Seeking Alpha
  • Friday, April 17, 2015

  • 7:06 PM
    • As reports spread that Justice Dept. attorneys were likely to recommend blocking Comcast's (CMCSA -2.1%) $45B buyout of Time Warner Cable (TWC -5.4%), the cable companies both argued there was no basis to block the deal.
    • It'll mean "faster broadband speeds, access to a superior video experience, and more competition in business services resulting in billions of dollars of cost savings," according to a Comcast statement. "These benefits have been essentially unchallenged in the record."
    • Meanwhile, over at the FCC, 37 groups opposed to the deal wrote Tom Wheeler, the agency's chairman, saying that even conditional application of net neutrality regulation wouldn't soften their opposition. Signatories included Dish, Consumers Union, the Writers Guild of America, West, and Free Press; "they don't make any new arguments," Comcast responds.
    • Some volume came into competitive stocks and gave them a (relative) lift after the news: Charter Communications (NASDAQ:CHTR) came off lows to finish down 1.9%; Cablevision Systems (NYSE:CVC) rebounded to finish just -0.3%.
    • In February, BTIG analyst Rich Greenfield laid out why he thought the deal would ultimately get rejected.
    • Then shortly after the Justice Dept. news broke, Comcast noted it was bringing its top-speed 2-Gbps Gigabit Pro service to the California Bay Area. The company previously said it would launch the service in Atlanta (where Google Fiber and AT&T plan 1-Gbps service); it's setting June for the California launch, but still no word on possible pricing.
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  • 5:59 PM
    • With Google's Android Wear platform handicapped in China by the blocking of many Google services, Baidu (NASDAQ:BIDU) has launched DuWear, an Android-based smartwatch OS that comes with versions of Baidu's voice search and mapping apps.
    • Much like Android Wear and Apple Watch, mobile payments support, motion tracking, and heart rate monitoring are also included. Baidu promises a "major manufacturer" will launch a DuWear watch in June. In the meantime, it's releasing a ROM that lets users (if they're interested) install the OS on Android Wear devices such as the Moto 360, LG's G Watch, and Sony's SmartWatch 3.
    • Baidu also claims DuWear supports some 3rd-party Android Wear apps that don't use Google's mobile services framework. The OS launch comes a month after Baidu ended support for its Cloud OS Android smartphone ROM (had seen limited uptake).
    • Separately, Baidu has acquired Anquanbao, a provider of cloud-based software that protects sites against malware and DDoS attacks. The startup's clients include Tencent and major Chinese domain name service providers.
    • Baidu plans to use Anquanbao's software to improve load times for its sites and protect them from security threats. Anquanbao founder/CEO Ma Jie will head Baidu's cloud security ops.
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  • 2:30 PM
    • The WSJ and Bloomberg report Teva (TEVA +3.4%) is weighing a bid to acquire fellow generic drug giant Mylan (MYL +5.5%), while adding no decision has been made yet. Shaes of both companies have spiked higher.
    • Bloomberg's sources state Teva "hasn't made a formal approach yet," though Mylan is aware of Teva's interest. Many analysts have long expected Teva to go after Mylan, given many perceived top and bottom-line synergies. Teva is currently worth $66.2B, and Mylan $34.3B.
    • Perrigo (PRGO -2.8%), which Mylan announced a $28.9B ($205/share) bid for last week, has moved lower on the news.
    | 5 Comments
  • 2:09 PM
    • The Justice Department's staff attorneys looking into Comcast's (NASDAQ:CMCSA) $45B bid to purchase Time Warner Cable (NYSE:TWC) are close to urging the deal be blocked, Bloomberg reports -- and they're also not working with Comcast to secure changes that would satisfy them.
    • Already lower with the market today, TWC took a cliff dive, now -7%. Comcast shares are still down 2.8%.
    • The lawyers could submit their review as soon as next week to deputy assistant AG Renata Hesse. Officials will then decide on whether to sue to stop the deal.
    • Hesse is running the review since antitrust chief Bill Baer recused himself, as a previous representative of NBCUniversal in its takeover by Comcast.
    | 4 Comments
  • 10:00 AM
    • India's Business Standard reports French IT firms Capgemini and Atos are in early-stage talks to acquire IGATE (NASDAQ:IGTE).
    • Capgemini/Atos are said to be negotiating with P-E firm Apax Partners (owns a 29% IGATE stake), which is said to be looking for an exit after converting a $480M loan to IGATE into equity.
    • No word on a potential buyout price; IGATE's market cap currently stands at $3.6B. Shares are within $2 of a 52-week high of $45.72.
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  • 9:46 AM
    • 58.com (WUBA +5.2%) is buying a 43.2% stake in Chinese online classifieds rival Ganji.com for 34M shares (current value of $2.4B) and $412.2M in cash.
    • The companies will "continue to operate their respective brands, websites and teams," while exploring ways to partner and "maximize business synergies." Following the deal, Ganji stands to own a 25% stake in 58.com.
    • Messaging/gaming giant Tencent (OTCPK:TCEHY), which bought a 19.9% stake in 58.com last June, is investing another $400M in the company at a price of $52/share (27% below current levels). Tencent will own a 25.1% stake once the investment closes.
    • The FT reported on Tuesday 58.com and Ganji.com were planning a full-blown merger, while adding (without providing details) the transaction would occur in two stages to appease regulators.
    • After opening lower, 58.com has quickly shot higher. Shares are up 39% since the FT's report arrived.
    • Yesterday: Morgan Stanley sees major 58/Ganji synergies
    • Update (12:10PM): 58.com is now down 1.6% amid a broader market selloff.
    • Update 2 (3:00PM): Shares have reversed course again. They're now up 3.9%.
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  • 9:17 AM
    • UniPixel (NASDAQ:UNXL) is acquiring all manufacturing assets related to Atmel's (NASDAQ:ATML) XSense touch sensor ops, a rival to UniPixel's InTouch sensor line, and assuming related costs.
    • UniPixel is also taking out a 5-year license (with a 10-year renewal option) on Atmel's XSense patent portfolio and other IP. Atmel will "receive minimum royalties during the initial five year term equal to $16.25 million, of which $9.33 million is being prepaid in cash at close."
    • The deal comes two months after Atmel took a $26.6M charge on XSense manufacturing assets, and ahead of Atmel's May 6 Q1 report. It also follows numerous delays by UniPixel in ramping InTouch production.
    • UniPixel has soared to $8.55 premarket. Atmel is unchanged.
    • Update: UniPixel wound up closing down 6.9% following the news.
    | 6 Comments
  • 9:06 AM
    • Coca-Cola (KO +0.5%) agrees to buy China Culiangwang Beverages Holdings for a deal price of $400.5M.
    • The acquisition is the first time the company has nabbed a Chinese consumer products firm since 2010.
    • China Culiangwang sells multi-grain drinks in the fast-growing plant-based protein drink category.
    • Chinese regulators will review the transaction.
    • KO -0.26% premarket.
    | 3 Comments
  • 8:11 AM
    • Mallinckrodt (NYSE:MNK) completes its $2.3B acquisition of Ikaria. The all-cash deal will add at least $150M to MNK's top line and $0.25 to non-GAAP EPS.
    • The company will provide updated 2015 guidance on May 5.
    | 3 Comments
  • 8:10 AM
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  • 4:12 AM
    • Lafarge (OTCPK:LFRGY) and Holcim (OTCPK:HCMLY) have given details regarding their asset disposals in the U.S., as part of their planned $44B merger due to close in July.
    • Lafarge will sell its Davenport cement plant in Iowa and seven terminals along the Mississippi River to Summit Materials (NYSE:SUM) for $450M in cash plus Summit's Bettendorf, Iowa cement terminal.
    • Holcim will dispose of three terminals in Michigan and Illinois, as well as slag grinding stations in Illinois and New Jersey.
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  • Thursday, April 16, 2015

  • 7:19 PM
    • BMO, Citi, Crag-Hallum, Bernstein, Goldman, Credit Suisse, and Natixis have downgraded Alcatel-Lucent (NYSE:ALU) following news of its all-stock merger with Nokia (NYSE:NOK). Nokia has been upgraded by Bernstein, Natixis, and Morgan Stanley, and downgraded by Citi. RBC, and Finland's Pohjola Bank.
    • Citi: "We continue to believe Nokia would have been better off acquiring just the Wireless assets but were forced to acquire the entire company possibly leading to what we believe was a low purchase price...We believe the all stock structure (and no collar) creates new risk for Alcatel holders..."
    • The firm thinks a part-cash deal would've been better, given low interest rates. It also argues a target of €900M/year in cost savings by 2019 could be tough to hit, given limited R&D overlap.
    • RBC: "We're strong proponents of industry consolidation in markets with high R&D investments and intense price competition" But like Citi, the firm thinks Nokia should've only bought Alcatel's wireless assets. It also believes "product portfolio rationalization may take 3-5 years," and that R&D commitments to carriers could affect near-term cost savings.
    • Deutsche, in a note just before the announcement: "We believe a Nokia/ALU deal would create share gain potential for Ericsson (NASDAQ:ERIC), firstly in China, where telcos would likely want to restore share balance between overseas vendors, and in North America at Sprint, where Ericsson would likely be able to re-enter ... In addition, we note that ALU’s overlay technology is not compatible with Nokia’s single RAN which in our view will make it time consuming to combine R&D roadmaps and extract financial synergies."
    • Morgan Stanley is more optimistic: "With Alcatel, Nokia now has exposure to the #2 edge routing player, taking share in both edge and core, a strong footing in the consolidating optical market, and a duopoly position in the growing wireline access market ... In the US, Nokia will now supply to all big four wireless operators and now has enough scale to compete with Ericsson and Huawei on 5G. The larger Nokia will have doubled its patent portfolio too – which makes the patent story more credible."
    • Both companies fell slightly today. Nokia is nearly flat since a Friday report about a potential HERE unit sale (later confirmed) sparked M&A speculation. Alcatel, which has been on a roller-coaster ride, is up 2% since the report.
    • Previously: The merger announcement, details/asset sale plans
    | 34 Comments
  • 2:39 PM
    • "We believe potentially a large portion of their ad budget can be saved if a merger takes place ... In addition there could be more cost savings from other expense items," says Morgan Stanley following an FT report stating 58.com (NYSE:WUBA) is close to announcing a merger with online classifieds rival Ganji.com.
    • MS, which has maintained an Underweight rating on 58.com also sees revenue synergies, given 58 and Ganji are respectively stronger in different verticals and regions - in particular, it highlights Ganji's job and automotive listing strength. However, the firm cautions Chinese antitrust regulators could reject the deal. The FT stated (without elaborating) a deal will likely involve two stages in order soothe antitrust concerns.
    • 58.com skyrocketed on Tuesday following the merger report, and gave back a portion of its gains yesterday. Shares are up 33% from Monday's close.
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  • 2:21 PM
    • ARM (ARMH -1.4%) has acquired Wicentric, provider of a software stack and service profiles for the low-power Bluetooth Smart protocol (increasingly used in embedded/wearable devices), and Sunrise Micro (SMD), a developer of radio IP that enables sub-1V Bluetooth operation. Terms are undisclosed.
    • The deals follow the purchase of Dutch embedded security software vendor Offspark and embedded Web connectivity software provider Sensinode.
    • ARM, which is looking to fend off Intel in an embedded/wearables space widely seen as a huge unit growth opportunity, launched its mbed IoT platform last fall, and recently followed up by launching its IFC hardware/software framework for connected ARM-based devices. Q1 results arrive on April 21.
    • See also: New ARM-based Atmel microcontrollers said to enable 10-year battery lives
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  • 10:21 AM
    • "After extensive discussions with interested parties, the interests expressed were unlikely to lead to an acquisition of the entire Company and did not present an attractive alternative to the Company's stand-alone plan," says Carbonite (NASDAQ:CARB). "As a result, the board of directors unanimously determined that it is in the best interest of Carbonite and its shareholders to continue its present strategic course..."
    • Carbonite's decision comes 2 weeks after J2 Global stated it's only interested in buying Carbonite's endpoint protection service ops, and not the entire company.
    • Overshadowed by the strategic review announcement: Carbonite now expects Q1 revenue to top a prior guidance range of $31.9M-$32.1M and EPS to beat prior guidance of -$0.07 to -$0.09; consensus is at $32M and -$0.08.
    • Full-year revenue and EPS are expected to be "within or above" prior guidance ranges of $137M-$138M and $0.08-$0.10. Q1 results are due on April 28.
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  • 10:14 AM
    • Online marketing firm QuinStreet (NASDAQ:QNST) says it's acquired Brazil's Vemm, to build on a leadership position in the country's education market by moving into financial services.
    • Vemm is an online lead-generation company that has grown rapidly since its 2012 founding to serve customers in auto, life and health insurance as well as other personal finance markets.
    • QuinStreet also entered Brazil in 2012 and serves the leading companies in higher education.
    • Terms were undisclosed.
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  • 2:52 AM
    • More investor discontent is being heard over Macerich's (NYSE:MAC) recent rejection of Simon Property Group's (NYSE:SPG) $16.8B takeover proposal.
    • Macerich's fourth largest shareholder, Cohen & Steers (NYSE:CNS), asked the shopping mall company on Wednesday to produce a plan that would deliver as much value as the takeover offer by Simon.
    • "At least give us a plan of how Macerich will exceed Simon's offer over time," Executive Chairman Martin Cohen told Reuters on the sidelines of the NYU REIT Symposium.
    • Previously: What's next for Simon after Macerich rejection (Apr. 01 2015)
    • Previously: Macerich board rejects Simon offer (Apr. 01 2015)
    | 1 Comment
  • 2:12 AM
    • As part of a cost-cutting strategy by Chief Executive A.G. Lafley, Procter & Gamble (NYSE:PG) may soon offload $10B-$12B worth of its beauty brands.
    • Personal care and cosmetics companies Henkel (OTCPK:HENKY), Revlon (NYSE:REV) and Coty (NYSE:COTY) are preparing bids for P&G's haircare business, cosmetics division and fragrance unit, respectively, sources told Reuters.
    • CEO Lafley said last August he would reverse the company's strategy of aggressive expansion and shed more than half of its brands.
    | 3 Comments
  • Wednesday, April 15, 2015

  • 2:30 PM
    • Another potential stumbling block to its long-delayed sale to M&T Bank (MTB +1.1%) - now about three years and counting - Hudson City Bancorp (HCBK -1.1%) is under investigation by the DOJ and CFPB over vioations of the Fair Housing Act, with a preliminary CFPB review finding the bank denied loans to those in minority communities.
    • Source: Bloomberg
    • The sale to M&T has been delayed all this time over concerns about M&T's money-laundering controls, and it's unclear what delays this new probe could bring.
    • So far, the banks have signaled their sticking with the deal, but should it fall through, it could be a long way down for both. HCKB was trundling along at less than $6 per share prior to the agreement, and it's above $9 today.
    • Previously: Hudson City mulling options as sale to M&T delayed again (April 6)
    | 2 Comments
  • 11:41 AM
    • The Canadian unit of Bunge (BG +0.3%) and Saudi Agricultural and Livestock Investment Co. say they have formed a joint venture to acquire a 50.1% stake in the Canadian Wheat Board for C$250M.
    • The Canadian Wheat Board operates seven grain elevators in western Canada and port terminals in Thunder Bay, Ont., and Trois-Rivières, Que., and is building four other grain-handling facilities.
    • BG’s export terminal in Quebec City and four elevators in Quebec also will be part of the transaction.
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