Woolworths pays too-steep ransom in Aussie battle 24 Jun 2014 The South African group is buying billionaire Solomon Lew’s stake in an Australian unit in return for his support in its $2 bln takeover of retailer David Jones. The $201 mln side deal lifts the effective takeover premium – raising the pressure on Woolworths to realise synergies.
Shire’s case for resisting AbbVie is good enough 23 Jun 2014 The UK pharma group’s target of $10 bln of sales in 2020 is aggressive but not outlandish. Meanwhile, near-term revenue is growing. That leaves AbbVie’s recent $46 bln bid proposal looking insufficiently tempting. Factor in scarcity value and Shire can afford to sit tight.
Oracle deal provides partly cloudy forecast 23 Jun 2014 In a way the $5.3 bln deal for Micros is a relief for shareholders. Even if it’s the start of an M&A binge, it’s not at a crazy valuation. Then again, longtime partner Micros is more an add-on than a way to supercharge Oracle’s effort in the cloud. That challenge remains for now.
Midwestern utility keeps cool in hot M&A summer 23 Jun 2014 Wisconsin Energy’s $5.7 bln takeover of overlapping Integrys will justify the 17 pct premium with cost cuts of only around 6 pct. More should easily be doable. The market-wide surge in mergers may have encouraged the deal, but no one in the Badger State is losing their head.
GE scores a Pyrrhic victory in France 20 Jun 2014 The U.S. conglomerate has won the battle for Alstom’s energy businesses. It saw off nemesis Siemens and reached a truce with a hostile French state. Yet here’s a paradox: this is a clearer victory for Paris and Alstom than for GE itself. And it’s not all bad for Siemens either.
AbbVie has to dig deeper to win Shire 20 Jun 2014 The U.S. pharma group’s recent $46 bln bid proposal equates to a lowish 30 pct premium over Shire’s value before speculation intensified this week. Likely synergies and possible rival offers justify Shire’s rebuttal. But the target can’t be complacent about investor support.
GE remains the best bet for Alstom’s board 20 Jun 2014 Rival bids from GE and Siemens for Alstom’s energy business have converged in terms of cash, complexity, political acceptability, and Alstom’s future structure. This is not conventional M&A, so the outcome is unpredictable. But GE’s bid remains simpler, and richer in cash.
Paris forces GE into over-engineered Alstom bid 19 Jun 2014 Take 3: out goes a simple $16 bln cash deal with some job promises. In comes a string of joint ventures to satisfy France’s taste for alliances and industrial champions. This looks less shareholder-friendly but more deliverable, and pulls GE further ahead of rival bidder Siemens.
Man Group gives hedgies best of both worlds 19 Jun 2014 The hedge fund firm will pay up to $494 mln for Numeric, its second asset manager purchase in as many weeks. The deal addresses Man’s weak U.S. position. The target’s managers get a stable home within a big listed group. They also get autonomy and a good cut of future profit.
Aussie billionaire has least to lose in retail war 19 Jun 2014 Solomon Lew’s purchase of 10 pct of retailer David Jones could scupper a $2 bln takeover by Woolworths. The move may be an attempt to force the South African group to raise its bid or buy the retail veteran’s shares in another subsidiary. The two companies have the most to lose.
Elon Musk applies his magic touch to M&A 18 Jun 2014 The $350 mln acquisition of panel maker Silevo added $900 mln to SolarCity’s market value. It’s an investment in an efficient technology and a hedge against rising import tariffs. Manufacturing, however, is the riskiest part of solar. And Musk is a more proven builder than buyer.
Abstinent Valeant might enable Allergan deal 17 Jun 2014 A slugfest between the acquisitive pharma group and its reluctant $50 bln-plus quarry will probably drag out for months. Wrangling over a shareholder meeting is one big issue. Meanwhile, Valeant will have produced results less muddled by M&A. These could be the deciding factor.
Siemens offers Alstom a real alternative 17 Jun 2014 The German group and Mitsubishi Heavy proposed to buy some of the French company’s energy assets. Compared to GE’s friendly 11.4 bln euro bid, there’s less cash, less industrial sense, and more complexity. So this is still a Plan B. But it’s credible and politically astute.
Medtronic-Covidien is blast from M&A advisory past 16 Jun 2014 A mega-merger can be an excuse to hire multiple Wall Street advisers, sometimes just by way of thanks for providing loans or other services. The two companies in Sunday’s $43 bln medical devices tie-up are using just one each. Bankers will be hoping the flashback doesn’t last.
Morgan Stanley email shame begs a tech solution 16 Jun 2014 Messages sent by the bank’s head of M&A to Allergan look bad now that it works for hostile suitor Valeant. Merger practitioners, meanwhile, won’t like Allergan’s scorched-earth tactic releasing them. The episode does, however, prove there’s a market for a corporate Snapchat.
Williams digs deep in M&A playbook to exit a hole 16 Jun 2014 A complex series of deals including buying more of Access Partners and a merger turn Williams into a $100 bln pipeline titan. Its cost of capital should drop and an infusion of cash will help the MLP arm, which has been borrowing to pay investors. The price also looks right.
DTZ gets solid foundations in $1.1 bln sale to PE 16 Jun 2014 Australia’s UGL is selling the property services group to pay down debt. New private equity owners TPG and PAG Asia bring capital and management expertise. That could be enough to allow DTZ to challenge rivals CBRE and Jones Lang LaSalle, which are more than twice its size.
Medtronic-Covidien deal is marriage of convenience 16 Jun 2014 The $42.9 bln takeover includes a near-$10 bln premium that exceeds the estimated value of synergies. Stents and sutures aren’t an obvious fit, and moving from Minneapolis to Dublin won’t cut Medtronic’s tax bill. Freeing up overseas cash is too shallow a reason to tie the knot.
Priceline’s OpenTable buy is costly appetizer 13 Jun 2014 The $64 bln online travel outfit is paying a 46 pct premium – $2.6 bln in cash – to snag the restaurant reservation site. Each helps small businesses and customers find each other. But the tariff only makes sense if Priceline can plug many more of both into OpenTable worldwide.
Siemens needs more than Mitsubishi to win Alstom 11 Jun 2014 The German engineer has teamed up with Japan’s Mitsubishi Heavy Industries in its potential bid for Alstom. A joint approach lowers antitrust risk and cash outflows for Siemens. But trumping GE’s rival $15.4 bln proposal and job commitments will still be difficult.