Rumor Mill: Mergers and Acquisitions in Question

M&A deals continue to be significant this week, (See “DONE DEAL! M&A Activity of the Week“), but the rumors are bigger. Here’s your Cheat Sheet to mergers and acquisitions in the rumor mill:

• Rejected! NYSE Euronext’s (NYSE:NYX) board decided to reject the $11.3 billion joint bid from NASDAQ OMX Group (NASDAQ:NDAQ) and ICE (NYSE:ICE), despite the fact that the offer was higher than the $9.7 billion one from Deutsche Boerse (DBOEY.PK).  NYSE Euronext simply does not want to break up the company, which would be required if they took the higher offer.  Now, some analysts believe NASDAQ/ICE will take the bid hostile and even increase the price at the possible cost of its credit rating.  The thing is, the shareholders aren’t that interested, and as a result, NYSE’s board told them it would pay a special dividend as an enticement.

• BHP Billiton (NYSE:BHP) denies rumors that it plans to buy Royal Dutch Shell’s (NYSE:RDSA) stake in Woodside Petroleum (WPL) for a $48.6 billion takeover.  However, BHP is allegedly in talks with Shell, so what could they possibly be talking about?  The thing is, Woodside and Shell are also talking about how to get rid of the rest of Shell’s 24 percent stake in the former, after selling a 10 percent stake in November.  After the Potash fiasco (NYSE:POT), BHP better get its story right!

• BP’s (NYSE:BP) joint venture TNK-BP (TNMP.ME) is causing some problems for BP’s desire to do a share swap with Rosneft (ROSN.ME).  Rosneft insists that BP must reach a settlement with its joint venture partners or they won’t be able to continue with the share pact.  Why? This deal with Rosneft would allow BP to do some Arctic oil exploration, but the pact says that any BP activity in Russia must be funneled through TNK-BP. BP was able to buy another month of time to try to get the deal together, and in the meantime has been thinking about buying out its partners in TNK-BP.  Last week’s shareholders’ meeting was tough, as the CEO Bob Dudley came under fire for his handling of the situation.

• After Glencore’s IPO, it plans to go on the prowl for some acquisitions with newfound cash.  Glencore, the world’s number one commodities trader, has its eye on Xstrata (XTA.L), the British mining company of which Glencore owns 34 percent.

• Here’s an interesting case study on how to get rid of an unsolicited bid: Tenet Healthcare (NYSE:THC) is suing Community Health Systems (NYSE:CYH) for overcharging Medicare at more than $280 million to try to get rid of the unsolicited bid.  Now Community Health may have trouble raising cash, as its stock plummeted.  Community Health bid $7.3 billion or $6 per share in December, but was promptly rejected.

• Remember when Citigroup (NYSE:C) took over music company EMI from Guy Hands in an unexpected move?  Well, now Citigroup wants to sell off the company as a whole, rather than in pieces.  This decision could affect what happens to Warner Music Group (NYSE:WMG), which is on the auction block, and considered merging pieces of itself with counterparts of EMI, such as their recorded-music units or publishing businesses.

• Speaking of Warner Music Group…the company’s management decided to sell the company in one piece, rather than break it up as mentioned above.  The board made the decision after reviewing second-round bids, some of which were for parts of the business and others for the whole thing.  Those that bid for parts, namely Live Nation (NYSE:LYV), Sony (NYSE:SNE) and BMG Rights will not get what they want, while Ron Burkle’s Yucaipa, Industrialist Len Blavatnik, and Platinum Equity bid for the whole.

• Schneider Electric (NYSE:SU) made a preliminary $30 billion bid for Tyco International (NYSE:TYC), which owns security-systems company ADT.  Rumors were circulating beforehand, and Schneider denied everything, hoping that it could attempt damage control on its pressured stock price.  Tyco will likely want more than $30 billion, possibly upwards of $32 billion.

• Nokia (NYSE:NOK) and Siemens (NYSE:SI) are thinking about selling a controlling stake in their joint venture (Nokia Siemens Networks), which sells telecom equipment and isn’t doing that well.  While the potential $2 billion deal is in its preliminary stages, the two companies have received indications of interest from some private equity firms.  This makes sense, given that the two are committed to the JV until mid 2013.

• Alcatel-Lucent (NYSE:ALU) is considering selling its unit that sells telecom equipment to corporations, and has hired advisors to start exploring its options.  The company could be worth more than $1.5 billion, and all options are on the table, including an IPO.

Don’t Miss: DONE DEAL! M&A Activity of the Week.