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Mergers and Acquisitions Recap: Deals and Rumors of the Week

Another week is in the books and deals continue to flow through the pipeline. In case you missed anything, we’ve got your Cheat Sheet to all the big deals and juicy mergers and acquisitions rumors of the week:

Fresh Off the Press: Wall St. Cheat Sheet’s newest Feature Trades of the Month!

Monday

It’s about time Warner Music Group (NYSE:WMG) made a decision.  Finally, after rumors and debates about who the bidders would be and what price they would pay, Lee Blavatnik’s Access Industries will acquire Warner for $3.3 billion, or $8.25 per share, a 34 percent premium to the company’s average share price over the last six months.  Does this deal signal a coming consolidation wave in the music industry?  Blavatnik certainly wants a part of it, considering some analysts believe that he will also likely try to acquire EMI .  Blavatnik is an interesting character, in that he is going after these record labels despite previous owners’ lack of success.

New York Democratic Senator Charles Schumer maintains a publicly neutral stance on the two competing offers for NYSE Euronext (NYSE:NYX), but insiders say he secretly favors the Deutsche Boerse (DB1) proposal instead of the Nasdaq OMX Group (NASDAQ:NDAQ) and ICE ’s (NYSE:ICE) hostile offer, primarily because he sees the deal as a way to protect New York state.

Tuesday

1) U.S. biotechnology company Alkermes (NASDAQ:ALKS) will merge with Ireland’s Elan Drug Technologies (NYSE:ELN) in a deal worth $960 million.  This drug-delivery company will complement Alkermes existing product line, giving the new company a portfolio of treatments for schizophrenia, bipolar disorder, multiple sclerosis, diabetes and drug addiction, in addition to Alkermes’ already powerful position in the treatment of central nervous system disorders.

In a surprising about-face, Hertz Global Holdings (NYSE:HTZ) made yet another bid for Dollar Thrifty Automotive Group (NYSE:DTG), but this time, for $2.24 billion, or $72 per share, instead of last year’s meager $1.5 billion.  After rejecting last year’s offer, Dollar Thrifty decided to agree to a merger with the Avis Budget Group (NYSE:CAR) in a deal which values the former at approximately $1.8 billion.  This deal is waiting regulatory approval from the FTC.  Hertz is aiming to get rid of any and all anti-trust issues to win over regulators, and may sell off its Advantage brand as part of the deal.  What we really want to know is, will there be a bidding war, and will we get front seats?

Yesterday was the calm before the storm.  Which storm? The regulatory storm that the first congressional hearing will stir regarding AT&T’s (NYSE:T) $39 billion bid for T-Mobile USA .  Telecom companies on both sides of the fence will put their best lobbyists forwards in the hopes of supporting or derailing the deal.  The CEO of AT&T will testify before Congress on Wednesday, and will have to answer such questions as: if AT&T acquires T-Mobile USA, how will consumers NOT face higher prices with really only two companies from which to choose?

Volkswagen (VKW.L) made a takeover offer for German truck manufacturer MAN that values the company at approximately $19 billion.  At the same time, Volkswagen increased its stake in MAN from 29.9 percent to 30.47 percent in order to comply with German takeover laws.  Why MAN, and why now? Volkswagen has wanted to merge MAN with Sweden’s Scania (SNAB.MU), in which Volkswagen has a controlling stake, since 2009.  Now the company’s dreams may come true, provided that the various antitrust issues are resolved.  Any official deal would not arrive until May.

More news on the Nasdaq OMX Group (NASDAQ:NDAQ) and ICE (NYSE:ICE) front (act surprised)!  Nasdaq and ICE continue to play hardball: yesterday the joint bidders released a letter to NYSE Euronext (NYSE:NYX) investors, begging them to put off the planned July vote to approve the Deutsche Boerse (DB1) deal and to at least meet with them (just once! You won’t regret it!)  The joint bidders’ main messages were to consider their financially superior offer and to delay the vote for the other (less viable) deal.

The best rumors are the ones that very few can confirm! Yesterday, Nuance Communications’ (NASDAQ:NUAN) shares spiked 9 percent on rumors that it might do a deal with Apple (NASDAQ:AAPL).  Last week, TechCrunch reported that Nuance, which makes voice recognition and other technologies, was discussing various strategic options with Apple for months.  With $65.8 billion in cash, Apple needs to spend some money at some point, so let’s hope the Nuance rumors are correct!

After some drama and lawsuits, Community Health Systems (NYSE:CYH) will no longer be pursuing Tenet Healthcare (NYSE:THC), after the latter rejected the heightened bid of the former.  After rejecting multiple offers, starting a lawsuit against Community Health and adopting a poison pill, Tenet was finally able to convey the message.  Community Health now needs to get its act together, because there are currently some good bargains in the hospital space.

Wednesday

1) In one fell swoop, Microsoft (NASDAQ:MSFT) halted a Skype IPO and stuck it to Google (NASDAQ:GOOG): Microsoft will acquire Skype for $8.5 billion, and in the process will win a massive user base.  In the market for Internet communications, Skype has the upper hand on Google, which now means that Microsoft will have the upper hand on Google, assuming the acquirer will be able to integrate Skype into its own product line, a practice Microsoft failed to implement with many of its other past transactions.  This deal is Microsoft’s biggest, and its no surprise that its shares were under pressure after the announcement.  Skype’s supporting venture capital firm, Andreesen Horowitz , is pretty happy, and is telling the world, “I told you so!” Take a look at the Wall Street Journal deal blog’s take on what we should take away from the announcement.  Of course, Skype’s other initial investors, who were with the company since its sale by eBay in 2009, are pretty pleased themselves.

2) “ American Idol ” will now have a different owner.  The show’s producer, CKX , will sell itself to Apollo Global Management (APO) for approximately $509 million, or $5.50 per share.  In addition to “American Idol,” CKX owns the rights for “So You Think You Can Dance” and name and likeness rights for Elvis Presley and Muhammad Ali.  This deal is hardly a surprise, given that CKX has considered selling itself for years, at one point for as much as $1.33 billion.

DuPont (NYSE:DD) will budge no more.  It announced that its $6.4 billion bid for Danish food ingredient company Danisco (DAY.SG) is final, even though Elliott Advisers has raised its stake to a tad over 10 percent.  DuPont raised its bid last month in order to address shareholders’ concerns that the initial offer undervalued the company, and was successful in winning over ATP, a major Danisco shareholder.  Why is Elliott Advisers a problem? DuPont’s offer expires Friday, and it needs 80 percent approval to go through with the deal, and 90 percent approval to delist Danisco and buy out the remaining shareholders.

Thursday

Royal Bank of Canada (NYSE:RY) will try to sell off RBC Bank , its U.S. branch, but once potential bidders see what’s in the box, they may think twice.  RBC hasn’t been very profitable lately, and is saddled with bad loans and branches in second-tier cities.  Despite these unappealing characteristics, RBC has apparently found some interested parties.

Daimler (DAI.DE) and Rolls-Royce Group (RR.L) are allegedly considering raising their bid for Tognum (TGM.SG) by 8 percent, which would value the company at approximately $4.86 billion.  This isn’t exactly a surprise, given that Tognum shares have hovered above the initial offer price since Daimler and Rolls-Royce first made the announcement, and many investors aren’t too keen on accepting the offer at the lower price.  Out of the 50 percent required for the tender offer, the joint bidders received 0.02 percent.  The good news for Daimler is that, under German takeover laws, its shareholder ownership in excess of 25 percent allows it to block any potential counterbidders.

Blackstone (NYSE:BX) and KKR (NYSE:KKR) are thinking about making an offer for France Telecom’s (NYSE:FTE) 53.9 percent stake in Mobistar (MOBB.BR), which could value the entire company at approximately $4.3 billion.  A deal wouldn’t come as a surprise, at least for France Telecom, because it is evaluating its European businesses and is open to selling some of them or buying other companies.  Mobistar is an attractive candidate, as it is Belgium’s second-largest wireless company with more than 4 million subscribers and a foot in the door of the broadband and television services industries.

The CEO of the Nasdaq OMX Group (NASDAQ:NDAQ), Bob Greifeld, is getting all of his regulatory ducks in a row, or is at least making an effort.  NYSE Euronext (NYSE:NYX) shareholders will vote on the Deutsche Boerse (DB1) deal in July, long before the Department of Justice will be able to complete its regulatory review of the Nasdaq and ICE (NYSE:ICE) joint bid.  NYSE investors will have to decide whether or not they want to risk losing out on the joint offer or risk losing with the joint offer! A tough decision…

Friday

Takeda Pharmaceutical (TKD.DE), Asia’s largest pharmaceutical company, is allegedly in talks to buy Swiss rival Nycomed .  The possible price is rumored to be around $11.4 billion.  Nycomed is a good target for Takeda because it would allow the latter to expand its reach in developing markets and increase its product offerings with the former’s heartburn and smokers’ cough treatments.  This is yet another example of pharmaceutical companies, which face the threat of competing generic brands, aiming to expand their product offerings to offset declines in sales due to this generic competition.

On Wednesday, lawmakers at a hearing regarding AT&T’s (NYSE:T) proposed acquisition of T-Mobile USA expressed concern that the merger would hamper competition by creating a duopoly with Verizon (NYSE:VZ).  Of course, AT&T executives emphasized that the deal will actually help consumers by speeding up Internet service and lowering the number of dropped calls.  The final decision lies in the hands of the Justice Department and the Federal Communications Commission.

Fresh Off the Press: Wall St. Cheat Sheet’s newest Feature Trades of the Month!