Kraft investors bet Heinz can refill secret sauce 25 Mar 2015 The Velveeta cheese maker’s stock jumped a third – making the company worth nearly $50 bln – on news of its sale to the ketchup giant, which 3G Capital and Warren Buffett took private in 2013. The math works if Heinz can repeat its margin magic and leap hurdles to scaling Kraft.
Heinz and Kraft prove that one M&A bank is enough 25 Mar 2015 The companies have a single adviser each in their mega-merger: Lazard for the ketchup maker and Centerview for the mac-n-cheese king. The involvement of Warren Buffett and 3G helps, as does the absence of outside capital. But a lone consigliere per side suffices in most tie-ups.
Kraft buyout may work with a slathering of ketchup 25 Mar 2015 Mac-n-cheese maker Kraft is reportedly in talks with the Brazilian group that took Heinz private with help from Warren Buffett. A Heinz-style takeout looks doable, but the equity required is daunting. A merger with Heinz might be the best way to make a deal stack up.
Tronchetti and China pitch Pirelli price cleverly 23 Mar 2015 China National Chemical Corporation, aligned with Chairman Marco Tronchetti Provera, wants to buy and delist Pirelli. The 15 euros a share offer isn’t generous, but the market price is only slightly higher and the bidders aren’t forced buyers. Holdouts may not get much more.
Holdout investors can survive beating on the bayou 20 Mar 2015 At the New Orleans M&A jamboree, dealmakers slammed merger appraisal cases that allow shareholders to sue for higher prices. Even the Delaware chief judge’s fiery rebuttal didn’t carry the day. In the real world, though, the suits are proving sturdy checks on dodgy transactions.
China may finally end Pirelli’s stock market spins 20 Mar 2015 State-owned China National Chemical is buying into the listed tyremaker, run by Marco Tronchetti Provera. It’s the third big capital shift since 2013, each with control moving through a complex web of holding firms. But this one could be the last, if it leads to a full buyout.
Holcim scores clear victory in Lafarge deal 20 Mar 2015 The Swiss cement maker has reset deal terms with its French partner. That’s fair – the new exchange ratio keeps the tie-up a merger of equals. But Holcim has also managed to veto Lafarge’s Bruno Lafont as CEO. Lafarge’s concession suggests its shareholders are anxious for a deal.
U.S. mega-mall deal features bazaar tactics 17 Mar 2015 Macerich rejected an unsolicited $22 bln takeover bid from larger rival Simon Property. The suitor’s touted 30 pct premium may really be worth less. Even so, the target’s decision to shield itself by undoing good corporate governance is the more disingenuous haggling move.
M&A’s March Madness shindig puts refs center court 17 Mar 2015 Wall Street’s watchdog-in-chief and a revamped Delaware bench star in the industry’s annual New Orleans gig. Hot topics include how to make outvoted investors richer and lawsuit losers poorer. Activists and dealmakers will get their shots, but the focus is on rules of the game.
BHP takes no chances with South32 spinoff 17 Mar 2015 The new mid-sized miner will emerge with comparatively little debt. While BHP Billiton is spinning off unloved assets, South32’s balance sheet will be strong enough to allow new investment. The low gearing could also make it an attractive takeover target for a debt-funded bidder.
U.S. gym chain buyout demands a serious workout 16 Mar 2015 The $4 bln acquisition of Life Time Fitness by Leonard Green and TPG probably lards it with debt of about six times EBITDA. That may be why seven banks are limbering up to do the financial lifting. The new owners will have to run hard on the treadmill to make the numbers work.
Valeant’s $11 bln bid may have scored two knockouts 16 Mar 2015 By sweetening its offer for Salix, the acquisitive drugmaker now backed by hedgie Bill Ackman put rival suitor Endo on the mat. The extra cash and a balance sheet reeling from the Allergan deal leave the business model looking wobbly. Valeant may have just rung its own bell too.
Lafarge-Holcim merger can be rescued as takeover 16 Mar 2015 The European cement makers disagree about the financial terms and governance of their planned tie-up. A “merger of equals” has foundered yet again. To keep the deal’s benefits, the way forward would be for Lafarge to agree to be bought for a suitable premium.
GE’s crumbs make for Australian buyout feast 16 Mar 2015 The U.S. conglomerate is offloading its consumer lending arm down under in one of the country’s biggest private equity transactions. Yet the $6.3 billion deal shrinks GE Capital’s balance sheet by just over 1 percent. The group has far to go to reduce its dependence on finance.
Skadden’s double dose of pharma M&A may be toxic 13 Mar 2015 The law firm is advising both Endo and Valeant on varying aspects of their competing bids for Salix. Working two sides of a deal might pass ethical muster if clients consent. As Goldman and other banks have learned, though, shareholders – and judges – can be far less forgiving.
M&A world could teach niche U.S. colleges 13 Mar 2015 The collapse of liberal arts enclave Sweet Briar is bad news for cash-strapped schools across the country. Sagging enrollment has pushed some institutions to offer debt-shy students big discounts on tuition. But that risks a spiral. Merging may be one way to ease the pressure.
Holcim can push for more in Lafarge tie-up 13 Mar 2015 The Swiss cement group is outperforming its French rival, creating cracks in their $44 bln union. A special dividend or higher exchange ratio could fix matters. That is more likely to happen than deal failure, given that both sides would suffer if it fell apart.
U.S. toll road investor dodges predecessors’ ditch 12 Mar 2015 Australia’s IFM will pay $5.7 bln for a bankrupt Indiana turnpike operator, 50 pct more than Macquarie and a Spanish partner shelled out in 2006. Less than half the amount is debt, though, and the road is in far better shape. That should help the firm steer clear of any potholes.
Spain may give UK banking the challenger it needs 12 Mar 2015 Sabadell has offered to buy old-new UK bank TSB for 1.7 bln stg. Half-owner Lloyds has to sell anyhow. The Spanish lender would add foreign reach, while a fully owned TSB could focus on growth, not dividends. That could help it compete against a rash of newly listed peers.
Valeant’s mini-me turns into a hostile M&A rival 11 Mar 2015 The drugmaker’s stock has rocketed up as it has rolled over competitors, cut costs and preserved profit with a low offshore tax rate. Endo International, now led by Valeant’s ex-president, has copied the model in spades, trumping its rival’s offer for Salix with an $11 bln bid.