M&A Weekly Recap: Yahoo and AT&T Dominate Deal Chatter

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Nice Systems (NASDAQ:NICE), announces it’s acquiring Merced Systems an Israeli developer of software for analyzing communications streams. Its a developer of business performance software, which is being purchased for $170M in cash. Nice expects the deal to boost its 2012 revenue and EPS by $55M and $0.10.

Qualcomm (NASDAQ:QCOM) recently acquired Pixtronix, without announcing the deal. Pixtronix developer of low-power mobile device displays that rely on MEMS technology. Sources put the deal’s price tag in the $175M-$200M range. Qualcomm might try to use Pixtronix’s technology to bolster its Mirasol display line, which takes a different approach to using MEMS.

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Verizon Wireless (NYSE:VZ) (NASDAQ:VOD) agrees to buy Spectrum as it is trying to keep up with the fast-growing demand for bandwidth. It’s also purchasing 122 wireless licenses from Comcast (NASDAQ:CMCSA) and Time Warner (NYSE:TWX) for $3.6B. Comcast’s share of the proceeds will be $2.3B; Time Warner’s, $1.1B.

Google (NASDAQ:GOOG) is attempting a $400M acquisition of AdMeld, sources tell Bloomberg. U.S. Justice Department staff attorneys have recommended antitrust approval of the acquisition. The staff urged approval after a detailed analysis reportedly found AdMeld’s competitors in online display advertising were strong enough to offer companies alternative ways to advertise.

Yahoo (NASDAQ:YHOO) may give up a minority stake to Silver Lake. The proposal may seem upappealing at first, but it may be the company’s best option, argues Henry Blodget. Unlike TPG Capital’s bid, Silver Lake’s offer comes with Marc Andreessen attached. It also features plans to overhaul Yahoo’s much-criticized board and U.S. operations. Blodget is skeptical Alibaba’s rumored bid will ever materialize.

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AT&T (NYSE:T) and Deutsche Tel (DTEGY.PK) have not given up on the U.S. carrier buying T-Mobile USA. In fact, contrary to a WSJreport, are not in talks about a network-sharing alternative, sources say. If the merger was to win approval, DT has told AT&T it could provide “a few billion dollars” of financing for a buyer of any related divestitures.

BP (NYSE:BP) makes further progress in its plan to raise $45B to pay for the Gulf oil spill. It has agreed to sell its Canadian natural gas liquids business to Plains All American (NYSE:PAA) for $1.67B.

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Hertz (NYSE:HTZ) presents the FTC with a remedy package to shore up its faltering bid for Dollar Thrifty (NYSE:DTG). The company has lined up a strategic divestiture buyer to help make the deal palatable to regulators, according to one source. An outside attorney using circular logic partially explains why no deal has been struck after 18 months of pursuit, and says the FTC won’t agree to the deal in principle until the two players come to terms even though DTG says a deal must clear regulatory risk first.

Yahoo (NASDAQ:YHOO) may take a 20% stake in the firm after last night’s report of an Alibaba-led group. Kara Swisher reports that sources tell her there is no bid in the making. An Alibaba spokesman says flatly: “Alibaba Group has not made a decision to be part of a whole-company bid for Yahoo.”

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Onyx Pharmaceuticals (NASDAQ:ONXX) could command at least $70/share in a potential sale, or 70%-plus above its average in the past 20 days. Though pricey perhaps there it is still of interest to firms facing patent expirations such as Pfizer (NYSE:PFE), Bloomberg says. Onyx is developing a drug to treat blood cancer, and cancer is a growing area for drug makers in the market for transactions and new drugs.

ACI Worldwide (NASDAQ:ACIW) extends its tender offer for e-commerce company S1 (NASDAQ:SONE) while the two companies hammer out a pact. The deal will allow the DoJ more time to review the pact. In October, ACI agreed to acquire S1 for around $520M.

Lockheed Martin (NYSE:LMT) CFO Bruce Tanner says the defense contractor remains in an acquisition mode. He would also like to accelerate its pace from the last couple of years including dipping its toes back into the commercial pool. He says plays in the energy, health care, and cyber security sectors are all options as the firm looks to show positive revenue growth in 2012.

AT&T’s (NYSE:T) requested to withdraw its T-Mobile (DTEGY.PK) application, which was approved by the FCC yesterday, issued a sobering 109-page report saying the deal would limit competition in virtually every U.S. city. The FCC says it released it for the sake of transparency, though it holds no legal weight.

Silver Lake and Microsoft (MFST) bid of ~$16.60/share for a minority stake in Yahoo (NASDAQ:YHOO) was a bit low, sources say. It was somewhat lower than an offer made by TPG Capital. Alibaba Group, KKR (NYSE:KKR), THL and Blackstone (NYSE:BX) are still potential bidders as well.

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Adobe (NASDAQ:ADBE), struggling to deal with soft Creative Suite sales and the slow demise of Flash, is working to bolster its ad technology offerings. It was recently singled out as a priority for the company. The latest proof comes via its acquisition of Efficient Frontier, which is a provider of online ad buying solutions across multiple platforms. Adobe also announced the purchase of video ad solutions provider Auditude.

Advanced Analogic (NASDAQ:AATI) and Skyworks (NASDAQ:SWKS) both wireless chipmakers, do well after announcing a a revised merger agreement in which SWKS will acquire AATI for $5.80/share in cash. The price is below the $6.13/share agreed to in May, but at least the deal didn’t entirely collapse after Skyworks filed notices of breach against Advanced Analogic.

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Diamond Foods’ (NASDAQ:DMND) Steve Davidoff faces the challenges that have cast a shadow over a deal to acquire Pringles from Procter & Gamble (NYSE:PG). The challenges stem from the accounting behind a payment for walnuts at and a subsequent drop in the company’s stock. Even if DMND’s audit issues a clean bill of health, the company still may be irreparably harmed.

Autodesk (NASDAQ:ADSK) AD software giant climbs higher, after announcing the acquisition of Horizontal Systems, a developer of cloud-based building modeling software. Canaccord thinks Autodesk’s entry into the cloud software space will increase its addressable market, and improve the predictability of its results. This is given cloud software sales tend to be subscription-based.

US Airways’ (NYSE:LCC) pursuit of AMR (NYSE:AMR) could get a healthy nudge if the carrier needs a debtor-in-possession loan, according to Wolfe Trahan analyst Hunter Kealy. Eyeing AMR’s relatively slim $4.1B in cash it has to fund a restructuring. Kealy notes a DIP lender will want a strong action from a reminted AMR including a strategic combination with another airline.

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P-E firm Silver Lake and Microsoft (NASDAQ:MSFT) is reportedly submitting a plan to take up to a 20% stake in Yahoo (NASDAQ:YHOO), and TPG Capital is also eyeing a minority stake. Yahoo’s board is expected to meet this week to discuss options.

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Summit Entertainment and Lions Gate (NYSE:LGF) are reportedly resuming their merger talks. A tie-up would put the two independent studios in a stronger position to compete with the Hollywood majors. But it’s still to be seen if this will produce a deal.

AT&T (NYSE:T) has been quietly working on a last-minute deal to save its T-Mobile acquisition (DTEGY.PK). T is also reportedly in talks to sell a large chunk of T-Mobile’s customer accounts and some of its wireless spectrum to second-tier wireless player Leap Wireless (NASDAQ:LEAP). If everything falls apart, Sprint (NYSE:S) will continue facing tough low-end competition from T-Mobile, and Metro PCS (NYSE:PCS) and LEAP will have missed out on a chance to expand through AT&T’s asset sales.

Quantum (NYSE:QTM) jumps 9.4% higher premarket after talk about an acquisition from NetApp (NASDAQ:NTAP). Janney analyst Bill Choi says the competitive environment has pushed NTAP to the point that if it hopes to gain more customers it needs a “complete solution set”.

RBS (NYSE:RBS) is examining final bids for its aircraft leasing business. This could fetch up to $8B, reports Reuters. Those in the running for RBS Aviation Capital are China Development Bank, Wells Fargo (NYSE:WFC), Sumitomo Mitsui (NYSE:SMFG) and a Macquarie-led consortium (MQBKY.PK).

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Cameco (NYSE:CCJ) gains 4.1% after starting, which this will allow its C$4.50/share offer for fellow Canadian uranium miner Hathor Exploration (HTHXF.PK) to lapse. Barring regulatory holdups, Cameco’s move paves the way for Rio Tinto (NYSE:RIO) to acquire Hathor, courtesy of its C$4.70/share offer.

Commercial Metals (NYSE:CMC) was offered $15/share by Carl Icahn reports Bloomberg.

Ternium (NYSE:TX) is up. But it is up far less than other steelmakers, after announcing it will partner with Tenaris (NYSE:TS) to acquire a 27.7% stake in Brazilian steel manufacturer Usiminas. The stake goes for $2.7B. Separately, Japan’s Nippon Steel is acquiring a smaller stake in Usiminas.

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Akamai (NASDAQ:AKAM) is in talks to buy rival content delivery network Cotendo, which it’s currently suing, for more than $300M. Dan Rayburn views Contendo as a growing threat to Akamai. Customers are claiming the Israeli startup’s network is both faster and cheaper for certain high-margin applications. Publicly-traded rival Limelight (NASDAQ:LLNW) is also surging.

CommVault (NASDAQ:CVLT) joins Quantum (NYSE:QTM) in taking off on speculation NetApp (NASDAQ:NTAP) might bid for the company. Unlike Quantum, who sports a price/sales ratio of just 0.8, CommVault wouldn’t come cheap: the storage software vendor, which has been taking share from Symantec (NASDAQ:SYMC) in major enterprise accounts, has a trailing P/E of 51.

KKR (NYSE:KKR) is set to acquire Capital Safety, a maker of safety harnesses, possibly at a price of ~$1.1B. This is according to sources of Bloomberg. The news comes just a few days after KKR announced a $7.2B deal to acquire oil & gas producer Samson.

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