Friday, 29 April 2011

Mergers & Acquisitions - Week Ending 29/04/11



Monday saw Barrick Gold acquire Equinox Minerals for $7.8Bn in an all-cash deal that will increase their exposure to the copper market. This news failed to kick-start their share price for the week; they finished down 6.8% on Monday. On Tuesday Lawson Software was purchased by private equity firm Golden Gate Capital and Infor in a $2Bn dollar deal. Golden Gate said that Lawson would make a good strategic partner; extending their portfolio by offering complimentary software services. As of Thursday, however, it was announced that there would be an investigation into whether Lawson’s board were acting in the interests of shareholders; suspicions arose from unusual stock movements.

The deal of the week came on Wednesday in which Johnson & Johnson took over Synthes, the medical trauma specialists, in a $21.3Bn deal. Johnson & Johnson’s share price was up almost 1% on this announcement. They will be looking to merge their purchase with subsidiary DePuy to create an orthopaedic specialist firm. This monumental acquisition set the trend for the day. It was announced that telecoms giant CenturyLink would acquire IT firm Savvis for $2.5Bn in a move which will expand their data storage on a global scale and assist in their cloud computing operations. This acquisition is being investigated by several law groups to ensure that it is in the shareholders’ interests.

The mid-week also saw mobile developer Wonderland Software become the 12th acquisition for social game company Zynga in the last year. Keeping in the social networking sector, Research in Motion purchased online calendar developer Tungle for an undisclosed sum that same day, this deal did little to cushion RIM’s stock price plunging due to lower than expected forecasts. It was also announced that Yahoo had sold Delicious to Youtube. The founders of the online video giant say that the bookmarking site will become part of AVOS, their new internet company.

On Thursday, Exelon shook hands on a deal which sees them take over Constellation Energy for $7.9Bn worth of company stock, equating to around $38.60 a share. Constellation executives believe that their marketing combined with Exelon’s value and innovative streak will be a winning mix. Exelon were up 1.6% on this news. Also that day, Co-Star bought their online real estate rival Loopnet for $860 million. Loopnet shareholders are to receive $16.50 in cash as well as 0.4 of Co-Star common stock. Co-Star is no stranger to buyouts, having consolidated 12 firms previously.  They were up almost 6% by market end. BCG Partners shook hands on Thursday in a deal that will see them acquire Newmark, the real estate advisory business, for an undisclosed amount. The markets reacted positively, with the brokerage firm up almost 4% by Thursday’s close.

Friday saw Total SA acquire a 60% stake in SunPower for 1.38Bn. The French oil giant sees this as a great opportunity to diversify further into the budding renewable energy market. SunPower focuses on the solar panel manufacturing business, and is situated in California. Total SA was up o.6% by day’s end.