MergersAndAcquisitions posts
FeedPosted Jan 5th 2010 9:00AM by Mark Fightmaster (RSS feed)
Filed under: Kraft Foods'A' (KFT), Calif Pizza Kitchen (CPKI)

Early Tuesday morning, Kraft Foods (
KFT) announced that it is going to
sell its North American pizza business for $3.7 billion. And of course, the natural purchaser of the pizza business is Nestle -- wait a sec ...
What does Nestle want with KFT's frozen pizza business? Well, in case you didn't know it, Nestle already holds the Stouffer's, Lean Cuisine, Buitoni, Hot Pockets, and Lean Pockets brands. The Swiss company will now add DiGiorno, Tombstone, California Pizza Kitchen, Jack's, and Delissio brands to its prepared dishes lineup. This addition is a major coup for Nestle, as its presence in the prepared-food world was already substantial -- and is now downright formidable. I would have to say that this is $3.7 billion well spent by Nestle.
Continue reading Kraft Sells Pizza So It Can Buy Chocolate
Posted Nov 4th 2009 2:40PM by Sheldon Liber (RSS feed)
Filed under: Good news, Management, Rants and Raves, Berkshire Hathaway (BRK.A), Serious Money, Headline News, Burlington Northern Santa Fe (BNI), Best Stocks for 2009

Yesterday it was announced very loudly that
"my pal Warren" was
going to acquire the 77.4% of the
Burlington Northern Santa Fe (NYSE:
BNI) railroad, that Berkshire Hathaway (BRK.A) does not already own, for $100 per share, offering about a $24 premium to Mondays closing price.
Talk about putting your money where your mouth is --
yikes! Buffett has gone all in, betting the economy is healing, and silencing anyone that questioned his integrity or motives for cautious optimism saying it was all talk!
Continue reading Serious Money: Questions as Buffett's money & mouth converge on BNI
Posted Sep 15th 2009 4:40PM by Beth Gaston Moon (RSS feed)
Filed under: Deals, Rumors, Kraft Foods'A' (KFT)

Earlier today, the Street was
abuzz with rumors that
Kraft Foods (NYSE:
KFT) was investigating the sale of brands such as Maxwell House and Oscar Mayer in order to raise capital to up its
Cadbury (NYSE:
CBY) bid to something a little bit sweeter (and one the confectionery giant might not reject).
Kraft responded to the rumors saying they were just that - unfounded conjecture - and noted that it would not in fact need to ditch hot dogs and coffee for creme eggs and Trident gum. A spokeswoman for the company told
Reuters "The financing for this proposal does not require any divestitures." So where did these rumors get started, anyway? Is Kraft protesting too much?
Continue reading Will Kraft dump assets to sweeten the Cadbury bid?
Posted Feb 20th 2009 11:00AM by Tom Taulli (RSS feed)
Filed under: Cisco Systems (CSCO), Private Equity
According to a report from Thomson Reuters, the global M&A market reached $4.2 billion in 2007. No doubt, this represented a lucrative source of fees for many financial institutions.
But last year, things dropped off significantly, with deal volume at $2.9 billion.
So, is dealmaking going to continue its deep descent in 2009? Well, BusinessWeek, writes this may not necessarily be the case.
Continue reading Is M&A going to rev up?
Posted Feb 17th 2009 9:45AM by Beth Gaston Moon (RSS feed)
Filed under: Major Movement, Deals, Sirius Satellite Radio (SIRI)

Stern fans, breathe easy! In breaking news this morning,
SIRIUS XM Radio (NASDAQ:
SIRI) and
Liberty Media Corp. (NASDAQ:
LMDIA) have reached a deal that will save the satellite radio company (for now) from the brink of bankruptcy.
Liberty will
invest $530 million in SIRI, kicking off with a first phase: a senior secured loan worth $280 million, $250 million of which will be paid out today.
In response, Liberty will assume two spots on the SIRIUS XM board and receive 12.5 million shares of preferred stock, convertible into 40% of common SIRI shares.
SIRI CEO Mel Karmazin, told reporters, "Liberty's investment is an important validation of what SIRIUS XM has already achieved and a vote of confidence in what we will achieve..."
In pre-market trading, SIRI shares have jumped more than 80% to 19 cents per share.
Beth Gaston Moon works for WeSeed.com. The above comments are not intended as trading or investment advice.Posted Jan 14th 2009 11:05AM by Jamie Dlugosch (RSS feed)
Filed under: Deals, Employees, Genentech Inc (DNA)

After the initial rebuff of Swiss-based pharmaceutical giant Roche's offer to acquire the 44% of
Genentech (NYSE:
DNA) stock Roche does not currently own, DNA is coyly encouraging the completion of a deal at a higher price.
Genentech is among the leading biotech companies in the world. It is engaged in the discovery, development, manufacturing and commercialization of pharmaceutical products intended for treatment of previously untreatable illnesses.
In 1990, Roche acquired a 56% stake in the company. Since that time, the relationship between the two companies has been a model for similarly structured combinations.
Roche's offer of $89 per share for DNA was characterized by DNA as significantly undervaluing the company.
But this was hardly a "hit the road, Jack" response. DNA's board of directors has been encouraging the two sides to continue discussions, and recent comments suggest that the deal could come together soon.
Continue reading Don't sell your Genentech (DNA) stock just yet
Posted Dec 9th 2008 10:25AM by Tom Taulli (RSS feed)
Filed under: Goldman Sachs Group (GS), Recession, Financial Crisis
With the massive decline in equities, it would seem that M&A would be robust – as solid buyers find compelling deals. But, if you look at the history of M&A, recessionary environments tend to result in lower activity.
And yes, according to analysis from Bernstein Research, it looks like 2009 will remain a slow time for M&A. If anything, there won't be a comeback until 2010.
No doubt, this is bad news for deal shops like Goldman Sachs (NYSE: GS) and Greenhill (NYSE: GHL). Then again, the investment banking industry is undergoing lots of change right now (as top-tier firms becoming bank holding companies).
Essentially, Bernstein forecasts that M&A activity will be off by a quarter next year. If this happens, then the fall-off will be 45% from 2007 to 2010.
Sounds bad, huh? Well, this is actually normal stuff in the feast-or-famine M&A game.
Why? For the most part, companies do not want to take major risks during slow economic times. After all, how long will the recession last? If it continues for several more years, then making a commitment on a major deal could be harmful.
However, Bernstein still sees some positives. For example, counter-cyclical industries, such as healthcare, should still see strength in M&A. Oh, and expect distressed deals (where sellers have no choice but to sell out) as well as activity in the financial sector (as the federal government pumps up the sector with fresh cash).
Tom Taulli is the author of various books, including The Complete M&A Handbook
and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market
. He is also the founder of BizEquity, a valuation website.
Posted Dec 3rd 2008 2:20PM by Jamie Dlugosch (RSS feed)
Filed under: Deals, Microsoft (MSFT), Yahoo! (YHOO), Newsletters, Bargain Stocks, Stocks to Buy
Lately it's been very difficult for investors to get their bearings, but I can tell you that the winners in this game will be companies with little or no debt. Forget what stock values are doing now and focus on the future. You can take it to the bank that stocks gaining in value will have started from a very solid balance sheet foundation.
That said, I want to talk about Yahoo (NASDAQ: YHOO).
Yesterday the company was in the news again with reports that former AOL chief Jon Miller is seeking capital to purchase YHOO outright for a price that is reported to be in the $20 range.
YHOO shares rocketed higher on the news, immediately jumping up by nearly $1 per share, or approximately 10%.
My initial reaction, as you might expect, was skeptical. Jump on this news as a chance to dump shares. Management at YHOO, with or without Chief Yahoo Jerry Yang, has destroyed shareholder value so much that it would be hard to believe that anyone would pay a premium for the stock.
How could it be that a lone ranger from the failed AOL model be considered a serious alternative to YHOO going it alone? It makes no sense until you take a closer look at YHOO fundamentals. There the story starts to get a little more interesting.
Continue reading Is Yahoo a screaming bargain without Jerry Yang?
Posted Nov 6th 2008 2:54PM by Sheldon Liber (RSS feed)
Filed under: Deals, Rumors, Management, Rants and Raves, Competitive Strategy, Microsoft (MSFT), Yahoo! (YHOO)

For some reason this morning several high profile stories I have been ranting about in recent months have floated to the top of the headline heap again.
I just read that
Yahoo! (NASDAQ:
YHOO) CEO Jerry Yang is ready to return to the bargaining table with
Microsoft (NASDAQ:
MSFT) stating: "To this day, I believe the best thing for Microsoft to do is to buy Yahoo," Yang said Wednesday evening at the Web 2.0 summit in San Francisco.
ARE YOU KIDDING ME?! This has to be one of the biggest jokes in the investment world -- unless you are a Yahoo! shareholder. It was only last week I posted
Yahoo rejects $30 to buy itself for $12? Microsoft could now offer a 20% premium to today's stock price and still buy Yahoo for half what it offered last January. What do they say -- "good things come to those who wait". This is certainly a screaming example.
I would love to be in the conference room or on the call when Microsoft offers up a few crumbs to bail them out of a sticky situation. I was against MSFT doing the deal for a bloated price before, but it might make sense now. It could buy the company, and with Wall Street titan and M&A guy Carl Icahn on board, slice and dice this thing so that it cost them next to nothing to get the search advertising part of the company they coveted.
Yang looks like a child playing with grown-ups and his biography is taking one hit after another. Good thing he does not need food money and will never have to work again no matter what happens. By contrast, if Yahoo! took the $44 billion it would have been the deal of the year and Yang would look brilliant again. If I was a shareholder I would be really, really steamed!
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I do not own shares of MSFT or YHOO.
Posted Sep 9th 2008 1:00PM by Zac Bissonnette (RSS feed)
Filed under: Management

On November 29, 2007, IHOP, now
DineEquity (NYSE:
DIN), announced it had completed
the acquisition of Applebee's, with CEO Julia A. Stewart commenting that "We are delighted to complete the acquisition of Applebee's as it represents an opportunity to create significant long-term value for IHOP shareholders over and above what we could have achieved on a standalone basis." On that day the stock closed at $52.29.
The stock closed at $23.97 Monday, and will likely fall farther today following
CFO Thomas G. Conforti departure after nearly six years, a fact the company disclosed in a press release euphemistically titled
DineEquity, Inc. Announces Chief Financial Officer Transition.
Mr. Conforti "resigned from the Company effective immediately to pursue other opportunities." What those opportunities are, we don't know, but apparently they're more exciting than working at a company whose stock has declined by more than 50% in the past year.
Of course, it's always a red flag when a company's CFO resigns, and investors would do well to be skeptical here -- the move was abrupt, and no permanent replacement has been named.
Back when the deal was first announced, I
wrote that "IHOP's revenue in 2006 was lower than it was in 2002. So maybe this is a case of two drunken sailors trying to hold each other up. There's nothing much to get excited about for shareholders of either company."
So far that's been an understatement but I won't take too much credit. The fact is that company-changing mergers and acquisitions rarely create value, and in the long run, betting against them is likely to produce a pretty good track record.
Posted Sep 5th 2008 8:45AM by Jim Cramer (RSS feed)
Filed under: Deals, Market Matters, Altria Group (MO), Wells Fargo (WFC), Cramer on BloggingStocks
TheStreet.com's Jim Cramer says we're destroying huge amounts of capital, and investors are sick of it. No big mergers and acquisitions (although my fingers are crossed about
Altria (NYSE:
MO) (
Cramer's Take), because MO needs growth and
UST's (NYSE:
UST) (
Cramer's Take) really good). No initial public offerings of any consequence since
Visa (NYSE:
V) (
Cramer's Take) despite a huge queue of private-to-go-public deals. No private-equity deals despite incredibly low valuations, valuations so minuscule that deals would have been done at gigantic premiums from here and still be much less expensive than they were. No threatening stakes by swashbuckling hedge funds. No new huge buybacks or dividend boosts, save
CenturyTel (NYSE:
CTL) (
Cramer's Take), not that anyone cared about that one.
No nothin'.
It is an amazing time. It is the first week of an admittedly almost always bad month, but that's almost always because we are up going into September and funds want to lock in good gains.
Nothing to lock in now.
Continue reading Cramer on BloggingStocks: What an awful moment
Posted Aug 26th 2008 10:49AM by Tom Taulli (RSS feed)
Filed under: Deals, India

In India, the growth of the information technology (IT) industry has been stunning. For the most part, the strategy has been to focus on internal growth. However, this may be changing; that is, expect more M&A.
In fact, this week
Infosys Technologies Ltd. (NASDAQ:
INFY) has
agreed to pay $753.1 million for UK rival, Axon Group PLC.
In a way, the Indian IT service providers are victims of their own success. For example, wages are skyrocketing and it's getting tougher to find quality consultants.
With the Axon deal, Infosys will add about 2,000 consultants who specialize in the complex work of
SAP (NYSE:
SAP) implementations -- projects that can certainly generate juicy fees. Infosys will also get a stronger platform in Europe. Last year, Axon generated $378.3 million in revenues, with $37.4 million in profits.
According to Murray Beach, managing Managing Director of
TM Capital:
"This transaction is an impressive step for Infosys. Many of the leading offshore services firms have talked about climbing up the value chain of services offerings and improving on-site customer presence, but none have completed a deal of such magnitude to back up their rhetoric. We expect the acquisition of Axon to mark the first of many acquisitions by the leading Indian offshore players of traditional on-site strategic and technology consulting companies in the US and Europe."
Tom Taulli is the author of various books, including The Complete M&A Handbook
and The Edgar Online Guide to Decoding Financial Statements
. He also operates MergerBook.com.
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