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Bristol-Myers Squibb Company (NYSE: BMY) is going to completely separate itself from its holdings in Mead Johnson Nutrition Company (NYSE: MJN). The company expects that the split-off will be a tax-advantaged way to divest these holdings and is expected to be net cash flow positive to the BioPharma business and is expected to be accretive to earnings per share beginning in 2010. Mead Johnson has had one unbelievable year. This came public in February and traded as low as $25.72 after the IPO. Shares closed at $45.25 on Friday.
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Posts related to ‘Mergers and Buy Outs’
Bristol-Myers Cleans Up on Mead Johnson (BMY, MJN)
Cisco’s (CSCO) Tandberg Gamble That Video Quality Pays
Cisco (NASDAQ:CSCO) has decided to gamble that it can get reluctant Tandberg shareholders to support a buyout of their company by raising its offer to $3.4 billion. That is a 10% improvement over Cisco’s previous offer. A number of Tandberg investors lined up against the first deal, saying it valued the company at too low a price.
Cisco says it will walk away from its attempt to buy the company if Tandberg shareholders do not approve a purchase at the new figure. The offer by Cisco is a huge gamble on video conferencing, an over-crowded field. Read More
Are Silicon Storage Holders Getting Enough? (SSTI)
Silicon Storage Technology, Inc. (NASDAQ: SSTI) is trading up on a private equity and management-led buyout. SST is flash memory maker based in Sunnyvale, California. While the company has entered into a definitive merger agreement to be acquired for $2.10 per share, it is almost impossible not to wonder (at best) if this price is a fair value to the Silicon Storage shareholders who would be getting cashed out if a majority approves the deal.
First off, the company is being acquired by Prophet Equity LP’s Technology Resource Holdings, Inc. as well as by members of Silicon Storage’s management team. The $2.10 price is also only a 13% premium to yesterday’s close. It seems some believe that the private equity and management-led buyout will have to pony up more. Shares are above the buyout price.
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Many Key SPACs on Deck (PAX, TOH, EST, TCW, CFQCF, GQN, NSAQ, CIO)
We have been given some exclusive data from SPACupdate.com on the progress of many blank check and special purpose acquisition companies which their targets and relevant trading data. Prospect Acquisition Co. (AMEX: PAX), Hicks Acquisition Co. (AMEX: TOH), Enterprise Acquisition Co. (AMEX: EST), Triplecrown Acquisition Co. (AMEX: TCW), China Fundamental Acquisition Co. (OTC: CFQCF), Global Brands Acquisition Co. (AMEX: GQN), North Shore Acquisition Co. (OTC: NSAQ), and Asia Special Situation Acquisition Co. (AMEX: CIO) all have very recent or pending data important for SPAC and special situations investing.
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British Air And Iberia: Airlines Return To The Center Of M&A Stage
The rumor that US Air (NYSE:LCC) and American (NYSE:AMR) may merge is not so far-fetched today, or that Southwest (NYSE:LUV) might take over JetBlue (NASDAQ:JBLU).
British Air and Iberia, the flag carriers of the two nations whose fleets met at The Battle of Trafalgar, will merge, creating one of the world’s largest airlines. BA shareholders will control 55% of the new company which will have a market value of $7 billion and total sales of nearly $20 billion. It is noteworthy that just earlier this week, BA said it would fire 4,900 people because of a $485 million loss in the six months that ended on September 30. Read More
Tech Giants Now Hold ~$265 Billion Cash To Spend (HPQ, COMS, INTC, AMD, MSFT, CSCO, AAPL, GOOG, ORCL, JAVA, QCOM, EMC, YHOO, DELL, AMZN, EBAY, ONT, BRCD, JDSU, STAR, VMW)
You have already seen the Hewlett-Packard (NYSE: HPQ) buyout of 3Com Corporation (NASDAQ: COMS). But this week before that deal was announced we covered how mergers in the technology sector have been very slow to develop over the scale in which we and others think is possible for the sector. After the Intel Corporation (NASDAQ: INTC) settlement with Advanced Micro Devices (NYSE: AMD), the tally of cash that is now estimated would be an implied $265 billion that is available for the tech giants in our 24/7 Wall St. Real-Time 500 to make acquisitions.
The giant cash balances are held by Microsoft Corporation (NASDAQ: MSFT), Cisco Systems Inc. (NASDAQ: CSCO), Apple Inc. (NASDAQ: AAPL), Google Inc. (NASDAQ: GOOG), and Oracle Corp. (NASDAQ: ORCL), assuming nothing happens with Sun Microsystems Inc. (NASDAQ: JAVA). But players like QUALCOMM Inc. (NASDAQ: QCOM), EMC Corporation (NYSE: EMC), International Business Machines (NYSE: IBM), Dell Inc. (NASDAQ: DELL), Yahoo! Inc. (NASDAQ: YHOO), Amazon.com Inc. (NASDAQ: AMZN), and eBay Inc. (NASDAQ: EBAY) are either all sitting with large amounts of cash or will be very soon.
We have broken out these technology, IT, software, and Internet companies by the cash amount they hold or what they have in a soon-to-be cash balance. Of course only a fraction of this cash will be used for mergers. But there is also a ton of room here for dividends and of course the share buybacks.
Corel & Vector: From Strange to Stranger (CREL)
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We had already commented on hoe the merger offer for Corel Corp. (NASDAQ: CREL) from majority owner Vector Capital might be the strangest merger paths of this decade. The strange can always get stranger. Vector Capital had already raised its buyout price for the software company.
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Tech Strangeworld: 3Com Bought by H-P (COMS, HPQ, CSCO, IBM)
Sometimes the unimaginable happens, and that is today. 3Com Corporation (NASDAQ: COMS) is being acquired, and in a deal that won’t run regulatory risk at least over China having access to core technology. Hewlett-Packard (NYSE: HPQ) is the surprise buyer.
H-P is buying the networking and routing company for a price of $7.90 per share in cash, which comes to an enterprise value of about $2.7 billion. The deal has also been approved by the boards of directors at each company. Based upon Cisco Systems Inc. (NASDAQ: CSCO) expanding its reach further out into data centers and beyond and based on some recent moves from IBM (NYSE: IBM), this is actually a lower surprise than had this been announced a year ago. That would make one wonder what moves those companies will make.
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Tech Titans Still Have $269 Billion Cash For Deals (MSFT, CSCO, AAPL, GOOG, INTC, HPQ, QCOM, EMC, VMW, YHOO, DELL, ORCL, JAVA, AMZN, EBAY)
The recovery is on and mergers are happening, yet the technology sector has been slow to make deals. Despite some deals already having taken place from the technology giants and that $260 billion cash balance which was there in the middle of last quarter is even larger now. The tally for cash by our count is now right around $269 billion. We looked through the top market caps of technology companies in our 24/7 Wall St. Real-Time 500 and this list is expanded now that some issues have been resolved in all the companies. The stocks in this group are Microsoft Corporation (NASDAQ: MSFT), Cisco Systems Inc. (NASDAQ: CSCO), Apple Inc. (NASDAQ: AAPL), Google Inc. (NASDAQ: GOOG), Intel Corp. (NASDAQ: INTC), Oracle Corp. (NASDAQ: ORCL), Sun Microsystems Inc. (NASDAQ: JAVA), Hewlett-Packard Company (NYSE: HPQ), QUALCOMM Inc. (NASDAQ: QCOM), EMC Corporation (NYSE: EMC), International Business Machines (NYSE: IBM), Dell Inc. (NASDAQ: DELL), Yahoo! Inc. (NASDAQ: YHOO), Amazon.com Inc. (NASDAQ: AMZN), and eBay Inc. (NASDAQ: EBAY).
These few tech companies with the $269 billion cash that could be deployed for mergers, acquisitions, or the good old dividends are also listed before tallying up credit lines, factoring, debt sales, and other creative financing methods. We have listed the suppositions and counting methods for each one to illustrate how much is available at each company.
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Electronic Arts (ERTS): M&A And Layoffs Meet At A Crossroad
Electronic Arts (NASDAQ:ERTS) did something today that is almost never seen in the corporate world. It made a big acquisition and fired 1,500 of its workers, 17% of the total staff, on the same day. Read More
The EU Blocks Oracle (ORCL) Deal For Sun (JAVA)
Larry Ellison, the CEO of Oracle (NASDAQ:ORCL) is going to have to make some more threats if he wants the EU to approve his company’s deal to buy Sun Microsystems (NASDAQ:JAVA) for $9.50 a share. The Europeans have voiced some concerns that the combined company will have too much market share in the MySQL server software industry.
The EU’s concerns became more concrete today. Read More
Is JDSU Up For Grabs? (JDSU)
JDS Uniphase Corp. (NASDAQ: JDSU) is seeing a run in the stock and in the options trading today. The company announced this morning that had “licensed patent rights for fundamental picosecond laser technology to Hamamatsu Corporation for the development of microelectronic products.” Yet there may be more to the story here as some consider it one possible takeout or merger target in the land of technology. This notion of an acquisition may seem impossible if you have known the company since it was a $100 and far higher stock back in the tech bubble days.
NBC Universal Gets A $30 Billion Valuation
NBC Universal, the entertainment arm of GE (NYSE:GE) which is 20% owned by Vivendi, is worth $30 billion. That is the figure that GE and Comcast (NASDAQ:CMCSA), the cable company that intends to take control of NBCU agree on. Vivendi may be willing to take $6 billion for its piece of NBCU and if so, the valuation is to some extent academic. The $30 billion will also decide how much money Comcast will put into the joint venture that will own NBCU.
The Wall Street Journal has made the point that Vivendi could walk away from selling its stake and ruin the entire transaction, but it is hard to see what the French company would gain from that. Read More
AES Debate: China’s Infrastructure Grab (AES)
China is at it again buying key infrastructure access. AES Corp. (NYSE: AES) disclosed on Friday, along with earnings, that the company was raising significant cash. This is a capital raise which also may ‘raise some eyebrows’ because the company is selling a 15% stake to China’s sovereign wealth fund, China Investment Corporation. The stake sale will bring in $1.58 billion for expansion of global projects. AES also announced a Letter of Intent to sell a 35% minority stake in its global wind generation business valued at $571 million on top of the stake sale.
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Another “Stock to Double” Gets Acquired (ITWO, JDAS)
i2 Technologies Inc. (NASDAQ: ITWO) is a supply chain management company which has been a takeout stock before. Turns out that is again. In a complicated transaction, JDA Software Group Inc. (NASDAQ: JDAS) will pay some $34 million all said and done in a deal that values the company at $18.00. This was also an unlikely transportation stock, despite it being a software play, which we picked earlier as one which could double. It has doubled and then some.
Skype Dispute Nears End, The Blackmailing Of Ebay (EBAY)
An intellectual property dispute between Skype’s founders and the VoIP company, now owned by Ebay (NASDAQ:EBAY), threatened the auction company’s plans to sell Skype to private equity interests. That dispute is about to be settled, clearing the way for Skype to become independent.
Ebay will make $2 billion for selling about two-thirds of Skype. Skype’s founders have claimed that the VoIP company’s technology violates certain patents that they hold. Read More
The Return Of Wheeling And Dealing (BRK.A)(BNI)(KFT)
Kraft (NYSE:KFT) hinted very strongly that it would open a battle with Cadbury for ownership of the British company. GM said it would keep its Opel and Vauxhall European operations about an hour later. The news of those transactions ended a day in which Berkshire Hathaway (NYSE:BRK.A) announced its largest investment ever. Mr. Buffett’s company will buy the 77.4% of Burlington Northern (NYSE:BNI) that it does not own at a tremendous premium which carries a total price tag of over $26 billion.
All of that in less than 24 hours. Read More
The Layoff Culture Lives On
Economists still expect layoffs in the US and Europe to slow as the recovery gains momentum. Pessimists among experts on GDP growth and job losses believe that the major risk of a double-dip recession is that unemployment will keep rising well beyond the middle of next year. Read More
More E.U. Roadblocks in Sun-Oracle Deal (ORCL, JAVA)
There are reports from the Financial Times that were also just noted on CNBC that are almost baffling. It seems that the European Commission may issue a formal objection to the Oracle Corp. (NASDAQ: ORCL) buyout of Sun Microsystems Inc. (NASDAQ: JAVA). The reasoning is that Oracle has apparently refused to offer any concessions to European regulators.
While a formal set of objections would not constitute a formal merger blockage, that is the first real step to a formal block. This is also not set in stone yet and does not mean that either Oracle nor the E.U. will offer concessions.
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