5 bln-plus sale would seal a good return. It would also suggest President Nikesh Arora is making SoftBank more disciplined about selling, as well as buying, assets.
Tribune twists governance to wager investors’ cash 24 May 2016 The board turned down Gannett again and sold stock to an L.A. billionaire, now the publisher’s second-largest owner. The move could draw a higher offer. But a poison pill and other blocking tactics mean shareholders could easily be stuck, powerless, with a declining asset.
Egos may kill $54 bln health deal before watchdogs 23 May 2016 Cigna and Anthem haven’t consummated their merger, yet the U.S. insurers are squabbling over a lawsuit, information sharing and executives’ roles. The disharmony could make the deal fall apart. At the very least, it will make it harder to push it past antitrust regulators.
U.S. lenders’ $3.4 bln deal pits hope vs. reality 23 May 2016 Ares Capital’s takeover of under-fire rival American Capital may well bring more fees, lower funding costs and better returns. But the market for lending to mid-market companies has become tougher even as banks have retreated. The complexity of the tie-up doesn’t help, either.
Deutsche Bank needs BASF to spare its M&A blushes 23 May 2016 Germany’s biggest bank has no role on potentially the country’s largest deal - the $62 bln offer by Bayer for agrochemicals peer Monsanto. Deutsche’s share of global and domestic dealmaking is down. It sorely needs BASF, its own advisory gig, to hatch a successful counterbid.
Monsanto may strain to make case against Bayer bid 23 May 2016 A $62 bln all-cash offer from the German titan exploits a cyclical downturn in global agrochemicals. Even if Monsanto’s profit picks up again as expected, however, investors would have to value it considerably higher to match the takeover price. The bird in hand will be tempting.
Agro giants will have to wait for Malthus boost 23 May 2016 Tougher U.S. laws on tax inversions are one reason why Dutch fertiliser group OCI’s merger with CF Industries is off. But with supply outstripping demand, fertiliser prices are also falling. That’s delaying the price hikes that should come from rising populations.
Tribune turning tables on Gannett is fanciful 20 May 2016 The chairman of the Los Angeles Times publisher may counter an unwanted takeover bid by trying to buy the suitor instead. For Tribune to acquire Gannett, though, probably would require larding itself with immense debt. And that’s what made it vulnerable in the first place.
How a $12 bln UK buyout could ring up returns 20 May 2016 Private equity is reportedly circling Telefonica’s local unit after Brussels blocked a sale. That would be one of Europe’s largest-ever leveraged buyouts. The numbers might just add up - if the buyers can get O2 for a reasonable 8.5 bln stg or so, and then lift margins.
Oilmen fix smart $2.2 bln deal in Papua New Guinea 20 May 2016 Oil Search’s offer to buy InterOil is canny and opportunistic. The buyer will only pay later for future gas discoveries. An agreement to sell a big chunk straight on to France’s Total also cuts the chance of a rival bid. It leaves InterOil investors with an unattractive choice.
BASF best leaving Monsanto seeds for the birds 19 May 2016 Bayer’s bid for the U.S. seed maker puts its German rival on the spot. Monsanto and BASF work together on research and there are few other potential merger partners. Yet the maths of a $50 bln-plus counterbid would be a stretch. BASF has sat out other big deals; it can again.
Technip/FMC deal forged for a low oil price world 19 May 2016 France’s oil and gas services group is merging with US rival FMC Technologies. The all-share deal divides board seats and $400 million of annual synergies roughly equally. More to the point, it creates a business that can better compete for large projects in an oil price slump.
Nokia phone demise a warning for all tech giants 18 May 2016 Microsoft finally ditched the basic handset business in a deal that will see the devices reborn under the control of former Nokia bosses and Foxconn. The $350 mln sale price for the former crown jewel of a $300 bln enterprise is a testament to how quickly tech empires can vanish.
China’s $5 bln robot bid does not compute 18 May 2016 The 36 pct premium Midea may offer for German robot maker Kuka is frothy. There are no cost synergies, the suitor doesn’t seek control, and governance could be messy. Yet unless Kuka can find a white knight, minority shareholders have every reason to take the Chinese cash.
Labour costs drive China’s $5 bln march for robots 18 May 2016 Home appliance maker Midea is eyeing a takeover of German robot maker Kuka. Machines can replace domestic migrant workers as wages soar, and help push China up the manufacturing value chain. Government subsidies may aid the otherwise thin financial logic for the buyer.
Pandora investor hits right note with sale push 17 May 2016 Activist Keith Meister’s firm urges the online music service to find buyers after becoming its largest shareholder. A costly purchase, CEO change and lack of song rights suggest the company’s fading. Rivals Spotify and Sirius XM are possible partners. The board should be all ears.
Indian banks require capital before M&A 17 May 2016 The government is hinting at plans to merge some of the 27 state banks. Having fewer, stronger lenders makes sense but consolidation is not a substitute for repairing balance sheets. Deal-making now would disrupt the demanding turnaround that is already underway.