Acquisitions Monthly articles from August 2007

Acquisitions Monthly archives from August 2007

Private equity vanquished; financial sponsors have failed to win Sainsbury and Altadis, showing the power of corporate acquirers in a tightening credit market.(EDITORIAL)
August 1, 2007... Cracks are starting to appear in the mighty deal-making edifice that private equity has built up. Instead, corporate acquirers are returning to dominate the deal landscape once again. This week, Imperial Tobacco has managed to outwit rival...

Nominate your deals and your firm for awards; Acquicisitions Monthly magazine encourages firms to make submissions for its awards for M&A and buyout work completed during 2007.(EDITORIAL)
August 1, 2007... The winners will be announced at the Acquisitions Monthly Awards Dinner in mid January 2008 and choices will be influenced primarily by the range of submissions, our own research and meetings, and the views of the external judges. If you...

Pistols at dawn: shareholder activists battle to unlock value: shareholder activists are becoming increasingly emboldened to take on the boards of some of the largest listed companies. But, are their activities good news for all investors?(COVERY STORY: SHAREHOLDER ACTIVISM)(Cover story)
August 1, 2007... There were strict rules governing pistol duels between gentleman back in the days when disputes were commonly settled in such a manner. The point was that the fight had to be fair. Marksmanship alone would decide the outcome. But in the world...

July snapshot: synopses of the largest global deals announced last month follow, along with pie charts illustrating volumes of global activity by sector and region as well as league tables of financial advisers for the last 12 months and year-to-date.(MARKET INTELLIGENGE)
August 1, 2007... CANADA -- Rio Tinto PLC (RT) agreed to launch a challenging offer to acquire all the outstanding common stock of Alcan Inc (AL), a manufacturer of aluminium products, for C$106.484 (49.822 [pounds sterling], US$101) a share, or a total value of...

Private equity and EU antitrust; acquisitions monthly is looking for firms interested in sponsoring a special report on this topic. Please contact Henry Gibbon or Stephen Howard to discuss the synopsis and contents of this planned 2007 supplement.
August 1, 2007... In the US the Federal Trade Commission is now investigating private equity groups, fearing that their size and weight in the market is now impacting on the free play of competition. Where the US authorities investigate the EU is unlikely to be...

Second quarter sees increased premia; Phoenix IT pays highest premia of second quarter in offer for software and computer services group ICM.(MARKET INTELLIGENCE)
August 1, 2007... Although the volume of eligible completed offers for UK listed companies saw little change during the quarter of2007 when compared to the first, the average premia paid were up. The second quarter of 2007 saw the completion of 24 eligible...

Infrastructure--a very public practices; as they seek to address the issues facing an ever-more public-facing investment industry, practitioners in the global infrastructure sector have developed their businesses in many ways.(SECTOR REPORT: INFRASTRUCTURE REPORT)(Industry overview)
August 1, 2007... The current focus on private equity is split largely into two key issues: taxation of investment professionals; and the role and requirements of the public as stakeholders in what are increasingly larger and more relevant buyouts. While...

Canadian pensions lead record buyout; Bell Canada Enterprises, a US$48.5bn deal, was fought over by Canadian pension funds battling to keep their 'pension promise'.(SECTION REPORTS: INFRASTRUCTURE REPORT)
August 1, 2007... The direct acquisition of assets by Canadian pension funds reached record heights when on June 30 Canadian telecommunications company Bell Canada Enterprises (BCE) entered into an agreement to be acquired by a consortium led by Teachers'...

Investing in wireless assets: although not at first glance a sector to send the pulse racing, mobile phone masts and broadcasting towers are an emerging sector with many attractions.(SECTOR REPORTS: INFRASTRUCTURE REPORT)
August 1, 2007... Commercial infrastructure, as it is sometimes called, has at least in theory many of the safe characteristics associated with a typical infrastructure business, but without the government meddling. This is because it tends not to have the...

A year on: the cost to Ferrovial of its 24.4bn [pounds sterling] purchase of BAA; Can the Spanish airports-to-toll roads company afford to pay back the debt it took on when it bought the UK's largest airport operator in a massive LBO?(SECTOR REPORTS: INFRASTRUCTURE REPORT)
August 1, 2007... Ever since Spain's Ferrovial led a multinational coalition force willing to spend a staggering 16.4bn [pounds sterling] (US$24.4bn) on buying BAA, the question has always been: Can BANs new owners afford to pay back the debt it raised for the...

Insatiable thirst for water put to the test; Tightening credit markets and the prospect of a tougher regulatory pricing review in 2010 have convinced many that the current valuations in the sector are unsustainable.(SECTOR REPORTS: INFRASTRUCTURE REPORT)
August 1, 2007... Takeover in hit a new high in the run-up to the results of the five remaining publicly quoted companies at the beginning of June. The share prices of Pennon and Kelda, the parent groups of South West Water and Yorkshire Water respectively,...

Hospitality gears up for a record M&A year: the hotel sector hasn't had so much going for it in decades but globalisation and the growing importance of brands is driving consolidation, with 2007 promising record M&A activity in the sector.(SECTOR REPORTS: FOCUS ON PROPERTY & HOTELS)
August 1, 2007... Rates for London hotel rooms are rising strongly this year, particularly at the luxury end. This is great news for guests, but it's certainly a welcome boost for an industry that has so often struggled to fill empty rooms. Last year,...

Reits ripe for M&A.(SECTOR REPORTS: FOCUS ON PROPERTY & HOTELS)
August 1, 2007... "We consider it would be surprising if there was not a significant amount of M&A activity in 2007 when UK REITs first come into existence." That quote was the conclusion of a report entitled UK REITs--The M&A Opportunity, dated September...

New Ariel and old Atrium chime: Bermudan and Lloyd's insurers are combining in the face of a softening market.(SECTOR REPORTS: FOCUS ON REINSURANCE)
August 1, 2007... Ariel's 193.2m [pound sterling] (US$396.3m) cash acquisition of Atrium, announced on July 20, brings together two reinsurers from across the seas and from competing sides of the reinsurance market--albeit not for the first time. Ariel is...

Friends provident, resolution confirm merger talks: if the all-share merger of the life insurers goes ahead, Resolution shareholders will own 50.9% of the merged company while Friends Provident will have a 49.1% stake.(SECTOR REPORTS: FOCUS ON INSURANCE)
August 1, 2007... UK life insurers Friends UProvident and Resolution have confirmed that they are in advanced discussions regarding an allshare merger. One analyst, who declined to be named, estimated that the cost synergies of the merger could be as little...

Barclays sells stake to Asian investors, sweetens ABN offer: UK bank agrees to sell up to 13.5bn [euro] in new shares to two state-backed Asian investors in order to sweeten its offer for Dutch counterpart ABN AMRO.(SECTOR REPORTS: FOCUS ON BANKING)
August 1, 2007... Barclays said it was raising its offer for ABN AMRO of the Netherlands, helped by the sale of up to 9bn [pounds sterling] (US$18.5bn) of its shares to government-controlled Asian investors China Development Bank (CDB) and Temasek. Barclays...

Vodafone activist voted down: more than 93% of shareholders vote against ECS resolutions to spin off Vodafone stake in Verizon Wireless.(SECTOR REPORTS: FOCUS ON TMT)
August 1, 2007... It is just as well that John Mayo, former finance director of Marconi and a backer of activist shareholder Efficient Capital Structures (ECS), did not appear at Vodafone's Annual General Meeting in London on July 24 2007 in support of the...

Eiffage and Sacyr await decision on landmark AMF ruling Spanish concert party decision by French regulator put to the test in Court of Appeal.(LEGAL & REGULATORY)
August 1, 2007... On June 26, French stock exchange regulator the Autorite des Marches Financiers (AMF) gave what was a landmark decision in relation to the offer for French construction and toll roads company Eiffage by its Spanish rival Sacyr Vallehermoso. ...

Schneider wins damages for Legrand veto: in a precedent-setting case that makes the regulator financially liable for its mistakes, a court ruled that Schneider Electric must be compensated after the European Commission wrongly rejected a 2001 merger.(LEGAL & REGULATORY)
August 1, 2007... The Court of First Instance (CFI) last month held that the European Commission should pay compensation to French electrical distribution company Schneider for some of the losses incurred as a result of the Commission's prohibition of its...

Bright prospects down south:(US$5OOM-US$3OM) strong selling conditions have meant this year has proved busier than ever for advisers on deals in the South of England.(MOVING IN THE MID-MARKETS)
August 1, 2007... Several years ago, corporate finance activity in the South of England appeared to be on the wane. One of the region's major acquirers, veteran venture capitalist 3i, was retrenching its operations, closing down smaller offices to concentrate on...

Food fight: competition for restaurant deals is fierce, with trade buyers, private equity firms and even pubs eager to get their feet under the table.(MOVING IN THE MID-MARKETS: FOCUS ON PUBS & RESTAURANTS)
August 1, 2007... Who knew tapas could cause such a stir? Earlier this year, La Tasca, a UK high street chain of Spanish eateries, found itself fought over by two hungry predators. In the course of just one week, the trendy tapas chain received competing...

Third financial eyes first deal: a father and son team plans to back financial software businesses with a new private equity venture.(INSTITUTIONS)
August 1, 2007... With decades of experience in the financial technology sector between them, father and son Roger and Stewart Foster have launched Third Financial, a new private equity firm focused on sector investments in the lower mid-market. The firm...

Capula appoints ex CEO of IBM.
August 1, 2007... Capula, the UK's leading advanced automation and real-time business intelligence company to the nuclear, power generation and utility industries has appointed Nick Temple, the former Chief Executive of IBM UK, as its new Chairman. Capula was...

Moody's warns on LBO market: credit rating agency notes the inherent risks of the private equity industry, while separate survey and deal statistics signal 'steady as she goes'.(BEHIND THE BUYOUTS: PRIVATE EQUITY COLUMN)
August 1, 2007... Moody's issued a special comment last month entitled "Rating Private Equity Transactions." It warns on the potential downside of private equity portfolio company refinancings that enable financial sponsors to pay themselves and their limited...

Thrills on hold for leisure seekers: after a wave of frenetic activity, leisure sector specialists expect a pause before further significant deals are unveiled.(BEHIND THE BUYOUTS: FOCUS ON LEISURE)
August 1, 2007... Dealmakers are expected to catch their breath in the leisure sector over the next 12 months, following a frantic bout of activity over the past two years. This has seen both of the UK's listed casino companies - Stanley Leisure and London...

NBGI scores with disposals as it chases Fund II: following two high-multiple sales, the directors at UK-based mid-market private equity firm NBGI private equity look ahead to a new fund and new opportunities. They talked to Robert Venes.(BEHIND THE BUYOUTS)
August 1, 2007... NBGI Private Equity, a UK lower mid-market private equity firm, can let the numbers do the talking as it chases a 100m [pounds sterling] (US$203m) target for its second fund. The firm announced on July 12 the flotation of Superglass, the...

Risk Capital Partners weighs 100m [pounds sterling] fund options.(BEHIND THE BUYOUTS)
August 1, 2007... Risk Capital Partners, the private equity fund chaired by Luke Johnson, is weighing up its options for raising a new fund -perhaps as early as the first quarter of 2008. The fund raising is likely to be in the region of 100m [pounds sterling]...

Delta approaches Sainsbury.(BEHIND THE BUYOUTS)
August 1, 2007... Qatari investment group Delta Two has approached UK supermarket chain J Sainsbury regarding a cash offer expected to be worth some 10.6bn [pounds sterling] (US$21.7bn). It has been reported that Delta--advised by Credit Suisse and Dresdner...

CVC completed 4.25bn [pounds sterling] of deals.(BEHIND THE BUYOUTS)
August 1, 2007... CVC Capital Partners, a London-based buyout house, has capped a busy month announcing more than 4.25bn [euro] of deals. On July 4, CVC put about 200m [euro] into the 800m [euro] buyout of Taminco's, a Ghent, Belgium-based producer of...

Providence and KKR to bid for Virgin.(BEHIND THE BUYOUTS)
August 1, 2007... Providence Equity Partners and KKR have hired advisers on a 15.9bn [euro] bid for Virgin Media. Providence is thought to have teamed up with Blackstone and Cinven, and other private equity firms, including Texas Pacific Group, also considering...

APAX revives Air France dialogue.(BEHIND THE BUYOUTS)
August 1, 2007... Apax Partners is believed to have renewed discussions with Air France in support of its intended bid for Spanish airline Iberia. There is currently just one indicative offer for Iberia from a consortium comprising US private equity firm TPG...

Baugur could buy Debenhams: Iceland could take the department store that floated just over a year ago private.(BEHIND THE BUYOUTS)
August 1, 2007... If Baugur, the Icelandic investment company founded and headed by Jon Asgeir Johannesson, bids for struggling UK department store Debenhams, you can bet your bottom dollar that Baugur's long-time business partner, FL Group, will also be there...

Carlyle buys Applus for 1.48bn [euro].(BEHIND THE BUYOUTS)
August 1, 2007... Private equity house Carlyle has agreed to buy Spanish testing and certification company, Applus, from its shareholders Agbar, Union Fenosa and Caja Madrid, for 1.48bn [pounds sterling] including debt. With headquarters in Barcelona, the...

Terra Firma's EMI bid in doubt.(BEHIND THE BUYOUTS)
August 1, 2007... Private equity firm Terra Firma's recommended bid of 265p per share for UK music group EMI looks in doubt, with a low acceptance rate from shareholders and news that lenders could refuse to back the deal. The deadline for accepting Terra...

Turkey: blue sky potential drives M&A boom: just on the rim of the European Union, Turkey's economy is growing at a blistering pace and sucking in considerable sums in foreign investment. Much of this money is funding the country's sizzling merger and acquisition activity. Justin Pugsley reports.(COUNTRY REPORT TURKEY)
August 1, 2007... The purchase of Oyak Bank by financial service giant ING might well mark the tail end of the current round of banking consolidation in Turkey, but it is by no means the end of merger and acquisition activity in a country that is rapidly earning...

M&A deal data: this country analysis included acquisitions and buyouts announced between 18 June 2007 and 18 July 2007.
August 1, 2007... M&A DEAL DATA This country analysis included acquisitions and buyouts announced between 18 June 2007and 18 July 2007. Benelux Target Bidder Capital & Finance (BE) 90.0% Ackermans & van...

Foreword.
August 1, 2007... This guide could hardly be more topical given the wide-ranging debate on the tax treatment of mergers and acquisitions, especially those involving private equity firms, on both sides of the Atlantic. Yet one of the striking features of this...

Introduction: why tax is important to the success of deals.
August 1, 2007... Modern mergers and acquisitions (M&A) activity is inspired by global strategies and employs increasingly sophisticated approaches to buying and selling businesses, often in competitive auctions between well-advised, sceptical buyers. More...

What are the crucial tax issues that can make or break a merger or acquisition?(Roundtable Forum)
August 1, 2007... Here, in a Roundtable Forum, specialists explore some of the critical tax factors that M&A professionals should be on top of in seeking to close a successful M&A deal. Acquisitions Monthly quizzes KPMG firms' senior M&A tax specialists on what...

A snapshot summary of M&A tax in six major EU national jurisdictions.(Snapshot)
August 1, 2007... When structuring a multinational deal there are a wide range of tax complexities that need to be taken into account. Careful planning is required to achieve the most efficient outcome. Such planning tends to revolve around six key issues,...

Interest deductibility: the key tax issue on acquisitions: Developments in government policy towards interest deductibility across continental Europe are likely to prove a strong influence on policy makers in the UK. Keith Boyfleld reports.(Interest deductibility)
August 1, 2007... Rarely do arcane aspects of corporate tax policy dominate newspaper headlines. Yet that is precisely what occurred this spring in Britain. The extent to which private equity funds should be permitted to claim interest payments against taxable...

Why should interest on debt capital be deductible from taxable profits?(Interest deductibility)
August 1, 2007... As John Plender, the Financial Times columnist and chairman of the Advisory Council of the Centre for the Study of Financial Innovation often points out, companies may prefer to issue debt because it is tax deductible rather than raise money...

Why tax makes a difference: contrasting the needs of corporates with private equity buyers: Christian Janisch, Anneli Collins and Arco Verhulst of KPMG's Global M&A Tax network discuss some of the commercial differences that can arise.
August 1, 2007... What are the crucial tax issues that distinguish corporate transactions from M&A deals involving private equity capital? In broad terms there are three distinguishing factors: the speed of deal completion, the appropriate holding period and...

Indirect but nonetheless vital: why indirect taxes can play a pivotal role in M&A deals. Keith Boyfield write.(Indirect Taxes)
August 1, 2007... Historically, corporate income taxes have been the key tax focus on most deals. However, with the growth of exemptions for capital gains and increasing treaty reliefs, the amount of income tax exposure on a deal is often reducing and instead,...

How insurance capital can be employed as a tool for managing tax liabilities.(Indirect Taxes)
August 1, 2007... "The management and apportionment of unknown or contingent liabilities is always a key aspect of all deal negotiations", says Daniel Max, a Senior Vice President within Marsh's Private Equity and M&A Practice (PEMA). He points out while it is...

Benchmaking European tax and legal environments.(Glossary)
August 1, 2007... The European Venture Capital Association (EVCA) and KPMG International undertake a regular benchmarking study to compare the relative merits of European countries' tax and legal regimes for private equity and venture capital investors. The most...

KPMG and M&A Tax.
August 1, 2007... No company with global ambitions can afford to disregard the opportunities offered by mergers, acquisitions and disposals for profitable growth. However, it is important that the tax implications of each deal are understood and taken into...

KPMG's Global Network: European regional M&A tax team contacts: below is a brief biography of each of the member firms' leaders for KPMG M&A tax.
August 1, 2007... KPMG IN THE UK Michelle leads KPMG's M&A Tax practice in the UK and EMA Region. Michelle has provided tax advice on corporate transactions for 13 years and has been a dedicated M&A Tax adviser for the last 6 years; providing due diligence,...