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Sun, Jan. 3, 8:45 AM
- Despite a record-setting year for M&A, 2015 has also been full of plenty of no's from U.S. antitrust officials:
- Staples (NASDAQ:SPLS) agreed to buy its rival Office Depot (NASDAQ:ODP) in February for more than $6B, but regulators worried the tie-up would eliminate competition and sought to block the merger in December.
- Although General Electric (NYSE:GE) decided to sell its appliances business to Electrolux (OTCPK:ELUXY) for $3.3B in 2014, the Justice Department filed suit this summer, alleging the deal would result in higher kitchen appliance prices. GE walked away from the deal last month.
- Sysco (NYSE:SYY) reached its $3.5B deal for U.S. Foods in December 2013, hoping the combination would help it cut costs, however, the tie-up got shot down by the FTC in June.
- The nation's two biggest cable operators, Comcast (NASDAQ:CMCSA) and Time Warner Cable (NYSE:TWC), reached a $45.2B deal to combine in February 2014, although the DOJ said the merger would make Comcast "an unavoidable gatekeeper for Internet-based services." The latter canceled the deal in April.
- Thai Union (OTC:TUFRF), owner of the Chicken of the Sea brand, struck a $1.5B deal for U.S. rival Bumble Bee Seafoods in December 2014, but the companies walked away from the agreement a year later amid antitrust objections.
Dec. 22, 2015, 9:47 AM
- Comcast (NASDAQ:CMCSA) is up 1% as Morgan Stanley names it a top large-cap pick for 2016, noting things have been flat with its stock price in the nearly two years since it launched an unsuccessful pursuit for Time Warner Cable.
- That's in spite of EBITDA growth of 7-8%/year. Analyst Benjamin Swinburne has Comcast rated Overweight, with a $70 price target -- 23% implied upside from its current price.
- Swinburne says Comcast's cable subscriber losses can be directly tied to its efforts to serve "cord shavers" and that it can take advantage of a strong broadband pipe and skinny bundles to take share from the competition. He writes that Comcast has a good chance to add net video customers in 2016 for the first time in 10 years.
- The company is denying British media reports that it's considering a $16B bid for the UK's ITV (OTCPK:ITVPY), in which John Malone has a near-10% interest.
- The Mail said that the two companies had been in talks, a report that Comcast tried to tamp down as speculation. Comcast does have a big balance sheet for deals after its pursuit of TWC fizzled out.
Dec. 7, 2015, 6:47 PM
- A serious courtship between America's No. 3 and No. 4 wireless providers went sour in 2014 after the government made it clear it wanted four players, and since then merger speculation (particularly among suffering Sprint shareholders) has held that any new move wuold have to wait for a new administration.
- But what if the relationship could be rekindled earlier? Overtures toward wireless service from Comcast (CMCSA -0.6%), or other cable firms yet to express interest, could allow for a union between T-Mobile (TMUS +3.2%) and Sprint (S +2.8%) while maintaining the desired competitive players.
- Comcast started a process that would let it resell Verizon airwaves and acknowledged it was testing a service for a launch sometimes in the future. One catalyst could be a heavy bid into the March spectrum auction.
- "It seems clear that Sprint is playing for time, presumably to try again to merge with T-Mobile in 2017-18 under a new administration," says analyst Crag Moffett. "By then, Comcast will likely have bought spectrum in the TV broadcast auction, making it plausible to argue that a Sprint/T-Mobile combination can be called a five-to-four merger, not a four-to-three."
- Several outcomes are yet possible, though, and not all favor Sprint: Comcast could use an auction bid as a precursor for its own T-Mobile buyout; firms like Alphabet or Amazon.com could buy spectrum; or private investor Chamath Palihapitiya could succeed in an audacious plan to bid billions of dollars in the auction to create a new player called Rama.
- Previously: Comcast: Testing wireless service, but in no hurry to launch (Oct. 27 2015)
Dec. 7, 2015, 3:32 PM
- In a debate over who's-in and who's-out (and are-they-even-selling) around Yahoo's Internet business, Comcast (CMCSA -0.9%) -- floated as a big-pocketed prospect to take it on -- is "unlikely" to buy the operations whole, SunTrust's Inder Singh says.
- Instead, the company might go more piecemeal, especially with substantial existing content assets in NBCUniversal. “We believe there are some adtech assets, for example BrightRoll (online video advertising), which Comcast may be interested in, but we believe CMCSA is unlikely to acquire all of core Yahoo to get these assets," Singh says.
- He also points to Verizon's AOL buy (lately held up as a model for a Comcast-Yahoo deal) as not necessarily the answer: "Comcast already has a number of adtech assets and significantly more video content with its ownership of NBCUniversal. Further, Comcast has acquired Visible World (programmatic TV ad sales platform), This Technology (content delivery including dynamic ad insertion business), FreeWheel (video ad content platform), ThePlatform (spin-in of online video management system), and is an investor in Videology (Private)" -- all part of a strategy already well at work.
- SunTrust colleague Robert Peck had speculated before that media companies like AT&T and Disney could be interested in pieces, as could News Corp. or Time Inc.
- Previously: Mizuho: Yahoo should sell core business, to Comcast (Dec. 04 2015)
- Previously: Media companies linked to circling pack around Yahoo Internet business (Dec. 02 2015)
Dec. 4, 2015, 1:28 PM
- As Yahoo (NASDAQ:YHOO) wraps a few days of deliberations over its future amid speculation about whether it should focus on its core or its Alibaba stake, Mizuho is weighing in definitively: Sell the core Web business, and sell it to Comcast (CMCSA +2%).
- "It remains unclear if the IRS will tax the spin-out of Aabaco, but in our view, a taxed transaction on a likely $3-$5b sale of the core Yahoo business outweighs the risk of the company/shareholders being hit with a $20b IRS tax bill on a spin-out of Aabaco," write the firm's Neil Doshi and Sam Phan. "We think the best option for Yahoo would be to sell its core biz to a strong strategic buyer –- namely Comcast."
- The two cited four reasons for targeting the media/telecom giant as a buyer: First, skepticism that Yahoo can pull another turnaround; Comcast's existing digital assets; ad assets at Yahoo complementary to Comcast's ad business; and Comcast's strong ability to absorb a deal (with $25B in annual EBITDA, Comcast could retain debt-to-EBITDA ratio of 2:1).
- Previously: WSJ: Alibaba unlikely to buy core Yahoo business (Dec. 03 2015)
- Previously: Media companies linked to circling pack around Yahoo Internet business (Dec. 02 2015)
Dec. 2, 2015, 9:42 PM
- While speculation about buyers for Yahoo's (NASDAQ:YHOO) core Internet business is focused on private equity, Yahoo's evolution as a media company means a number of media/telecom firms are in play for all or part of the business.
- A sale of the core business might not happen -- it's not the main purpose of Yahoo's meeting -- but on the other hand, a transaction would certainly value it at more than where it is locked up in Yahoo, which may be less than zero because of the investments in Alibaba and Yahoo Japan.
- Estimates vary widely on the Internet business' value, from just under $2B to as much as near $4B. Comcast (NASDAQ:CMCSA) could have room for that after it failed to acquire Time Warner Cable; it's been spreading out investments in a number of media and Internet companies this year, and it could lump in Yahoo's properties with its own Xfinity online video.
- Like Verizon (NYSE:VZ), another potential Yahoo Internet suitor, Comcast has also been shoring up its ad-tech bona fides with some 2015 acquisitions. Verizon could use Yahoo's data to present a better competitive face to Google and Facebook, though it would have redundancies to deal with.
- Other companies like News Corp. (NWS, NWSA) or Time Inc. (NYSE:TIME) may be more interested in some pieces of Yahoo's business rather than the whole. SunTrust analyst Robert Peck even considers AT&T (NYSE:T) and Walt Disney (NYSE:DIS) prospective buyers; Disney for tapping the data to market theme parts and movies, and AT&T trying to match up better against the Verizon/AOL combo.
- Previously: FT: P-E firms show interest in Yahoo's core business (updated) (Dec. 02 2015)
Oct. 28, 2015, 7:55 PM
- With IBM taking on the digital and data assets of The Weather Company, what happens to The Weather Channel that it's leaving behind?
- It's struggling, but it will pursue storm coverage as a "hyper-local streaming service," according to channel CEO Dave Shull. "We are continuing to invest in our strategic partnerships with our distributors, advertisers, and emerging technology start-ups."
- The network will continue as its own company -- still owned in part by NBCUniversal (CMCSA +0.7%) along with Bain Capital and Blackstone (BX +1.2%) -- and has a long-term deal to use the services it sold to IBM. It's also still one of the most distributed channels on pay TV; Shull says more than half of America tunes in at least once a week.
- Comcast's recent earnings filing shows its investment in the channel has been marked down to $81M after a $252M impairment charge.
- Previously: IBM confirms Weather Co. deal, touts cloud/analytics synergies; shares rise (updated) (Oct. 28 2015)
- Previously: WSJ: IBM near $2B-plus deal for The Weather Company assets (Oct. 27 2015)
Oct. 27, 2015, 8:28 PM
- IBM is nearing a deal in excess of $2B to acquire the digital and data assets of The Weather Co., owner of the Weather Channel, The Wall Street Journal is reporting.
- The company -- owned in part by NBCUniversal (NASDAQ:CMCSA) along with Bain Capital and Blackstone (NYSE:BX) -- started hiring banks to seek a buyer in August for a deal it hoped would hit $3B. The company's digital bits were widely considered to be the most valuable.
- IBM has a particular interest in the company's forecasting group, WSI, the WSJ says -- a unit that's chock full of tech and weather data that the Weather Co. licenses to various businesses.
- The deal would reportedly come with Weather Co. CEO David Kenny, who would join IBM.
- A $2B deal would be a discount over the company's 2008 sale price, valued at $3.5B. IBM shares fell 4.1% today.
- Previously: IBM eyes digital assets of The Weather Company (Oct. 19 2015)
- Previously: Weather Channel hires banks to explore sale for up to $3B (Aug. 20 2015)
Oct. 21, 2015, 4:18 PM
- Comcast (CMCSA -0.7%) is inching toward introducing its own wireless service, triggering part of a 2012 airwaves deal that lets it resell Verizon's (NYSE:VZ) service, Bloomberg reports.
- Verizon CFO Fran Shammo said during the company's earnings call yesterday that unnamed cable companies had said they'd execute their right to resell Verizon airwaves as part of the deal where Verizon bought spectrum from a cable consortium.
- Bloomberg says that Comcast plans a hybrid cellular/Wi-Fi service, not unlike Google's Project Fi and which would draw on Comcast's network of Wi-Fi hotspots that may be 10M strong.
- With notification of Verizon, Comcast could start a market trial within six months and offer it commercially by this time next year.
- Good for T-Mobile (TMUS -1.2%) either way? The carrier comes up in rumors about a Comcast merger -- though Comcast denied them earlier this year -- but in any cast, a Comcast entry would press the big two of AT&T (NYSE:T) and Verizon more. “This will be bad for the carriers, with the possible exception of T-Mobile, and good for cable,” says New Street Research's Jonathan Chaplin.
- And T-Mobile chief John Legere has been not-too-subtly dropping lines about a merger with his company: "You really believe that the Comcast future in wireless is to be an MVNO with Verizon? I mean, give me a break."
- Previously: Legere: T-Mobile will bid in auction; Verizon video a 'debacle' (Sep. 18 2015)
- Previously: Comcast source denies interest in T-Mobile purchase (Jun. 17 2015)
Oct. 19, 2015, 8:26 AM
- The Weather Company is in advanced talks with IBM about the sale of its digital assets, Re/code reports, stating that a number of different parties have been discussing the purchase of either parts or all of its assets.
- Those include: The product and technology division, the television business (with the Weather Channel) and a large meteorological team.
- The Weather Company is currently owned by the Blackstone Group (NYSE:BX), Bain Capital and NBC Universal (NASDAQ:CMCSA). The trio paid $3.5B for the firm in 2008.
Sep. 28, 2015, 5:56 AM
- As leaked a couple of weeks back, Comcast's (NASDAQ:CMCSA) NBCUniversal agreed to the purchase of a majority stake in Universal Studios Japan from Goldman Sachs and other owners of the theme park.
- “We are excited to expand our global footprint with this wonderful theme park in Osaka,” said Comcast CEO Brian Roberts. “This investment represents a huge opportunity and commitment to creating value for our shareholders and continuing to grow internationally.”
- Goldman Sachs (NYSE:GS) currently has a majority stake in USJ, the owner/operator of Universal Studios Japan, with remaining shares held by Japanese P-E firms and a U.S. hedge fund. All will be selling more than half of their holdings to NBCUniversal.
- The deal is expected to close in November.
- Source: WSJ
- Previously: WSJ: NBCUniversal considering buying majority of Universal Studios Japan (Sept. 15)
Sep. 17, 2015, 11:11 AM
- Cablevision (NYSE:CVC) is up 15.3%, hitting highs it hasn't seen in more than four years, in the wake of its $17.7B deal to be acquired by France's Altice (OTCPK:ATCEY).
- Shares are trading at $32.90 against Altice's $34.90/share proposal, though analysts are sounding off largely in consensus that there shouldn't be any regulatory issues with the deal. Altice was up nearly 13% in Amsterdam, but has settled down to a gain of 0.8%.
- Most analysts rate Cablevision a Hold. The combination doesn't surprise Pivotal's Jeff Wlodarczak, but the price does a bit, considering a willing seller and Altice likely the only bidder; he expected a $32.50/share deal.
- Wunderlich's Matthew Harrigan was surprised the sale happened with this FCC in place; he expected a deal after a new administration, perhaps to Liberty's John Malone or Charter's (and formerly Cablevision's) Tom Rutledge.
- Michael McCormack at Jefferies thinks Comcast (NASDAQ:CMCSA) or Charter (NASDAQ:CHTR) could look at getting into the bidding for Cablevision. He says a synergy target of $900M "looks aggressive" and implies some best-in-class margins.
- Overall, analysts are taking Altice's Patrick Drahi at his word: The company probably isn't done expanding in the U.S. Likely targets could be any number of telecom assets, including private players like Cox or Mediacom, or CLECs.
Sep. 2, 2015, 4:57 PM
- Prestige studio Miramax, previously rumored to be exploring a sale, has hired Morgan Stanley to find a buyer, Bloomberg reports.
- Qatari investment bank QInvest will co-advise on the process, which is said to start formally after the Labor Day holiday. The studio is part-owned by Qatar through the country's sovereign wealth fund.
- Miramax could be looking for up to $1B after its current owners bought it from Disney for $660M in 2010, and bidders could include streaming services like Hulu (CMCSA, DIS, FOX, FOXA), Netflix (NASDAQ:NFLX) or Amazon.com's Instant Video (NASDAQ:AMZN), or studios like MGM or oft-rumored buyer Lions Gate (NYSE:LGF).
- Miramax's most recent release is Mr. Holmes, with Ian McKellen as famed detective Sherlock Holmes, and it currently produces From Dusk Till Dawn, the TV adaptation of the film now in its second season on the El Rey network.
Aug. 25, 2015, 2:25 PM
- Home-focused Web community Houzz is making its first acquisition in GardenWeb, which it's buying from NBCUniversal (CMCSA +1.5%).
- Terms of the deal weren't disclosed, but GardenWeb originally came to NBCU in 2006, as part of a $600M deal for iVillage when NBCU was still part of GE.
- Houzz, which has raised more than $200M in funding and was last valued at $2.3B last year, will get millions of discussion threads (with more than 14M discussion posts) in the deal while expanding outside home design to garden design. It's launched its first TV ads this month.
Aug. 20, 2015, 3:39 PM
- The Weather Channel is hoping some buyer can make it rain, as it's reportedly hired J.P. Morgan and PJT Partners to seek a sale for up to $3B.
- The network -- owned in part by NBCUniversal (CMCSA -2.2%) along with Bain Capital and Blackstone (NYSE:BX) -- could sell as a whole or in parts. The digital pieces (websites, Weather Underground and several B2B sites) might be the most valuable.
- The 2008 deal to purchase the company was valued at $3.5B. It reportedly began interviewing banks last year.
- In its second-quarter earnings, Comcast said its net income included $252M of equity in net losses of investees resulting from its proportionate share of an impairment loss at The Weather Channel.
- Previously: Dish signs multi-year deal with Weather Channel, including Sling TV (Apr. 21 2015)
- Previously: Carriage dispute drops Weather Channel from Verizon FiOS (Mar. 10 2015)
- Previously: Weather Channel reportedly mulling strategic options (Sep. 12 2014)
Aug. 18, 2015, 4:30 PM
- Comcast (CMCSA -1.2%) has a deal to acquire This Technology, a multiscreen video company that will help speed its new parent's transition to IP video.
- Terms were undisclosed. This Technology specializes in dynamic ad insertion and, interestingly, features an alternate content delivery platform that enters play during TV blackouts (such as for sports events).
- Most of the Denver-based This Technology team will join Comcast's VIPER team in Colorado, with others joining Comcast Wholesale.
- It's the second significant ad-tech acquisition for Comcast this summer. In June, Comcast announced its deal to acquire Visible World, with an eye surely to highly targeted ZIP code-based ad targeting based on data from set-top boxes.
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