“Billionaire investor Carl Icahn is proposing an alternative to the $24.4 billion plan to sell slumping PC maker Dell to a group led by founder Michael Dell, saying it substantially undervalues thecompany.

Icahn says he favors paying a one-time dividend totaling $9 per share in a move that would allow shareholders to keep their stake in the company.

He says that would be more valuable to shareholders than selling it as negotiated by a special committee of independent Dell directors to sell the company to an investment group for $13.65 per share.

Icahn says that if the board turns down his plan….”

Full article

“KKR & Co. is nearing a deal to buy industrial pumps manufacturer Gardner Denver Inc. for more than $75 a share, said a person familiar with the matter.

The deal values Gardner Denver, which employs roughly 6,400 people, at more than $3.68 billion and could be announced in coming days, the person said. Gardner Denver closed at $73.62 on the New York Stock Exchange on Monday, giving it a market capitalization of about $3.61 billion.

KKR had bid $75 a share for the Wayne, Pa.-based company in February and increased the offer after Gardner Denver’s board sought a higher price, the person said.

KKR, the New York private-equity firm, appeared to be the only suitor as the hot-and-cold sales process dragged on in recent months….”

Full report

“Specialty chemicals firm Ferro Corp. (NYSE: FOE) has received an unsolicited buyout offer from A. Schulman Inc. (NASDAQ: SHLM), another provider of specialty chemicals and plastics. The total value of Schulman’s offer is about $563 million, or $6.50 a share, of which half will be paid in cash and half in Schulman common stock.

According to Schulman’s press release, the offer represents a 25% premium to Ferro’s closing price on Friday and a 32% premium over the volume-weighted average trading price for the past 60 days. Including debt, Schulman’s offer totals $855 million….”

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“…….In recent months, Bristol studied a possible acquisition of Biogen Idec Inc.,BIIB +1.42% a $39 billion-market-cap biotechnology firm that makes drugs to treat neurological diseases such as multiple sclerosis, people familiar with the matter said. Last year, Bristol also engaged advisers to study a possible acquisition of ShireSHPG +2.81% PLC, a U.K. biotech whose drugs treat attention deficit and hyperactivity disorder and a range of rare diseases, other people familiar with the matter said. Shire has a market value of roughly $18 billion.

And in 2011, Bristol had flirted with the idea of buying Pharmasset Inc., a hepatitis C drug manufacturer that Gilead Sciences Inc. GILD +1.71% bought for $11 billion.

Bristol declined to comment about takeover or deal-making specifics, saying it doesn’t talk about market rumors or speculation. Biogen and Shire declined to comment.

Whether the leaner Bristol succeeds could prove a bellwether for the prospects of other drug makers that have simplified their businesses in the face of severe patent cliffs. Pfizer Inc., PFE +0.07% which lost its top-selling drug Lipitor in late 2011, has sold its infant-formula and animal-health businesses. Abbott Laboratories,ABT -0.56% concerned about the outsize sales of rheumatoid arthritis treatment Humira, split into medical-device and pharmaceuticals companies….”

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“Paulson & Co., the largest shareholder ofMetroPCS Communications, said it will vote against the wireless service provider’s proposed merger with T-Mobile USA, a unit of Deutsche Telekom, unless the companies sweeten the deal.

Paulson, owner of 36.3 million shares or 9.9 percent of MetroPCS stock, is following in the footsteps of another shareholder, P. Schoenfeld Asset Management (PSAM). PSAM, whose holdings represented 1.66 percent of MetroPCS shares at year end, is leading a proxy battle against the merger.

Paulson said on Thursday that, while the deal has strategic merits, the merged company would have “too much debt at too high an interest rate to be competitive” and it complained about the exchange ratio for MetroPCS shareholders….”

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“China Petrochemical Corp.’s $1.02 billion deal with Chesapeake Energy Corp. (CHK) gives the second- largest Chinese energy producer a stake in a shale oilfield for less than one-third of its estimated value.

Sinopec, as the Beijing-based explorer is known, will take a 50 percent interest in 850,000 acres Chesapeake controls in the Mississippi Lime formation, the companies said yesterday in separate statements. The price equates to $2,400 an acre, less than the $7,000 to $8,000 at which Oklahoma City-based Chesapeake valued the asset in a July presentation….”

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“Barnes & Noble Inc.’s BKS +2.37% chairman and biggest shareholder, Leonard Riggio, has expressed interest in buying out the retailer’s consumer-bookstore chain, raising the prospect that the company could be split in two.

Mr. Riggio, 71 years old, built Barnes & Noble into a retail powerhouse in the 1980s and ’90s, and he still controls about 30% of the company’s common stock.

In an regulatory filing Monday, Mr. Riggio said he plans to propose to purchase the company’s stores and website, but not Nook Media LLC—the company’s college-store chain and its Nook e-reader and tablet business. Mr. Riggio plans to negotiate a price with Barnes & Noble’s board and pay for the deal with cash and debt.

Early last year, Barnes & Noble disclosed it was exploring dividing the Nook business from the rest of the company, although it hasn’t elaborated on the effort since. But a special committee of the board, advised by Evercore Partners, EVR +2.84% has been working on the separation idea….”

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“RP Management LLC, an investor in royalty streams from pharmaceuticals, offered to buy Elan Corp. (ELN) for about $6.5 billion, threatening the Irish drugmaker’s plan to embark on its own acquisitions.

A sale of Elan would allow shareholders to avoid the substantial risks of the company’s plan to make purchases with the $3.25 billion it will receive from selling its stake in the Tysabri multiple-sclerosis drug to Biogen Idec Inc. (BIIB), the New York-based firm, known as Royalty Pharma, said in a statement today. The informal offer of $11 per American depositary receipt is 3.8 percent above the closing price Feb. 22, and represents “the full value of Elan today,” RP said.

The offer is a challenge to Dublin-based Elan’s strategy of reinvesting the proceeds from the Tysabri divestiture, which will leave the company with virtually no operations. Chief Executive Officer Kelly Martin’s plan to buy drugs that are on the market, late-stage experimental products or some early-stage clinical research projects drew skepticism from investors when announced Feb. 6. The company said Feb. 22 it also would buy back $1 billion of stock.

“The conservative investors will say let’s tender the shares because of the uncertainty about what management will do with the cash,” Olav Zilian, an analyst at Helvea SA in Geneva who has a reduce rating on the stock, said in a telephone interview. “It’s still open as to where the cash will be reinvested and shareholders possibly have no say in that.”

Stock Gains..”

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“China Petrochemical Corp., the nation’s second-largest energy company, will pay $1.02 billion to buy 50 percent of Chesapeake Energy Corp. (CHK)’s Mississippi Lime assets, seeking to benefit from surging U.S. crude output.

The assets in Oklahoma produced 46,000 barrels of oil a day at the end of 2012, according to an e-mailed statement released today by Beijing-based unit Sinopec International Petroleum Exploration & Production Corp. Cnooc Ltd. (883), a unit of China’s largest offshore oil producer, has bought $1.65 billion of assets from Chesapeake since 2010.

U.S. energy acquisitions may soar after Cnooc this month won approval from the U.S. Committee on Foreign Investment to buy Nexen Inc. (NXY) for $15.1 billion. Chinese companies are seeking energy assets globally to lock in supplies for the world’s fastest growing major economy and access technology to retrieve fuel trapped in rocks that has driven U.S. oil production to the highest in almost 21 years.

“While Chesapeake has many quality assets, Chinese oil companies care more about their drilling and shale-fracking technology,” Laban Yu, Hong Kong-based analyst at Jefferies Group Inc., said in a telephone interview. “The reason Chinese oil companies have gone after Chesapeake in the past year was also because they wanted to apply the technology to tap the world’s No.1 shale gas reserves in China.”

Rising Production…”

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“Softbank Corp. (9984), the Japanese wireless carrier that agreed to buy a $20 billion stake inSprint Nextel Corp. (S), wants to raise 370 billion yen ($4 billion) in bonds to help finance the acquisition.

Japan’s third-largest carrier priced 300 billion yen of 1.47 percent four-year notes that will go on sale to retail investors on Feb. 25, Nomura Holdings Inc. said in a statement today. The company also sold 70 billion yen of similar-maturity 1.467 percent debt, data compiled by Bloomberg show…”

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Source

“HOUSTON (AP) — Linn Energy is buying the drilling company Berry Petroleum Co. for stock worth about $2.5 billion.

Linn, an oil and gas producer, says the deal announced Thursday will broaden its presence in California, Texas and the Rockies and boost its production.

As part of the transaction, a Linn affiliate will issue 1.25 shares for each outstanding Berry share. That values Denver-based Berry’s stock at almost $46.24 per share, a 19.8 percent premium to Berry’s closing price on Wednesday.

The companies value the deal at $4.3 billion including assumed debt.

The combined company will be based in Houston.

The companies’ boards unanimously approved the deal. It still needs approval from the companies’ shareholders. The acquisition is expected to close by June 30.

Berry’s stock jumped more than 8 percent in premarket trading.”

Source

“NEW YORK (AP) — Office Depot Inc. and OfficeMax have agreed to merge in an all-stock deal that would transform the $21.2 billion office supply retail sector.

Boca Raton, Fla.-based Office Depot Inc. and Naperville, Ill.-based OfficeMax say holders of OfficeMax shares will receive 2.69 shares of Office Depot for every OfficeMax share they own.

That’s equal to about $13.50 per share, giving the deal a total value of about $1.2 billion.

Analyst say if the deal closes it would likely benefit the largest office supply player Staples Inc.because the combined entity will likely close stores.”

“Office supply retailers Office Max andOffice Depot are near a merger that could be announced this week, according to people familiar with the matter.

As of Monday night, the two companies and their advisers were still working toward a price for the deal, expected to be all-stock and originally set to be announced later in the week, one of the people said. However, the announcement could get moved up, given heightened media attention after news of the talks was reported by The Wall Street Journal on Monday, a stock market holiday, two of these people said.

(Read More: We Know M&A’s Back—But Where’s It Going Next?)

Representatives for Office Depot could not be reached for comment. A spokesperson for Office Max said it is the company’s policy not to comment on market rumors or speculation.

JPMorgan is advising Office Max, while Morgan Stanley and boutique Peter J. Solomon are advising Office Depot, according to people familiar with the talks. Office Depot hired Morgan Stanley after activist Starboard Value bought a nearly 15% stake in the struggling retailer in September….”

Full article

“M&A activity could be up some 50 percent this year, and analysts point to energy, tech, consumer goods and chemicals as sectors to watch.

A week full of mega-deals — America Airlines and US Airways, Comcast and NBC Universal, Berkshire Hathaway and Heinz, Michael Dell and his namesake company — got everyone’s attention. And already, M&A activity has hit the $182 billion mark, compared with $58 billion at this time last year.

“I do think the dam is finally breaking,” said Bob Profusek, lead M&A adviser at Jones Day, citing “just fabulous” financing terms, low equity prices, not-terribly-strict transaction regulation, and “more capital available than at any time in my lifetime.”

At the same time, Profusek noted that this week’s big deals each had unique characteristics that may mitigate their relevance to the broader market: The airline deal was in the works for years; Warren Buffett’s Berkshire Hathaway slays an “elephant” like Heinz every 12 to 18 months; and Dell is a founder wresting control of the company he founded. The Comcast-NBCUniversal deal, he said, is a movie we’ve seen before — one that hasn’t ended well (Viacom–CBS and AOL–Time Warner come to mind), so perhaps an unlikely model for others…..”

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“A flurry of acquisitions announced within hours of each other Thursday, for everything from ketchup to airlines to drug wholesaling, suggests big-time deal-making is back after a nearly six-year absence from Wall Street.

Mergers and acquisitions took a sharp tumble after the financial crisis, as economic uncertainty and paranoia on corporate boards kept deal-making on the sidelines. This year, though, has been different.

The $40 billion-worth of deals struck Thursday brings the total value of M&A transactions announced since January to nearly $160 billion, the fastest start to a year since 2005, according to Dealogic. M&A volumes historically follow the lead of the stock market, and the 6.67% increase in the Standard & Poor’s 500 Index this year suggests more are on the way….”

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“Anheuser-Busch InBev NV (BUD, ABI.BT) agreed to give up key U.S. assets and beer licenses of Grupo Modelo SAB (GPMCY, GMODELO.MX) worth $4.75 billion to fend off U.S. antitrust regulators and push through its $20.1 billion takeover of the Mexican brewer.

AB InBev, the world’s biggest beer maker by revenue, will grant perpetual rights for the popular Corona and Modelo lager brands in the U.S., as well as sell its Piedras Negras bottling factory in Mexico, to U.S.-based Constellation Brands Inc. (STZ, STZB), the No. 1 wine group, for a total of $2.9 billion.

AB InBev will also sell Modelo’s 50% stake in Crown Imports, a U.S. beer importer and distributor, to its joint-venture partner Constellation for $1.85 billion, the companies said.

Leuven, Belgium-based AB InBev already owns 50% of Modelo, but at the end of last month the U.S. government filed a lawsuit seeking to block a full takeover. Regulators are concerned the deal would restrict competition and push up prices for beer drinkers, amid growing big-brewer dominance in the mainstream lager market.

“I can’t comment on a specific proposal. However, we would give any proposal serious consideration and at the same time we would continue to prepare for litigation,” said Gina Talamona, a spokeswoman for the U.S. Department of Justice in Washington, D.C….”

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“Another classic Warren Buffett purchase.

Berkshire Hathaway (along with investment firm 3G) are buying ketchup maker Heinz for $28 billion.

This is a 20% premium from yesterday’s closing price.

The full press release is below

—————————————————————

PITTSBURGH & OMAHA, Neb. & NEW YORK–(BUSINESS WIRE)–

H.J. Heinz Company (HNZ) (“Heinz”) today announced that it has entered into a definitive merger agreement to be acquired by an investment consortium comprised of Berkshire Hathaway and 3G Capital.

Under the terms of the agreement, which has been unanimously approved by Heinz’s Board of Directors, Heinz shareholders will receive $72.50 in cash for each share of common stock they own, in a transaction valued at $28 billion, including the assumption of Heinz’s outstanding debt. The per share price represents a 20% premium to Heinz’s closing share price of $60.48 on February 13, 2013, a 19% premium to Heinz’s all-time high share price, a 23% premium to the 90-day average Heinz share price and a 30% premium to the one-year average share price….”

Full article

“(Reuters) – American Airlines and US Airways Group said they plan to merge in a deal that will form the world’s biggest air carrier with a combined equity value of $11 billion.

The merger caps a wave of consolidation that has helped put U.S. airlines on more solid financial footing.

The widely expected deal has been more than a year in the making. American, a unit of AMR Corp , filed for Chapter 11 bankruptcy in November 2011, and US Airways began its pursuit of a merger in early 2012.

The new carrier — which would carry the American Airlines name — would be 2 percent larger than current No. 1 United Continental Holdings in traffic, as measured by the number of miles flown by paying passengers worldwide.

The new American will be based in Dallas-Fort Worth and will be headed by US Airways Chief Executive Doug Parker, who has long advocated industry consolidation.

US Airways stockholders will receive one share of common stock of the combined airline for each US Airways share, the companies said in a statement….”

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“(Reuters) – U.S. drug wholesaler Cardinal Health Inc said it plans to acquire AssuraMed, a privately held direct-to-home medical supply distributor, for about $2.07 billion.

The acquisition will be financed with $1.3 billion in new senior unsecured notes and cash, and is expected to close by early April.

Cardinal Health said the deal would add 2 cents to 3 cents per share to adjusted fiscal 2013 earnings if the deal closes in early April. It would add at least 18 cents per share to adjusted earnings in fiscal 2014.

The deal will give Cardinal access to the growing number of Americans who are treated in home settings….”

Full article

“Citic Group Corp., China’s largest state-owned investment company, will pay about A$452 million ($468 million) for a stake in Alumina Ltd., partner in the world’s biggest alumina business. Alumina’s shares soared.

Citic, through its Citic Resources Holdings Ltd. and Citic Ltd. units, will take a 13 percent stake by agreeing to purchase about 366 million new shares at A$1.235 each, 3 percent higher than Alumina’s close yesterday, the Melbourne-based company said today in a statement.

Alumina climbed to the highest in almost a year in Sydney trading, signaling some investors expect Citic may seek a takeover. The Australian company’s partner, Alcoa Inc., last month forecast global aluminum demand growth will accelerate to 7 percent this year as China’s economic rebound drives demand for cans, cars and buildings….”

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