Seeking Alpha
  • Today - Wednesday, April 16, 2014

  • 2:57 PM
    • "Looking over the landscape, we do not see too many competitors that would be willing to pay a similar premium to book value," says Janney's Ryan Byrnes, commenting on Endurance Specialty Holdings' (ENH -0.3%) hostile offer of 1.16x book value for Aspen Insurance Holdings (AHL +2.9%).
    • "The chance of another acquirer coming into the picture is uncertain," says Sterne Agee. "While we have seen competing offers in past insurance transactions over the last several years, the deal multiples in those instances were close to/below book value.”
    • Barclays isn't so sure, saying other suitors looking to increase their scale could emerge. Possible candidates: Allied World Insurance (AWH +0.7%) and Validus Holdings (VR +0.2%) - both were involved in 2011/2012's bidding war for Transatlantic, in which Alleghany ended up buying the company in a $3.4B deal.
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  • 12:25 PM
    • French waste and water companies Veolia Environnement (VE +3.8%) and Suez Environnement (SZEVF) both deny they are in merger talks or even studying such a project.
    • A report earlier today from Exane BNP Paribas said the "stars are aligned" for the companies to revisit the idea of merging after discussing the possibility two year ago.
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  • 9:59 AM
    • Zalicus (ZLCS) has agreed to sell itself to Boston-based Epirus Biopharmaceuticals, a developer of biosimilar monoclonal antibodies, in an all-stock deal.
    • The combined company will trade on Nasdaq and will be led by Epirus' management team, with Amit Munshi as CEO.
    • The deal comes after Zalicus' Z160 therapy for pain treatment failed in two Phase 2 trials.
    • Epirus has also just closed a $36M Series B financing round. The company's pipeline includes biosimilars to Merck's Remicade (inflammatory diseases), AbbVie's Humira (anti-inflammatory, such as for rheumatoid arthritis) and Roche's Avastin (cancer).
    • Zalicus' stockholders will own approximately 14-19% of the combined company at the closing of the deal and Epirus' shareholders 81-86%, based on the amount of cash that Zalicus will hold. If closing were today, Zalicus shareholders would get 14%.
    • Notwithstanding, Zalicus' shares are +44%. (PR)
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  • 9:51 AM
    • Yamana Gold (AUY -1.5%) and Agnico Eagle Mines (AEM -3.3%) agree to acquire Osisko Mining (OSKFF) for C$3.9B, or C$8.15/share.
    • The total offer consists of C$1B in cash, C$2.33B in AUY and AEM shares, and shares of a new company with an implied value of ~C$575M.
    • The companies say the offer represents an ~11% premium to the implied value of Goldcorp's (GG +2%) hostile bid.
    • The deal replaces a transaction announced April 2 in which AUY agreed to buy 50% of Osisko’s assets.
    | 5 Comments
  • 9:35 AM
    • 3D Systems (DDD) is acquiring Robtec, a Sao Paulo-based firm declared to be the largest additive manufacturing service bureau and 3D printer/scanner distributor in Latin America.
    • 3D will initially buy 70% of Robtec, and the remainder of its shares in 5 years. The deal's price tag is undisclosed; 3D says it will be accretive to EPS within 12 months of closing.
    • Robtec, which operates in Brazil, Mexico, Argentina, Chile, and Uruguay, will support 3D's Quickparts custom manufacturing/prototyping service. 3D has already acquired a string of service bureaus over the last couple of years. Services accounted for 28% of the company's Q4 revenue.
    | 3 Comments
  • 8:23 AM
    • Johnson Controls (JCI) has agreed to acquire Air Distribution Technologies from Canada Pension Plan Investment Board for $1.6B.
    • Johnson Controls says the deal complements its existing heating, ventilation and air conditioning offerings. It also reflects the company's "commitment to invest in the buildings business as a growth platform."
    • Shares are +1.1% premarket. (PR)
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  • 7:35 AM
     
    • Finish engineering company Metso has rejected a takeover offer from Scottish peer Weir, saying the deal "is not in the best interest of shareholders."
    • Weir said there is no certainty it will increase its bid, which values Metso at $5B.
    • The offer hit a major roadblock after Finland's government said it would oppose the deal.
    • The failure of the bid could make Weir a target for big beasts such as General Electric or Honeywell, which could be attracted to the Glaswegian firm's strong position in U.S. shale. (PR)
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  • 7:12 AM
    • Citic Pacific (CTPCF) has agreed to pay at least $36.5B to acquire 100% of the main operating unit of its parent Citic Group in a deal that amounts to a backdoor Hong Kong listing for the latter company.
    • Citic Pacific will pay 49.92B yuan ($8B) in cash and issue 177.01B yuan worth of shares to Citic Group, one China's largest state-owned conglomerates. Pacific also intends to sell another 4.66B shares to institutional investors to ensure that it complies with the Hong Kong exchange's requirement to maintain a free float of at least 25%.
    • Pacific will change its name to Citic Ltd.
    • Citic Group's assets include a bank and resources companies, while Pacific's include iron-ore, steel, and real-estate in Hong Kong and China.
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  • Tuesday, April 15, 2014

  • 2:26 PM
    • Zebra Technologies (ZBRA -11.1%) aren't thrilled with the company's plans to spend $3.45B in cash to buy Motorola Solutions' (MSI -1.3%) enterprise hardware/software unit. (FT report)
    • Zebra, which had only $416M in cash/investments at the end of 2013, says it will pay with $200M in cash on hand and $3.25B in new debt. Zebra's current market cap only stands at $3.05B. The deal is expected to close by year's end.
    • Motorola's enterprise unit offers barcode scanners and RFID readers that complement Zebra's inventory/location-tracking and specialized printing products. It also sells Wi-Fi hardware, interactive kiosks, handheld computers, and two-way radios.
    • The unit had 2013 pro forma sales of $2.5B, easily surpassing Zebra's 2013 sales of $1B. But it has been struggling: Sales were down 2% in 2013, and op. income fell 9% to $358M.
    • Along with the deal, Motorola has announced it expects to report Q1 revenue of $1.8B (-9% Y/Y) and EPS of $0.50, below a consensus of $1.88B and $0.51. 2014 revenue is now expected to fall by a single-digit %; the consensus is for a 0.7% increase.
    • Excluding acquisition expenses, Zebra expects to report Q1 revenue of $287M-$289M and EPS of $0.88-$0.91, above a consensus of $281.6M and $0.83.
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  • 1:26 PM
    • ValueAct Capital, which won a Microsoft board seat last year, is among the activist investors thinking of taking a stake in Symantec (SYMC), sources tell Reuters.
    • Meanwhile, P-E firms including Bain, Blackstone, and Carlyle have reportedly "started assessing the possibility of a leveraged buyout of all or parts of Symantec." Reuters adds some P-E firms "have approached Symantec in recent weeks to discuss deal possibilities," but there are currently no serious talks going on.
    • 11 days ago, Reuters and Bloomberg reported Symantec is hiring one or more banks to explore its options and defend itself against activists following the firing of CEO Steve Bennett.
    • Shares are near breakeven on a rough day for the Nasdaq.
    | Comment!
  • 1:13 PM
    • FeedMagnet provides software tools that allow brands to aggregate, share, and personalize social media content (inc. photos and videos) involving them.
    • Bazaarvoice (BV -2.7%) is buying the company for $9M in cash, and says the deal will complement its existing online/social media customer interaction tools.
    • Last week, Bazaarvoice announced it has signed an LOI to sell its PowerReviews unit, which the DOJ has wanted the company to unload for some time.
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  • 11:05 AM
    • Gnip provides businesses with real-time and historical datasets (as well as value-added data "enrichments") for nine social sharing platforms, including Twitter (TWTR +0.5%), Foursquare, Tumblr, and WordPress. The company also offers managed API access for Facebook, Instagram, Google+, and several other platforms.
    • Twitter: "Gnip has played a crucial role in collecting and digesting our public data and delivering the most essential Tweets to partners ...  Together we plan to offer more sophisticated data sets and better data enrichments."
    • Gnip complements a data licensing business that accounted for 9% of Twitter's Q4 revenue, and which has been trying to grow via industry-specific partnerships.
    • The startup could also help Twitter provide higher-quality data to advertisers (already a priority) as it continues fleshing out its ad product lineup. Gnip's clients include ad tech and social media monitoring firms.
    • Deal terms are undisclosed. The acquisition might not go over well with Gnip rivals/fellow Twitter partners such as DataSift. Apple bought Twitter search engine/data provider Topsy last year.
    | 3 Comments
  • 9:28 AM
    • In spite of the recent tech selloff, Elliott Associates is maintaining its $21/share offer for Riverbed (RVBD), which was rejected by the company on Feb. 28.
    • Elliott's offer has been viewed by many observers as an attempt to drive up Riverbed's value, with the goal eventually having the WAN optimization hardware leader sold to a P-E firm. In early March, Riverbed denied reports it had received offers from P-E firms in the $25/share range.
    • Separately, Riverbed has announced a refresh for its Granite branch-office appliances - they provide access to consolidated data center resources, and allow virtualization solutions to be extended to branch offices - and has renamed them SteelFusion. Riverbed promises a 6x performance gain and a 3x capacity increase over its prior-gen appliances.
    • Q1 results are due on April 29.
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  • 9:13 AM
    • Aaron's (AAN) acquires Progressive Finance in an all-cash deal for $700M.
    • The purchase of the merchandise lease-to-own concern will be "double digit" accretive to EPS this year and even more accretive in 2015, according to Aaron's.
    • The company is also out with announcement that its board has determined that the standing offer from Vintage Capital Management at $30.50 per share isn't in its best interest.
    • AAN -5.2% premarket as a drop in Q1 revenue and EPS guidance factors in along with the buyout developments.
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  • 8:36 AM
    • Potash (POT+2.3% premarket on speculation that BHP Billiton (BHP) may make another run at acquiring the fertilizer company after failing in a prior buyout attempt in 2010, according to the Globe & Mail.
    • The report says industry speculation is "intense" because "the numbers work, the personalities are closer to working, [and] even the politics are not insurmountable because the landscape has shifted," but it adds that "there is no sign that any potential deal is underway."
    | 12 Comments
  • 5:26 AM
    • Diageo (DEO) makes a $1.9B bid to purchase an additional 26% in United Spirits.
    • The transaction will increase Diageo's (DEO) stake in the Indian company to 54.78%.
    • Shares of United Spirits are up over 10% in Bombay trading.
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  • Monday, April 14, 2014

  • 6:22 PM
    • A short, dry PR from Maker Studios makes it clear the company has no intention to abandon Disney's (DIS) offer for the company (worth up to $900M) in favor of a last-minute bid from Relativity Studios (reportedly worth up to $1.1B in cash and stock).
    • Though shareholders don't officially vote on Disney's offer until tomorrow, Maker says the deal has already been approved by "the majority of its shareholders." It's expected to close within the next few weeks.
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  • 2:28 PM
    • Titan Aerospace, once rumored to be in Facebook's crosshairs, has been acquired by Google (GOOG +0.8%).
    • The Information previously reported of Google's interest in Titan. The Web giant plans to have Titan's drones (the Solara 50 and Solara 60) complement Project Loon, which aims to provide 3G-or-faster Web access via hot-air balloons to areas lacking connectivity. Google might also have Titan support its Makani unit, which is working on airborne wind turbines.
    • Facebook, for its part, is looking to connect offline regions with the help of its Connectivity Lab and recently-acquired U.K. drone startup Ascenta.
    • Titan's 20-employee team will remain at its New Mexico HQ. In addition to providing voice/data services, Titan asserts its drones will be able to collect high-res imagery and sport atmospheric sensors (possibly of value for Google Maps). It expects individual drones to support up to 1Gbps of bandwidth.
    • UAV maker AeroVironment (AVAV +0.7%) has turned positive on the news.
    | 6 Comments
  • 11:12 AM
    • A check of some mutual fund managers after TIAA-CREF agrees to buy Nuveen for $6.5B find Janus (JNS +2.9%), Invesco (IVZ +1.2%), Affiliated Managers (AMG +1.4%), and Federated Investors all posting gains. Acquisitions in this industry don't happen too often as key assets - star fund managers - can pick up and leave pretty much when they choose.
    • Top tick? Nuveen's P-E owner Madison Dearborn purchased the company for $6.3B in June 2007. TIAA-CREF chief Roger Ferguson's purchase today takes Madison out at near breakeven.
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  • 10:31 AM
    • Earlier, Endurance Specialty Holdings (ENH -3.2%) went public with a hostile $47.50 (cash and stock) per share bid for Aspen Insurance Holdings (AHL +15.3%) after weeks of fruitlessly courting Aspen management.
    • Aspen Chairman Glyn Jones: "Endurance's ill-conceived proposal undervalues our company, represents a strategic mismatch, carries significant execution risk, and would result in substantial dis-synergies. Furthermore, most of the consideration to Aspen shareholders would be in a stock that would reflect these problems."
    • Both stocks are currently under trading halt.
    • Press release
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