Over the weekend, it
was revealed that there would be a $3.2 billion merger in the
insurance market between Transatlantic Holdings and Allied World
Assurance. On Monday, Transatlantic’s share price was boosted by
the 16% premium being offered to their shareholders; it closed up
9.5%, while Allied World Assurance fell 4.5%. Horizon Acquisitions
purchased APR Energy, a temporary power provider, for $855 million.
This had only a marginal effect on the investment vehicle’s stock
price. VF Corporation purchased shoemaker Wrangler for around $2
billion in an all cash deal. This was met extremely positively on the
markets, with the apparel holding company’s price up 10%. Wendys
sold the Arby’s chain to Roark Capital Group in a deal worth $430
million. Wendy’s was up almost 1%, having offloaded a considerable
amount of Arby’s debt on the private equity firm. It was announced
that Honeywell International would purchase EMS Technologies for
$506 million in an all cash deal. The technology giant was up 0.5%
while the wireless solutions provider jumped 32%, just 1% short of
the premium being offered. Also that day, in the healthcare sector, Aetna said it would buy Genworth Financial’s Medicare unit for
$290 million. Genworth closed up 1.4%, while Aetna was down 0.26%.
On Tuesday, it was
announced that Avis Budget Group would buy Avis Europe for $1
billion. This news boosted both car rental companies; Avis Europe’s
price jumped by a massive 58%, reflecting the generous premium
tendered by the buyer. Avis Budget was up 7.6%. In telecoms, Ericsson purchased Telcordia for $1.15 billion. The Swedish
communications major was up 2.3% by market close. The following day, SunPower investors voted to support a $1.3 billion takeover by Total SA. Shares in SunPower fell almost 15% following the
announcement, despite the premium offered by the French oil firm.
Shares in Total fell 1.5%.
Thursday also saw
action in the energy sector; Itochu Corporation, a Japanese
conglomerate, said that it would acquire 20% of a Columbian coal
venture operated by Drummond Company in a deal worth $1.5 billion.
Shares in Itochu were down 2.4%. Energy Transfer Equity said it
would absorb Southern Union Company for about $4.2 billion worth of
stock, which will create one of the country’s largest natural gas
companies. The buyer’s stock rose by 8.2%, while Sothern Union rose
by 17.5%, mirroring the premium being paid. Also that day, Capital
One Financial purchased ING Groep’s US online banking unit for
$9 billion as part of efforts to create a national banking franchise.
Shares in Capital One were trading almost 2.4% higher, while ING
Groep’s price was relatively unaffected. On Friday, Reynolds Group
announced a takeover of Graham Packaging worth $4.5 billion. This
followed word that Silgan Holdings would not be challenging the
latest offer made by the subsidiary of New Zealand’s Rank Group.
The container manufacturer ended the week down 2%, whilst the Rank
Group’s stock fell almost 1%.
