Category Archives: Deals

AES to buy Ohio Utility

HedgeFundLIVE.com — In a $4.7 mill cash deal AES is acquiring DPL for $3.5 mill and taking their $1.2 million of debt. DPL’s closing price was $27.59 and is currently trading 8.9% above that closing price. The deal is expected to close in six to nine months and is the second big utility deal to be announced in the Untied States this year.

DPL serves more than half a million customers and posted net income of $290.3 million on revenue of $1.9 billion in 2010, up from net income of $229.1 million on $1.6 billion in 2009. It is set to announce its first quarter earnings on April 28. DPL is an energy company based in west central Ohio, with about 3.8 gigawatts in power generation capacity. Coal-fired units produce 2.8 gigawatts of that total, and natural gas and diesel units produce the rest. The $4.7 billion deal will be supported with bridge financing from Bank of America Merrill Lynch.

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AT&T Buying T-Mobile

-hedgefundlive.com-

I wasn’t expecting AT&T to buy T-Mobile since the news of Sprint possibly buying T-Mobile. There are some major questions that arise when analyzing the effects of this merger:

  • How will T-Mobile and AT&T integrate their two networks? What sort of synergy opportunities are present?
  • How will this affect AT&T’s suppliers such as Ericsson, Nokia Sieman’s Networks and Alcatel-Lucent SA?
  • Will there be layoffs as these two companies merge and if so how many will there be?
  • How will this affect Verizon Wireless?

Without a doubt there will be a lot of speculation on these topics and it will be interesting to see how it all plays out.

Anyway, I was reading Dilbert once again and I know everyone can relate to this one.

The Official Dilbert Website featuring Scott Adams Dilbert strips, animations and more

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Rumors du Jour - Deutsche Bank

HedgeFundLIVE- In a report last night, Deutsche Bank’s U.S. Equity Strategy team said the M&A cycle has room to run this year and listed their top 50 M&A candidates in the S&P 1500.   The list is as follows:

Consumer:  ADM, BYD, COCO, LYV, ODP, PHM, RYL, SAH, SPF, WEN

Energy:  CEG, DYN, EXH, PVA, VLO

Financials:  BAC, C, KEY, MI, PKY, RF, XL, WY

Health Care:  AFFX, BSX, CVH, HNT, HUM, WCG

Industrial/Materials:  ABFS, BGG, CDI, FSS, GVA, JBLU, LPX, LUV, TEX, UFPI, WPP

Tech/Telecom:  AVID, CLGX, CVG, ERTS, IN, S, THQI, TLAB, TTWO, UNTD

As most of you know we always try to stay up to date on potential takeout targets so some of these names seem familiar to be while other’s come as a shock.  First I was taken back when I saw BAC and C as potential targets but I guess you have to but a few bold picks out.  Although, C and BAC seem extreme some of these names did match up with our lists from the past and they are ADM, ODP, PHM, RYL, DYN, MI, XL, ERTS, and JBLU. 

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Deal and Related News

· SLE – PE group led by Apollo submits offer for SLE according to Reuters but an expected offer by JBS has yet to be made.  Details of the Apollo bid weren’t available – Reuters

· TUI AG may soon purchase more shares in TUI Travel; There are plans to float (TUI AG’s) Hapag-Lloyd within the next three months, and TUI is likely to buy TUI Travel shares within another 3-4 months after that – Reuters

· ITT – the stock may have another 20% upside – Barron’s

· SRX – Serco, the services company in the UK, has made a $2B offer for SRA Int’l (SRX); an initial offer was rebuffed by SRX but Serco is believed to be working on a new better proposal.  London Telegraph.

· China’s ICBC moves into the US – ICBC struck a deal to buy a majority stake in Bank of East Asia’s US subsidiary; the deal would for the first time give a Beijing-controlled institution a US retail presence.  Bank of East Asia has about 13 total branches in the US.  The deal is said to be worth $100MM.  US regulators still need to bless the transaction.  WSJ

· Facebook – the co announced after the close Fri that it had raised $1B from investors and another $500MM from Goldman and Digital Sky; the $1.5B fund raising valued the company at $50B; the demand was there for the company to raise up to $5B; Facebook said it would release financial information by Apr ’12.  WSJ

· Facebook – why the company is a bargain at $50B; the co is a natural monopoly similar to GOOGWSJ

· Prada – the company may decide to proceed w/an IPO by the end of the month – Independent

· Lone Star is in talks with other lenders to take control of Japan’s Tokyo Star Bank for the second time – WSJ

· E.ON – Hong Kong billionaire Li Ka-shing is poised to make a GBP3.5B bid for E.ON’s electricity distribution network in the UK – Reuters

· CDEL – Citadel Broadcasting is discussed in the NYT in an article which alleges that mgmt may not have had the shareholder’s best interests in mind when it turned down a takeout offer from Cumulus – NYT

· WMG –the co decided to bring in Goldman and explore strategic options after one of its largest shareholders, Thomas H. Lee Partners, announced plans to sell its stake in the company.  WMG may look to sell its Warner/Chappell publishing business in order to raise cash and retire debt on the recorded music side, a move that would help pave the way for an EMI bid – NY Post.

· China Unicom/Telefonica announced strengthened strategic ties; Telefonia to buy $500MM worth of Unicom shares and Unicom will buy same amount of TEF stock at EU17.16/shr – Reuters

· Riversdale – Indian state-run companies may decide next week to counter Rio Tinto’s A$3.9B bid for Riversdale – Bloomberg