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.
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