Acquisitions Monthly articles from June 2003

Acquisitions Monthly archives from June 2003

Shareholders can profit from M&A. (Insight).
June 1, 2003... Proponents of mergers and acquisitions are fighting back. An accumulation of research reports had fed the conventional popular wisdom that most M&A deals do not produce shareholder value. Now, both strategic consultants Bain & Company and KPMG...

Synopses of the largest global deals in May 2003. (Market intelligence).
June 1, 2003... DENMARK: D/S Svendborg (SG) plans to merge with D/S 1912 (DS), a provider of container, tanker, offshore supply and offshore drilling services, in a stock swap transaction valued at DKr63.94bn (US$9.85bn). SG offered DKr330 (US$50.83) in cash...

Airlines vexed about valuations: a merger between midland and virgin is on the cards but there are some difficult issues to surmount first. (Market intelligence).
June 1, 2003... Virgin Atlantic is looking seriously at the possibility of a deal with British Midland International (BMI), the privately owned carrier in which Lufthansa holds a 25% stake and SAS a 20% equity stake. Unrealistic ideas about valuations,...

Downgrading Northumbrian water: the consortium that acquired the water company from Suez has fences to mend after Standard & Poor's downgraded the company's debt. (Restructuring column).
June 1, 2003... The bid led by Deutsche Bank, stockbroker Collins Stewart and investment management and advisory group Ecofin--which was predicated on refloating the water company on the stock market--beat rival offers that would have refinanced Northumbrian...

RBS at 10: it was only a decade ago that the Royal Bank of Scotland poached Leith Robertson from Bank of Scotland to establish an acquisition finance division, but how Things have changed in the last 10 years. (Institutions).
June 1, 2003... Back then, the European buyout market was worth just over 5.8bn [euro], while the combined value of last year's deals was nearer 40bn [euro]. Falling numbers and rising values mean that the average size of deals has also rocketed during this...

Big game: if a gaming business can succeed in spite of restrictive regulations, how much better might it do when those restrictions are lifted? Cinven's Dick Munton and Peter Catterall explain the background to the recent acquisition of the Gala Group. (Sponsored Article).
June 1, 2003... Gaming is the most heavily regulated sector of the UK leisure industry. Restrictions cover membership, opening hours, and where and how drinks can be served. They limit the number of machines in each club, the value of prizes and the types of...

Boutiques lead the way; the recruitment market is still depressed but some of the new boutiques and some of the smaller corporate brokers are showing signs of life. (Institutions).(extensive listing of bankers who have been recently hired in Europe)
June 1, 2003... Corporate finance recruitment is still in the doldrums but some encouraging trends are emerging. Bankers are now talking about having reached the "bottom" of the M&A market, leading headhunters to believe that a perceptible recovery in both...

Galloway launches West Hill; ex-HSBC head of financial institutions starts new boutique. (Institutions).(Brief Article)
June 1, 2003... Andrew Galloway, the former global head of financial institutions at HSBC Investment Bank, is launching a new sector-focused boutique with the help of ex-James Capel analyst Alan Richards. West Hill Corporate Finance employs six...

Banks build up leverage teams; ABN AMRO and Lehmans have made hirings to add to their debt coverage. (Institutions).(Brief Article)
June 1, 2003... ABN AMRO has announced series of hires to the bank's financial sponsors and leverage finance groups. Gavin Alexander, global head of structured finance in ABN AMRO's financial market business, said: "The hires are designed to allow the bank to...

Cartel-busting bounty-hunters: the next step in antitrust? Professor Bill Kovacic of the US Federal Trade Commission last month made a surprising contribution to the transatlantic antitrust dialogue. (Legal and Regulatory).
June 1, 2003... A first sight the idea of bounty-hunters seeking out cartels does appear outlandish. However, at the British Institute International Antitrust Conference two weeks ago, no less a figure than leading antitrust specialist Professor Bill Kovacic,...

Enterprise Act comes into force: the OFT will now decide which mergers are referred to the Competition Commission and the OFT and the CC will apply a substantial lessening of competition test replacing the public interest test. (Legal and Regulatory).
June 1, 2003... Merger guidance has been published by the OFT explaining how it will carry out its responsibilities in the new merger regime under the Enterprise Act 2002, which comes into force on June 20. From then, the examination of mergers by the...

What price reputation? The pressure to disclose environmental performance is getting more pronounced and more meaningful from a business perspective. Ben Harding assesses changing attitudes and legislation and the impact this is having on M&A due diligence. (Legal and Regulatory).
June 1, 2003... Mounting legislation, as well as measures designed to make industry become more self-policing, have shifted environmental issues into the spotlight. Following last year's corporate governance scandals, environmental issues have become linked...

Potential for asset-based lending: "what role does asset-based financing have to play in European management buyout financing?" (Viewpoints).
June 1, 2003... "The short answer is, unequivocally, an increased role. With European stock markets depressed, a string of poor corporate results and profit warnings, combined with low Eurozone GDP growth, conditions are right for increased levels of disposal...

Problem with whole business securitisation: despite its seemingly attractive characteristics, whole business securitisation has run into some very high profile problems of late. Ben Harding investigates whether the reality is as bad as the recent gloomy press reports would have us believe. (Acquisition finance).
June 1, 2003... In the past, securitisation deals were generally completed on a pool of similar assets--for example, the rental income from an investment property portfolio. However, over the last few years the traditional boundaries of securitisation have...

M&A capital markets round-up. (Acquisition finance).
June 1, 2003... Lead arranger Barclays is preparing to launch a combined senior and mezzanine package of about 1 bn [euro] to support the buyouts of BertelsmannSpringer and Kluwer Academic Publishing (KAP) by private equity duo Cinven and Candover. Bertelsmann...

Vivendi kicks off roadshow presentations; Vivendi Universal is putting the finishing touches to a series of asset sale roadshows in New York and Los Angeles this month. (TMT sector report).
June 1, 2003... Vivendi has arranged a series of meetings targeting first-round bidders for the company's US entertainment assets. The deadline for first-round bid submissions is looking like the end of June. Citigroup is acting as lead adviser to Vivendi...

Definition of media centre stage: the convergence in technologies in the media sector, which is blurring boundaries between market definitions, is the subject of recent studies. (TMT sector report).
June 1, 2003... As the European media market prepares for further consolidation over the next year, the EU competition authorities are looking at bringing more clarity to the way they make judgements on media mergers. Recently, the issue of media merger...

Insinger lures private equity investor; Candover has backed a rare buyout in the financial services sector. (FIG sector report).
June 1, 2003... Candover's 200m [euro] acquisition of the trust and fiduciary business--known as "Equity Trust"--of Insinger de Beaufort represents a rare foray into financial services for the private equity community. The deal is likely to be the first of...

Scottish electricity faces reorganization; Scottish and Southern Energy could look for an asset swap with Scottish power if it completes its acquisition of midlands electricity. (Utilities sector report).
June 1, 2003... Scottish & Southern Energy's 1.1bn [pounds sterling] (US$1.8bn) bid for Midlands Electricity looks to industry insiders like a key step towards a bigger reorganisation of the electricity business in Scotland. A growing number of...

Moving in the mid-markets (US$300m-US$30m).
June 1, 2003... Overview Industrials remain the top sector this month followed by financials, which has taken over the second slot from energy and power. In both sectors the US has played a prominent role. Deals have included the US$217m acquisition...

Radio picks up bad vibes; beware the hype, is the message from analysts and company executives in the UK radio industry. (Sector watch).
June 1, 2003... City brokers and advisers who think healthy fees lie just ahead as the industry undergoes a wave of takeover and merger activity, will be disappointed. There will be a few large deals in the wake of the Communications Bill, due to become law...

Oil and gas steals the limelight; although oil & gas retains its dominance on the Scottish landscape support services in the non-oil and gas arena has proved lucrative. (Moving in the mid-markets).
June 1, 2003... Scotland's huge oil & gas sector has once again proven its dominance in a quiet market. Activity over the last six months has seen venture capital and management buyout activity in the sector, driven mainly by 3i, and the emergence on the...

Technology hots up for Broadview; after abortive talks about a deal with UBS Warburg last year, Broadview International is happy to go it alone as the technology sector regains some of its health. (Moving in the mid-markets).
June 1, 2003... Broadview International was in the market last year for a buyer. With the UBS Warburg talks finally falling through, the future could have looked rather uncertain. UBS Warburg had shown an interest in acquiring Broadview back in 2000, when...

Registered intermediaries needed in the US: this is the first in a new series of columns addressing issues in the mid-markets. Here, Howard Leigh of Cavendish Corporate Finance looks at the changing regulatory environment involving transactions in the US. (Mid-markets column).
June 1, 2003... Until recently very few corporate financiers in the mid-market have been aware of a potential regulatory issue when trying to sell a business to a purchaser in the US. The SEC, which is the main regulatory body in the US, recently withdrew...

Behind the buyouts.
June 1, 2003... Overview According to figures just released by the European Venture Capital Association (EVCA), the private equity market in Europe reached a happy equilibrium in 2002, after several years when the money coming in far exceeded the money...

Smash-and-grab days come to an end; the secondaries market is coming of age and is now increasingly crowded. (Behind the buyouts).
June 1, 2003... Time was when private equity was a simple game of buying low and selling high; the economy and leverage took care of business. The secondaries private market in all its variations is undergoing a similar transformation to the rest of the...

Permira's buyout bid for Debenhams. (Behind the buyouts).
June 1, 2003... Private equity house Permira is in discussions with three banks about underwriting the debt to back its 1.5bn [pounds sterling] (US$2.5bn) bid to buy out UK high street department store chain Debenhams. Royal Bank of Scotland and Bank of...

Selfridges recommends Galen Weston bid. (Behind the buyouts).(Brief Article)
June 1, 2003... Galen Weston, the Canadian billionaire, has offered 387p a share in cash plus a final dividend of 5.25p for UK department store group Selfridges. This represents a premium of 60% to the share price before news of bid talks was disclosed. The...

KKR makes French hire; US group strengthens French franchise. (Behind the buyouts).(Brief Article)
June 1, 2003... Kohlberg Kravis Roberts (KKR), the US-based buyout giant, has announced the appointment of Jacques Garaialde as managing director, in a move designed to bolster its French operations. Ned Gilhuly, European managing director of KKR said:...

Candover and Cinven acquire BertelsmannSpringer; private equity frims snap up Bertelsmann's professional publishing business. (Behind the buyouts).
June 1, 2003... Private equity firms Candover and Cinven have won a highly competitive auction to acquire the academic and professional publishing business of Bertelsmann for 1.05bn [euro]. BertelsmannSpringer will subsequently be merged with Kluwer Academic...

Holmes Place recommends private equity bid. (Behind the buyouts).(Brief Article)
June 1, 2003... Following months of speculation, UK health club operator Holmes Place has recommended a 210m [pounds sterling] (US$350m) offer from Bridgepoint Capital and Permira. The bid consists of a 25p a share offer, valuing the company at 25.4m...

CVC Capital in exclusive talks with IG Group. (Behind the buyouts).(Brief Article)
June 1, 2003... Spread betting company IG Group is in exclusive negotiations with CVC Capital Partners about the potential 255p per share (150m [pounds sterling]) MBO of the business. Chief executive Nat le Roux is thought to be leading the management team....

Pipe dreaming: VC investment in public companies has long been a contentious subject Ben Harding talks to lawyers about new developments in the concept. (Private equity column).
June 1, 2003... Private investments in public equities (PIPES) emerge in various guises whenever the stock markets drop and liquidity dries up. In the late 1980s and early 1990s several firms dabbled in similar kinds of deals in all but name. The technique...

Funds & exits. (Behind the buyouts).
June 1, 2003... First exit for Montagu Montagu Private Equity announced that it has sold Risdon Pharma, a manufacturer of plastic packaging for the pharmaceutical industry, to Rexam, a consumer packaging group, for a total consideration of 125m [euro]....

VCs gain the whip hand in Switzerland; M&A activity looks set to increase in Switzerland, driven by the financial pressures on many of its largest corporates, this wave of restructuring will provide private equity groups with a rare window of opportunity. (Switzerland).
June 1, 2003... The Swiss private equity market has traditionally been driven by a steady, if unspectacular, stream of buyouts from family owned businesses, punctuated by the odd larger spin-off. This changed last year with the completion of several large...

Privitisation on the cards in Austria: sales of state assets look set to keep the market flowing in Austria in the second half of the year as real estate assets are sold off. (Austria).
June 1, 2003... The Austrian market looks set for a new wave of privatisation in the second half of the year. Already on the block are a potential 3bn [euro] worth of assets as the Ministry of Finance puts five residential building companies up for sale. ...

M&A deal data.
June 1, 2003... M&A deal data Benelux Target Joined NV (NT) --Wholesale medical, dental, hospital equipment Sales ($): n/a Net Profits ($): n/a Bidder Abbott Laboratories (US) --Manufacturer pharmaceutical,...

Monthly sector analysis.
June 1, 2003... Monthly Sector Analysis THIS SECTOR ANALYSIS INCLUDES ACQUISITIONS AND BUYOUTS ANNOUNCED BETWEEN 1 MAY AND MAY 31, UK PUBLIC OFFERS COMPLETED BETWEEN THESE DATES ARE INCLUDED, WHEREAS NEW AND PENDING OFFERS ARE EXCLUDED, THE...

Close Brothers' Corporate Restructuring Group. (Sponsored Statement).
June 1, 2003... Close Brothers' Corporate Restructuring Group (CRG) is an integral part of Close Brothers Corporate Finance's (CBCF) Europe wide independent advisory business. CBCF also has leading non-distressed Debt Advisory (DAG) and M&A advisory...

The changing marketplace: restructuring is becoming increasingly specialized. (Restructuring report).
June 1, 2003... M&A specialists envious of the bonuses paid to their debt colleagues should take some solace. Debt restructurings have been engaging large numbers of advisers including corporate financiers for long periods of time, especially in the UK and in...

Restructuring in the UK energy: generation market: the UK electricity market appeared to have survived the collapse of Enron in 2001 remarkably unscathed but 2002 has seen a number of high profile market participants in financial difficulty. (Sponsored Article).
June 1, 2003... Although energy retailers have benefited from falling prices, generators have suffered. In October 2002, Powergen's chief executive, Paul Golby, commented: "Since the start of the new electricity trading arrangements, wholesale electricity...

American rescue culture over here; US restructuring and turnaround experts are seeking to exploit an expanding market in Europe. (Restructuring report).
June 1, 2003... US restructuring professionals are arriving in Europe in numbers, in some cases bringing with them a new approach to the business. As David Lovett, a principal and head of the UK at AlixPartners and a former partner at Andersen, says: "There is...

The quantum leap: insolvency and restructuring have become vastly more complicated in recent years. (Restructuring report).
June 1, 2003... The successive crises in the new technology, telecoms, energy and travel industries over the past three years have created the biggest market for corporate restructuring since the recession in the 1990s. But the quantum leap in the...

Acquisitions monthly editorial calendar 2003. (Restructuring report).(Brief Article)
June 1, 2003... July Half Year Review (Advisory and Private Equity) Food, Consumer, Tourism & Leisure Sectors Mezzanine Finance Germany Report Nordic Region August Independent Corporate Finance Houses Ireland UK regional mid-markets...

Chapter II vs. UK insolvency laws: US investors have brought their own style of conducting restructurings to the UK and are having a growing influence. (Restructuring report).
June 1, 2003... Across Europe, bankruptcy laws vary greatly from country to country. Any restructuring has to be structured and operate within the framework of the bankruptcy laws applicable to the company concerned, so the laws need clearly to be identified...

Marconi: the most complicated restructuring ever done? the lengthy rescue operation has been adjudged a success, but it was also extremely expensive. (Restructuring report).
June 1, 2003... Success is always difficult to measure in restructuring, but Marconi's recent relisting following a long rescue operation is a minor triumph. The advisers involved are accordingly not at all embarrassed by the huge amount of money--some 75m...

Case study: Teesside utilities and services provider emerges from the shadow of Enron; the sale of the Enron Teesside operations limited business to Sembcorp utilities is a good example of how a pre-packaged insolvency can be used to implement a sale to a third party whilst protecting value for stakeholders. (Sponsored Article).
June 1, 2003... Few events can have attracted the business headlines in 2001 as much as the collapse of Enron. The dramatic fall of the US utilities giant and its entry into Chapter 11 proceedings produced shockwaves throughout the business world and triggered...

Northumbrian raises concerns; the water company is still highly geared despite the restructuring, according to analysts. (Restructuring report).
June 1, 2003... The 2.2bn [pounds sterling] (US$3.6bn) takeover of Northumbrian Water that restructured the company through a flotation on the Alternative Investment Market (AIM) on May 23 has raised concerns about the company's future cost of funding. As...

Restructuring report.
June 1, 2003... THOMSON FINANCIAL ELIGIBLE DEBT RESTRUCTURING * Date Date Target Acquirer announced effective 29/01/02 09/05/02 AEI Resources Inc (US) Bondholders (nk) 31/01/02 30/07/02 ...