Mergers and Acquisitions Recap: Deals and Rumors of the Week

The Cheat Sheet

Monday

Google  is buying mobile phone maker  Motorola Mobility Holdings  for $12.5 billion in cash. The deal offers shareholders a 63% premium to Friday’s closing price, and is by far Google’s largest acquisition, trumping is $3.2 billion purchase of DoubleClick in 2008. Motorola has been building its reputation as a smartphone maker using Google’s Android operating system, but has struggled to compete with  Apple  and other Asian smartphone makers.

Time Warner Cable Inc. will acquire Insight Communications Company, Inc. for $3 billion in cash, the two companies announced today. Insight serves more than 750,000 customers in Indiana, Kentucky and Ohio –537,000 high-speed data subscribers, 679,000 video subscribers, and 297,000 voice subscribers. TWC expects that the acquisition, after incurring one-time costs and capital expenditures, will create annual cost efficiencies of approximately $100 million through programming expense savings and other cost reductions.

Investing Insights:  Steve Jobs Prepares to Deliver a New Catalyst for Apple’s Stock.

Bank of America announced today that it will sell its Canadian credit card business to TD Bank Group and that it will also exit its credit card businesses in the U.K. and Ireland. According to BofA CEO Brian Moynihan, “While the credit card remains a fundamental core product for our U.S. customers, an international consumer card business under another brand is not consistent with that strategy.”

Ralcorp Holdings announced late Friday that its board has rejected an improved $5.2 billion takeover bid from ConAgra Foods . Ralcorp said their plan to spin off their Post Cereals unit offered shareholders a greater value. Friday’s was the third rejected bid by ConAgra, which could soon turn hostile and take its bid straight to shareholders.

Transocean , the owner and operator of the Deepwater Horizon rig at the center of last year’s U.S. Gulf oil spill, is paying double the market price for Aker Drilling (OSL:AKD.OL - News) in order to refresh its aging fleet of Norwegian drilling rigs. Transocean is paying $1.43 billion, a 98.5% premium to Aker’s closing price on Friday, and 62% above the stock’s 30-day average price. The deal adds $1 billion of contracts to Transocean’s books.

Don’t Miss: Why Apple Needs to Replace Cisco on the Dow 30 Now.

Scripps Networks  has agreed to buy  Virgin Media’s  50% stake in  UKTV , a British cable and satellite TV channel operator, for roughly $552.4 million, allowing Scripps to grow abroad. Scripps will pay about £239 million for Virgin’s common shares in UKTV, and £100 million for Virgin’s preferred shares and debt. The  BBC  will keep its half of UKTV, which currently claims about 36 million viewers a month.

Wednesday

Chico’s FAS has agreed to acquire privately-held Boston Proper for $205 million in an all-cash deal. The company says the the transaction is expected to be immediately accretive to Chico’s earnings in its first full year of operations, even before giving any consideration to potential synergies, which among others could include marketing, circulation, and sourcing.

Williams Cos. reaffirmed its $5.5 billion takeover bid for Southern Union on Tuesday, stating their believe that their offer is superior to a cash-and-stock bid from Energy Transfer Equity . Over a month ago, Energy Transfer Equity raised its bid to $44.25 a share, topping Williams’s offer of $44 a share. But since the new deal was announced July 19, ETE’s stock has declined over 10%, reducing the value of the company’s cash-and-stock offer to about $42.32 by Williams’s estimates. Williams also said that it had completed its due diligence and was ready to begin work in finalizing the deal.

Defense contractor General Dynamics plans to buy Vangent Holding Corp. for $960 million in cash in order to expand its health care information technology business. Vangent is owned by private equity firm Veritas Capital Fund . The deal has been approved by the boards of both General Dynamics and Veritas Capital, and the purchase, announced Tuesday, is expected to close by October 1. General Dynamics expects the acquisition will add to its profits in 2012. GD provides the U.S. Department of Health and Human Services, Education, Labor, State, and Defense with health information exchange, electronic health records, and data analytics, and employs over 7,500 workers.

Bank of America is in talks with The Blackstone Group to sell a major portion of Merrill Lynch’s real estate portfolio for up to $1 billion in order to raise additional capital. The portfolio includes a variety of commercial properties and real estate around the world. Bank of America has been selling non-core assets in an attempt to shore up its balance sheet.

The Walt Disney Co. buyout of UTV Software Communications Ltd. must be approved by the Competition Commission of India, as the $440.6 million deal would have Disney taking over the stake held by public shareholders and other promoters of the company. The CCI must determine that the stake sale will not have any ramifications on market competition. Walt Disney is already the majority shareholder in UTV, with a 50.44% stake.

Friday

Sprint is in talks with Comcast , Cox , and Cablevision about a possible investment that would allow Sprint to buy the remaining shares in Clearwire it doesn’t already own. Sprint and Comcast are already investors in Clearwire with Time Warner Cable and Bright House Networks LLC , who are discussing ways to fund Clearwire in building its high-speed wireless network, a project that will cost roughly $600 million in order to upgrade its network to technology that can compete with AT&T and Verizon Wireless .

Investing Insights:  Steve Jobs Prepares to Deliver a New Catalyst for Apple’s Stock.

Yesterday, Hewlett Packard announced that it planned to spin off its personal-computer business to focus exclusively on software development. Possible suitors for the PC unit are China’s Lenovo Group (HKG:0992.HK - News), which bought IBM’s PC business in 2005, and South Korea’s Samsung (SEO:005930). Credit Suisse estimates the business to be worth around $12 billion. As part of HP’s plan to focus more on software development, the company announced yesterday that it planned to buy U.K. software firm Autonomy Corp. (LON:AU) for $10 billion.

Liberty Media agreed Thursday to buy a $204 million stake in Barnes & Noble , a deal that disappointed investors who had hoped Liberty would buy Barnes & Noble a majority stake in the bookseller. Back in May, Liberty had offered to buy 70% of Barnes & Noble for $17 a share. After doing its due diligence, Liberty became more wary of a full takeover, both of the high cost and the volatility of stock markets.

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