Friday, 1 July 2011

Mergers & Acquisitions - Week Ending 01/07/11

Last week got off to an extremely sluggish start deal-wise, with no major announcements until Wednesday. BJ’s Wholesale Club sold itself to two private equity firms; Leonard Green & Partners and CVC Capital for $2.8 billion in an all-cash deal. This news, which adds to the recent trend of retailer buyouts, was well received by the markets; BJs was up by 4.6%. Troubled social networking site MySpace was sold by News Corporation to Specific Media for $35 million. The once lucrative website was originally purchased by the media giant for $580 million before being overtaken in popularity by Facebook. It had become increasingly unprofitable, and the sellers, who had been looking to dispose of it, were up 1.25%.

On Friday, Nortel Networks, the bankrupt telecommunications manufacturer, sold $4.5 billion worth of patent assets to a group of technology companies which included Microsoft, Apple, Research in Motion, EMC and Sony Ericsson. The alliance fought off competition from rivals like Google and Intel. The seller was up 42%, while the buyers’ biggest gainers included Apple which was boosted 2.3% and EMC up 1%. Providence Equity Partners purchased Blackboard Inc for $1.64 billion. The firm, which makes university coursework software, was up 1.8% by the bell. Internet domain registration giant Go Daddy sold itself to KKR and Silver Lake for $2.25 billion. KKR ended the week up 1.5%. Also that day, the New York Times Company sold a stake in the Boston Red Sox worth $117 million in order to generate cash to help them in the current financial slump. The seller’s share price was relatively unaffected by this news.