Today - Wednesday, October 7, 2015
- Nokia (NYSE:NOK) executives are set to dominate the new leadership team that will arise following its proposed acquisition of Alcatel-Lucent (NYSE:ALU).
- Chief Financial Officer Timo Ihamuotila will stay in his job and altogether 10 out of a total 13 members in the planned leadership group will come from Nokia.
- The €15.6B all-share acquisition is still on track to close in the first half of 2016.
- Two of China's biggest tech startups are said to have agreed to a merger, creating a $15B company that would be the country’s biggest online-to-offline provider of local services like movie tickets and restaurant bookings.
- The combination of Meituan.com, part-owned by Alibaba (NYSE:BABA), with Tencent (OTCPK:TCEHY)-backed Dianping.com may be announced as soon as Thursday - the latest consolidation of Chinese Internet firms this year.
- Anheuser-Busch InBev (NYSE:BUD) has raised its bid for SABMiller (OTCPK:SBMRY), proposing to buy the group for for £42.15 per share in cash and valuing the group at £68.2B ($104B).
- The move comes after the British firm rejected two earlier proposals at £38/share and £40/share.
- AB InBev expects most investors to accept the higher cash offer, and Altria (NYSE:MO) (SABMiller's largest shareholder with a 27% stake) has already given the bid a green light.
- Previously: NY Post: Anheuser-Busch InBev won't go hostile with SABMiller (Oct. 06 2015)
- Previously: Bloomberg: SABMiller shoots down AB InBev offer (Oct. 06 2015)
- Re/code reports Pandora (NYSE:P) "appears close" to acquiring Ticketfly, an online ticket agency that specializes in events at smaller venues (rather than competing directly with the likes of StubHub and Ticketmaster for events at bigger venues). Sources state Pandora plans to pay ~$450M in cash and stock.
- For reference, Pandora has a current market cap of $4.7B. Buying Ticketfly would represent a major attempt by Pandora to diversify beyond its core Web/mobile radio business, as it deals with Spotify, Apple, Amazon, Google, TuneIn, and a slew of other rivals.
- Opportunities could exist for Pandora to cross-promote Ticketfly music events to its ~80M active listeners. In May, Pandora announced the purchase of music analytics firm Next Big Sound.
Tuesday, October 6, 2015
- "I've been hearing Juniper (NYSE:JNPR) may go private for a while," says an "experienced [Silicon] Valley technology executive" speaking with Light Reading. "It's the same threat as Riverbed ... In Juniper's case, it would be cool…it is needed."
- The "threat" in question is pressure from activist Elliott Management, which had a stake in Riverbed prior to its acquisition by P-E firm Thoma Bravo, and has prodded Juniper to carry out major job cuts and capital returns. To date, Elliott hasn't publicly demanded a sale.
- Meanwhile, a "senior executive in the router sector" states Juniper has been looking for a buyer. In addition, Benzinga recently reported hearing "unconfirmed market chatter" (doesn't always pan out) that Juniper has hired Goldman to "assist it in handling offers to take the company private for $32 per share."
- Earlier this year, the Nokia/Alcatel-Lucent deal fueled speculation Ericsson would counter by bidding for Juniper. Ericsson has said it's open to a major acquisition, but hasn't yet pulled the trigger on such a deal.
- With a $10.9B market cap - a buyout might require a $13B+ price - Juniper would be a big fish for a peer or P-E firm to swallow.
- Yesterday: Juniper rallies after landing Stifel upgrade, announcing AT&T deal
6:37 PM| 6:37 PM | 1 Comment
- Russian billionaire Mikhail Fridman's LetterOne fund is in advanced talks to acquire German utility E.ON's (OTCQX:EONGY) Norwegian North Sea assets for more than $1B, Financial Times reports.
- The potential deal would signal a renewed push by the Russian oligarch to expand his P-E fund's oil and gas portfolio after being forced to sell his British North Sea assets because of U.S. and European sanctions.
- E.ON owns a 28% stake in the BP-operated Skarv field, which is expected to reach peak output of 165K boe/day, as well as 30% and 17.5% stakes in two Statoil-operated (NYSE:STO) fields.
- LetterOne, whose energy fund is run by former BP CEO John Browne, recently asked the U.K. to delay an October deadline to sell its North Sea assets after a first round of offers came in well short of expectations.
- Vasco (NASDAQ:VDSI) is acquiring Silanis, a Montreal-based provider of on-premise and cloud/SaaS electronic signature software for banks, insurers, and government agencies, for $85M in cash.
- Vasco: "Both VASCO and Silanis are focused on addressing the business needs of organizations conducting secure transactions that must meet strict regulatory and compliance requirements. VASCO has identified demand for digital transaction solutions among its customer base and, following the closing of the transaction, can immediately start selling Silanis solutions to its global banking customers."
- Silanis is expected to post 2015 revenue of $16M (+30% Y/Y), and deliver 25% 2016 sales growth. Fast-growing DocuSign (recently valued at $3B) is a major rival, as is Adobe's eSign (formerly EchoSign) service. Vasco expects to pay for the acquisition with cash on hand (offshore?), and aims to close it by the end of January. It's expected to be dilutive in 2016, and accretive in 2017.
- Vasco is unchanged after hours. Shares rose 9.1% in regular trading following a bullish coverage launch from Sidoti.
- Washington D.C. Mayor Bowser announces her support for a settlement of Exelon's (NYSE:EXC) $6.4B takeover of Pepco (NYSE:POM), the city’s electric utility, that will boost EXC's investment in the city to $78M from $14M.
- The mayor initially opposed the merger, which was turned down by D.C.'s Public Service Commission in a unanimous decision Aug. 25, and her endorsement is considered critical in an appeal before the PSC, whose next meeting is scheduled for tomorrow.
- The move would be a final hurdle to a merger that already won approval from regulators in several states and the U.S. government.
- POM jumped 3.1% into the close on word of the pending announcement.
- Johnson Controls (JCI -0.2%) is in talks to acquire battery maker EnerSys (ENS +5.6%), as JCI tries to reshape itself in an effort to boost profitability, WSJ reports.
- Terms are not known, but with a ~$2.7B market cap, a sale of ENS could value the company at well north of $3B given a typical takeover premium.
- CEO Alex Molinaroli has been trying to steer JCI away from low-margin automotive markets to become a more-profitable “multi-industrial” company; its battery business is one of its best-performing units, with a FQ3 operating margin of 15.9% and a 22% increase in operating income from last year to $234M.
- Another major shareholder is speaking out against Media General's (MEG -0.4%) $3.1B plan to buy Meredith (MDP +0.9%), as Oppenheimer has lined up against the deal.
- Oppenheimer holds a 7% stake in Media General. Starboard Value, a 4.5% stakeholder, last week sent a letter saying it was against the tie-up and it was interested in the "highly strategic" hostile $4.1B offer coming in from Nexstar Broadcasting (NXST +0.1%).
- Oppenheimer is critical of the fact that Media General didn't reveal an earlier approach from Nexstar, calling the refusal to consider the earlier offer "inexplicable."
- At first, Media General was mum on Nexstar's hostile bid, but now says it's hired advisers to examine it.
- Previously: Media General hires more advisers to examine Nexstar hostile offer (Oct. 05 2015)
- Previously: Wells Fargo favoring Nexstar hostile offer for Media General (Oct. 01 2015)
- Previously: Major holder Starboard Value weighs in against Media General/Meredith (Sep. 29 2015)
- Marvell (MRVL +3%) and Exar (EXAR +4.2%) are rallying after Skyworks announced a $2B deal to buy PMC-Sierra. Marvell competes against PMC in the storage controller IC and network processor markets; Exar does so in the telecom IC market.
- Marvell has already been the subject of some M&A rumors as the chip industry continues consolidating. Light Reading reported in July Avago is thinking of buying Marvell after digesting (Marvell rival) Broadcom. The company's recent decision to launch major job cuts at its money-losing mobile baseband chip unit could make it more appealing to a would-be suitor.
- Skyworks (NASDAQ:SWKS) has tumbled towards $75 after announcing it's buying storage and telecom IC vendor PMC-Sierra (NASDAQ:PMCS) for $2B in cash on hand. (PR)
- Fellow RF chipmaker Avago (AVGO -6.7%), which (thanks to the LSI acquisition) competes against PMC-Sierra in the storage controller market, is also off, as is merger partner Broadcom (BRCM -3.2%), which competes against PMC to an extent in the telecom IC and network processor markets. RF peer Qorvo (QRVO -3.3%) is also getting hit. The Nasdaq is down 1.2%.
- Possibly hurting the group: Skyworks has used the PMC deal to announce it expects FQ4 (calendar Q3) revenue of $880M and EPS of $1.52. That's slightly above prior guidance of $875M and $1.51 and a consensus of $876M and $1.51, but expectations have been high following a long string of beat-and-raise quarters.
- The PMC acquisition expands Skyworks' reach to a slew of non-RF chip markets and enterprise/telecom infrastructure end-markets. It's expected to yield $75M in cost synergies within 12 months of closing (expected in 1H16), and subsequently boost Skyworks' annual EPS by $0.75. Assuming that target is hit, Skyworks is paying 14x forward EPS.
- Update (1:04PM ET): BofA/Merrill is defending Skyworks and Avago, arguing forward P/Es of less than 10 make shares very cheap.
- Update 2 (5:01PM ET): The group staged a comeback in afternoon trading. Skyworks closed down 1.4%, Avago 3.4%, Qorvo 1.1%, and Broadcom 1.6%. The Nasdaq closed down 0.7%.
- Generex Biotechnology (OTCQB:GNBT) enters into a non-binding Letter of Intent (LOI) with privately-held Alfa Rhythm Ltd. to establish a 51% equity stake in the Israeli firm for $5M plus an 8% royalty on product sales. The discussions are at an early stage as the valuation and other due diligence efforts are not yet completed.
- Alfa has developed a proprietary transcranial electro-biometric stimulator for the treatment of symptoms of attention deficit hyperactivity disorder (ADHD), depression, anxiety and sleep disorders. It is designed to emit frequency-specific low voltage electric pulses for cerebral stimulation for a period of 10 - 30 minutes. Its goal is to modulate brainwaves to enhance attentiveness and concentration.
- Seagate's (NASDAQ:STX) $9.75/share ($696M) acquisition of storage array/software vendor Dot Hill Systems (HILL) is officially on the books. Dot Hill's shares will no longer trade on the Nasdaq.
- The deal was originally announced on Aug. 18. At the time, its price represented an 88% premium to Dot Hill's most recent closing price. Seagate forecast the deal would be accretive to FY16 (ends June '16) EPS.
- A steady build on the open market has brought Vivendi (OTCPK:VIVHY) and its chief Vincent Bollore to just short of a 20% stake in Telecom Italia (TI +0.3%) -- about €3.05B worth ($3.4B).
- People familiar with Bollore's plans say he views TI as a financial investment where he'd ultimately want to influence strategy and create changes.
- The moves have been interesting (and seemingly contradictory) as Vivendi has been divesting telecoms, but Telecom Italia represents part of a southern media strategy when combined with Canal Plus in pay TV.
- TI CEO Marco Patuano says there's no problem in Vivendi's buildup. Last year, though, Italy reduced the threshold for a mandatory takeover offer to a 25% stake (from 30%) for large companies, a protection for minority shareholders.
- Meanwhile, Morgan Stanley has rated Vivendi at Overweight and set a €25 price target. Shares are up 2% in Paris, to €21.38, implying 17% upside in the target.
- Barclays has downgraded Telecom Italia to Underweight.
- Previously: Reuters: Vivendi eyeing around 19% stake in Telecom Italia (Oct. 02 2015)
- Previously: Telecom Italia: 'Always fine' if Vivendi raises stake (Oct. 01 2015)
- Satellite asset tracking firm Orbcomm (NASDAQ:ORBC) is acquiring WAM Technologies, extending its reach into management/control of ocean transport refrigerated containers.
- WAM is a unit of Mark-It Services; its product monitors the temperature and location of refrigerated containers for global shippers and produce companies.
- Orbcomm's cold chain monitoring now includes sea containers along with trailers, rail cars and gensets. The company's potential market reach expands by more than 1M assets worldwide with the deal.
- AmerisourceBergen (NYSE:ABC) acquires PharMEDium Healthcare Holdings, a privately held national provider of outsourced compounded sterile preparations to acute care hospitals, for $2.575B in cash.
- The deal is expected to add $0.22 - 0.26 to ABC's non-GAAP EPS in fiscal 2016 and $30M in synergies by fiscal 2018. The transaction is expected to close by the end of calendar 2015.
- PharMEDium maintains four compounding facilities providing 2,000 products to over 3,000 hospitals in all 50 states.
- Equifax (NYSE:EFX) is now offering A$2.825 per share in cash for Veda Group Limited, boosting its offer by $75M, with an implied market cap of $1.7B. The offer is non-binding, and the Veda board will recommend it, assuming it becomes binding after Equifax does its due diligence.
- Source: Press Release
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