Category Archives: M&A
$BLK Gobbles Up MGPA to Expand Real Estate Holding in Asia
“BlackRock Inc. (BLK), the world’s largest asset manager, agreed to buy private-equity property investment advisory firm MGPA for an undisclosed amount to expand real-estate business in the Asia-Pacific region and Europe.
MGPA manages about $12 billion, focusing on real estate funds management, co-investments and separate-account mandates for institutional investors, BlackRock said today in a statement. The transaction is expected to close in the third quarter and won’t materially affect BlackRock’searnings per share, the New York-based firm said….”
$ACT to Buy $WRCX for $5 Billion in Stock
“(Reuters) – Generic drugmaker Actavis Inc, which has been the subject of takeover speculation, plans to buy specialty pharmaceutical company Warner Chilcott Plc for $5 billion in stock.
The companies said the deal had an enterprise value, including debt, of $8.5 billion.
The move comes as Actavis has spurned approaches from Canadian pharmaceutical companyValeant Pharmaceuticals International Inc and Mylan Inc. Analysts have said that if Actavis were to buy Warner Chilcott, it would kill the chances of its being taken over.
Warner Chilcott shareholders will receive 0.16 share of the combined company. The companies said that would equate to $20.08 per share, based on Actavis’ closing share price of $125.50 on Friday….”
$YHOO Plans to Purchase Tumblr for $1.1 Billion
“SAN FRANCISCO (AP) — Yahoo is buying online blogging forum Tumblr for $1.1 billion as CEO Marissa Mayer tries to rejuvenate an Internet icon that had fallen behind the times.
The deal announced Monday represents Mayer’s boldest move yet since she left Google 10 months ago to lead Yahoo’s latest comeback attempt. It marks Yahoo’s most expensive acquisition since the Sunnyvale, Calif., company bought online search engine Overture a decade ago for $1.3 billion in cash and stock.
Yahoo is paying all cash for Tumblr, dipping into some of its remaining stash from a $7.6 billion windfall reaped last year from selling about half of its stake in Chinese Internet company Alibaba Holdings Group. Taking over Tumblr will devour about one-fifth of the $5.4 billion in cash that Yahoo had in its accounts at the end of March.
Yahoo also says that “per the agreement and our promise not to screw it up, Tumblr will be independently operated as a separate business” with David Karp staying on as CEO.
Tumblr, a service started six years by Karp, a high school dropout, now figures to play a pivotal role in Mayer’s attempt to reshape Yahoo. To take on the challenge, Mayer ended a highly successful 13-year career at Google, which she helped surpass Yahoo as the Internet’s most influential company. Since coming to Yahoo, Mayer has concentrated on improving employee morale, redesigning services and bringing in more engineering talent through a series of small acquisitions that have collectively cost less than $50 million….”
$ELN Will Pay $1B For a Stake in an Irish Drugmaker, $THRX
“Elan Corp. (ELN) agreed to pay $1 billion for a share of the royalties on new drugs fromTheravance Inc. (THRX) as the Irish drugmaker tries to persuade shareholders to spurn a takeover offer by Royalty Pharma.
Elan will receive 21 percent of the royalties earned by Theravance from GlaxoSmithKline Plc (GSK) on the four respiratory medicines, and 20 percent of that income stream will be paid to Elan shareholders as a dividend, the Dublin-based company said in a statement today. The transaction is subject to shareholder approval, it said.
Elan is adopting an investment model pioneered by Pablo Legorreta, chief executive officer of Royalty Pharma, which has offered to buy Elan for about $5.7 billion. The company’s board last month unanimously rejected the takeover bid, advising shareholders not to take action. Elan plans to announce several more deals this year, Chief Executive Officer Kelly Martin said in a phone interview today.
“This is just one piece of the puzzle,” Martin said. “This deal allows us to invest our long-termcash flow into interesting clinical and commercial assets.”
Elan’s hunt for new assets stems from Biogen Idec Inc.’s Feb. 6 agreement to buy Elan’s stake in the Tysabri multiple sclerosis drug for $3.25 billion in cash plus future royalties. The sale transformed the Irish company into an investment vehicle, since it has no operations. Elan said at the time that it planned to use the cash for possible acquisitions and would return some of the proceeds to shareholders.
‘Risk Spectrum’….”
$YHOO Expected to Make a Bid for Hulu
“Yahoo! Inc. Chief Executive Officer Marissa Mayer is exploring whether to bid for the Hulu LLC streaming-TV service, people with knowledge of the matter said.
Mayer met this month with Hulu senior executives to learn more about the site, said one of the people, who asked not to be identified because the talks are private. Amazon.com Inc. has also expressed an interest in Hulu, this person said…”
$BKS Gaps Up 30% on Nook Sale to $MSFT
“Microsoft is offering to pay $1 billion to buy the digital assets of Nook Media LLC, the digital book and college book joint venture with Barnes & Noble and other investors, according to internal documents we’ve obtained. In this plan, Microsoft would redeem preferred units in Nook Media, which also includes a college book division, leaving it with the digital operation — e-books, as well as Nook e-readers and tablets.
The documents also reveal that Nook Media plans to discontinue its Android-based tablet business by the end of its 2014 fiscal year as it transitions to a model where Nook content is distributed through apps on “third-party partner” devices. Speculation about the plan to discontinue the Nook surfaced in February. The documents we have are not clear on whether the third-party tablets would be Microsoft’s own Windows 8 devices, tablets made by others (including competing platforms) or both. Third-party tablets, according to the document, are due to get introduced in 2014.
Nook e-readers, meanwhile, do not appear to fall into the discontinuation pile immediately. Rather, they’re projected to have their own gradual, natural decline — following the general trend of consumers moving to tablets as all-purpose devices.
Microsoft and B&N representatives declined to comment for this story.
A deal to buy the digital assets of Nook Media is the natural next step for Microsoft, which first announced a plan to work with Barnes & Noble on its Nook devices and content in April 2012, ponying up $300 million at the time to help. That plan included an additional $180 million advance to develop content for its Windows 8 devices — which Nook has been doing.
To date, there have been 10 million Nook devices sold, including both tablets and e-readers, with more than 7 million active subscribers. Microsoft has seen limited interested in its Windows 8 devices (although it says it has sold more than 100 million licenses for the OS to date). Currently the Nook app is available on every major platform, including Android, iOS and Windows…..”
The Cloud is in Full Force as $BMC Accepts Off to go Private
“BMC Software Inc. (BMC) agreed to be taken private in a $6.9 billion deal by Bain Capital LLC and Golden Gate Capital after struggling to compete with newcomers better equipped to handle the shift toward cloud computing.
The buyout group, which includes Singapore’s GIC Special Investments Pte Ltd. and Insight Venture Partners, is taking control of BMC in the third-largest private-equity deal of 2013. The investors said yesterday that they will pay $46.25 a share in cash, a 13 percent premium to the closing price on March 4, before Bloomberg reported that BMC had drawn renewed takeover interest after failing to find an acquirer last year.
BMC, a Houston-based provider of software that keeps corporate computer networks running smoothly, gets about 40 percent of its sales from the lucrative business of managing powerfulmainframe computers from International Business Machines Corp. Yet it has had a harder time keeping up with rivals in the market for server software, which is expanding as companies rely more on programs delivered over the Web, fueling demand for data centers and the technology that runs them.
“They’ve been outpositioned by some of the growth companies out there,” said Joel Fishbein, an analyst at Lazard Capital Markets. “The world’s changed from a technology perspective very dramatically, and they haven’t been able to keep up.”
The emergence of software delivered as a service via the so-called cloud has helped newer competitors such as ServiceNow Inc. and Splunk Inc. grab market share. BMC is also contending with traditional rivals CA, Hewlett-Packard Co. and IBM. About a quarter of new ServiceNow customers are replacing BMC products, ServiceNow Chief Executive Officer Frank Slootman said in a recent interview….”
Alibaba Buys an 18% Chunk of $SINA’s Social Network Platform, Stock Soars Pre-market
“(Reuters) – Sina Corp, China’s largest Internet portal and media website, said e-commerce company Alibaba Group has bought an 18 percent stake in its microblogging service Weibo for about $586 million, valuing Weibo at more than $3 billion.
The company has also granted Alibaba the option to increase its stake in Weibo to 30 percent within a stipulated time, which it did not specify.
Sina’s U.S.-listed shares jumped 17 percent to $58.85 in premarket trade on Monday…..”
Bayer to Buy $CPTS for $1.1 B
“FRANKFURT (Reuters) – Germany’s Bayer AG has agreed to buy U.S. contraceptive devices makerConceptus for $1.1 billion, aiming to underpin its position as the world’s largest women’s healthcare provider,
Bayer, whose shares were down 2.3 percent by 0823 GMT, will launch a public tender offer to acquire all Conceptus shares for $31.00 each in cash, in an offer agreed with Conceptus’s management, Bayer said on Monday.
That is a premium of 19.7 percent over the stock’s closing price on Friday and a multiple of about 30 times the adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) that Conceptus is targeting for this year.
Shares in global healthcare equipment and services companies on average trade at 9 times annual EBITDA, according to Thomson Reuters StarMine…..”
Capstone to Acquire $BHP’s Pinto Valley Mine
“Capstone Mining Corp. (CS), the owner of copper mines in Mexico and Canada, agreed to buyBHP Billiton Ltd. (BHP)’s Pinto Valley mine and railroad in the U.S. for $650 million in cash, marking its biggest acquisition.
Vancouver-based Capstone is expected to complete the purchase of the Pinto Valley copper mine in Arizona and the related San Manuel Arizona Railroad Co. in the second half of 2013, Melbourne-based BHP said today in a statement.
The deal comes as Capstone scouts for producing copper mines in the Americas to add about 100 million pounds of copper. BHP and Rio Tinto Group are among mining companies selling assets to shore up earnings and cut costs after more than $60 billion of writedowns in the industry. The agreement takes BHP’s divestments to $5 billion over the last 12 months, according to the BHP statement today.
BHP shareholders are likely to respond well to the company disposing of smaller assets like Pinto Valley, which have been taking up “too much management time and too much peripheral capital,” said Vincent Pisani, an analyst at Shaw Stockbroking Ltd. “It’s taken some time, but I think BHP are finally getting it,” he said.
BHP suspended mining operations at Pinto Valley in Feb. 2009 and said mining began again during the last quarter of 2012. Capstone said BHP had spent $194 million on equipment and infrastructure to enable operations to resume.
Cash Cost…”
$ELN’s Board Rejects Royalty Bid Citing it Was Grossly Undervalued
“DUBLIN (Reuters) – Irish drugmaker Elan rejected a reduced $11.25 per share bid from Royalty Pharma , putting the ball back in the U.S. investment company’s court in an increasingly convoluted takeover saga.
Royalty made its initial approach in February, attracted by the promise of lucrative revenues from Elan’s multiple sclerosis drug Tysabri. But Elan has fought to maintain its independence through a series of maneuvers designed to frustrate the bid, which is contingent on 90 percent acceptances.
Royalty last week lowered its bid for Elan to $11.25 a share from an earlier $12 offer, pricing in the result of a $1 billion share buyback by Elan. The $12 per share offer had valued Elan at $7.3 billion and had been sweetened from an initial proposal.
Buoyed by the outcome of the buyback, Elan, which claimed last month that most of its shareholders did not view Royalty’s original proposal as worth consideration, strongly advised shareholders to take no action in relation to the bid.
“The offer from Royalty Pharma grossly undervalues Elan’s current business platform and our future prospects. As a result the board unanimously and without reservation rejected the offer,” Elan Chairman Robert Ingram said in a statement on Monday.
As part of the share buyback, U.S. healthcare firm Johnson & Johnson cut its stake in Elan to 4.9 percent from 18 percent, accounting for more than 90 percent of shares repurchased.
Analysts were divided as to whether the buyback’s outcome signaled confidence in Elan’s plans to reinvent itself through a series of acquisitions, or speculation that Royalty would eventually return with a higher bid.
But after 73 percent of shares excluding Johnson & Johnson’s were not tendered at any price in the pre-announced $11.25 to $13.00 range, Royalty may have to come back with a better offer.
VAST MAJORITY…”
$BLK Turns in the Towel to Pursue $DELL
“(Reuters) - Blackstone Group LP has ended its pursuit of Dell Inc, three people familiar with the matter said on Thursday, easing the way for founder Michael Dell and his private equity partnerSilver Lake to go ahead with a $24.4 billion deal to acquire the world’s No. 3 PC maker.
New York-based Blackstone pulled out just a month after it first launched a challenge to the billionaire’s attempt to take private the PC maker he founded.
Blackstone withdrew citing an unprecedented 14 percent drop in industry PC sales in the first quarter of 2013 and a lower earnings forecast by the Dell’s management, which saw operating income dropping from $3.7 billion to $3 billion in the current fiscal year, one of the sources said.
Blackstone and activist investor Carl Icahn, who has taken a significant stake in the company and opposes Michael Dell’s buyout, had made preliminary offers to the company challenging the deal with Silver Lake.
Icahn’s chances of a successful rival offer are viewed by analysts and investors as slimmer than Blackstone’s, yet the deal with Silver Lake still faces significant opposition from some Dell shareholders, including Southeastern Asset Management, the activist investor that owns 8.4 percent of the company.
Dell, Blackstone and Silver Lake declined to comment. Icahn could not immediately be reached for comment…”
Will Au’s Dump Cause M&A Activity?
“The collapse in bullion prices is set to rekindle gold mining takeovers as Chinese companies, sovereign wealth funds and private equity and hedge funds step in to rescue cash-strapped small and mid-sized miners.
Gold miners in China, the world’s biggest producer, have been chasing mines and listed companies in a bid to grow and match the largest global producers, like Barrick Gold.
A seven-fold rise in gold prices between 2001 and 2011 spurred a run of goldmergers and acquisitions. Activity fell last year as major miners digested some big buys and smaller players held out for better offers, with global gold M&A tumbling to $14.6 billion from $43.3 billion in 2011, according to Ernst & Young.
But that is expected to pick up again this year as a 15 percent plunge in gold prices this month forces smaller miners, especially those with high-cost production or single assets, to seek partners to stave off a cash crunch.
“This might be the final shoe to drop that makes some people think ‘there’s no way I’m able to finance myself going forward, so I’ve got to think more seriously about my investors and give my investors a return by putting things together with people that have … got the cash,’ ” John McGloin, executive chairman of Africa-focused minerAmara Mining, told Reuters….”
Softbank Bids for $S, Bidding War Begins
Many publications and analysts are expecting more bidders to come to the table to buy out $S.
The most Recent offer comes from Softbank allowing shareholders to keep more stock with a lower bid price…..
$DISH Offers $25.5 Billion for $S
“NEW YORK (AP) — Dish Network is offering to buy Sprint Nextel Corp. in a cash-and-stock deal it values at $25.5 billion, saying its bid is superior to that of Japanese phone company SoftBank.
Sprint’s stock jumped in premarket trading Monday.
Dish, an Englewood, Colo. satellite television company, said that its transaction includes $17.3 billion in cash and $8.2 billion in stock.
Sprint stockholders would receive $7 per share, which is a 13 percent premium to its Friday closing price of $6.22. This includes $4.76 per share in cash and 0.05953 Dish shares per Sprint share.
Softbank is seeking approval from U.S. authorities for its $20 billion purchase of a 70 percent stake in Sprint Nextel Corp. that would be Japan’s biggest foreign acquisition ever.
Dish Network Corp. said that its offer is a 13 percent premium to the existing SoftBank proposal.”
$FB Acquires Mobile Software Startup Osmeta
“While Facebook is building out a bolder role in mobile in the form of Facebook Home, it looks like it is also continuing to make acquisitions that will help bolster that strategy overall. We have learned that in the lead-up to the launch last week, the social network appears to have quietly picked up Osmeta, a Mountain View-based mobile software startup. Osmeta had yet to launch a commercial product, and it is not completely clear at this point if this is an acqui-hire or a technology deal as well.
We have reached out to Facebook for a comment and will update this post if we hear back. Update: A Facebook spokesperson has now confirmed the acquisition, with no further comment. Original story continues below.
This is what we’ve been able to piece together:
– Osmeta has been around since August 2011. It was co-founded by Google/IBM alum Amit Singh, and IBM alum Mark Smith, and it had 17 employees — all engineers. It’s “about” page describes a team of “world-renowned hackers and highly accomplished researchers capable of herculean software engineering.” In addition to Google and IBM Research, other past employers included Yahoo Research, VMware and Facebook.
– A number of employees who had listed Osmeta as a place of employment are now indicating that they work at Facebook on their LinkedIn profiles. One of them specifically notes that he moved to Facebook after it acquired Osmeta in March 2013.
– The company had yet to publicly launch a product, but….”
$PL to Buy Axa’s U.S. Life Insurance Portfolio for $1.1 Billion
“(Reuters) - Protective Life Corp agreed to buy a portfolio of old policies from French insurer AXA SA’s U.S. business for $1.1 billion, with the aim of squeezing more value out of them.
Birmingham, Alabama-based Protective Life said the deal with Axa’s Mony Life Insurance Companyshould produce a steady income stream and increase earnings per share. Most of the policies are life insurance written before 2004.
AXA, which bought Mony in 2004 for $1.5 billion, will take a capital loss of below 100 million euros ($131 million), in part attributable to the difference between what it paid for the business initially and what it is being sold for now.
Last month, people familiar with the situation said Protective Life was the leading candidate to buy U.S. life insurance assets from Axa, which has been expanding into emerging markets while scaling back its presence in North America after years of underperformance in that region.
AXA said on Thursday it would continue to use Mony Life to write new business in the United States.
“This transaction allows us to further grow our US business where we have been achieving good momentum while freeing up capital invested in closed portfolios to improve our financial flexibility and enable additional investment in high-growth markets and businesses,” AXA Chief Executive Henri de Castries said in a statement.
AXA shares were up 1.2 percent at 3.38 a.m ET, outperforming the European insurance sector <.sxip>, which was up 0.4 percent.
The transaction values the portfolio at 0.7 times its book value, a premium to AXA’s own book value, a Paris-based analyst said. AXA trades at 0.6 times book, according to Thomson Reuters data….”
Deutsche Telekom Sweetens MetroPCS Bid by Cutting Debt
“Deutsche Telekom AG (DTE) sweetened the debt terms of an October proposal to merge its T-Mobile USA unit with MetroPCS Communications Inc. (PCS) to placate shareholders.
Under what it called a “best and final offer,” Deutsche Telekom cut the amount of debt it’s imposing on the combined company by $3.8 billion, according to a statement from the Bonn- based company yesterday. The carrier also lowered the interest rate it plans to charge on the loan by half a percentage point.
The transaction has faced opposition from investor-advisory firms and some of MetroPCS’s largest shareholders, who were concerned the new company would be loaded with too much debt, threatening to scuttle Deutsche Telekom’s second attempt to sell T-Mobile in as many years. MetroPCS agreed to delay a shareholder vote to April 24 on the new terms, which would cut the loans to $11.2 billion from $15 billion.
“This puts the new company under less pressure and gives them more strategic flexibility,” said Jonathan Chaplin, an analyst with New Street Research LLP in New York. With less of a debt burden, the new company can more easily afford to make network investments and acquire more wireless airwaves, he said.
Deutsche Telekom also extended the lockup period during which it’s barred from publicly selling shares in the combined company. The time frame will now be 18 months, up from six. That may reassure investors that the German company doesn’t plan to cut and run….”
$FSLR Melts Up on Acquisition Announcement and Better Guidance
Usually the company doing the buying has a soft price, but $FSLR is vaulting higher on news they will buy a start up that saves nearly 21% compared to conventional production methods.
Upgrading guidance also played a hand in today’s massive move.
$GE to Buy $LUFK for $3.3 Billion
“(Reuters) - General Electric Co said it will buy oilfield services provider Lufkin Industries Inc for about $3.3 billion to expand its oil and gas business.
The offer values Lufkin at $88.50 per share, representing a premium of 38 percent to the stock’s Friday close. Lufkin shares rose to $87.97 in premarket trading.
Lufkin, which makes artificial lift technologies and industrial equipment, has operations in the United States, Canada, Latin America, the Middle East and Europe….”
