Friday, 14 October 2011

Mergers & Acquisitions - Week Ending 14/10/11

On Sunday, Sinopec announced that they would buy Daylight Energy for $2.1 billion in an all-cash deal. This deal reflects the high demand for energy by the Chinese as they continue to expand quickly. The buyers were up 3.4% the following day, while the target was up a massive 110% on Tuesday, reflecting the large premium being paid. Monday also saw action in the energy sector as Superior Energy purchased Complete Production Services for $2.7 billion. Despite this move creating a top-tier diversified oil services company, Superior fell 13.8%, while Complete was boosted 39.5%. The following day, 99 Cents Only was acquired by Ares Management and the Canadian Pension Plan Investment Board for $1.6 billion. This is the latest in a string of private equity purchases of discount stores, which look to be somewhat immune to the credit crunch. The retailer finished the day 4.4% higher. Also that day, NeuStar absorbed Targus Information, a provider of caller ID services, in a $650 million deal. The telecommunications company 7.4%.

Wednesday saw Liz Claiborne sell its namesake brand as well as Monet to fellow retailer JC Penney and its Kensie brand to Bluestar Alliance. This is part of a series of brand sales which are expected to generate $328 million for the debt-laden firm. It was up 34%, while JC Penney was up 0.9%. The following day, aerospace firm Pratt & Whitney took over Rolls Royce’s share of International Aero Engines for $1.5 billion. The British power systems provider gained 8.7% on the news, as United Technologies, parent company of the buyer, lost almost 1% by the bell. On Friday, consumer goods giant Unilever bought an eighty two percent stake in Concern Kalina, a Russian cosmetics brand, for $537 million. This move reflects large American consumer firms’ reliance on emerging markets for growth as domestic demand wanes. They were up 2.5% at week’s end.