Friday, November 21, 2014
- American Tower (NYSE:AMT) is buying 6,480 towers from TIM Participacoes (NYSE:TSU) for R$3B ($1.2B), slightly more than the ~$1.1B previously reported by Reuters. AMT "intends to finance the acquisition in a manner consistent with its previously announced leverage targets."
- The towers are expected to produce R$435M/year ($171M/year) in revenue, and R$191M/year ($75M/year) in gross margin. TIM has agreed to 20-year leases for the towers, and will act as their anchor tenant.
- AMT has already bought Brazilian towers from NII Holdings, and acquired local tower owner BR Towers. The company also bought 666 Brazilian towers in 2011, a transaction Muddy Waters took aim at.
- Altogether, AMT owned/operated 69.5K towers at the end of Q3.
- Qualcomm (NASDAQ:QCOM) has sold its Taiwanese Mirasol display plant to TSMC (NYSE:TSM) for $85M, per a TSMC regulatory filing.
- Taiwanese media previously reported Qualcomm was set to sell the plant, which it once planned to invest up to $975M in, and that TSMC wanted to use it to expands its chip assembly/testing ops.
- Meanwhile, the sell-side has been busy debating Qualcomm's analyst day guidance and commentary, with much of the attention on focused on the company's China remarks. Cowen's Tim Arcuri is somewhat encouraged. "The company provided no new substantive regulatory (NDRC/FTC/EU) updates, but seemed to strike a more definitive tone about ultimately collecting royalties on 'substantially all LTE devices.'"
- That, in turn, makes Arcuri think the most likely outcome for the China dispute is "some combination of a fine, potential changes in the royalty rate structure for all of [Qualcomm's] licensees operating in China, and/or increased investment in the local China semiconductor supply chain."
- Bernstein's Stacy Rasgon is less positive. "We do not believe the near-term regulatory issues (particularly China) are truly the primary issue anymore ... The bigger issue being how the rise of China, at scale, is changing the overarching market dynamics that Qualcomm plays."
- More than 75% of the votes were cast in favor of the deal in which SWS Group (SWS +0.6%) shareholders will receive $1.94 in cash and 0.2496 shares of Hilltop Holdings (HTH +2%) for each share of SWS they own. Judging by the share price reaction, Hilltop investors think they're getting a bargain.
- Source: Press Release
- Halliburton's (HAL +2.4%) takeover of Baker Hughes (BHI +1.3%) will create an oilfield services powerhouse in North Dakota with more than half of the cementing market and a leading position in fracking, Reuters reports.
- In the Williston Basin, the combined company will control 53% of the market to line a new well with cement to prevent leaks, as well as 36% of the market for fracking and 35% of the market for directional drilling, according to the data.
- The North Dakota market share projections for the combined company will be of interest to competitors and regulators, as the deal is expected to face stiff antitrust hurdles and receive close scrutiny from regulators in the U.S. and Europe.
12:08 PM| Comment!
- "The 50-50 situation isn't a long-term scheme," says Orange (NYSE:ORAN) CEO Stephane Richard about his company's Everything Everywhere U.K. mobile JV with Deutsche Telekom (OTCQX:DTEGY). He adds "all options are open," but cautions investors not to "expect anything spectacular in the short-term."
- Bloomberg reported in October Orange and Deutsche were open to an EE sale, while adding an IPO was still "the most likely outcome" for the JV.
- With price competition remaining fierce and rivals narrowing EE's 4G coverage lead, the carrier saw its subscriber base (still the U.K.'s largest) fall by 2% Y/Y in Q3 to 24.5M. Both EE and rivals are now investing in offering triple-play packages.
- Orange has rallied on a good day for European equities. France's CAC 40 index is up 2.7%.
- CB Pharma Acquisition Corp. (CNLMU) files for an IPO of 4M units priced at $10 per unit. Each unit consists of one share of common stock, one right to purchase 1/10 of a share of common stock on the consummation of an initial business combination and one warrant to purchase 1/2 of one share of common stock at a full-share price of $11.50.
- The firm is a blank check company formed by Coronado Biosciences (CNDO +0.5%). It will seek business combinations via mergers, share exchanges, asset acquisitions, share purchases, recapitalizations or reorganizations.
- It has 18 months from the consummation of this offering to complete its initial business combination (up to 21 months in certain circumstances) or it will liquidate the trust account, distribute the proceeds to shareholders and dissolve.
- Per NASDAQ listing rules, the target business for the initial combination must have a fair market value equal to at least 80% of the value of the trust account.
- ETFs: IBB, BIB, IRY, BIS, IXJ, DRGS (NYSEARCA:IPO)
7:48 AM| 1 Comment
- Sysco (NYSE:SYY) is in talks to sell some assets to a food company owned by Blackstone (NYSE:BX) in order to win regulatory approval for its acquisition of US Foods, reports the New York Post.
- Sysco said in December 2013 that it would buy US Foods for about $3.5B, merging the two biggest U.S. food distributors.
- Previously: FTC questions Sysco, US Foods merger
- Telecom Italia (NYSE:TI) will likely sell the mobile phone towers of its Brazilian unit TIM Participacoes (NYSE:TSU) to American Tower (NYSE:AMT) for almost €900M ($1.1B), says Reuters quoting two sources.
- Yesterday, Telecom Italia was reported to be weighing a deal between TIM and Brazil's Oi (NYSE:OIBR), saying it would ask its board for support today to "explore a potential transaction".
- Previously: Oi, PT rally; Telecom Italia reportedly weighing deal
Thursday, November 20, 2014
- Nevsun Resouces (NYSEMKT:NSU) has emerged as a potential takeover target, and Financial Post's Peter Koven sees many positive factors to explain the interest and one big negative: Eritrea.
- NSU’s Bisha mine is extremely rich, with high-grade copper output that will transition into high-grade zinc output in coming years when many analysts expect shortages in the zinc market.
- But the downside is that Bisha is in Eritrea, which is ruled by one of the world’s most repressive governments and has caused major problems for the company.
- If a contested takeover battle is going to happen, analysts say offers would have to come from companies - perhaps Glencore (OTCPK:GLCNF, OTCPK:GLNCY) or Lundin Mining (OTCPK:LUNMF, LUNCF]]) - that are very comfortable in high-risk jurisdictions.
- Bloomberg reports Telecom Italia (TI -1.4%) will ask for board support tomorrow to "explore a potential transaction" between TIM Participacoes (TSU -0.8%) and Brazilian rival Oi (OIBR +5.7%). Both Oi and merger partner Portugal Telecom (PT +2.8%), whose main asset is a stake in the merged company, have rallied.
- TI was rumored to be interested in Oi in September, but quickly responded by saying it's not in talks with the carrier.
- Meanwhile, multiple bids have been made for control of Portugal Telecom, and a report has also surfaced that all three of TIM's rivals (including Oi) want to buy the company and break it up in order to consolidate Brazil's slow-growing mobile market.
- Kinder Morgan (KMI -0.9%) confirms that shareholders and unitholders at KMI, Kinder Morgan Partners (NYSE:KMP), Kinder Morgan Management (NYSE:KMR) and El Paso Pipeline (NYSE:EPB) approved all proposals related to bringing all four pipeline companies under one roof.
- KMI also projects a 16% dividend increase to $2/share for 2015, and expects to grow the dividend by ~10%/year during 2015-20 while producing excess coverage of more than $2B.
- Optical networking hardware vendors and their component suppliers are turning in a good day. The gains come a day after component vendor Oplink announced it's being acquired by Koch Industries for $445M, and will be managed by connector maker Molex (a Koch subsidiary).
- RBC thinks Koch's entrance into the slumping component industry could trigger further consolidation. "Current fab utilization rates remain low ... with optical component vendors unable to charge a premium for their innovation. Gross margins are currently weighed by competitive pressures with optical component makers willing to cut pricing to account for high fixed costs."
- The firm believes Finisar (FNSR +1%) could be a buyer, and JDS Uniphase (JDSU +1.5%) and Oclaro (OCLR +7.1%) sellers. JDS, set to spin off its component unit, is facing activist pressure to put the business on sale.
- Meanwhile, Ciena (CIEN +2.8%) announced this morning it's partnering with Avaya to offer an enterprise solution that pairs its optical networking and integrated optical/Ethernet gear with Avaya's Ethernet switches. Like peers, Ciena is trying to lower its dependence on pressured carrier capex budgets.
- Other gainers: AFOP +3.7%. NPTN +3.3%. ADTN +2.7%. INFN +1.9%.
- Nevsun Resources (NSU +8%) says it has held preliminary talks with “various parties" about a potential transaction, but that is unaware of any bid for the company.
- NSU rose as much as 25% earlier this morning, leading to a trading halt, after Bloomberg reported that mining fund QKR Corp. was talking to the company about a potential takeover.
- CGG (CGG -5.3%) earlier confirmed it was approached by Technip (OTCPK:TNHPF, OTCQX:TKPPY) with an unsolicited offer - which it rejected - but in the view of Goldman Sachs analyst Henry Tarr, there is not a strong strategic rationale for a deal, and possible synergies are limited.
- Diversification can, as in the Halliburton-Baker Hughes tie-up, have merit, but this deal looks more expansionist than defensive, WSJ's Helen Thomas reports, as CGG’s seismic imaging and exploration services are largely separate from the actual construction of projects.
- Technip seems to be making a long-dated bet on a recovery in activity, Sanford C. Bernstein analysts say, but with the volatile seismic cycle approaching another trough, a deal could put pressure on earnings as fleets lie idle.
- As of November 19, just 23.2M shares of GFI Group (GFIG +1.2%) were tendered, which along with 17.1M shares already owned by BGC Partners (BGCP -0.9%) makes up just shy of 32% of the company.
- BGC extends its tender offer for $5.25 per share in cash until the end of business on December 9.
- The GFI board continues to favor CME Group's $4.55 cash and stock offer.
- Source: Press release
- Nevsun Resources (NSU +13.3%) spikes higher after a Bloomberg report says Qatar-backed QKR Corp. is close to making a ~$1B bid for the Canadian miner, which owns 60% of the Bisha gold, copper and zinc mine in Eritrea in east Africa.
- NSU would be the second acquisition by QKR, funded by Qatar’s sovereign wealth fund and Poland’s richest man Jan Kulczyk, after its July purchase of AngloGold Ashanti's Navachab mine in Namibia.
- Technip (OTCPK:TNHPF, OTCQX:TKPPY) says it has made a preliminary takeover offer of €1.46B ($1.83B) for smaller French oil services company CGG, which says it rejected the offer.
- Technip, which says it first approached CGG on Nov. 10, has offered €8.3/share in cash, a 27% premium over CGG’s closing share price yesterday.
- CGG -6.6% premarket after surging more than 22% late yesterday after word of the deal was reported.
- The Wall Street Journal reports that Fresenius (NYSE:FMS) and the Permira investment fund have made an offer for Danone's (OTCQX:DANOY) (OTCPK:GPDNF) medical nutrition business. The size of the bid is unknown, but according to analysts the business is worth between €3.5B - 4.5B ($4.38B - 5.64B).
- The private equity fund CVC is reportedly mulling an offer as well.
- The deadline for bids is next week.