Friday, 5 August 2011

Mergers & Acquisitions - Week Ending 05/08/11

It was announced on the weekend that HSBC would sell 195 branches in New York State to First Niagara Financial Group for $1 billion as it continues to cut costs in the face of falling revenue. The following week, the seller was up 1.6%, while the buyer fell 2.7%. On Monday, Windstream Corporation acquired Paetec, a broadband provider, for $891 million. The tech giant fell 0.5% as Paetec rose over 20% on the news. Radio stations Westwood One and Dial Global merged in a stock-for-stock deal worth $250 million. Westwood was boosted 13.6%. Google purchased Dealmap, a website that gathers discounts from hundreds of online stores, for an undisclosed fee. The world’s most popular search engine was up 0.5%. Monday also saw two deals involving activist investors looking to improve struggling American businesses. A ten percent stake in Talbots was bought by Sycamore Partners, a private equity firm. The market reacted positively, with shares in the troubled clothing chain up almost 18%. A five percent stake in McGraw-Hill was acquired by a Canadian pension and Jana Partners, a hedge fund, in after-hours trading. This sent shares in the information services provider over 2% higher by Tuesday’s opening bell.

The following day, Kirin Holdings purchased Aleadri-Schinni Participações e Representações, a Brazilian drinks manufacturer, for $2.6 billion. The Japanese food and drinks manufacturer was down 0.3%. Fresenius Medical Care announced that it would buy two dialysis chains; Liberty Dialysis for $1.7 billion and American Access Care for $385 million. Despite this aggressive move, the world’s largest dialysis treatment firm fell 2.4%. The board of Northumbrian Water Group has decided to accept the offer made by Cheung Kong Holdings worth $3.9 billion. The buyer was down 0.65%, while the British utilities company was up 4.3%. Following a quiet midweek, Thursday saw the Blackstone Group acquire Emdeon, which provides medical data services, for $3 billion. This didn’t stop the buyout firm’s share price plummeting 10.8%, as Emdeon rose 13%. On Friday, the Industrial & Commercial Bank of China purchased an eighty percent stake in Standard Bank Argentina, Standard Investment and Inversora Diagonal for $600 million. The buyer was down 1.4% at week’s end.