Double Pac-Man healthcare M&A contains triple risk 20 Oct 2015 AmSurg wants to be king of U.S. doctor outsourcing. The $3.8 bln firm made an unsolicited $5.3 bln offer for TeamHealth while also backing its target’s agreed purchase of another company for $1.4 bln. The double gulp raises the odds of overpaying, buying a dog, or poor execution.
Alibaba bid turns Youku from horror to mystery 16 Oct 2015 The Chinese e-commerce group is offering $5.2 billion to buy the video site in which it owns a stake, at a 30 percent premium. Being absorbed into Alibaba ought to improve returns for the perpetually loss-making Youku. It should create value – not that either side is asking.
Thruppence: Naming that brew 16 Oct 2015 It could be called Anheuser-Busch de Bebidas das Américas und South African et Asian Inter-Breweries (ABBASAAIB). Breakingviews columnists brainstorm some alternatives to this over-fermented concoction of beer-merger dregs past and present.
Dell-EMC tracker stock gives arbs a new plaything 14 Oct 2015 The mega-LBO touted at $67 bln is now worth $3 bln less, while EMC’s full market cap is only some $56 bln. That means investors aren’t sure the deal will close or they’re nervous about the synthetic shares in EMC’s VMware unit that will be issued as part of the deal – or both.
Chill on M&A lawsuits puts heat on Wall Street 14 Oct 2015 A judge has poured cold water on HP’s attempt to settle claims over its $2.7 bln Aruba purchase, slamming the practice of buying peace with fees. But suing bankers over conflicts provides better kindling. Efforts to cut deal litigation are simply blowing legal fires elsewhere.
Home intrusion could pay for German landlords 14 Oct 2015 Residential landlord Vonovia is upsetting 8.1 bln euro rival Wohnen’s agreed merger with LEG, offering to acquire the buyer instead. At first glance, the new deal would leave Wohnen’s shareholders better off. In return, they cede control and take on the risk Vonovia has overreached.
AB InBev may suffer beer-swill antitrust hangover 13 Oct 2015 The brewer’s latest deal could trip over a decades-old Supreme Court defeat for former rival Pabst. That case’s crackdown on beer mergers led to a backlash and big JVs like Molson’s with SABMiller. Since AB InBev’s bid for the latter, trustbusters seem ready to turn back the clock.
AB InBev must change spots to make SAB deal work 13 Oct 2015 Having won its UK rival’s agreement to merge, the Budweiser brewer now gets to put its fearsome talent for cost-cutting to work. But that may not be enough. AB InBev will need to create growth and court governments to make the $104 bln bid stack up. Those are different skills.
AB InBev makes an offer SABMiller shouldn’t refuse 12 Oct 2015 Budweiser’s parent has made a fourth proposal for the UK-listed brewer at some $103 bln. The cash-and-shares bid is 42 pct above SAB’s stock price before the latest approaches were made, and comes at nearly 15 times last year’s EBITDA. It is just about time to say “I do.”
EMC investors get $67 bln ticket out of trouble 12 Oct 2015 Michael Dell and others are paying $33 a share for the tech conglomerate. Sure, most of the notional 38 pct premium comes as a flaky tracking stock in EMC sub VMware. But there are no other obvious bidders and breaking up the company is a risky alternative for only slight gains.
Dell takes $67 bln EMC challenge out of public eye 12 Oct 2015 The PC maker has deleveraged since going private in 2013. That’s also how it plans to handle the disk storage firm after adding debt to buy it. A waning EMC core business, a need for revenue synergies and other twists make this another deal best tackled behind closed doors.
Aggressive AB InBev risks joining sorry M&A club 9 Oct 2015 The Bud brewer is as close to a hostile bid for SABMiller as possible without formally going directly to shareholders. About half of big, unsolicited, cross-border deals eventually close. The results, however, are often disastrous, as Vodafone, RBS, Mittal and others can attest.
SABMiller’s Budweiser fightback lacks punch 9 Oct 2015 The Peroni brewer’s promise to find $550 mln of new cost savings by 2020 is paltry in the context of the $100 bln approach from AB InBev. SAB might have more powerful defences in its locker. It had better, if it wants to stay independent from the Budweiser brewer.
Prognosis is bleak for Shire’s troubled Baxalta bid 9 Oct 2015 The rout in pharma stocks has made the Irish group’s all-share offer less attractive for its recently spun-off U.S. rival. Shire would have to add much more stock to offer Baxalta the $30 bln it initially touted. It should delay – even if it then misses its chance altogether.
SABMiller’s best defence: debt and deliverability 8 Oct 2015 The Peroni brewer has leverage in the face of AB InBev’s aggressive $100 bln bid approach. It could gear itself up instead of letting the suitor take the spoils. It is also hard to see how the bidder could deliver value from SAB’s various partnerships without the board on side.
Dell’s gnarly $50 bln EMC idea smells of peak M&A 8 Oct 2015 The PC maker may offer to buy the data-storage firm. Borrowing $40 bln or so wouldn’t be easy. Spinning off part of EMC’s 81 pct stake in its $35 bln subsidiary VMware would add complexity, too, and make it tough for the numbers to work for everyone. It could be a deal too far.
Only beer goggles make AB InBev deal look right 8 Oct 2015 Cost savings in previous brewery mergers suggest the Budweiser maker is far from covering the 37 pct premium in its $100 bln offer for SABMiller, based on Breakingviews calculations. Sales growth and disposals might help. Sweetening the bid, however, is a tall order.
China web merger is latest sign of funding fatigue 8 Oct 2015 A mooted $15 bln tie-up between two discount shopping sites comes months after the country’s top taxi apps joined forces. Web giants like Alibaba and Tencent have poured billions into startups that connect local services to users. But subsidy wars are testing investors’ patience.
Li Ka-shing concession gives investors power boost 8 Oct 2015 The tycoon’s Cheung Kong Infrastructure unit has slightly sweetened its $12.4 bln offer for affiliate Power Assets. The move is designed to pre-empt a public showdown with minority shareholders. But it risks emboldening them to hold out for even more - and resist future deals.
Bud almost has the SAB keg tapped 7 Oct 2015 AB InBev’s $99 bln cash offer for SABMiller is robust. The alternative stock package is unusual, but looks cleverly designed to meet the tax needs of Altria and BevCo, SAB’s 41 percent shareholders. It also eases post-deal debt pressures. MegaBeer is almost here.