Sprint’s antitrust pitch hedges against DoJ miss 25 Oct 2011 The third-largest U.S. mobile operator says it just wants to help Justice kill AT&T’s takeover of T-Mobile USA. But its separate lawsuit suggests unease with Uncle Sam’s arguments. Such private cases rarely succeed. But this one looks like insurance against a government stumble.
Turkish banks still shine despite musical chairs 25 Oct 2011 Dexia has joined the foreign lenders looking to exit the country after just a few years. But Turkey’s banks are well capitalised in an underpenetrated market, and valuations are near historic lows. Even with an economic slowdown looming, they offer a potential bargain for buyers.
Pfizer milk bid could fortify China’s M&A hopes 25 Oct 2011 Mengniu Dairy’s bid for the U.S. pharma giant’s $10 bln nutrition unit would make strategic sense. China can gain from deals pegged on rising consumer demand rather than cheap labour. Buying foreign brands may also help address food safety problems, if bidders tread carefully.
Icahn’s American truck merger pitch has wheels 24 Oct 2011 The billionaire investor often has loopy ideas for M&A among his holdings (remember Lions Gate-MGM?) But a $5 bln-plus combination of Navistar and Oshkosh makes some strategic sense. The net present value of cost synergies could be worth more than their combined market cap.
Apax misses with HIT disposal 24 Oct 2011 The private equity firm’s ownership of HIT Entertainment, the company behind kids’ character Bob the Builder, makes for sad reading. Mattel may enjoy the $680 million company more. But fixing Bob up with Barbie does not necessarily mean they’ll live happily ever after.
Citi’s CDO payout is ripe for the Rakoff treatment 19 Oct 2011 The bank’s $285 mln settlement with the SEC is about half what Goldman paid on Abacus. And yet Citi allegedly picked the assets in the CDO itself while keeping buyers in the dark. Judge Jed upbraided the watchdog for its light touch on BofA. This case warrants a similar hearing.
Closed-door justice will leave dealmakers in dark 19 Oct 2011 A spat between Skyworks and takeover target Advanced Analogic will play out in private instead of open court under Delaware’s new arbitration system. That may save the parties time and money. But it cheats the M&A world - and investors - of valuable legal guidance.
Abbott prescribes a dose of financial engineering 19 Oct 2011 The runaway success of blockbuster drug Humira has been a mixed blessing. It larded the healthcare group’s attractive nutrition and generic drug businesses with a pedestrian Big Pharma multiple. Splitting off its research drug arm should rectify the valuation mismatch.
SAB’s $1.9 bln Turkish tie-up has double benefit 19 Oct 2011 The UK-listed brewer is swapping its Russian unit for a 24 percent stake in Turkey’s Efes. Though Russia is challenging for brewers, the combined business will have a broader base. And SAB is now in pole position if the families behind Turkey’s dominant beer-maker ever sell up.
Abu Dhabi’s airline strategy lacks coherence 19 Oct 2011 Etihad, the UAE’s official national carrier, wants tie-ups with Virgin Atlantic and Aer Lingus via minority stakes. Its ambition is to catch up with Dubai rival Emirates. Such deals may deliver tactical gains. But they won’t replicate Emirates’ impressive organic success.
Shanda’s opportunistic MBO may start a trend 18 Oct 2011 Its founder looks to be exploiting the plunging share prices of China’s U.S.-listed dotcoms. Shanda’s cash pile will cut the amount he has to put in. Delisting from the United States paves the way for a relisting in China. Others frustrated by rising U.S. scrutiny may follow suit.
Through adversity, Goldman still plays all angles 17 Oct 2011 The $38 bln Kinder Morgan deal epitomizes what the bank does best. It owns a stake in the pipeline operator, underwrote its IPO and worked with its takeover target, El Paso. Such finesse is what sets Goldman apart. It’s just not clear it’s a gift that will keep on giving.
Hulu owners destined to be regretful refuseniks 17 Oct 2011 Disney, News Corp and Providence pulled the plug on the video streaming service’s auction after bids were too cheap and conditional. But the media giants have struggled with their own digital transitions. Hulu is likely to become a distracting headache they’ll wish they’d exited.
Market sends CEOs harsh message on M&A 17 Oct 2011 Investors have blown a raspberry at G4S’s $8 bln bid for ISS and related $3 bln rights issue. Europe’s first big corporate transaction since the summer was never going to be easy, and the cash-call is massive. If G4S stock doesn’t recover, opportunistic M&A will be cowed.
Rio Tinto takes bold step into aluminium rehab 17 Oct 2011 The miner’s $38 billion purchase of Alcan in 2007 was a financial disaster, and aluminium’s prospects still look poor. Rio is making some amends with a plan to sell off a third of the business. The strategy is sensible and now looks as good a time as ever to sell.
Kinder pays top dollar to enter energy big league 17 Oct 2011 If regulators give the nod, a new $94 bln pipeline titan will be born, becoming among the biggest U.S. energy firms. Kinder is paying more than is justified by the synergies for El Paso. But Kinder’s chief has done investors proud in the past and is not to be underestimated.
IPO shut-down allows strategic bidder to clean up 17 Oct 2011 Private equity is offloading Danish outsourcer ISS to London-listed rival G4S for $8.2 bln – the same value it sought in March’s aborted IPO. So far, so good. But with the IPO market now shut, G4S has got away with paying partly in stock, and has avoided paying a massive premium.
Latest MAC attack hints at bigger M&A trouble spot 14 Oct 2011 After crying “material adverse change,” buyout firm Cerberus is close to landing Innkeepers for less than first agreed. The broad MAC in this bankruptcy deal may not reflect market reality. But sellers still have work to do ensuring buyers know the price of trying to walk.
Credit Suisse has awkward role in Nat’s coal deal 14 Oct 2011 The bank is broker to Nat Rothschild’s mining vehicle, Bumi Plc, and lender and sometime adviser to his partners, Indonesia’s powerful Bakrie family. That’s a tricky position now the Bakries are scrambling to meet a margin call on a $1.3 bln loan - arranged by Credit Suisse.
Richard Li’s financial alchemy fails to wow 12 Oct 2011 The HK tycoon’s plan to spin off his telecoms business into an innovative trust structure is designed to unwind PCCW’s huge conglomerate discount, while preserving his control. The cost is unnecessary complexity, and potential dilution of minority shareholders.