Friday, 25 November 2011

Mergers & Acquisitions - Week Ending 25/11/11


Monday saw action in the insurance sector as Alleghany Corporation purchased Transatlantic Holdings for $3.4 billion. Executives claim that the fusion of their complimentary product lines will lead to superior performance. The bidder was down 6.8%,while the target gained 0.75%. In pharmaceuticals, Gilead Sciences bought Pharmasset for $11 billion in an all-cash deal. The buyer is very excited about the Pharmasset’s development of a new oral treatment regimen for Hepatitis C, which could be available by 2014. Gilead fell 9% as Pharmasset was boosted a massive 84%, reflecting the large premium being paid. Also that day, eBay acquired Hunch, a website which utilises a collective intelligence decision-making system, for an undisclosed amount. The figure is believed to be in the region of $80 million. Despite the technology being used to improve eBay’s e-commerce recommendations, the world’s largest online marketplace dropped 3.6%. 
The rest of the week’s major deals came on Wednesday. Samson Investment Company, one of the largest unlisted energy firms in the US, was taken over by a consortium led by KKR for $7.2 billion. The year’s biggest leveraged buyout would be the latest in a string of profitable oil and shale gas deals for KKR. The private equity firm lost 2.5%. Also that day, JPMorgan Chase said that they would buy MF Global’s 4.7 percent stake in the London Metal Exchange for $38.9 million. The bankrupt brokerage’s owners are looking to sell off different assets to repay creditors. Despite the deal making the buyer the largest shareholder in the exchange, the financial conglomerate closed 3.5% lower.