Etihad’s Alitalia grab not as loony as it looks 2 Jun 2014 After spending another 300 mln euros on struggling Air Berlin, the Abu Dhabi carrier gives Italy’s stricken flag carrier another lease of life. Acquiring yet another minority stake in a loss-making peer does make sense. And Etihad buys much-needed political clout in Europe.
Clippers may actually be Ballmer’s least-bad deal 30 May 2014 That isn’t saying much given the ex-CEO’s record at Microsoft. But TV revenue means sports teams are no longer money pits. Even including the ego premium in the $2 bln price tag, buying the Los Angeles basketball squad could work out better than aQuantive, Skype or Nokia.
Sausage fight may have more sizzle in it yet 29 May 2014 Tyson Foods’ $6.8 bln offer for Hillshire should give it the edge over Pilgrim’s Pride. The meat processor seems to bake in decent synergies and has a stronger balance sheet. But there could be more fat to trim from this hot dish. Too much, though, could leave both bidders burned.
Apple gets back to music roots with Beats purchase 29 May 2014 Dropping $3 bln on the headphones maker and streaming service and hiring co-founders Jimmy Iovine and Dr. Dre may reinvigorate the tunes franchise that helped put the iPod creator on top. It also suggests subscription songs – and maybe “smart homes” – are the wave of the future.
Alibaba hints at overseas push with SingPost stake 29 May 2014 Buying a $249 mln stake in logistics operator Singapore Post suggests the Chinese e-commerce group is planning its move overseas. But the concrete benefits are unclear – besides encouraging investors to consider the value of Alibaba’s future expansion ahead of its imminent IPO.
Smith & Nephew returns to M&A spotlight 28 May 2014 The British medtech firm’s shares jumped on a report of bid interest from Stryker. The U.S. rival ruled out bidding for six months. But the market looks keen on a takeover of S&N, the subject of perennial bid talk. There could be synergies, scale and tax benefits.
GE’s new Alstom bid makes Siemens a distant second 28 May 2014 The U.S. conglomerate pledged new jobs and an asset swap to improve its $16 bln offer for Alstom’s power units. France seems to be warming to a bid already backed by the board. Rival bidder Siemens looks increasingly like a stalking horse, used merely to wring more out of GE.
Valeant’s sweetener comes off a little defensive 28 May 2014 Upping its bid for Allergan to $49 bln disappointed investors on both sides. Using a messy financial instrument probably didn’t help, especially after the target rejected the deal math and compared its suitor to Tyco. Valeant needs to do more to reclaim the aggressor’s role.
Korean chat app sends mixed valuation messages 28 May 2014 Kakao is going public in a $3.3 bln reverse takeover. That’s just one sixth of what Facebook paid for WhatsApp. The Korean app rules its home market and is profitable, but its metrics offer few clues for valuing rivals. Putting a price on mobile chat is still anybody’s guess.
Pilgrim’s Pride positions itself atop food chain 27 May 2014 The U.S. poultry group is offering $6.4 bln for Hillshire Brands, two weeks after the sausage maker proposed to buy Pinnacle Foods. The earlier deal hasn’t satisfied investor palates. Intended or not, though, it did at least smoke out a strategically and financially superior bid.
Failed bid would leave Astra under pressure 26 May 2014 Pfizer looks foolish for the way it handled a $119 bln offer for the UK drugmaker. But its shares have barely suffered. Astra remains independent and yet it is now under more scrutiny. Some of its shareholders welcomed a possible takeover - and could again.
Dull industrials could make shiny tax-arb targets 22 May 2014 Juiced up on drug deals that promise big tax savings, like Pfizer’s bid for Astra, bankers are pitching copycat transactions before Congress gets wise. Tyco, Ingersoll-Rand and Pentair went abroad during a previous exodus and may tempt acquirers seeking inversions of their own.
M&A targets can get stiffed when they "go shop" 22 May 2014 The tactic of seeking bids after signing up a buyer is meant to ensure top dollar. More often, it leads to low offers and sale prices, new research shows. Deals like Media General’s buyout of Lin Media suggest sellers are wising up, though, portending better value for investors.
Hess $2.9 bln sale vindicates high-octane activism 22 May 2014 The oil industry laggard will shed its retail outlets to refiner Marathon and focus on lucrative exploration. Hedge fund Elliott can take credit for the transformation that has allowed Hess to catch up with rivals. It’s more evidence that uppity investors can drive useful change.
Cheap Japanese debt is secret sauce in Ragu sale 22 May 2014 Mizkan, a closely held rice-vinegar maker, is buying Unilever’s U.S. Ragu and Bertolli brands for $2.15 bln. Paying 3.6 times sales in the mature pasta-sauce market looks rich. For the Japanese buyer, the flavour is sweetened by low rates and a shrinking domestic market.
Astra-Pfizer needs a fresh start later in the year 21 May 2014 Some shareholders want the UK pharma company to talk to its American suitor now. But there is no honest route to a higher bid until August. Talks in the dying days of the bid timetable could actually delay a full move. An amicable cooling off period is the best plan.
Valeant’s slashing could trigger FDA lashing 20 May 2014 The Canadian pharma M&A machine buys rivals and strips costs to the bone. It promises to cut Allergan’s R&D spending from $1 bln to $200 mln and still develop drugs. That doesn’t look sustainable. It may not be enough to even finish studies on existing drugs that regulators require.
Loophole offers Pfizer risky way back into AZ deal 20 May 2014 The U.S. pharma group noted that it could technically make a higher offer for Astra if the target first agreed to its “final” $119 bln proposal. After this dodge, Astra could accept the real, higher price. But the UK takeover watchdog would almost certainly reject such cunning.
KKR’s $3.1 bln bid pours pressure on Treasury Wine 20 May 2014 The Australian wine producer has rebuffed an opportunistic offer from the U.S. buyout firm. The former Foster’s unit is a persistent underperformer. Treasury’s new CEO needs to quickly demonstrate his turnaround credentials, or let KKR try to squeeze out some value instead.
Chastened AT&T enlists new team for fresh fight 19 May 2014 None of the three banks that worked on the telecom giant’s botched bid for T-Mobile US is back for the DirecTV deal. Instead, Lazard is sole adviser, aiding AT&T for the first time in 20 years. CEO Randall Stephenson also has more lawyers. Fresh eyes may help see things through.