Trustbusters cook up simpler way to fry food deal 20 Feb 2015 The FTC need only raise “serious” questions to thwart Sysco’s $3.5 bln US Foods purchase. It’s an unusually low hurdle that has helped stall mergers like Whole Foods and Wild Oats. A bill that would change the rule may not pass in time to keep Sysco’s from going up in smoke.
Time Warner Cable’s deal risk goes down to wire 19 Feb 2015 A $45 bln sale to larger rival Comcast hangs in regulatory balance. Time Warner Cable’s stock price implies a 40 pct chance of collapse. A Breakingviews calculator shows how longer odds of success might hurt investors. The lack of a break fee would add insult to injury.
Drinks can merger may yet get flattened 19 Feb 2015 U.S. drinks can maker Ball agreed to pay 4.3 bln stg in cash for British rival Rexam. Ball also pledged to pay a chunky 302 mln stg fee if it is blocked. Rexam’s share price suggests the merger may still fall foul of trustbusters.
Italy could host Europe’s next bout of mobile M&A 17 Feb 2015 Previous deal talks between Hutchison Whampoa and Vimpelcom led nowhere. Still, there’s a big incentive to unite the duo’s Italian units. That combination could create financial benefits worth 4.1 bln euros – and lead to a 30 percent uplift in value.
Caixa’s BPI bid is a smart way to grow in Portugal 17 Feb 2015 The Spanish bank is bidding 1.1 bln euros for the remaining 56 pct of Portugal’s BPI. The price is decent, though synergies look ambitious. Caixa may not get to 100 pct but will exercise control. The obvious follow-up, buying Novo Banco, will be harder given the capital needed.
European telecoms euphoria is about to be tested 16 Feb 2015 The euro zone’s four big incumbent operators are about to outline future prospects as they report annual results. M&A and yield-hunting has powered huge rallies, especially at Deutsche Telekom and Orange. Investors could find the market has run ahead of itself.
Expedia indicates first-class M&A tickets remain 12 Feb 2015 The online travel company’s shares jumped after it agreed to buy smaller rival Orbitz for $1.6 bln. Advertised synergies worth $525 mln today amount to twice the premium being paid. Despite evidence of fewer easy pickings, Expedia shows why the deal boom still has some runway.
Yahoo’s Alibaba spinoff attracts big discount 11 Feb 2015 The company’s plan to distribute its stake in the Chinese company hasn’t excited investors. A Breakingviews calculator suggests they are attaching a 34 pct discount to the U.S. tech firm’s Alibaba shares – assuming Yahoo’s core business is worth something. That’s too cautious.
Starwood and Grace show that "proactivism" can pay 11 Feb 2015 Without any visible activist involvement, the hotel chain decided to spin off its timeshare business, while chemical maker W.R. Grace volunteered to split in two. Investors loved the deals. Uppity shareholders aren’t alone in wising up to carve-up potential – boards are too.
A $5.5 bln merger is one way to fill the CEO gap 11 Feb 2015 Telecity will buy U.S.-listed data-centre rival Interxion for $2.5 bln in stock. There’s a fittingly slim premium and investors seem sold on the touted synergies. Yet the recent departure of the UK group’s veteran CEO makes it harder to believe it got the best deal possible.
Comcast deal watchers cutting cord too quickly 10 Feb 2015 Just as the media conglomerate wrestles with a crisis over NBC news anchor Brian Williams, doubts are rising about its $47 bln acquisition of Time Warner Cable. The market’s implied probability of success has tumbled to 60 pct. Interpretation of FCC signals may be too gloomy.
Sky’s insecurity helps Premier League net $8 bln 10 Feb 2015 The pay-TV giant is spending 83 pct more than its last deal to retain most of England’s top-flight soccer. Sky can make the sums add up. But runner-up BT is a real threat. And Sky can’t afford to test what losing its football dominance would mean. The big winners are the clubs.
China developer rescue more grey knight than white 6 Feb 2015 The purchase of 49 percent of defaulted property group Kaisa by rival Sunac gives offshore bondholders hope of getting their money back. For the wider sector, though, it’s only a problem deferred. While Kaisa may have been saved, there are only so many brave buyers to go around.
Can maker dons tin hat to reveal $6.6 bln approach 5 Feb 2015 Shares in London-listed Rexam jumped 20 pct on news it might sell itself to U.S. rival Ball. A deal isn’t even inked, and the antitrust concerns are substantial. The British company’s decision to publicise the price under discussion looks brave – or designed to force Ball’s hand.
Britain’s $35 bln mobile shake-up risks blowback 5 Feb 2015 BT is buying EE and Hutchison is in talks to buy O2. The firms and their investors hope watchdogs will permit both deals without too many strings. But rivals want tough scrutiny from antitrust bodies. And if BT pushes too boldly onto their turf, Sky and Vodafone may hit back.
Pfizer’s generics injection lifts mood for breakup 5 Feb 2015 The pharmaceutical giant’s $15 billion purchase of Hospira gives it a shot at reversing a history of value-destroying acquisitions. The injectable drug maker’s strength in non-branded medications should fortify Pfizer’s generics unit – and clear the way for spinning it off.
AstraZeneca becomes more reliant on investor trust 5 Feb 2015 The UK pharma group’s 2014 results disappointed. That shows the challenge CEO Pascal Soriot faces reaching the double-digit growth he promised when seeing off Pfizer’s $118 bln bid. AZ’s full valuation, and maybe its independence, are vulnerable if there are more slips.
Staples-Office Depot can pass antitrust checkout 4 Feb 2015 Crunching together the two U.S. office supply chains is a financial winner: the value of the synergies alone pays for the $6.3 bln deal. Though trustbusters may squawk, even they acknowledge that with internet and big box stores thriving, the competitive landscape has changed.
Smucker deal may keep activists in Kibbles ‘n Bits 4 Feb 2015 The jam maker is gobbling Big Heart Pet Brands for $5.8 bln. Mixing coffee with dog food could create bargaining heft with stores but more likely will leave uppity investors hungry for a breakup. There’s a reason the one-time Nabisco division is caught in a cycle of spinoffs.
Shopping mall merger adds low rates to M&A toolkit 3 Feb 2015 Australia’s Federation Centres is buying larger local rival Novion Property Group for $6.1 billion. Cost savings don’t fully justify the tie-up. But the two will also reduce expenses by refinancing their debt. As rates head south, it’s a rationale that others may adopt.