M&A Weekly Recap: Microsoft YAMS, United Technologies TACTICS

Monday

Goldman Sachs (NYSE:GS) is said to be in advanced talks to divest its hedge fund administration unit to State Street (NYSE:STT). If true, such a transaction would create a giant of an administration services provider, with a value near $700 billion.

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In a move to persuade the European Commission to approve its acquisition of Goodrich Corporation (NYSE:GR), United Technologies (NYSE:UTX) is offering to sell (so far unnamed) assets, according to Reuters. If allowed, the proposed acquisition would have a value of $16.5 billion; the EU, however, is worried about competition in the markets for AC power generators, fuel nozzles, aftermarket services, and engine controls if the deal goes forward.

The New York Times is standing by its report that Comcast (NASDAQ:CMCSA) is toying with the idea of an offer for British Sky Broadcasting (BSYBY.PK). A spokesperson for Comcast says of the story, “This is complete rubbish, speculation, and inaccurate”… which means that it’s probably true.

Samsung (SSNLF.PK) puts the kabosh on chatter that it’s mulling the acquisition of the distressed mobile major Nokia (NYSE:NOK), and shares of the latter plummet. It might be correct to assume that Samsung would benefit from Nokia’s brand, production expertise, and intellectual property, but merging the two giants would entail would be problematic, to wallow in understatement, plus the fact that regulators might well object.

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Tuesday

United Technologies (NYSE:UTX) divests 20 million equity units (common shares and notes) with a value of $1 billion, in order to help pay for its purchase of Goodrich (NYSE:GR), which cost $16.5 billion. Further, its underwriters will have the option to buy an extra $100 million of the securities.

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BlackRock’s (NYSE:BLK) unsatisfactorily performing Australian property trust is the subject of several proposals to purchase or to help restructure the unit, which contains assets of A$468 million, or $464.75 million. The trust is in need of cash for redemption purposes, and Blackstone (NYSE:BX) tops the list of bidders to take it over.

Shareholders of Human Genome (NASDAQ:HGSI) might be expecting the U.K. firm GlaxoSmithKline (NYSE:GSK) to raise its $13 per share offer for the firm, as its shares have traded above that price since it was rejected in April. Fewer than one percent of investors had tended their shares to GSK before the proposal was extended last week, and an offer of $15 a share would overcome HGSI’s poison pill.

Warren Buffett’s policy of snapping up newspapers with strong community connections was seen again as Berkshire Hathaway’s (NYSE:BRKA) Omaha World-Herald acquires a small Texas newspaper to its collection.

Wednesday

Johnson & Johnson’s (NYSE:JNJ) cash and stock acquisition of Synthes is approved by U.S. regulators, and the deal, valued at $19.7 billion should close on Thursday. Financing the purchase was aided by a J&J subsidiary, which set approximately $12.9 billion in buyback agreements in motion. This acquisition is expected to add between 3 and 5 cents to the current year earning per share, which represents an improvement to the prior projection of a 22-cent decrease. For 2013, it will increase the earnings by between 10 and 15 cents per share, excluding certain items.

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Universal Music (VIVHY.PK) might receive the European Commission’s “statement of objections” against its proposed $1.9 billion acquisition of the recorded music unit of EMI within some five days, says Reuters. The lobbying group Impala, and Warner Music are asking the Commission to reject the transaction, as it could greatly add monopoly conditions to the already concentrated market.

United Tech (NYSE:UTX) has sold $1 billion worth of convertible notes, or 20 million equity units at $50 each, which is considerably less than the $1.5 billion the company said it would raise to help finance its $16.5 billion purchase of Goodrich (NYSE:GR). However, UTX reports that it has located alternatives sources of cash, which might include the divestiture of three units, one of which is said te be imminent.

Microsoft (NASDAQ:MSFT) is said to be in discussions to acquire Yammer, which is a major supplier of enterprise social networking sites. The price tag could be more than $1 billion, and Yammer would likely be added to an extensive list of Microsoft solutions (Lync, SharePoint, and Skype) which allow businesses to collaborate. Yammer rival Jive Software (NASDAQ:JIVE), is also a center of merger and acquisition chatter; its shares are soaring Thursday on word that the former might be snapped up by Microsoft.

Quest Software (NASDAQ:QSFT) shares pop on the news that it has received a purchase bid of $25.50 per share, from a ‘strategic bidder’. The offer is well above that of Insight Venture ($23) and even surpasses Wednesday’s close of $23.81. The new bid emerges almost two weeks after the reported talks with Dell fell flat; Quest stipulates that the terms of a merger agreement “have been fully negotiated”, however Insight Venture is thought to maintain “certain matching rights” related to its offer.

Royal Dutch Shell (NYSE:RDSA) hasn’t given up on its £1.12 billion ($1.74 billion) bid for Cove Energy, as it extends its deadline for the latter’s shareholders to support its offer rather than that of PTT’s £1.22 billion. A sticking point might be Cove’s and Anadarko’s (NYSE:APC) recent new finds of natural gas deposits in Mozambique, which could raise hopes of higher offers.

Beleaguered Nokia (NYSE:NOK) announces that it is amenable to selling a portion of portfolio of some 30,000 patents, to help raise needed cash. Some of the patents have enabled the firm to collect royalties from Apple (NASDAQ:AAPL), and include several innovations that are critical to three to four gigabyte networks and smartphone user interfaces. In the meantime, Nokia reports that it’s purchasing Scalado, a Swedish developer of imaging technologies that are employed in more than one billion devices.

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Friday

A bidding competition could be in the offing, as Blackstone (NYSE:BX), Carlyle (NYSE:CG) and KKR (NYSE:KKR) are said to be mulling offers for approximately one half of Australia’s Pact, which is believed to be seeking an investor that could further it’s growth generation outside of Oz. Estimates have it that such a purchase could shape the packaging firm’s value at as much as $1.4 billion.

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Not unexpectedly, Microsoft (NASDAQ:MSFT) gains the voluntary acquisition of the business-software firm Yammer. Sources report that the transaction price will be $1.2 billion, but it’s so far unclear as to the official announcement and the closing date. Observers think that Microsoft might be attempting to complete its Office software array with Yammer, which is often referred to as the “Facebook for the workplace”.

After a considerable amount of speculation and offers, Intercontinental Exchange (NYSE:ICE) is beaten by Hong Kong Exchanges & Clearing, for the acquisition of London Metal Exchange, at a price of £1.39 billion.

Aircraft parts manufacturer United Technologies (NYSE:UTX) gains a conditional okay by Chinese regulators for its $16.5 billion purchase of Goodrich (NYSE:GR). However, the agency says that UTX will be required to sell its electrical power generation and transmission systems units, plus 60 percent of its Aerolec joint venture with Thales Avionics. The European Commission is evaluating the transaction, as well.

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