Friday, October 9, 2015
- Digital Realty Trust (NYSE:DLR) says in a filing that it's completed its acquisition of Telx Holdings for a final price of about $1.886B.
- The cash price was funded by its public offering of 10M shares of preferred stock in August, a private placement of $950M in debt and a forward sale deal of 10.5M shares of stock, completed yesterday for about $674.1M.
- Previously: Digital Realty prices $950M debt offering (Sep. 24 2015)
- Previously: Digital Realty closes preferred stock offering (Aug. 24 2015)
- Previously: Digital Realty scoops up Telx for $1.886B (Jul. 14 2015)
- Ares Capital (ARCC -0.6%) CEO Kipp deVeer - speaking at the company investor day last week - poured a little bit of cold water on ideas of a wave of consolidation in the BDC sector.
- Why wouldn't he be interested in picking up a BDC selling for 0.7x NAV for, say 0.9x? 1) It's a mess, which is what we're watching right now (referring to the TICC deal); 2) Making a few points on $300M of assets isn't material enough for the effort necessary; 3) If management were to go to a board asking to sell the company at 0.9x NAV, the board would rightly go "You're fired," we're bringing in someone to liquidate at NAV because that's what you told us it was worth.
- The TICC board faces plenty of challenges in that TICC isn't facing credit quality issues, so why would it be interested in selling to TPG Specialty (NYSE:TSLX) at 0.87x book? On the other hand, turning the company over to Benefit Street Partners may not be a great deal either (there's still NexPoint).
- The major takeaway: Barring any real industry stress, don't expect a lot of deals to get done. Why would management teams - in the chips just for showing up for work each day - give that up unless they were about to lose it all anyway. As the BDC team at Wells Fargo says, the events surrounding TICC "make us sad for the industry."
- Source: Jordan Wathan at The Motley Fool
- ETFs: BDCL, BDCS, BIZD, FGB
- Previously: TICC Capital sued by NexPoint Advisors (Oct. 9)
- Previously: Wells Fargo excoriates TICC Capital board (Oct. 7)
- The deal was approved last week by the Federal Reserve, and today the New York State Department of Financial Services gives its thumbs up.
- After a multi-year wait, M&T Bank (MTB -0.8%) and Hudson City Bancorp (HCBK -0.8%) expect to close their merger on or about November 1.
- Source: Press Release
- Previously: Next targets mulled as bank M&A heats up (Oct. 2)
- Reuters reports EU regulators have approved Intel's (NASDAQ:INTC) planned $54/share ($16.7B) acquisition of Altera (ALTR +1.3%), following September clearance from the DOJ. Regulatory approval has been widely expected - Intel doesn't compete with Altera's core FPGA products, and Xilinx remains a formidable rival FPGA supplier.
- Altera still trades $1.60 below Intel's buyout price. SA author Chris DeMuth Jr. has been arguing a good merger arb opportunity exists. He estimated yesterday Altera's net arbitrage spread (diminished a bit today) spelled a 15% annual return.
- 3 days ago: Altera shareholders approve Intel deal
- A day after reporting Dell is bidding more than $27/share for EMC (EMC +1.5%), CNBC's David Faber reports Dell's bid is believed to be worth at least $30/share, and is expected early next week.
- Faber adds the deal will feature both cash and a VMware (VMW +0.6%) tracking stock, and that Dell is still lining up financing. He reiterates Dell would maintain control of VMware.
- EMC and VMware are both trading higher; the former is still below $28. VMware fell hard yesterday amid reports Dell could sell/spin off part of EMC's 80% VMware stake to make a deal more digestible.
- Prior EMC/Dell coverage
- Earlier: Dell reportedly confidentially files for IPO of security services unit
- Update: Re/code reports Dell is offering $27.25/share in cash for EMC to go with a VMware tracking stock.
- Less than two hours after Reuters reported the company is in talks with P-E firms about potentially selling itself, SolarWinds (SWI +6.5%) announces it "has commenced a review of its strategic alternatives," including a possible sale or other business combination. JPMorgan and law firm DLA Piper have been hired to help out.
- Shares have pared the initial gains seen following Reuters' report, but remain sharply higher.
- Update (12:02PM ET): SolarWinds is now up 12.7%.
11:33 AM| 11:33 AM | Comment!
- Reuters reports SolarWinds (SWI) is talking with several P-E firms about potentially selling itself.
- The systems/app management software vendor's shares have spiked higher. They're still more than $7 below a 52-week high of $53.44.
- A slew of enterprise tech firms have been acquired by P-E over the last two years. Examples include Riverbed, Tibco, and Informatica.
- BT Group (BT -0.6%) is keeping up the pressure in its response to a strategic review by UK telecom regulator Ofcom, saying that there's no case for divesting its Openreach wholesale access business -- a move it says would hurt the UK's "digital health" -- and pointing regulators instead toward the dominance of pay-TV rival Sky (OTCQX:SKYAY -0.9%).
- The regulator is conducting its first strategic review of the sector in 10 years amid some key and rapid change.
- BT in February agreed to a $19B acquisition of EE, the UK's top mobile firm, raising vocal calls from competitors (especially Vodafone) over network access. Liberty Global (LBTYA +0.3%) and Vodafone (VOD +0.3%) discussed -- and then dropped -- a merger or asset swap in Europe. And the UK's second- and fourth-largest mobile firms are pursuing a $15.7B merger.
- This summer, a determined BT CEO Gavin Patterson threatened the specter of a decade of litigation over Openreach if the company were forced to unload it. Now it says that the existing "functional separation" of its units has served the UK "exceptionally well over the past decade."
- Elsewhere, Citigroup today reiterated its Neutral rating on BT Group.
- Previously: BT Group up as Societe Generale reiterates Buy rating (Sep. 23 2015)
- Previously: BT Group recommits to 10M homes with ultrafast broadband by 2020 (Sep. 22 2015)
- Previously: Vodafone, rivals renew call for BT Openreach split (Sep. 21 2015)
- LastPass provides a single sign-on service that stores password data for sites and cloud apps, and automatically enters it when a login page appears. It also allows online shopping profiles with saved billing data to be set up.
- LogMeIn (LOGM -1.3%) is buying LastPass for $110M in cash up-front, plus up to $15M in milestone/retention payments. The deal is expected to close in "the coming weeks."
- LastPass' service, which is offered via free, premium, and enterprise pricing tiers, will be integrated with LogMeIn's existing identity management offerings, including its Meldium enterprise single sign-on service (supports 2,350 apps).
- LogMeIn: "In the near-term, both the Meldium and LastPass product lines will continue to be supported, with longer-term plans to center around a singular identity management offering based on the LastPass service and brand." Microsoft and VMware are among the other companies to have shown an interest in enterprise identity management services for cloud apps.
- Telecom Italia (NYSE:TI) has hired Deutsche Bank to sell its stake in Infrastrutture Wireless Italiane, or Inwit, its spun-off mobile towers unit, Bloomberg reports.
- TI has a 60% stake worth €1.6B ($1.8B) in the towers firm, which has gained 20% in price since an initial public offering earlier this year.
- Bidders could include Cellnex (itself a towers unit spun off from Abertis) and infrastructure fund F2i SGR -- with whom TI was linked in talks about a purchase of a minority stake in fiber-optic carrier Metroweb. The TI board is set to meet in a week to discuss that potential deal.
- In Milan trading, Telecom Italia is up 2.2%; Inwit is up 1.4%.
- Previously: Telecom Italia mulling 40% stake in fiber carrier Metroweb (Oct. 08 2015)
- Previously: Reuters: Telecom Italia wants to close on Inwit deal by year-end (Sep. 28 2015)
- Software company Daegis (NASDAQ:DAEG) +93% premarket after agreeing to be acquired by OpenText (NASDAQ:OTEX) for $0.82/share, or ~$13.5M in cash.
- DAEG offers products for information governance, application migration, data management and application development; the company says ~20% of Fortune 100 companies use its solutions.
- Roche (OTCQX:RHHBY) acquires Berkeley, CA-based privately held Adheron Therapeutics. Under the terms of the deal, Adheron shareholders will receive $105M upfront plus potential milestones of up to $475M.
- Adheron has developed a technology that disrupts immune cell adhesion through a cell surface protein called Cadherin-11, which has the potential for treatments for a range of inflammatory and autoimmune diseases. Its lead product candidate is SDP051, a humanized monoclonal antibody targeting Cadherin-11 that just completed Phase 1 development.
- Cadherin-11, a protein that acts as an "adhesive" between cells, is a key mediator of joint destruction in rheumatoid arthritis and plays a key role in fibrotic pathology.
- "We view BSP's recent press release as a desperate attempt to divert stockholder attention from the key issue at hand," says NexPoint: At least $60M (it had been $132M until a chastened BSP cut it) is being paid to current TICC management instead of to the stockholders.
- In contrast, says NexPoint, its proposal offers owners $45-$50M in savings over the next ten years and includes no payments to current management (hence its rejection!).
- "In our view, the Company and its insiders are attempting to steal the election by refusing to recognize our valid and highly qualified alternative slate of independent board candidates."
- Source: Press Release
- The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR) expires today regarding Horizon Pharma's (NASDAQ:HZNP) proposed acquisition of Depomed (NASDAQ:DEPO), satisfying one of the conditions required to consummate the deal.
- The next milestone is October 29, the record date to determine the shareholders of record who may request a special meeting to vote on Horizon's three proposals to remove obstacles to its bid, including replacing the board of directors and repealing its '"poison pill."
- Depomed has rejected Horizon's offers three times, saying the bids undervalue the company.
- Previously: Depomed sets October 29 as shareholder of record date regarding Horizon proposals (Aug. 31)
- Denmark-based DSV (OTC:DSDVF, OTCPK:DSDVY) is buying California-based logistics company UTi Worldwide (NASDAQ:UTIW) for $7.10/share in cash, a 50% premium to Thursday's close and a 34% premium to UTIW's 30-day VWAP.
- Implied enterprise value of $1.35B for UTIW.
- UTIW's board has unanimously accepted the offer.
- In its most recent 12 months, UTIW had consolidated revenue of $3.9B and Ebitda of -$6M.
- UTIW is -54% since trading at $10.38 in early June.
- Related: Could The UTI Worldwide Turnaround Story Finally Be Materializing? (Jul. 15)
- Related: UTi Worldwide's CEO Ed Feitzinger on Q2 Results (Sep. 3)
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