Mergers and Acquisitions Recap: Deals and Rumors of the Week

Another week is in the books and deals continue to flow through the pipeline. In case you missed anything, we’ve got your Cheat Sheet to all the big deals and juicy mergers and acquisitions rumors of the week:

Monday

1) Total (NYSE:TOT), a French oil and gas exploration company, will buy a 60 percent stake in SunPower(NASDAQ:SPWRA), which produces solar panels, in a deal that values the latter at $2.3 billion.  Total will pay $23.25 per share, which represents a 46 percent premium over the unaffected share price.  Since the nuclear disaster in Japan,many oil and gas giants have experienced a surge in interest in renewable energy.  Solar energy is a wild card, particularly because it hasn’t been that competitive with fossil fuels and feeds off of government subsidies.

2) Blackstone (NYSE:BX) likes Australia…a lot!  It agreed to acquire Australian real estate company Valad Property Group (VPG.AX) for $227 million, a 50 percent premium over the unaffected share price, and will also receive a nice pile of $655 million in debt.  Blackstone acquired the shopping malls of Australia’s Centro Properties(CNP.AX) only two months ago.  Blackstone made these acquisitions under the assumption that the Australian real estate market is due for a rebound.  Let’s hope they’re right!

After being rejected twice by NYSE Euronext (NYSE:NYX), the Nasdaq OMX Group (NASDAQ:NDAQ) and ICE(NYSE:ICE) may take their $11.1 billion bid hostile in a tender offer to NYSE shareholders.  Currently, NYSE management wants to do the deal for less with Deutsche Boerse (DB1), but since the shareholders’ meeting this week, investors have been putting pressure on NYSE to either take the higher bid or encourage Deutsche Boerse to sweeten their offer terms.  At least meet with Nasdaq and ICE!

Tuesday

1) Teva Pharmaceuticals (NASDAQ:TEVA), the largest generic drug maker by sales in the world, will acquireCephalon (NASDAQ:CEPH) for $6.8 billion or $81.50 per share, which represents a 39 percent premium over the unaffected stock price.  Teva, a Jerusalem-based company, will now be able to focus more on selling brand-name drugsinstead of generics, since Cephalon has a vast array of products with more than $21.5 billion in sales.

2) Arch Coal (NYSE:ACI) is getting it done—it will acquire International Coal Group (NYSE:ICO) for $3.4 billion, making it the second-largest U.S. coking coal producer, after Alpha Natural Resources (NYSE:ANR), which is acquiring Massey Energy (NYSE:MEE).  This bodes well for Arch, considering rising commodity costs and developing countries’ increasing demand.  Arch will have access to coal assets in every major U.S. coal basin and will increase its reserves by 25 percent.

3) French luxury goods company PPR (PP.PA), which controls Gucci (GUCG.PK) and Puma (PUM.DU), will acquire Volcom (NASDAQ:VLCM), which sells skating, surfing, and snowboarding clothing, for $607.5 million, or $24.50 per share, a 25 percent premium over the unaffected stock price.  This deal is a relief to some investors, who were nervous that the CEO, Francois-Henri Pinault, had his heart set on a massive acquisition, comparable toLVMH’s (MC.PA) acquisition of Bulgari (BUI.MU).

Terex (NYSE:TEX), a U.S. crane producer, offered $1.31 billion in a hostile bid for Demag Cranes (DMGCF.PK), a German crane company.  The two had talked, but Terex wasn’t getting anywhere, so it decided to go directly to Demag shareholders.  Some analysts think the price is too low, and another competitor, such as Konecranes (KNCRF.PK), may just barge in and out-bid Terex.  Why Demag? Buying the company would give Terex access to Europe and emerging markets, particularly China.

DuPont (NYSE:DD) raised its offer 5 percent to $6.64 billion, or $139 per share, for Danisco (DCO.CO), a Danish food ingredients producer.  The offer is a 32 percent premium over the unaffected stock price. Now Danisco is urging its shareholders to accept the offer, since many of them decided to reject the original price.  DuPont already had about 48 percent acceptance from shareholders, and with the higher bid, many institutional investors, including the largest shareholder, Danish pension insurance company ATP, will now take the deal!

Warner Music Group’s (NYSE:WMG) day of reckoning is finally here.  Final bids were due last night, and it’s likely the company will have an official buyer by the end of the week, possibly at a price greater than $3 billion. The contenders are two groups: Access Industry, and a joint bid by Platinum Equity and Gores Group.  A bunch of bidders dropped out earlier in the process, including Yucaipa, and BMG Music Rights, a joint venture between German music company Bertelsmann and KKR (NYSE:KKR).

Speaking of raising bids, Community Health Systems (NYSE:CYH) raised its bid for Tenet Healthcare(NYSE:THC) to $4.07 billion, or $7.25 per share from $6 per share.  The new price is a 69 percent premium over the unaffected stock price.  This situation has been hostile in every way: Tenet adopted a poison pill to protect itself from Community Health, and the latter shot back by attempting to remove Tenet’s board.  Then, Tenet filed a lawsuit against Community Health, accusing the company of overbilling Medicare.  Community Health then converted its offer to all-cash in order to avoid legal ramifications should the lawsuit go through.

In case you didn’t think they were serious, the joint bidders Nasdaq OMX Group (NASDAQ:NDAQ) and ICE(NYSE:ICE) are now deciding, after two rejections, that they will make their offer for NYSE Euronext (NYSE:NYX)hostile.  Now Nasdaq and ICE will go directly to NYSE shareholders with their “superior offer” that values the company at $14.24 per share, or approximately $11 billion.  The joint bidders certainly deserve an A+ for effort!  NYSE’s response was interesting enough: the company merely emphasized to shareholders that the offer did not change, and in fact, is the same offer that was rejected twice.

Ralcorp Holdings (NYSE:RAH), which makes Post Cereals and private-brand foods, allegedly received a takeover offer from an unidentified party for an undisclosed amount.  Who could it be?  Is it ConAgra (NYSE:CAG), who CNBC claims made an approach? Ralcorp apparently rejected their offer.  Plus, Ralcorp’s chairman denies any such takeover rumors.  This will continue until they spill the beans.

Wednesday

1) India’s Adani Enterprises (ADANIENTE.BO) will buy Australia’s Abbott Point Coal Terminal for approximately $2 billion.  The terminal is located in Queensland, which was hit hard by a series of floods last year.  Billionaire Mr. Adani controls the largest private coal importer in India, and has been interested in Australia for a while, most recently in a $3.3 billion deal last fall with Linc Energy (LNC.AX) to develop coal properties in Queensland.  The Queensland government has embraced the terminal purchase, as it is a vote of confidence in the area.

2) Canadian private equity firm Onex sold Canada’s Husky International, an injection molding equipment producer, to Berkshire Partners and Omers Private Equity for $2.1 billion.  Husky produces equipment that manufactures plastic products, such as food containers, bottles, and packaging for medical and electronic devices.  Onex did pretty well in this deal, considering it bought Husky in 2007 for $622 million in equity.  Net proceeds from the past years totaled $1.8 billion.

3) Cerberus Capital Management and Chatham Lodging Trust (NYSE:CLDT) will acquire Innkeepers USA(INKPQ.PK), which operates hotels under such brands as Hilton and Marriott, for $1.1 billion, including debt.  After its acquisition by Apollo in 2007, Innkeepers went bankrupt in the middle of 2010 after struggling with declining occupancy rates and spiraling debt obligations in the aftermath of the crisis.

The fashion world has bee pretty active this week! Puig, a Spanish perfume maker, is in discussions to purchase a controlling stake in Jean-Paul Gaultier, the French fashion firm.  Puig makes perfumes for Prada and Commes des Garcons and owns various fashion brands, including Carolina Herrera, Nina Ricci, and Paco Rabanne.  While it seems Gaultier is the main candidate, a joint bid from China’s Fung Capital and Shiseido (SSDOY.PK), or a bid from French Interparfums (IPAR.PA) would give the front-runner a run for its money!

Fashion designer Pierre Cardin is ready to sell his business, and is telling the world!  He’s certainly selling a good time: valuations of fashion companies have been increasing ever since LVMH (MC.PA) paid a huge premium forBulgari (BUI.MU) in March.  The price? Approximately $1.46 billion, a sum much larger than what bankers suspect the company is worth.  Considering Mr. Cardin doesn’t know how much revenue his company makes, the battle over price could make for an interesting drama.
ING (INGA), the largest Dutch financial services firm, may be selling its Australia online banking unit, and one possible contender is Standard Chartered (NASDAQ:STAN).  This sale would accomplish two goals: it would get rid of assets as it promised on the condition of its bailout by the European Union, and it would focus on the European retail market instead of expansion into Asia and Australia.  The company may be valued at approximately $6.5 billion.

Carl Icahn, who offered $17 per share for Mentor Graphics (NASDAQ:MENT), a much higher price than potential competitors would be willing to pay, recently gained the support of one of Mentor’s proxy advisory firms Institutional Shareholder Services for his array of board member candidates.  However, Icahn may not win this one, because another advisory firm, Glass Lewis, wants shareholders to support Mentor’s candidates.  Mentor has made it clear that Icahn’s bid undervalues the company and is not in the interest of shareholders, but Icahn will hear none of it.

Thursday

1) Semiconductor company Applied Materials (NASDAQ:AMAT) will be acquiring Varian Semiconductor Equipment Associates (NASDAQ:VSEA) for $4.9 billion, or $63 per share, in order to hop on the high-tech mobile device bandwagon.  Not too much drama with this deal: both boards agree, and the price represents a hefty 55 percent premium over the unaffected stock price.  Varian’s specialty, ion implantation equipment, will provide Applied Materials with a better platform for mobile apps, as well as a possible door into the solar world.

2) What began as a mere rumor is now the real deal: ConAgra Foods (NYSE:CAG) made a public $4.9 billion bid, or $86 per share, for Ralcorp Holdings (NYSE:RAH), which makes Post cereals and generic brands.  Although the price represents a 32 percent premium over the unaffected stock price, Ralcorp promptly rejected the offer, and adopted a poison pill.  Now, ConAgra may have to go hostile.  This is the second rejection, as ConAgra made an unsolicited bid for Ralcorp at the end of March. The question now is, is Ralcorp really not going to sell? The firm’s zooming stock price says otherwise.

GE (NYSE:GE) is about to try again, and we hope this time it will succeed!  The company plans to put its railcar leasing business on the auction block, which is the second time it’s tried in three years.  Last time GATX Corp (NYSE:GMT) wanted to buy the business, but it hit some financing problems and the deal fell apart.  The business could fetch as much as $3 billion. Why sell? GE wants to focus more on industrial businesses and ensure that GE Capital doesn’t represent such a huge portion of its revenues as it did before the financial crisis.

Here’s some more fashion news: we know that Puig will be acquiring a 60 percent share of Jean Paul Gaultier from Tuesday’s announcement, but yesterday we found out that in order to do this, Hermès (RMS.PA) will have to sell its 45 percent stake in Jean Paul Gaultier to Puig.  The stake is worth about $24 million.

After delaying its IPO, Skype is rumored to be in discussions with Facebook and Google (NASDAQ:GOOG).  A couple of options are on the table: Facebook or Google may buy Skype, or enter into a joint venture that could be worth between $3 billion and $4 billion.

Warner Music Group (NYSE:WMG) may have a buyer! Russian investor Len Blavatnik’s Access Industries is close to making a $3 billion bid for Warner.  While there are other bidders, and Warner’s board will meet today to choose the winning bid, Blavatnik is widely believed to be the primary contender, given that he served previously on its board and is close with the chairman.

Friday

Sara Lee (NYSE:SLE) is continuing to slim down.  We already know from January that the company will split into two parts, and now Sara Lee is exploring its options with its North American refrigerated dough business and international baked goods business, which both fall under one of the new separate businesses.  Now Sara Lee will operate as two separate businesses: a coffee company and a packaged meat/frozen baked goods business.  No one really wanted to buy the whole business, so Sara Lee is stuck selling itself in bits and pieces.

After hearing about the Nasdaq OMX Group (NASDAQ:NDAQ) and ICE’s (NYSE:ICE) takeover shenanigans, it’s a relief to hear from Deutsche Boerse (DB1), the original bidder for NYSE Euronext (NYSE:NYX).  Deutsche Boersehas officially published its tender offer for NYSE, and received a stamp of approval from German regulators on its merger documents.

The market is talking, but CVS Caremark (NYSE:CVS) won’t be balking! Five consumer groups complained to the Federal Trade Commission that CVS should never have acquired Caremark five years ago because the merger hurts competition, but the CEO today assured investors that the company would not break up.  Although it seems that they won’t be spinning off anytime soon, some analysts believe that the company should consider a tax-free spinoff.