New $23 bln woodland monster looks good on paper 9 Nov 2015 Forestry giant Weyerhaeuser is paying a 14 pct premium for Plum Creek, a $7 bln timberland REIT. That’s modest but fair, given $100 mln of expected cost savings and a planned $2.5 bln stock buyback for both sets of owners. Weyerhaeuser’s long transformation looks near complete.
UK brokers take opposing bets on future of trading 6 Nov 2015 ICAP may sell its voice-trading business and related bits to Tullett Prebon for stock, some of which would go to the seller’s shareholders. The mooted deal is messy. But it allows Tullett to double down on its core competence while ICAP can bet on an electronic future.
Darty-Fnac deal carries digital danger discount 6 Nov 2015 Books and music retailer Fnac has sweetened the terms of its bid for homewares rival Darty. Its 615 mln stg offer has board agreement too. The premium is still skinny when set against synergy estimates. That probably reflects the big threat from online rivals.
No knockout in Australia’s $6 bln waterfront brawl 6 Nov 2015 Canada’s Brookfield moved to salvage its takeover of Asciano, buying a 19 pct stake to match last week’s lightning raid by rival Qube. The Aussie challenger could hit back by making a full bid for the ports and rail group. Or antitrust referees could haul Brookfield away.
Expedia finds back door to Airbnb’s market 4 Nov 2015 The travel site is paying $3.9 bln for HomeAway. Though the vacation-rental firm lacks the urban clout of its better-known rival, moving in with its new parent will help. Cost cuts are low, but HomeAway’s cash pile will ease the blow to Expedia of shelling out a 28 pct premium.
Candy Crush bid relies on hope over experience 3 Nov 2015 The London-based maker of the sweet-matching mobile game is selling to Activision for $5.9 bln. It’s just a 20 pct premium, which leaves investors in last year’s IPO with a loss. With few synergies, this looks as much an excuse to use excess cash as a sound bet on future hits.
Indian telco M&A calls for closer Ambani ties 3 Nov 2015 Anil Ambani’s Reliance Communications is buying the Indian unit of Sistema, giving the country’s fourth mobile operator extra spectrum. That makes indebted RCom a more attractive partner for an upstart led by brother Mukesh. A deeper alliance would seal the siblings’ truce.
Halliburton’s Baker Hughes bid looks less refined 2 Nov 2015 The gap between the offer and market prices is a yawning 15.4 pct, implying there are serious doubts about the $27 bln oil services merger. Aussie trustbusters have raised fresh concerns. A blocked deal would cost Halliburton $3.5 bln, nearly triple this year’s expected profit.
Shire pays up for easier prey than Baxalta 2 Nov 2015 The UK pharma group is offering $6 bln for rare-disease drugmaker Dyax while biding its time for an eventual swoop on Baxalta. The deal relies on bold assumptions and could take years to pay off. Shire is good at M&A, but a weak share price shows market support can’t be assumed.
Visa picks a tough time for $23 bln Europe deal 2 Nov 2015 The U.S. payments network is using an earnout, buybacks and other maneuvers to soften the blow of paying 61 times pre-tax earnings for its overseas cousin. It’s a crafty solution but the integration will take a while and distract management just as industry competition heats up.
Merger Monday has a scary Halloween afterglow 2 Nov 2015 At least six corporate buyers unmasked acquisitions of $1 bln or more to sustain the freakish pace of M&A. Some of them, including Visa’s, are tricky, while others like Shire’s treat sellers to rich prices. The zombie-like deal march is causing investors to take fright.
American bank laggards band together for safety 30 Oct 2015 KeyCorp is paying $4.1 bln for First Niagara, creating the 13th-largest U.S. institution. Key is healthier than its quarry but doesn’t meet its cost of capital. The combination is expected to bring cost cuts of $400 mln and more efficiency – and may be tasty prey for big rivals.
Pfizer may overdose on quick and complex deals 29 Oct 2015 The drug giant is in talks to buy Allergan and seems likely to split the merged firm. It is moving briskly to take advantage of low share prices and tax benefits that could vanish with a new Congress. Speed can prompt missteps, though, as the pharma giant knows only too well.
Pfizer may pay dearly for Allergan tax-lite charms 29 Oct 2015 The U.S. drugs group is eyeing a $330 bln tie-up with its Ireland-based rival, reports suggest. Allergan, with an enviably low tax rate, can hold out for a good price. But if Pfizer stumps up for a premium of more than 25 percent, it will risk paying away the benefits of a deal.
Did Watson randomly generate IBM’s weather deal? 28 Oct 2015 Big Blue’s purchase of the bulk of Weather Co assets carries no clear strategic logic or even a price tag. But it has created a golden opportunity for CEO Ginni Rometty to distract her long-suffering shareholders with a litany of buzzwords and hollow corporate speak.
NYSE parent may be getting short end of IDC stick 28 Oct 2015 Exchange operator ICE’s $5.2 bln deal for Interactive Data bags it potentially lucrative info on bonds. But ICE will end up with more debt than rival marketplaces for a slow-growth asset. Sellers Silver Lake and Warburg Pincus, meanwhile, stand to make impressive gains.
Investors coax Walgreens Boots to swallow Rite Aid 27 Oct 2015 Scooping up the No. 3 U.S. drug chain strengthens $98 bln Walgreens as it battles domestic leader CVS. Antitrust is an obvious question given the rough ride Staples has faced with Office Depot, but the hurdles look manageable. Shareholders are certainly not worried.
Collapsed Ares deal leaves friends with benefits 27 Oct 2015 Tony Ressler’s buyout shop called off its $2.6 bln merger with Kayne Anderson after disagreements over investing in energy. Even so, Ares is giving Kayne $150 mln to play with. It’s a cozy solution between cronies that contrasts starkly with how some crisis-era LBOs ended.
Japan’s 7-Eleven owner is ripe target for activism 27 Oct 2015 U.S. agitator Dan Loeb has bought into top convenience store operator Seven & I. The $39 bln group is already tackling its ailing supermarkets, one of Loeb’s main concerns. Still, it could further reward investors with dividends, balance-sheet efficiency and succession planning.
Keep one eye on Sam Zell’s "For Sale" sign 26 Oct 2015 The U.S. real estate mogul’s Equity Residential is offloading a collection of apartments for $5.4 bln. While Zell got the timing right as a seller in 2007, so did buyer Barry Sternlicht’s Starwood in 2009. The one big difference is Zell’s two extra decades of investing experience.