In case you missed any of these catchy tunes last week, it's not too late to boogie down. Grab your headphones, CD player, iPod, speakers, guitar, cowbell, whatever you need -- it's time for the M&A Mix Tape.
"Fight the Power" by Public Enemy featuring Barclays and ABN Amro
With the announcement of exclusive merger talks still fresh, Barclays
Barclays, of the U.K., and ABN, of the Netherlands, are two global banking giants with a wide range of services, including consumer banking, credit cards, business banking, asset management, and investment banking. The talks come at a time when activist shareholders, principally The Children's Investment Fund (TCI), have been looking for some action out of ABN. TCI, a primarily value-oriented hedge fund, got some prime-time headlines a few years back, when it had a hand in blocking the London Stock Exchange takeover of the Deutsche Boerse. Now TCI has its sights set on ABN and has been pushing for the bank to either break up or sell itself to a competitor.
The Barclays bid is a problem solved, then, right? Not quite. In a sale situation, TCI obviously wants to see the highest price for its position in ABN, and is pushing for the bank to put a two-month "go shop" clause in place. A "go shop" clause, typical in M&A deals, allows the target company's board of directors time to seek out other, higher bidders for the company. In a massive deal such as this, two months would give new bidders a chance to do due diligence.
With plenty of large banks focused on global growth, ABN's operations in the U.S. and Brazil, as well as its home country of the Netherlands, could be of interest to a number of players. Prior to the Barclays bid, France's BNP Paribas and Societe Generale both expressed an interest in ABN. HSBC and ING could also stick their noses in here, and Citigroup
"The Thin Ice" by Pink Floyd featuring KKR
Last month, buyout shops Kohlberg Kravis Roberts and Texas Pacific Group made sure private equity stayed prominent by proposing a $45 billion buyout of Texas power company TXU
It's not as if the deal was open and shut from the outset -- far from it. This wasn't the first time buyout firms have targeted a utility, and past attempts have met squarely with failure. This time looked to be different; strong political alliances, as well as a set of concessions from the outset (including a 10% rate cut for the company's customers), seemed to put the bidders in a good position.
With Texas TVs already blaring ads touting the "new TXU," the state's politicians are thinking that maybe turning over some stones might be a good idea. Currently under debate is whether the Public Utilities Commission should undertake a full review of the deal, an action that would likely put the takeover in limbo for a good chunk of time. KKR and TPG are obviously not happy with the turn of events, and KKR's Henry Kravis has made some noise suggesting that KKR may walk away from the deal if it does go to full review.
"This Is Why I'm Hot" by Mims and Google
Maybe in the past it was enough for Google
More recently, it looks as though Google has returned to its tried-and-true strategy of gobbling up small acquisitions and snapping them into its massive platform. This has worked well for the company; it turned up aces on acquisitions like Pyra Labs (owner of Blogger), Urchin Software (now known as Google Analytics), and Upstartle, which provided the technology for what is now Google Docs & Spreadsheets.
The most recent pickup was video-game advertiser Adscape. Adscape specializes in integrating advertising into video games so the ads act like a seamless part of the flow of the game. Video game giants like Electronic Arts have begun targeting this area, which could develop into a very lucrative aspect of the already gigantic video game industry. Google didn't release financial terms of the deal, but it's rumored to have been in the $23 million range.
I think YouTube could definitely end up being a cash engine for Google as it continues to develop the platform, but with the success the company has had through small, targeted acquisitions and internal development, I wonder why it would want the risks and headaches that come with the big-ticket acquisitions.
Claire's Stores agreed to be bought out by Apollo Management for $3.1 billion, or 9.5 times trailing EBITDA. The company has been on the market looking for a suitor since December. Though the terms represent a pretty fair price, it's less than the $35 per share traders had been speculating on in mid-February.
In a big week for private equity, Affiliated Computer Services
And in a little more PE action, logistics specialist EGL
That's it for this album, but be sure to keep tuned in to The Motley Fool for more tunes from the M&A front.
TXU is an Income Investor pick. Electronic Arts is a Stock Advisor selection. You can check out any of the Fool's newsletters with a 30-day free trial.
Fool contributor Matt Koppenheffer is currently ranked 2,370 out of 25,056 Fools participating in The Motley Fool's CAPS service, and he encourages everyone to get heard. He does not own shares of any of the companies mentioned. The Fool's disclosure policy says "this is why, this is why, this is why I'm hot."