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.
"Kiss on My List" by Hall and Oates featuring Movielink
It sounds like a kiss from Blockbuster (NYSE:BBI) may be on Movielink's list. It's rumored that Blockbuster may be in talks to buy the privately held movie-download service for $50 million in cash and stock. Though fellow Fool Rick Munarriz thinks you should kill Blockbuster in your portfolio, he views the $50 million as a reasonable price for Blockbuster to add downloadable movies to its store rental and mail rental services. It would certainly be better than laying out money to add MovieBeam.
And speaking of MovieBeam, last Wednesday, Blockbuster competitor Movie Gallery (NASDAQ:MOVI) announced that it would be snapping up the company. MovieBeam delivers films via a digital signal through the air to a set-top box at the movie watcher's location. Though it's been backed by media and technology heavyweights Disney, Cisco, and Intel, it hasn't made a huge splash in the marketplace.
Though downloadable movies currently make up a tiny sliver of the multibillion-dollar movie rental industry, it's expected that this fast-growing segment will steal market share in years to come. Players already offering movie downloads include Blockbuster's arch-nemesis Netflix and Apple.
"Can't Buy Me Love" by The Beatles featuring Citi and Nikko
A wad of cash may not be enough to get that special someone to show you some love, but in the realm of mergers and acquisitions, some extra cash can go a long way. Such is the case for Citigroup (NYSE:C) in its amorous approach to Japanese brokerage house Nikko Cordial.
It's not that shareholders are inherently against Citi swallowing Nikko; they just think the bank could dig a little deeper in its pockets and cough up some more cash for the deal. Since I took a look at the deal last week, three investors that own 5% or more of Nikko's stock (in addition to Harris Associates) have come out against the deal at the current price. Southeastern Asset Management and Orbis Investment Management both put their target price at 2,000 yen, the same as Harris, while Canada-based Mackenzie Financial said that it would accept an offer between 1,700 and 1,800 yen.
Aiding these investors is the Tokyo Stock Exchange's decision to allow Nikko to keep its listing, despite the firm's recent accounting scandal. Citi has already come out saying that it does not plan to up its 1,350-yen offer, so it's likely relying on a strong response from other shareholders, including Mizuho Financial, which holds just less than 5% of Nikko's stock.
"Take Me Out to the Ball Game" by Jack Norworth featuring Topps
For iconic baseball card maker Topps (NASDAQ:TOPP), the buyout offer from Madison Dearborn Partners and Michael Eisner's Tornante makes the song sound more like "Take Me Out of the Ball Game." Last week, the two private equity firms made a $9.75-per-share offer for Topps, an offer that gave investors a 9% premium over the previous day's closing price.
Crescendo Partners, which (along with Pembridge Capital Management) waged a proxy war against Topps' CEO, Arthur Shorin, last year, was quick to criticize the deal. While the offer won't give any of Topps' shareholders the urge to break out the cigars, it may be just good enough to convince them to move on from Topps and its middling (though recently somewhat more promising) performance and find greener pastures.
There is a 40-day "go shop" period for Topps, though it seems unlikely that a competing bid will come to the table. Some investors are betting on just that, though, and have bid Topps' stock above the buyout offer price.
If the deal goes though, it'll be interesting to see what the buyout group does with Topps. Despite my own fond childhood memories of Topps baseball cards, Garbage Pail Kids, and Bazooka Joe gum, Topps has been decidedly less exciting as a company in the digital age.
Lehman Brothers advised Topps on the transaction, and Deutsche Bank worked on the deal from the buyers' side.
Liner Notes
As DaimlerChrysler (NYSE:DCX) trudges forward with its plans to possibly sell the U.S.-based Chrysler unit, private equity and hedge fund buyers are emerging as legitimate contenders for the struggling automaker. Though GM still looms large in the picture, reports have been circulating that private equity firm Blackstone and hedge fund Cerberus Capital are taking a hard look at Chrysler's pitchbook. In separate reports, DaimlerChrysler may also be looking to spin off the financing arm of Chrysler.
Continuing deliberations on what the future will hold for Tribune (NYSE:TRB), one of the nation's largest newspaper publishers, the company's board said that it is considering the late bid from investor Sam Zell. Zell is known for his investing success in the realm of real estate, and in particular for knowing how to spot a sorely undervalued asset. His plan would be to take the company private using a good slug of debt and an employee ownership structure. Meanwhile, Tribune continued its efforts to turn around the company on its own and sold two Connecticut-based newspapers to competitor Gannett for $73 million.
Just as Shaq doesn't make all his money from basketball, Jay-Z isn't counting on continued music success to pad his bank account. His most recent move has been to sell his Rocawear brand to brand licensing company Iconix (NASDAQ:ICON). Iconix -- which manages the Joe Boxer, Mossimo, Candies, and London Fog brands -- paid $204 million for Rocawear. Jay-Z will continue to own the Rocawear operating company, which manufactures the clothing, and he will also stay on as the company's chief creative officer.
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.
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Fool contributor Matt Koppenheffer is currently ranked 5,296 out of 24,201 Fools participating in The Motley Fool's CAPS service, and he encourages everyone to get heard. He owns shares of Goldman Sachs, but does not own shares of any of the other companies mentioned. The Fool's disclosure policy always delivers those block rockin' beats.
