Welcome to the Yahoo! issue of M&A Daily
Yahoo! (NASDAQ:YHOO) reports fourth-quarter earnings after the market closes today. Part of the focus will be on cost cuts, including reducing the workforce by 15%. More importantly, we will get an update on the board's deliberations regarding selling the core internet business or the entire company. The core business could fetch a price of around $7 billion. With activist investors and bidders circling, it will be interesting to hear who is able to ask questions on the call. Meanwhile, major telecommunication companies such as AT&T (NYSE:T) and Verizon (NYSE:VZ) are looking to bid on Yahoo!'s core assets if they are placed on the auction block. CEO Marissa Mayer wants more time before such a sale. Major shareholders do not.
CalAmp (NASDAQ:CAMP) agreed to acquire LoJack (NASDAQ:LOJN) in a cash deal valued at $134 million. LOJN holders get $6.45 in cash per share. This definitive deal is an improvement from the earlier $5.50 offer. The buyers wanted to pay 23x EV/EBITDA but settled on 26x. Not a steal.
The Pfizer (NYSE:PFE) merger with Allergan (NYSE:AGN) is expected to occur during the second half of this year, according to its management. The $42.96 net arbitrage spread offers a 17% annual return if the deal closes by year-end.
ChemChina seeks to take control of Syngenta (NYSE:SYT) for $43 billion.
Proxy advisory firms Institutional Shareholder Services, Glass Lewis and Egan-Jones recommended that Targa (NYSE:TRGP) shareholders support the acquisition of Targa Resources (NYSE:NGLS). The $0.15 net arbitrage spread offers a 22% annual return if the deal closes this month.
A 2% stakeholder in Axiall (NYSE:AXLL) is encouraging the board to enter into discussions with Westlake (NYSE:WLK) and to start a strategic review, including consideration of a sale. The $2.55 net arbitrage spread between the Westlake offer and the Axiall market price offers a 22% annual return if a deal is signed and closed by October.
The Maryland PSC staff testimonies were filed for Southern's (NYSE:SO) acquisition of AGL (NYSE:GAS). Testimony conditionally supported the merger. The $3.12 net arbitrage spread offers a 7% annual return if the deal closes by October. More to come in future editions of M&A Daily…
Sumitomo successfully completed its acquisition of Symetra (NYSE:SYA).
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Disclosure: I am/we are long YHOO, AGN, SYT, BRK.A, BRK.B, DJCO, FRFHF.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Chris DeMuth Jr and Andrew Walker are portfolio managers at Rangeley Capital. Rangeley invests with a margin of safety by buying securities at deep discounts to their intrinsic value and unlocking that value through corporate events. In order to maximize total returns for our investors, we reserve the right to make investment decisions regarding any security without further notification except where such notification is required by law.
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