Australia's Arrow Energy Ltd agreed to a fresh takeover offer from Royal Dutch Shell and PetroChina, raised by six percent to A$3.4 billion ($3.1 billion) for most of its Australian assets.
The new bid, which would give China its first stake in Australia's burgeoning coal-seam gas industry, followed two weeks of talks after Shell and PetroChina made an offer that investors considered too low.
The takeover needs approval from Australia's Foreign Investment Review Board, which is likely to study it closely after regulators said they wanted to cap state-owned companies' stakes in Australia's top resource firms to 15 percent.
The fresh offer comes on the same day that China puts four employees of Ango-Australian miner Rio Tinto on trial for bribery and commercial spying, a case that has hurt relations between Australia and China.
Shell and PetroChina are now offering A$4.70 a share in cash for Arrow's Australian assets plus one share in a new listed company to be called Dart Energy, which will house its Asian exploration assets and some Australian assets, Arrow said on Monday.
The bid is pitched at a 35 percent premium to Arrow's last trade ahead of March 8, when the first offer of A$4.45 a share for the Australian assets was announced.
Arrow Energy's Managing Director Nick Davies told reporters on Monday he was "reasonably confident" that shareholders would approve the revised offer.
MARKET ADJUSTS
Disappointed investors, mostly hedge funds who piled in expecting a bigger offer, sold the shares down 3.6 percent to A$5.10.
"People probably got a bit ahead of themselves, so now we're seeing the market adjust accordingly," said Tim Schroeders, a portfolio manager at Pengana Capital, which does not own Arrow shares.
"The difficulty around it is that there probably aren't any other bidders, so Shell aren't compelled to pay the highest prices that people have seen for similar assets in the market over the past 12 months."
Analysts had said previously that an improved bid could raise the cash portion to at least A$5 a share to reflect the value of Arrow's potential reserves.
Arrow's biggest shareholder, New Hope Corp, with a 17 percent stake, had no immediate comment on the bid. New Hope Managing Director Robert Neale told Reuters he would only be able to comment after the group's board met on Monday afternoon.
Arrow has previously valued the international exploration assets at 55 cents a share. At that price, the new offer would be worth A$5.25 a share in total.
"In a nutshell, we believe this creates value now and value for the future," Chairman John Reynolds told reporters after the deal was announced.
Coal seam gas, or natural gas trapped in coal beds, has attracted global energy companies to Australia looking to export supplies to energy-hungry Asian countries, like China.
Shell is looking to use Arrow's coal seam gas to supply a planned liquefied natural gas (LNG) plant in Queensland, having lined up PetroChina to buy the gas.
Shell's LNG project will be competing against three other LNG projects in Queensland involving BG Group, ConocoPhillips, and Malaysia's Petronas.
Dart Energy will hold Arrow's international coal seam gas exploration assets in China, Indonesia, India and Vietnam as well as its stakes in BOW Energy, Apollo Gas and LNG Ltd.
Shell will continue to hold its 10 percent stake in the international assets.
Arrow said the company has appointed Citigroup and UBS as financial advisers and Mallesons as legal advisers in relation to the offer.
Wednesday, March 24, 2010
Perrigo To Buy PBM Holdings For $808M
- Generic drugmaker Perrigo Co (PRGO.O) said it would buy privately held PBM Holdings Inc, a store-brand baby food manufacturer, for about $808 million in cash to expand its presence in infant formula and baby food.
Perrigo shares rose 3 percent to $52.93 in premarket trade.
The deal, expected to close in the fourth quarter of Perrigo's fiscal 2010, would add a minimum 10 cents to net earnings per share in fiscal 2011 and about $300 million in sales.
The company also sees about $150 million in tax savings from the deal, over the next 15 years.
Perrigo, which is not assuming any PBM debt, plans to fund the deal using about $175 million of cash on hand and $300 million available under the terms of its existing debt agreements.
The balance amount is expected to be raised through one or more sources of new debt financing, Perrigo said in a statement. The company has received a bank bridge financing commitment for up to $350 million to fund the deal.
Gordonsville, Virginia-based PBM manufactures and distributes over-the-counter store-brand infant formula and baby foods sold by retailers in the mass, club, grocery and drug channels in the United States, Canada, Mexico and China.
Perrigo, which is the largest U.S. maker of store-brand generic medicines, had said in an interview to Reuters last September that it would like to gain a larger store-brand presence in infant formula, ophthalmics and home diagnostics.
The company had said it would like to do more tuck-in acquisitions rather than larger transactions.
Perrigo is being advised by J.P. Morgan Securities and PBM has Citigroup as its financial advisor.
Perrigo shares rose 3 percent to $52.93 in premarket trade.
The deal, expected to close in the fourth quarter of Perrigo's fiscal 2010, would add a minimum 10 cents to net earnings per share in fiscal 2011 and about $300 million in sales.
The company also sees about $150 million in tax savings from the deal, over the next 15 years.
Perrigo, which is not assuming any PBM debt, plans to fund the deal using about $175 million of cash on hand and $300 million available under the terms of its existing debt agreements.
The balance amount is expected to be raised through one or more sources of new debt financing, Perrigo said in a statement. The company has received a bank bridge financing commitment for up to $350 million to fund the deal.
Gordonsville, Virginia-based PBM manufactures and distributes over-the-counter store-brand infant formula and baby foods sold by retailers in the mass, club, grocery and drug channels in the United States, Canada, Mexico and China.
Perrigo, which is the largest U.S. maker of store-brand generic medicines, had said in an interview to Reuters last September that it would like to gain a larger store-brand presence in infant formula, ophthalmics and home diagnostics.
The company had said it would like to do more tuck-in acquisitions rather than larger transactions.
Perrigo is being advised by J.P. Morgan Securities and PBM has Citigroup as its financial advisor.
Calix Inc Prices $82M Share IPO Offering
Broadband communications equipment maker Calix Inc., formerly known as Calix Networks Inc., priced its initial public offering at the top of its expected range Tuesday night, raising $82 million.
The Petaluma, Calif. company's products enable the delivery of phone, TV and Internet services, primarily through service providers with small networks.
Calix and its shareholders sold 6.3 million shares to initial investors for $13 each, the top of its expected range of $11 to $13, according to a person with knowledge of the deal. The person requested anonymity because details have not yet been publicly released.
Calix had expected to sell 6.3 million shares for $11 to $13 apiece, according to a regulatory filing.
The underwriters were led by Goldman Sachs and Morgan Stanley.
The Petaluma, Calif. company's products enable the delivery of phone, TV and Internet services, primarily through service providers with small networks.
Calix and its shareholders sold 6.3 million shares to initial investors for $13 each, the top of its expected range of $11 to $13, according to a person with knowledge of the deal. The person requested anonymity because details have not yet been publicly released.
Calix had expected to sell 6.3 million shares for $11 to $13 apiece, according to a regulatory filing.
The underwriters were led by Goldman Sachs and Morgan Stanley.
MaxLinear Prices $71.4M Share Offering
MaxLinear Inc., the Carlsbad, Calif., provider of radio-frequency and mixed-signal integrated-circuit solutions for broadband-communications applications, priced its initial public offering of 6.4 million Class A common shares at $14. MaxLinear is offering 5.1 million shares and selling holders are offering 1.3 million. The underwriters have options on another 967,000 shares, 80% of them from the company and 20% from the holders, if demand for the deal requires. Morgan Stanley and Deutsche Bank are running the books for the offering, the company said late on Tuesday.
Wednesday, February 17, 2010
Simon Prop Grp To Buy Gen Growth For $10B
Simon Property Group, Inc. (NYSE:SPG - News) today announced that it has made a written offer to acquire General Growth Properties, Inc. (OTC Pink Sheets:GGWPQ.pk - News) in a fully financed transaction valued at more than $10 billion, including approximately $9 billion in cash. The text of Simon's February 8, 2010 offer letter to General Growth, as well as a letter Simon sent today to General Growth, are below.
Simon's offer would provide a 100% cash recovery of par value plus accrued interest and dividends to all General Growth unsecured creditors, the holders of its trust preferred securities, the lenders under its credit facility, the holders of its Exchangeable Senior Notes and the holders of Rouse bonds, immediately upon the effectiveness of a definitive transaction agreement. This consideration to creditors totals approximately $7 billion.
General Growth shareholders would receive more than $9.00 per General Growth share, consisting of $6.00 per share in cash and a distribution of General Growth's ownership interest in the Master Planned Community assets valued by General Growth at more than $3.00 per share. Simon is also prepared to offer Simon common equity instead of the cash consideration, in whole or in part, as payment to those General Growth shareholders or creditors who would prefer to participate in the upside of owning stock in Simon. Under Simon's offer, the existing secured debt on General Growth's portfolio of assets would remain in place.
The Official Committee of General Growth's Unsecured Creditors has advised Simon that it supports the Simon offer, and encourages General Growth to engage with Simon promptly to allow the proposed transaction to be considered by General Growth's creditors and shareholders as soon as possible.
David Simon, Chairman and Chief Executive Officer, said, "Simon's offer provides the best possible outcome for all General Growth stakeholders. Simon is in the unique position of being able to offer General Growth creditors and shareholders full, fair and immediate value. Our offer provides much-needed certainty to conclude General Growth's protracted reorganization process. We are confident it is the best option for all General Growth constituencies and far superior to any other third-party proposal or stand-alone plan that could be completed."
Mr. Simon continued, "This acquisition also offers a compelling value-creation opportunity for Simon shareholders. Simon's strong track record of successfully completing large acquisitions and our history of delivering superior property-level performance ideally position Simon to create additional value with General Growth's portfolio."
Michael Stamer, counsel for the Official Committee of General Growth's Unsecured Creditors, said, "Full cash payment to all unsecured creditors and the substantial recovery for equity holders that Simon has proposed would be a great result. We fully support and encourage prompt engagement by the company with Simon."
The transaction is not subject to a financing condition and would be financed through Simon's cash on hand and through equity co-investments in the acquisition by strategic institutional investors, with the balance coming from Simon's existing credit facilities. Simon expects the transaction to be immediately accretive to its Funds From Operations in the first year after closing.
Simon's offer is subject to confirmatory due diligence, which it believes can be completed within 30 days, and customary proceedings in the General Growth bankruptcy process, including bankruptcy court and creditor approvals. The transaction is also subject to negotiation of a definitive transaction agreement between Simon and General Growth which would provide for reasonable certainty of closing. Simon believes this can be accomplished promptly, simultaneously with the completion of confirmatory due diligence.
Lazard Ltd., J.P. Morgan and Morgan Stanley are acting as financial advisors to Simon and Wachtell, Lipton, Rosen & Katz is serving as legal advisor.
Simon's offer would provide a 100% cash recovery of par value plus accrued interest and dividends to all General Growth unsecured creditors, the holders of its trust preferred securities, the lenders under its credit facility, the holders of its Exchangeable Senior Notes and the holders of Rouse bonds, immediately upon the effectiveness of a definitive transaction agreement. This consideration to creditors totals approximately $7 billion.
General Growth shareholders would receive more than $9.00 per General Growth share, consisting of $6.00 per share in cash and a distribution of General Growth's ownership interest in the Master Planned Community assets valued by General Growth at more than $3.00 per share. Simon is also prepared to offer Simon common equity instead of the cash consideration, in whole or in part, as payment to those General Growth shareholders or creditors who would prefer to participate in the upside of owning stock in Simon. Under Simon's offer, the existing secured debt on General Growth's portfolio of assets would remain in place.
The Official Committee of General Growth's Unsecured Creditors has advised Simon that it supports the Simon offer, and encourages General Growth to engage with Simon promptly to allow the proposed transaction to be considered by General Growth's creditors and shareholders as soon as possible.
David Simon, Chairman and Chief Executive Officer, said, "Simon's offer provides the best possible outcome for all General Growth stakeholders. Simon is in the unique position of being able to offer General Growth creditors and shareholders full, fair and immediate value. Our offer provides much-needed certainty to conclude General Growth's protracted reorganization process. We are confident it is the best option for all General Growth constituencies and far superior to any other third-party proposal or stand-alone plan that could be completed."
Mr. Simon continued, "This acquisition also offers a compelling value-creation opportunity for Simon shareholders. Simon's strong track record of successfully completing large acquisitions and our history of delivering superior property-level performance ideally position Simon to create additional value with General Growth's portfolio."
Michael Stamer, counsel for the Official Committee of General Growth's Unsecured Creditors, said, "Full cash payment to all unsecured creditors and the substantial recovery for equity holders that Simon has proposed would be a great result. We fully support and encourage prompt engagement by the company with Simon."
The transaction is not subject to a financing condition and would be financed through Simon's cash on hand and through equity co-investments in the acquisition by strategic institutional investors, with the balance coming from Simon's existing credit facilities. Simon expects the transaction to be immediately accretive to its Funds From Operations in the first year after closing.
Simon's offer is subject to confirmatory due diligence, which it believes can be completed within 30 days, and customary proceedings in the General Growth bankruptcy process, including bankruptcy court and creditor approvals. The transaction is also subject to negotiation of a definitive transaction agreement between Simon and General Growth which would provide for reasonable certainty of closing. Simon believes this can be accomplished promptly, simultaneously with the completion of confirmatory due diligence.
Lazard Ltd., J.P. Morgan and Morgan Stanley are acting as financial advisors to Simon and Wachtell, Lipton, Rosen & Katz is serving as legal advisor.
Derma Sciences Prices Share Offering
Derma Sciences, Inc. (Nasdaq:DSCI - News), a specialty medical device and pharmaceutical company focused on advanced wound care, today announced the pricing of a public offering of 972,000 shares of DSCI common stock and 324,000 warrants to purchase shares of common stock at a price of $5.50. Each share, together with a warrant to purchase one-third of a share, was priced at $5.00. The Company has granted the underwriters a 45-day option to purchase up to an additional 145,800 shares of common stock and 48,600 warrants to purchase shares of common stock to cover over-allotments, if any.
Rodman & Renshaw, LLC, a subsidiary of Rodman & Renshaw Capital Group, Inc. (Nasdaq:RODM - News), acted as sole book-running manager for the offering.
Rodman & Renshaw, LLC, a subsidiary of Rodman & Renshaw Capital Group, Inc. (Nasdaq:RODM - News), acted as sole book-running manager for the offering.
Walgreen To Buy Duane Reade For $1B
Walgreen Co. said Wednesday it has agreed to buy the drugstore operator Duane Reade in a move that will more than quadruple the number of stores it has in the New York City metro area.
Walgreen, the nation's biggest drugstore operator, said it would pay about $623 million for Duane Reade Holdings Inc., which is the biggest drugstore chain in the city. Including $457 million in debt held by Duane Reade, the transaction is valued at $1.08 billion.
Duane Reade, which has been operating in the New York area for 50 years, is owned by a group that includes affiliates of the buyout firm Oak Hill Capital Partners. Walgreen said Duane Reade's sales totaled about $1.8 billion in 2009.
The deal, which requires regulatory approval, would include all 257 Duane Reade stores, along with the corporate office and two distribution centers. Most of those stores are in Manhattan, where Walgreen currently has 13 stores.
Walgreen, based in Deerfield, Ill., operates 70 stores in the New York area and had 7,162 stores overall as of Jan. 31. The company opened a new store in Times Square in 2008, but said it would take many years to match the amount of stores and the quality locations Duane Reade already has.
Walgreen said Duane Reade stores will keep their name after the deal closes, and it will decide over time on how to combine the two brands.
The deal unites two chains that are in transition. Walgreen is trying to improve sales by converting hundreds of stores to a new layout, and Duane Reade has done the same with 30 of its stores. Walgreen suggested it could get new ideas from Duane Reade. It plans to continue renovating Duane Reade stores, and all of them should be converted to the new format in four or five years.
Walgreen also praised Duane Reade's FlexRewards customer loyalty program, its private label products, and its "store within a store" Look Boutique section, where cosmetics and skin care products are sold in an area that looks more like a department store than a drug store.
Some analysts feel Walgreen is struggling to sustain its sales while making changes to its store layouts and its array of products. It plans to convert 3,000 stores by fall 2010.
The company will fund the buyout with existing cash and expects the deal to close by Aug. 31, the end of its current fiscal year.
Walgreen expects the deal to cut its profit by close to 10 cents per share in fiscal 2010 and by about 3 cents per share in fiscal 2011. The buyout will cut costs between $120 million and $130 million by the third year.
Shares of Walgreen rose 25 cents to $34.33 in morning trading.
Walgreen, the nation's biggest drugstore operator, said it would pay about $623 million for Duane Reade Holdings Inc., which is the biggest drugstore chain in the city. Including $457 million in debt held by Duane Reade, the transaction is valued at $1.08 billion.
Duane Reade, which has been operating in the New York area for 50 years, is owned by a group that includes affiliates of the buyout firm Oak Hill Capital Partners. Walgreen said Duane Reade's sales totaled about $1.8 billion in 2009.
The deal, which requires regulatory approval, would include all 257 Duane Reade stores, along with the corporate office and two distribution centers. Most of those stores are in Manhattan, where Walgreen currently has 13 stores.
Walgreen, based in Deerfield, Ill., operates 70 stores in the New York area and had 7,162 stores overall as of Jan. 31. The company opened a new store in Times Square in 2008, but said it would take many years to match the amount of stores and the quality locations Duane Reade already has.
Walgreen said Duane Reade stores will keep their name after the deal closes, and it will decide over time on how to combine the two brands.
The deal unites two chains that are in transition. Walgreen is trying to improve sales by converting hundreds of stores to a new layout, and Duane Reade has done the same with 30 of its stores. Walgreen suggested it could get new ideas from Duane Reade. It plans to continue renovating Duane Reade stores, and all of them should be converted to the new format in four or five years.
Walgreen also praised Duane Reade's FlexRewards customer loyalty program, its private label products, and its "store within a store" Look Boutique section, where cosmetics and skin care products are sold in an area that looks more like a department store than a drug store.
Some analysts feel Walgreen is struggling to sustain its sales while making changes to its store layouts and its array of products. It plans to convert 3,000 stores by fall 2010.
The company will fund the buyout with existing cash and expects the deal to close by Aug. 31, the end of its current fiscal year.
Walgreen expects the deal to cut its profit by close to 10 cents per share in fiscal 2010 and by about 3 cents per share in fiscal 2011. The buyout will cut costs between $120 million and $130 million by the third year.
Shares of Walgreen rose 25 cents to $34.33 in morning trading.
Subscribe to:
Posts (Atom)
