Real deals are in the mix, (See “DONE DEAL! M&A Activity of the Week“), but the rumors remain as intriguing as ever. Here’s your Cheat Sheet to mergers and acquisitions in the rumor mill:
- Porsche (POAHF.PK), which plans to merge with Volkswagen (VOW.DE), will initiate a share sale to Stuttgart, the current owners, at the end of March to help reduce debt. This was a long time coming, because the two companies had agreed to merge in the summer of 2009, when Porsche racked up billions in debt to try to gain control of Volkswagen. The deal probably won’t close until later this year or next year, because it still needs to get through some German regulatory hurdles.
- After Rio Tinto (NYSE:RIO) extended its offer to acquire Riversdale Mining (RIV.AX) from CSN (CSNA3) four times since the deal’s announcement in December, prospects aren’t looking too good with Riversdale shareholders. Rio needs more than 50 percent shareholder acceptance of their $16.50 bid (total of $4 billion), and it only has 39.7 percent as of this past Monday. Adding Riversdale to its portfolio would give Rio exposure to coking coal, which would reduce Rio’s risks and improve its reserves of steelmaking coal as commodity prices rise.
- Carl Icahn, after his $1.91 billion bid was rejected as too low, will not be acquiring Mentor Graphics (NASDAQ:MENT). In fact, Mentor Graphics is no longer up for sale, after Icahn suggested a month ago that the company should put itself up for sale. Yet it still says it’s open to third party proposals. Icahn currently owns 14.25 percent of Mentor’s shares, and generally likes to make bids for companies he believes are undervalued and shakes up the company to make improvements. He then decided to offer a $220 million loan, but Mentor Graphics shot that down as well.
- Oh no they didn’t! Nasdaq OMX Group (NASDAQ:NDAQ) and IntercontinentalExchange (NYSE:ICE) made an $11.3 billion ($42.50 per share) joint bid for NYSE Euronext (NYSE:NYX), which is 19 percent higher than what Deutsche Boerse (DB1.DE) plans to pay. The deal would expand Nasdaq’s equity market capabilities in the U.S. and Europe, as well as ICE’s derivatives business.
- Bertelsmann, a German media company and fifth-largest music group, wants to go for the big time: it may aim to acquire the publishing businesses of Warner Music (NYSE:WMG) or EMI. BMG, a joint venture with KKR (NYSE:KKR), is considering the auction of both Warner Music and EMI. BMG is on the prowl after emerging stronger from cost-cutting measures of the credit crisis, and will target medium-sized companies, possibly in Brazil, Australia, or Asian markets.
- As you probably guessed, AT&T (NYSE:T) will acquire T-Mobile, but not before drama ensues. The Attorney General’s Office just announced that it plans to conduct a “thorough review” of the potential transaction, looking for signs that the tie-up will create a virtual oligopoly and hurt consumers (limited options means more company pricing power). If the deal goes through, AT&T and Verizon will control 80 percent of the wireless market. A scary thought? FCC Commissioner Michael Copps thinks so, claiming that the deal is less likely to go through than the Comcast-NBCU merger.
- Valeant Pharmaceuticals (NYSE:VRX) began the process to launch a hostile bid for Cephalon (NASDAQ:CEPH) for $5.7 billion, or $73 per share. This really is hostile: Valeant plans to replace Cephalon’s board with its own people, and is pretty certain it can get financing for the deal. They tried negotiating privately, but to no avail.
- After only six percent of shareholders accepted the bid, DuPont (NYSE:DFT) decided to extend its $6 billion offer for Danisco (DCO.CO) until April 29th. Apparently, shareholders aren’t too keen on accepting the offer as long as regulatory approval is up in the air. They need 90 percent of shareholders to agree, so they’ve got a long way to go. Market chaos as a result of the Middle East and Japan situations is making this deal more difficult, as DuPont is reluctant to pay more and shareholders are reluctant to accept less. Acquiring Danisco will help DuPont improve its tech capabilities with food and enzymes.
- SK Telecom (NYSE:SKM), South Korea’s top wireless company, may invest in Blockbuster, which, if you remember, went bankrupt. Analysts aren’t receiving this too well, since SK Telecom does not seem to be in the movie rental business, and the movie rental business itself doesn’t have great future prospects. Other potential buyers include Carl Icahn and Charlie Ergen, who runs the satellite-TV companies Dish Network (NASDAQ:DISH) and EchoStar (NASDAQ:SATS). Ergen’s rationale is that he could use the Blockbuster brand to sell more subscriptions to Dish television services.
- Japan Airlines, which recently completed restructuring after emerging from bankruptcy, is already generating interest from potential buyers, specifically International Consolidated Airlines, which formed with the merger of British Airways and Spain’s Iberia. Despite Japan Airlines’ troubles, it will begin a joint venture with American Airlines (NYSE:AMR) next month.
- Three Spanish savings banks (Cajastur, Caja de Extremadura and Caja Cantabria) will not merge with Caja de Ahorros del Mediterraneo (CAM.MC), which will force CAM to ask for help from the state, i.e. nationalization. These banks had agreed last year to initiate talks about a merger as part of the government’s efforts to force mergers to shore up the financial system. Now these companies will need to scramble to get their capital requirements up to par.
- Telestat Holdings, a Canadian satellite company owned by Loral Space & Communications (NASDAQ:LORL) and Canada’s Public Sector Pension Investment Fund, may accept takeover offers from EchoStar Corp (NASDAQ:SATS) or the Carlyle Group. If the bids are less than $6 billion, Telestat may instead pay out a special dividend. EchoStar is an interesting bidder, because the company has been building up its satellite portfolio this past year, including acquisitions of Hughes Communications (NASDAQ:HUGH) for $2 billion.
- Private equity firm Terra Firma will be selling its Odeon & UCI theater chain, which owns more than 200 cinemas and 1,850 screens across Europe, and hopes to get between $1.1 and $1.6 billion. Potential bidders include rival Vue Entertainment, BC Partners, and Omers Private Equity. If the sale is successful, it may help repair Terra Firma owner Guy Hands’s reputation after Citigroup (NYSE:C) took control of EMI, a record company, in February.
Interact: Which deals do you think will get done? Which are just PR from hedge funds and traders? Let us know in the comments below …
Don’t Miss: DONE DEAL! M&A Activity of the Week.