M&A Weekly Recap: RIM Dissed, Best Buy’s Surprise

Citigroup Inc. (NYSE:C) will divest its Diners Club card-issuing operations in the United Kingdom and Ireland to Affiniture Cards, a private equity investor group. The sale is part of the seller’s strategy of ridding non-core assets held in Citi Holdings. Financials of the transaction were not divulged.

ING Groep N.V. (NYSE:ING) is now thought likely to sell its Asian life insurance units in parts, since no offer was received for the entire unit, a deal that would have been likely to gain an okay from regulatory, according to the Wall Street Journal. Separate divestitures would likely raise $7 billion, but they are more complex. Bidders still in competition for various ING businesses include The Blackstone Group L.P. (NYSE:BX), KB Financial Group Inc. (NYSE:KB), and Manulife Financial Corporation (NYSE:MFC).

The Carlyle Group (NYSE:CG) is said to be nearing its $5 billion acquisition of E.I. du Pont de Nemours and Company’s (NYSE:DD) auto paint division, reports the New York Post. The transaction, which is said to be at approximately 8 times earnings before interest and taxes, would make offers by Apollo Global Management, LLC (NASDAQ:APO), and The Blackstone Group. L.P. (NYSE:BX) moot.

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Shares of Best Buy Co. (NYSE:BBY) spike Monday but don’t drop back very far, as the firm confirms receiving a bid from founder Richard Schulze to buy out its shareholders at $24 to $26 per share. Schulze will have to raise between $1 billion and $2 billion from private equity firms and obtain from $7 billion to $8 billion in debt secure the deal, says BB&T Capital Markets.

Xstrata Plc (XSRAF.PK) assures interested parties that its $62 billion merger with Glencore is on track and should close in the fourth quarter, even though the statement comes amid pressure from Xstrata shareholders to improve the deal’s details. At the same time, Xstrata’s first half net profit plunges by 33 percent to $1.94 billion while revenue slides 7 percent to $15.55 billion. Also, the firm postpones $1 billion of capital expenditures.

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Home Depot, Inc. (NYSE:HD) will purchase U.S. Home Systems, Inc. (NASDAQ:USHS) at $12.50 per share, which represents a 38 percent bonus over Monday’s closing price. Amounting to approximately $93 million, the acquisition should help reinforce Home Depot’s custom quality specialty home improvement product line.

Shares of KIT Digital, Inc. (NASDAQ:KITD) pop on the news that activist investors Seth Hamot and Peter Heiland have joined its board as director Joseph Mullin exits and that their funds, Costa Brava and JEC Capital, now respectively own 7 and 8 percent investments in the IP video software provider. After these changes, KIT announces that its board will “address several expressions of interest” concerning a divestiture of part or all of the company.

Both U.S. political parties now have members who oppose China’s Cnooc Limited (NYSE:CEO) proposed purchase of Nexen Inc. (NYSE:NXY), as Senator James Inhofe (R-OK), who was a leading critic of Cnooc’s 2005 attempt to acquire Unocal, now says that the current agreement should be heavily scrutinized by the Committee On Foreign Investments in the United States which is an inter-agency board that evaluates deals for national security implications.

Comments from the earnings call of Leap Wireless International, Inc.(NASDAQ:LEAP) are fueling speculation by SA’s Helix Investment that the company might be getting ready to put itself on sale, perhaps hoping that some large carrier might offer a tidy sum for its lucrative spectrum. In the meantime, Leap shares crater as Baird downgrades the firm in response to its weak second quarter results that posted ugly subscriber figures. To make matters even worse, Canaccord calls the carrier “dead money at best” for the second half. However, peer MetroPCS Communications, Inc. (NYSE:PCS) is only slightly nicked by the bullets, which implies that investors see Leap’s problems as for the most part company-specific, rather than industry-wide.

BB&T Corporation’s (NYSE:BBT) chief of South Florida operations comments that “We still have an eye on acquisition possibilities”, only a few days after the bank closed its buyout of BankAtlantic. The just-finished purchase gave BB&T an additional 78 branches and $3 billion in core deposits.

Bristol-Myers Squibb Company (NYSE:BMY) should now finalize its $7 billion purchase of Amylin Pharmaceuticals, Inc. (NASDAQ:AMLN) following its gaining tenders for 85.55 percent of the latter’s shares. Through the terms, AztraZenica Group plc (NYSE:AZN) will now pay $3.4 billion to the buyer, as part of a collaboration arrangement for developing and commercializing Amylin’s products.

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Shares of Research In Motion Limited (NASDAQ:RIMM) spike, but there is no news story that might have caused the movements. However, merger and acquisition chatter has been all over the firm recently as Tuesday morning Jefferies contended that Samsung might be interested and a columnist from The Street said much the same for Facebook.

A123 Systems, Inc. (NASDAQ:AONE) shares have been up and down Wednesday as investors digest the details of its financing agreement with China’s Wanxiang Group which includes a bridge loan, convertible notes, and warrants. Tom Konrad at Forbes calculates that Wanxiang should be able to purchase an 80 percent investment in A123 at 55 cents per share, which is a bit over its late afternoon level of 40 cents.

JP Morgan Chase & Co. (NYSE:JPM), as a member of a consortium, is said to have helped to make a £520 billion bid for Biffa, a United Kingdom waste management group that has a debt of £1.1 billion. The consortium includes recycling specialist Chinook Urban Mining and the private equity firm Clearbrook Capital; it believes that it can return Biffa to profitability through a plan that should convert waste into energy.

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ING Groep N.V. (NYSE:ING) reaffirms that it can divest its Asian insurance operations in separate pieces as opposed to the entirety sold to a single buyer. The firm says that the sale of the division, which has a book value of €6.6 billion, or $8.18 billion, is “on track,” although further details were not divulged.

Rio Tinto plc (NYSE:RIO) wants to divest aluminum and diamond assets, and the company’s Chief Financial Officer Guy Elliot reports that they are attracting interest. Specifically, Rio will consider a sale, a spin-off and “public market” options for Pacific Aluminum, which contains the operations that the firm wants to sell.

Shares of Avion Gold Corp. (AVGCF.PK) pop on the news that it will be acquired by Endeavour Mining Corporation (EDVMF.PK) for an amount of $389 million, or 88 cents per share, which represents a 57 percent bonus to Tuesday’s closing price in Toronto. The buyer reports that the deal will increase its 2012 gold output by around 50 percent; much of the production is in West Africa at which location the company now expects to produce between 282,000 and 304,000 ounces in this year.

Nokia Corporation (NYSE:NOK) will divest its Qt software operations, which it obtained along with the purchase of the Norwegian firm Trolltech in 2008, to the Finnish information tech services firm Digia. Analysts suspect that the price tag was well under the $150 million that Nokia paid for Trolltech in the first place. Financials of the current transaction were not released.

AstraZeneca Group plc (NYSE:AZN) will pay Bristol-Myers Squibb Company (NYSE:BMY) $135 million to obtain an equal role in decision-making at Amylin Pharmaceuticals, which Bristol Myers just acquired for $7 billion. The former is already paying $3.4 billion to Bristol-Myers for a 50 percent share in Amylin’s products, which are being adding to an ongoing diabetes partnership.

The Carlyle Group (NYSE:CG) is acquiring the asset management company TCW, according to the Wall Street Journal. The price of the transaction is being estimated at around $700 million.

Once again, Samsung (SSNLF.PK) says that it does not want to acquire Research In Motion Limited (NASDAQ:RIMM), in reaction to comments in a Jefferies report which implied that the former is thinking of either licensing BB10 or purchasing RIM. In any case, Samsung already offers Bada and Windows Phone devices along with its Android lineup.

Shares of Robbins & Myers, Inc. (NYSE:RBN) are popping due to its impending acquisition by National Oilwell Varco Inc. (NYSE:NOV) for $2.5 billion. This deal marks the sixth purchase NOV has made in 2012 alone, which pushes its total mergers and acquisitions spending past $4 billion. However, analysts mostly praise this latest deal, saying that the price is reasonable and also that the two firms have a good fit. Moreover, they believe that the acquisition will push NOV’s earnings in 2013.

Yahoo! (NASDAQ:YHOO) shares fall way off, following its 10-Q surprise, which suggests that Chief Executive Marissa Mayer would rather spend Alibaba proceeds to purchase companies instead of Yahoo shares. Nicholas Carlson believe that such a decision was a necessity, as the company has troubles from rivals, and also a talent deficit. The analyst thinks that the highly valued Yelp (NYSE:YELP), which Meyer wanted Google (NASDAQ:GOOG) to acquire during her tenure there, and also Pinterest, Quora, and Vimeo could be on Yahoo’s shopping list. Meanwhile, Bank of America downgraded the latter to Hold.

Shares of the chip IP company MIPS Tevchnologies, Inc. (NASDAQ:MIPS) move up, subsequent to the cancellation of its plans to present at an upcoming conference, which ignited a new round of buyout chatter. AMD could be a potential suitor, but that isn’t so likely now, due to Advanced Micro Devices, Inc. (NYSE:AMD)’s selloff. In the meantime, MIPS is said to have recruited Goldman to help it facilitate a sale.

China’s Cnooc Limited (NYSE:CEO) reports that it wants a national security review by the United States for its proposed $15 billion acquisition of Canadian oil producer Nexen Inc. (NYSE:NXY). The company plans to describe itself as a publicly traded company with a record of compliance with United States law. The purchase has evoked criticism from U.S. lawmakers of both parties, including demands that it be investigated as a potential risk to national security.

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Janus Capital Group Inc. (NYSE:JNS) announces strategic partnership with Japan’s Dai-ichi Life Insurance which should permit it to buy as much as a 20 percent investment and a $2 billion investment of its general account assets with the company. Once it receives a minimum of 15 percent of JNS shares, Dai-ichi says that it expects to obtain a seat on the firm’s board.

Xstrata PLC (XSRAY.PK, XSRAF.PK) says that its stand-alone prospects for growth are firm, even if its proposed merger with Glencore fails. The company posted a notable decline in earnings recently, but its Chief Executive Mick Davis foresees the combined company as a “more powerful business model” even though “the inherent capacity of Xstrata to generate value as a stand-alone company remains very, very powerful.”

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