Friday, 8 June 2012

Mergers & Acquisitions - Week Ending 06/08/12

On Monday, purchased social networking specialist Buddy Media for $689 million. Through this deal, the relationship management company will strengthen its offerings in this rapidly growing sector. The buyer was up 0.2%. Also that day, Starbucks acquired Bay Bread for $100 million in cash. They will be looking to expand the San Francisco-based baker’s stores while introducing their product in Starbucks outlets. The global coffee shop chain gained 3.4%. The following day, private equity firm Thomas H. Lee Partners took a majority stake in Party City for $2.69 billion. Their plan is to grow the scale of what already is the leading party supply retailer in the country. Oracle absorbed social media analysis firm Collective Intellect for an undisclosed amount. The second such deal in as many days, this will allow Oracle to offer clients a new form of customer analysis which is believed to be quite effective. The enterprise software giant increased by almost 2%. Also that day, Venoco was bought out by CEO Timothy Marquez for $770 million. The MBO follows the energy group’s stock dropping over 30% in the past year. They fell 2.3% on the news.

The midweek saw Lloyd’s Banking Group sell $1.25 billion of distressed Australian real estate assets to Morgan Stanley and Blackstone. Proceeds from the sale will be used to pay back part of the British government’s bailout. The move was met positively by the markets; the vendor closed 6% higher, while Morgan Stanley and Blackstone jumped 8.4% and 3.5% respectively. Absa Group announced that it would buy the credit card business of retailer Edcon for $1.2 billion. This will allow the South African unit of Barclays to expand its reach in the fast growing country, while strengthening its relationship with the seller. The British bank was up 3.8%. Also that day, fashion company Kenneth Cole Productions was taken private by its namesake for $279 million. Mr Cole is apparently looking to revive the fashion brand’s focus on innovation. It gained 3.8%. 

On Friday, Chesapeake Energy sold assets from its midstream unit to Global Infrastructure Partners for $4 billion. This is expected to help improve the company's liquidity, which has been hampered by low gas prices. The oil and gas company was elevated 2.9% on the news. Sberbank acquired Turkish financial group Denizbank for $3.5 billion. The Russian state-owned bank has purchased numerous troubled financial firms since the economic crisis began. Sberbank dropped 0.3%. Later that day came the news that Marks & Spencer had entered into a joint venture with HSBC to open branches at 50 stores. Several retailers have begun providing banking services following the credit crunch to offer an alternative to traditional lenders. M&S and the banking group lost 1% and 0.4% respectively.