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:
- 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!
- 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.
- 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.
Interact: Which deals do you think will get done? Which are just PR from hedge funds and traders? Let us know in the comments below …
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