Mergers & Acquisitions - Week Ending 05/25/12

Over the
weekend, it was announced that the Alibaba Group would buy $7.1
billion of its own stock back from Yahoo, equating to around half
of Yahoo’s 40 percent stake in the Chinese website. It is believed
that the struggling internet firm will use the money to buy back
stock in an attempt to improve its dwindling price. The seller gained
1% on Monday. Setting the pace for what was a hectic day deal-wise, DaVita purchased HealthCare Partners, a firm which runs several
medical groups, for $4.4 billion. This move is part of DaVita’s
plan to expand westward and into parts of Florida. The dialysis
clinics operator jumped 5% on the news. The Dalian Wanda Group of
China acquired AMC Entertainment for $2.6 billion. This deal will
create the world’s largest theatre operator, and many believe it
will strengthen Chinese influence on American film. The Chinese real
estate giant already had large interests in the entertainment
industry. It was announced that Barclays would sell its $6.1 billion stake in BlackRock, with
as much as $1 billion of that being bought back by the investment
manager. This comes amid talk that banks won’t be able to maintain
such risky investments when the new Basel III regulations take
effect. The British bank was up 3.8%, as BlackRock lost 2.4%. Power
management firm Eaton Corporation absorbed Cooper Industries for
$11.8 billion. By adding electrical equipment to its product line,
the buyer believes that it can create a global electricity group. The
power management firm dropped 0.7%, as Cooper soared over 25%,
mirroring the premium being offered.
The following day, Accor sold its
American hotel unit to Blackstone Group for $1.9 billion. The spin
off comes as the French hotel chain looks to focus on emerging economies and Europe. This deal was met positively on the
markets; with the vendor and the private equity firm gaining 5.8% and
2.5% respectively. Also that day, SAP took over rival Ariba for $4.5 billion. They become the latest firm to invest in the cloud
market, with the enterprise software giant expecting the industry to
“redefine network innovation”. The bidder was relatively
unchanged, while Ariba spiked almost 20%. The midweek saw PTT
Exploration and Production beat Shell at the post to acquire Cove
Energy for $1.91 billion. The backdrop of this battle is the promise
of East African gas finds for which the target is heavily involved.
Cove was boosted over 11%. Surprisingly, the snubbed Dutch company
was elevated 0.8% as the state-owned Thai energy group lost 2%. Also
that day, Seagate bought a majority stake in rival LaCie for $186
million. The French group will add a premium edge to Seagate’s
mass-driven offerings. The buyer fell 4.2%, while LaCie was 1.8%
higher by closing. On Thursday, Global Blue was procured by Silver
Lake, a private equity firm and Partners Group, an investment
management company. The tax-free shopping outfit was chosen as a way
to profit from the growing luxury travel market. Also that day,
Lehman Holdings purchased the remainder of real estate group
Archstone for $1.58 billion. The group, which owns many apartment developments, is
expected to aide the downtrodden financial firm in repaying
creditors.