Allergan bosses put money where their mouths are 23 Jul 2014 The drugmaker says it’s worth more on its own than the $52 bln Valeant is offering. That’s straight from the empty-promise, takeover-defense playbook. Allergan, however, is linking stock and option grants to lofty profit goals. It’s a bolder gambit that should become an M&A norm.
Carl Icahn picks better oil loser than Jana 23 Jul 2014 The septuagenarian activist could extract at least 40 percent from his stake in energy laggard Talisman. That’s more than Jana reckons it’ll earn agitating for change at Apache. It’s late to that party, whereas Repsol’s interest in Talisman could add more fuel to Icahn’s profit.
Doors opened wide for U.S. retail M&A 23 Jul 2014 Amazon’s steady march makes it harder for trustbusters to stop big merchants that cater to the same customers from uniting. Pressure on Family Dollar and PetSmart, two $7 bln chains, to merge with rivals shows uppity investors have taken note. Expect more deals of a similar ilk.
Rob Cox: Listen to Murdoch’s muzzled minorities 22 Jul 2014 Most Fox believers are relegated to owning non-voting stock, the same second-tier paper on offer to Time Warner shareholders. While there’s broad investor overlap in the two companies, the record shows a clear distaste for the imperialistic ways of media mogul Rupert Murdoch.
Club Med organisers can welcome latest arrival 22 Jul 2014 Andrea Bonomi’s Investindustrial is offering 790 mln euros for the all-inclusive holiday group. This may not be a five-star price but it blows a rival Franco-Chinese bid out of the water. And investors have spent years in the wilderness. This is an offer the board can recommend.
Crisis a distant memory in BBVA’s Catalonia buy 22 Jul 2014 The Spanish bank won an auction for the bailed-out Catalunya Banc. BBVA was willing to sacrifice 55 basis points off its capital ratio to double market share in rich Catalonia. The price reflects government guarantees, and confidence that banks have turned the corner.
AbbVie may find more than just tax charms in Shire 18 Jul 2014 The U.S. pharmaceutical group’s fifth offer, at $55 bln, finally persuaded its UK rival to sell. A 53 pct premium is a hefty price to pay given the modest synergies and potentially ephemeral tax arbitrage savings. Shire’s rare-disease drugs, however, should have lasting benefits.
Time Warner can justifiably hold out for more 18 Jul 2014 Though Rupert Murdoch’s $80 bln bid includes a 20 pct premium, his quarry may have been on track to achieve the offer price on its own. Time Warner also should be able to get more credit from the market for its growth. That gives boss Jeff Bewkes some negotiating power with Fox.
Blackstone needed a little help on its Spanish bet 18 Jul 2014 Madrid twice failed to flog bailed-out Catalunya Banc. Selling 6.4 bln euros of the bank’s bad loans to the U.S. buyout group will help a privatisation – but only after Spain stumps up another 572 million euros. In return, Madrid gets some potential upside. Strictly potential.
Liberty Global may eventually bid for all of ITV 17 Jul 2014 The cable group bought 6.4 pct of the British broadcaster from BSkyB for 481 mln stg. The stake is too small to confer any sway over ITV or stop a rival bidder. But Liberty is increasingly keen on content as well as distribution. A full takeover could follow.
VW tilt at Fiat would be a bad idea 17 Jul 2014 Shares in Fiat are climbing on a German media report of a possible bid from Volkswagen for all or part of the $13 bln Italian carmaker. VW has enough on its plate. It’s hard to see the benefit of adopting Fiat’s problems. The logic of Fiat selling its Chrysler unit is weak too.
Murdoch may be heading for Pyrrhic Time Warner win 16 Jul 2014 The media mogul’s rebuffed $80 bln bid for his rival already looks a stretch. He’d need more than twice the $1 bln of expected synergies to cover that premium – and a ton of debt. History suggests the octogenarian won’t give up – and may destroy value by offering more.
Dual-share inequity to figure in Time Warner fight 16 Jul 2014 If Rupert Murdoch wants to own the HBO-to-Looney Tunes conglomerate he needs to be willing to convert Fox into a one- share, one-vote company. The combo would be too big for a takeover anyway. The irony is that Fox’s super-votes are what give Murdoch the chutzpah to attempt a deal.
Lottery firm buys pricey $5 bln ticket out of Italy 16 Jul 2014 GTECH is buying U.S. slot-machine maker IGT for $4.7 bln in cash and stock. That’s a bold price given IGT’s competitive challenges. The buyer is talking tough on synergies. Still, this cuts GTECH’s reliance on Italy - and could also bring down its tax bills.
China’s $1.5 bln pizza takeout can deliver returns 16 Jul 2014 Hony Capital has gobbled up Britain’s Pizza Express. The Chinese buyout firm looks better placed than seller Cinven to bring crispy goodness to Middle Kingdom diners. A price of 10 times EBITDA is digestible. A dollop of debt means modest growth could bring 21 pct annual returns.
Battery wager should give chemicals maker a jolt 15 Jul 2014 Albemarle’s $6.2 bln deal for rival Rockwood is a big bet on demand for lithium-ion power cells. Its investors were less than electrified, but cost savings cover the premium offered – and owning a low-cost producer of lithium is a smart play on the rise of electric cars.
Market has message for tobacco M&A trustbusters 15 Jul 2014 Reynolds and Lorillard have gained over $10 bln of market value since talk of their $55 bln merger surfaced. That can’t be justified by promised savings or the market rally. Anticipation of a surge in pricing power through the creation of a duopoly explains investor enthusiasm.
Mylan sets itself for M&A repeat prescription 14 Jul 2014 The U.S. pharma company will pay $5.3 bln for generic drug assets owned by Abbott. The transaction between the two American companies will see Mylan acquiring a tax home in Europe. The buyer is also likely to do further deals – and look for more tax arbitrage.
Unilever teaches a valuable lesson on gluttony 14 Jul 2014 The Anglo-Dutch consumer giant hedged its bets when it swallowed Slim-Fast and Ben & Jerry’s at once in 2000. The weight-loss brand cost seven times more, and Unilever just sold it for cheap. Ice cream still keeps it fat and happy. Fads, in both diet and investing, are dangerous.
Whiting bid for Kodiak leaves minorities in cold 14 Jul 2014 The Bakken oil driller is offering no premium in a $3.8 bln all-share bid for rival Kodiak. That’s OK for the 60 pct of shareholders who the companies say own both stocks – like hedgie John Paulson. And the deal’s logic is solid. But it short-changes the rest of Kodiak’s owners.