Sunday, June 10, 2012

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Reuters: Mergers News: UPDATE 1-UAE's Aldar, Sorouh in due diligence on potential merger

Reuters: Mergers News
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UPDATE 1-UAE's Aldar, Sorouh in due diligence on potential merger
Jun 10th 2012, 12:58

Sun Jun 10, 2012 8:58am EDT

* Due diligence process to take number of months

* Goldman Sachs and NBAD to advice steering committee

* C.Suisse to advice Aldar; M.Stanley to work with Sorouh

By Praveen Menon

DUBAI, June 10 (Reuters) - Due diligence process is underway on the potential state-backed merger of indebted Abu Dhabi developer Aldar Properties and smaller rival Sorouh Real Estate, the two firms said, also naming financial advisors for the deal.

Aldar and Sorouh said in March they were in talks for a potential merger, with the blessing of the government, potentially creating a company with $15 billion in assets.

Goldman Sachs and National Bank of Abu Dhabi are advisors to the steering committee overseeing the proposed tie-up between Abu Dhabi's top two developers, the companies said in a joint bourse statement.

Credit Suisse is advising Aldar while Morgan Stanley will work with Sorouh.

"A due diligence process is now underway to assess in detail the implications for all stakeholders and this process will take a number of months," the statement from the companies said.

Reuters reported in May that those banks had been appointed to the roles, adding momentum to the state-backed deal.

Ernst&Young will provide accounting advice to the steering committee while property consultants Jones Lang LaSalle will help with valuations.

Aldar, which has relied heavily on the government over the past 18 months for funding, also appointed Allen & Overy as the legal advisors.

The builder of the Yas Marina Formula One motor racing circuit received as much as $10 billion in rescue funds from the government. This is equivalent to the amount Abu Dhabi deployed to rescue Dubai from a bond default in 2009.

Sorouh, which is the smaller among the two firms, appointed Clifford Chance as legal advisors, the statement added.

Shares of Aldar and Sorouh closed up 1.8 percent and 1 percent respectively on the Abu Dhabi bourse on Sunday, before the announcement.

Abu Dhabi's property market is facing challenges as a huge supply of high-end homes are expected to enter the market this year. Property prices in the emirate are expected to fall another 5 percent in 2012, a Reuters poll showed.

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Reuters: Mergers News: UAE's Aldar, Sorouh in due diligence on potential merger

Reuters: Mergers News
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UAE's Aldar, Sorouh in due diligence on potential merger
Jun 10th 2012, 12:18

DUBAI, June 10 | Sun Jun 10, 2012 8:18am EDT

DUBAI, June 10 (Reuters) - Due diligence has begun on the potential state-backed merger of indebted Abu Dhabi developer Aldar Properties and smaller rival Sorouh Real Estate , the two firms said on Sunday.

The developers also named advisors to the two sides with Credit Suisse advising Aldar while Morgan Stanley is working with Sorouh. Goldman Sachs and National Bank of Abu Dhabi are advisors to the steering committee overseeing the proposed tie-up.

"A due diligence process is now underway to assess in detail the implications for all stakeholders and this process will take a number of months," a joint statement from the companies said.

Reuters reported in May that those banks had been appointed to the roles.

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Reuters: Mergers News: PRESS DIGEST-Sunday British Business - June 10

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PRESS DIGEST-Sunday British Business - June 10
Jun 10th 2012, 10:51

LONDON, June 10 | Sun Jun 10, 2012 6:51am EDT

LONDON, June 10 (Reuters) - British newspapers reported the following business stories on Sunday:

Sunday Telegraph BRITAIN'S BANK REGULATOR TO BE BEEFED UP UK Chancellor George Osborne will drop the case for major reform of the UK's largest banks and say that much of the detail on how to implement the recommendations of the government-appointed Independent Commission on Banking (ICB) will be left in the hands of the Bank of England.

OASIS SETS TARGET TO DOUBLE ITS PRACTICES Oasis, Britain's second biggest chain of dentists, has appointed DC Advisory to lead a 250 million pound ($385 million) sale as it attempts to double the number of practices it runs.

DIAGEO LOOKS TO A LISTING IN ASIA Diageo, the world's biggest drinks company, says it has studied a potential listing on the Hong Kong stock exchange as it looks to cement its Asian expansion. HOUSE OF FRASER CLOSES FINAL SALARY PENSION House of Fraser, the UK retailer, has closed its final salary pension scheme in an attempt to strengthen its balance sheet.

WADE UP FOR SALE Wade Allied Holdings, the maker of collectible items, has been put up for sale for more than 20 million pounds as chairman and largest shareholder Edward Duke plans to retire.

UNIVERSITY FIRM BOSS TO SELL MINORITY STAKE Andrew Colin, the entrepreneur behind INTO Partnership, one of the major British companies involved in attracting overseas students to study at UK universities, has hired advisors to sell a stake in his 200 million pound company.

TCHENGUIZ HEAD OF FINANCE RETIRES The Tchenguiz brothers' finance director, Michael Ingham, has stood down as the property developers attempt to clear their names following the Serious Fraud Office's (SFO) inquiry into their business affairs.

Sunday Times VODAFONE FACES CRITICISM OVER TAX Vodafone faces a fresh attack over its tax affairs after an investigation by The Sunday Times revealed the mobile phone giant paid no corporation tax in Britain last year. Vodafone responded by saying: "For every 4 pounds we make in profit, we pay 1 pound in corporate taxes around the world. As in most countries, there are tax reliefs for capital investment and interest costs in the UK, which applied in this case."

TOPSHOP BAGS BURBERRY EXECUTIVE Sir Philip Green has hired Burberry executive Justin Cooke to assist with his global expansion plans for Topshop. CABLE CLIMBDOWN ON PAY UK business secretary Vince Cable has backed down from his proposal to enforce annual shareholder referendums on executive pay packages.

METRO BANK PLOTS FLOAT Metro Bank is aiming for a flotation within two years after the high street lender secured 125 million pounds in new funding.

BLACKSTONE BIDS FOR TIGER TIGER Blackstone, one of America's biggest buyout firms, has emerged as a surprise bidder for Novus Group, the bar operator behind the Balls Brothers and Tiger Tiger chains.

CIRCLE THROWN 20 MLN STG LIFELINE Circle, the first private health company to take over day-to-day running of a National Health Service (NHS) hospital, has secured 20 million pounds in funding from Invesco Perpetual for a 22 percent stake.

HONG KONG SET TO BUY LME Hong Kong Exchanges and Clearing, which counts Hong Kong as its biggest shareholder, is expected to clinch a 1.3 billion pound takeover of the London Metal Exchange (LME).

TRITON PARTNERS EYES FINDUS Private equity firm Triton Partners is attempting to take control of Findus, the troubled frozen food giant.

Mail on Sunday BAE PREPARES FRESH BID FOR INDIA FIGHTER JET DEAL Britain's BAE Systems is preparing a fresh bid for the world's biggest fighter jet order despite India's rejection of its Eurofighter Typhoon in favour of France's Dassault Rafale.

UNIVERSITY BACKING FOR NEW BANK A bank backed by a Cambridge University college is being launched this week, aiming to lend 100 million pounds over the next four years to small and medium-sized enterprises.

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Reuters: Mergers News: Talks for $500 mln Gulf Marine sale collapse- sources

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Talks for $500 mln Gulf Marine sale collapse- sources
Jun 10th 2012, 07:02

Sun Jun 10, 2012 3:02am EDT

* Financing issues, valuation cause of stalled talks - sources

* CEO says still open to sale but acknowledges impediments

* Two bidders were shortlisted from dozen parties for talks

* Gulf Capital CEO says may look at IPO for GMS in 2 years

By Mirna Sleiman

DUBAI, June 10 (Reuters) - A potential $500 million sale of a 79-percent stake in Gulf Marine Services (GMS) by its Abu Dhabi-based private equity owner has collapsed due to financing issues and differences over valuation, three sources said.

They said that talks between seller Gulf Capital, a regional private equity firm with around $1 billion in assets and two bidders shortlisted from over a dozen suitors had ended, in a fresh blow to private equity exits in the region.

"There was a buy-sell price gap and the buyers could not get the financing sorted out. American and European investors were the final bidders but talks are now back in ground zero," said one of the sources.

Gulf Capital's Chief Executive Karim El Solh confirmed that there were impediments to a sale but added that the firm had not given up on its disposal plans.

"The size and profitability of GMS became so big that many of the interested buyers cannot afford it. We're still open for a sale process," he told Reuters on Sunday.

The private equity firm is also exploring a potential initial public offering for Gulf Marine in a major stock market like London or Singapore in two years' time, said El Solh.

"Our third option is to do a leveraged recapitalisation so we borrow against the company and distribute dividends to shareholders. That's one step leading to a blockbuster global IPO," said El Solh.

El Solh had told Reuters in an interview in April that the company expected to raise more than $500 million from the sale of its GMS stake before the end of June.

The failed discussions underline the difficulties companies face in raising funds for acquisitions as banks across Europe and the United States retrench due to the euro zone debt crisis and the prospect of increased capital requirements.

LITMUS TEST

Credit Suisse, which is also an investor in Gulf Capital's fund, was the advisor on the sale, seen as a litmus test for more private equity exits from the region.

J.P. Morgan Chase was brought in at a later stage by Gulf Capital to arrange financing and several local lenders were also approached but in vain, one of the sources said.

Private equity funds in the Middle East are under pressure to exit investments and provide returns to their investors who piled in money to the region during the boom years of 2004-2007.

Some 218 investments were made by regional private equity funds between 2004 and 2009, of which the funds have only exited 14, according to a 2011 report by the Wharton School of the University of Pennsylvania and Saudi private equity firm Amwal AlKhaleej.

Gulf Capital had acquired the stake in GMS in 2007. GMS' clients include prominent oil firms such as Saudi Aramco, Qatar Petroleum and Abu Dhabi National Oil Company.

GMS's EBITDA (earnings before interest, tax, depreciation and amortisation) has grown from $10 million in 2007 to $100 million last year, according to El Solh.

Gulf Capital owns stake in firms such as healthcare chain Techno Scan and water engineering firm Metito Holdings, according to its website.

Last year, the company and Amwal AlKhaleej sold their stakes in Maritime Industrial Services in a $336 million deal to Lamprell Plc in one of the rare private equity exits from the region.

Regional private equity firm Abraaj Capital also sold its stake in Turkish hospital group Acibadem to Malaysia's state-linked investor fund Khazanah Nasional.

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Reuters: Mergers News: RPT-Talks for $500 mln Gulf Marine sale collapse- sources

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RPT-Talks for $500 mln Gulf Marine sale collapse- sources
Jun 10th 2012, 07:06

Sun Jun 10, 2012 3:06am EDT

* Financing issues, valuation cause of stalled talks - sources

* CEO says still open to sale but acknowledges impediments

* Two bidders were shortlisted from dozen parties for talks

* Gulf Capital CEO says may look at IPO for GMS in 2 years

By Mirna Sleiman

DUBAI, June 10 (Reuters) - A potential $500 million sale of a 79-percent stake in Gulf Marine Services (GMS) by its Abu Dhabi-based private equity owner has collapsed due to financing issues and differences over valuation, three sources said.

They said that talks between seller Gulf Capital, a regional private equity firm with around $1 billion in assets and two bidders shortlisted from over a dozen suitors had ended, in a fresh blow to private equity exits in the region.

"There was a buy-sell price gap and the buyers could not get the financing sorted out. American and European investors were the final bidders but talks are now back in ground zero," said one of the sources.

Gulf Capital's Chief Executive Karim El Solh confirmed that there were impediments to a sale but added that the firm had not given up on its disposal plans.

"The size and profitability of GMS became so big that many of the interested buyers cannot afford it. We're still open for a sale process," he told Reuters on Sunday.

The private equity firm is also exploring a potential initial public offering for Gulf Marine in a major stock market like London or Singapore in two years' time, said El Solh.

"Our third option is to do a leveraged recapitalisation so we borrow against the company and distribute dividends to shareholders. That's one step leading to a blockbuster global IPO," said El Solh.

El Solh had told Reuters in an interview in April that the company expected to raise more than $500 million from the sale of its GMS stake before the end of June.

The failed discussions underline the difficulties companies face in raising funds for acquisitions as banks across Europe and the United States retrench due to the euro zone debt crisis and the prospect of increased capital requirements.

LITMUS TEST

Credit Suisse, which is also an investor in Gulf Capital's fund, was the advisor on the sale, seen as a litmus test for more private equity exits from the region.

J.P. Morgan Chase was brought in at a later stage by Gulf Capital to arrange financing and several local lenders were also approached but in vain, one of the sources said.

Private equity funds in the Middle East are under pressure to exit investments and provide returns to their investors who piled in money to the region during the boom years of 2004-2007.

Some 218 investments were made by regional private equity funds between 2004 and 2009, of which the funds have only exited 14, according to a 2011 report by the Wharton School of the University of Pennsylvania and Saudi private equity firm Amwal AlKhaleej.

Gulf Capital had acquired the stake in GMS in 2007. GMS' clients include prominent oil firms such as Saudi Aramco, Qatar Petroleum and Abu Dhabi National Oil Company.

GMS's EBITDA (earnings before interest, tax, depreciation and amortisation) has grown from $10 million in 2007 to $100 million last year, according to El Solh.

Gulf Capital owns stake in firms such as healthcare chain Techno Scan and water engineering firm Metito Holdings, according to its website.

Last year, the company and Amwal AlKhaleej sold their stakes in Maritime Industrial Services in a $336 million deal to Lamprell Plc in one of the rare private equity exits from the region.

Regional private equity firm Abraaj Capital also sold its stake in Turkish hospital group Acibadem to Malaysia's state-linked investor fund Khazanah Nasional.

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Saturday, June 9, 2012

Reuters: Mergers News: Russia's Tariko says wants control of Poland's CEDC

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Russia's Tariko says wants control of Poland's CEDC
Jun 9th 2012, 12:56

Sat Jun 9, 2012 8:56am EDT

* Vodka billionaire eyes controlling stake

* CEDC is having to restate 2010 results

* Shares have fallen 28.5 percent since June 4

MOSCOW, June 9 (Reuters) - The billionaire owner of vodka-to-banking group Russian Standard wants to take full control of Polish vodka maker Central European Distribution Corp (CEDC) after rescuing the group from debt troubles earlier this year.

Russian Standard increased its stake in CEDC to around 28 percent in April, allowing the owner of the Parliament vodka brand to retire looming debts.

"It (taking a controlling stake) is our long term goal. How we will do it is a question for future negotiations," Russian Standard owner Roustam Tariko told reporters.

Investors have rushed to offload CEDC stock in recent days after the company said it would have to restate financial results after incorrectly estimating the extent of trade rebates in 2010.

The shares have fallen 28.5 percent since the June 4 announcement to $2.89, 74 percent where they traded a year ago.

Tariko said he did not think other shareholders would object to his plans.

"They saw the purchase of our stake as an investment - not a way to seriously affect the business," he said.

Russian Standard bought $100 million of CEDC stock and exchangable notes at $5.25 a share and up to $210 million of newly issued CEDC notes due in 2016, allowing the company to retire notes due in 2013.

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Friday, June 8, 2012

Reuters: Mergers News: UPDATE 1-Investor offers to buy 26 pct stake in First Uranium

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UPDATE 1-Investor offers to buy 26 pct stake in First Uranium
Jun 8th 2012, 22:43

June 8 | Fri Jun 8, 2012 6:43pm EDT

June 8 (Reuters) - Canadian miner First Uranium Corp said Kumvest Pvt Ltd will offer to buy a 26 percent stake in the company at 37 Canadian cents per share, a premium of almost 95 percent to the stock's Friday close, if some conditions are met.

Sandton, Johannesburg-based Kumvest, a holding company with a diversified portfolio of public and private companies, is owned by financier Mandla "Bear" Kumalo, according to the company's website.

Kumvest's conditions include an opposition by First Uranium shareholders to the sale of the company's Ezulwini mine to Gold One International Ltd, and the appointment of a new management team.

"Based upon limited due diligence of Kumvest the board of directors of FIU has determined that Kumvest styles itself as a holding company but can find no specific information about its interests," First Uranium said.

In April, the company said Waterpan Mining Corp and Transalloys Ltd offered to pay $80 million for its gold-uranium mine in South Africa.

First Uranium shares closed at 19 Canadian cents on the Toronto Stock Exchange on Friday.

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Reuters: Mergers News: UPDATE 1-Chile Copec forestry arm to buy Canada panel firm

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UPDATE 1-Chile Copec forestry arm to buy Canada panel firm
Jun 8th 2012, 18:35

Fri Jun 8, 2012 2:35pm EDT

* Arauco's Canadian unit to buy Flakeboard for $242.5 mln

* Deal awaits regulatory approval in Canada, U.S.

June 8 (Reuters) - Chilean industrial conglomerate Copec's forestry arm Arauco said on Friday its Canadian unit would buy Canada's wood panel firm Flakeboard for $242.5 million, as Arauco seeks to consolidate its position in the North American wood panel market.

Arauco said the purchase would make it the top wood panel producer of the Americas, and should be finalized in the second half of the year, pending regulatory approval in Canada and the United States.

Flakeboard operates two wood panel plants in Canada and five in the United States, said Arauco, one of the world's top wood pulp exporters.

"Once the acquisition of Flakeboard is finalized, Arauco's installed capacity in the United States will allow it to produce up to 2.9 million cubic meters of panels a year," Arauco said in a statement to Chile's regulator.

Copec, which also owns the world's third-largest commercial fishing company and the main fuel distributor in Chile and Colombia, is on the lookout for more investment opportunities, CEO Eduardo Navarro told the Reuters Latin America Investment Summit last week.

Arauco recently bought the Moncure wood panel plant in North Carolina. The firm did not provide details on how it would finance the purchase of Flakeboard.

Shares in Copec were trading over 1 percent stronger following the announcement, but then reversed direction to trade 0.22 percent lower on Friday afternoon, underperforming Santiago's blue-chip IPSA stock index, which was up 0.37 percent.

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Reuters: Mergers News: TEXT-S&P revises American Pacific Corp outlook to positive

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TEXT-S&P revises American Pacific Corp outlook to positive
Jun 8th 2012, 18:07

Fri Jun 8, 2012 2:07pm EDT

  Overview          -- Las Vegas-based American Pacific Corp. announced it has reached  an agreement to divest its Aerospace Equipment segment for gross proceeds of      approximately $46 million.             -- We are revising our outlook on American Pacific to positive from          stable.                -- At the same time, we are affirming our ratings, including the 'B'         corporate credit rating, on the company.               -- The positive outlook reflects our opinion that improving operating        performance over the next year and the likely use of a majority of the    divestiture proceeds for debt reduction could support credit metrics in line      with slightly higher ratings.     Rating Action     On June 8, 2012, Standard & Poor's Ratings Services revised its outlook on        American Pacific Corp. to positive from stable. At the same time, we affirmed     all our ratings, including the 'B' corporate credit rating, on the company.                 Rationale         The outlook revision follows the company's recent announcement that it has        reached an agreement to sell its Aerospace Equipment segment to Moog Inc.         (BB/Stable/--) for gross proceeds of $46 million. We view the transaction as      neutral to the business risk profile because this segment offered lower           growth, generated somewhat lower EBITDA margins than that of the overall          company, and served the same end markets as the specialty chemicals segment.      However, we expect the company to use the majority of the proceeds to reduce      debt given its focus on strengthening its balance sheet, thus enhancing the       financial risk profile. The outlook revision also reflects our expectation        that American Pacific will sustain the recent improvement in its operating        performance and credit metrics. Total debt (adjusted for capitalized operating    leases, environmental liabilities, and unfunded pension and other         postretirement obligations) to EBITDA improved significantly to 3.3x as of        March 31, 2012, from a trough of 10.6x for the same period the prior year.        Based on our scenario forecasts, the company will likely maintain leverage        between 3x and 4x over the next year, given our expectations for moderate debt    reduction, which the loss of about $5 million in EBITDA from the divested         segment partially offsets.                  The ratings on American Pacific reflect the company's business position as a      niche provider of ammonium perchlorate (AP) and active pharmaceutical     ingredients. The ratings also reflect a narrow customer and product base,         demand that is somewhat dependent on governmental appropriations in the AP        business, and the continued success of a few key drugs in the active      pharmaceutical ingredients business. Partially offsetting these risks are the     company's positions as a sole- and dual-source supplier in markets that           represent a significant portion of its revenues. We characterize the company's    business profile as "weak" and financial profile as "aggressive".                   American Pacific generated approximately $239 million in revenues for the 12      months ended March 31, 2012. The company's fine chemicals business consists of    the production of active pharmaceutical ingredients for pharmaceutical    customers. High switching costs--once a drug receives Food and Drug       Administration (FDA) approval--and limited pricing pressure from the customer     base mitigate the high customer concentration risk for this business. (The        company derives about 86% of this segment's sales from four customers.)           However, it's still exposed to risks associated with FDA approvals of new         products, newer drugs that compete with current drug offerings, and, to a         lesser extent, generic drug competition as patents expire. The loss of a key      customer as a result of one or more of these factors could significantly          affect profitability and cash flows.                The company, through its more-profitable specialty chemicals segment, is the      sole U.S. domestic supplier of AP, a chemical used as an oxidizing agent in       composite solid fuels for rockets and booster motors. A relatively small          number of U.S. Department of Defense (DoD) and NASA contractors generate          demand in this market. Risks inherent in government contracts and dependence      on Congressional appropriations, particularly in an election year, make the       outlook for long-term demand uncertain. Moreover, the company's single    operating facility for AP is subject to hazards associated with chemical          manufacturing and other potential disruptions that could limit production. The    dual lines of production that the company has in place at this facility           mitigate only some of this risk. Although AP customer volume requirements vary    substantially from quarter to quarter, the company conducts a meaningful          portion of its business through contracts that provide some protection against    volume and margin deterioration.                    The continued uncertainty in demand for AP over the next few years reflects       the potential that programs related to NASA and ongoing requirements from the     DoD could affect the level and timing of profits. In fiscal 2011, the company     generated the bulk of earnings in the fourth quarter, primarily as a result of    the timing of orders for AP. However, we expect increased sales and       profitability from a mix of new and existing products in its fine chemicals       segment to somewhat offset the potential for irregular profitability within       its specialty chemicals segment. Earlier this year, the Drug Enforcement          Agency (DEA) approved American Pacific as a bulk manufacturer of schedule II      controlled substances, and the company signed a long-term contract with a         large pharmaceutical customer. We believe the company's penetration into this     area represents a modest revenue growth opportunity.                American Pacific's financial risk profile is aggressive. The key ratio of         funds from operations (FFO) to total debt was 16% as of March 31, 2012, in        line with the 10% to 15% range that we consider appropriate for the rating.       The company's sizeable environmental liabilities relate to the perchlorate        contamination in groundwater near its former Henderson, Nev., site, with about    $23 million reserved for future remediation efforts as of March 31, 2012.         Although we expect this liability to be manageable given its current liquidity    position, remediation may be more challenging or expensive than we expect.                  Liquidity         We expect liquidity to remain "adequate" with cash sources that will more than    cover needs over the next 18 to 24 months. As of March 31, 2012, American         Pacific had about $21 million in cash and no borrowings under $20 million         asset-based lending (ABL) facility. Based on our scenario forecast, we do not     expect the company will need to use this facility in fiscal-year 2012.    Instead, we expect it to fund its near-term liquidity needs through its cash      flows and existing cash balances.                   Based on our scenario forecast, we expect free cash flow to be neutral in the     fiscal year ending September 2012, with about $13 million in capital      expenditures and about $12 million in remediation spending, mostly related to     its former Henderson site. Debt maturities are manageable, with no significant    scheduled maturities until November 2014 when the ABL facility would come due     if the senior notes are not refinanced.             There are no maintenance financial covenants in the credit agreement. However,    the ABL facility has springing financial covenants that apply when the company    uses the facility and if availability falls below $5 million. The springing       financial covenants include a 1.1x fixed-charge covenant and an annual capital    expenditure limit of $21.5 million. Based on our scenario forecasts, we do not    expect the company will use its ABL facility and, therefore, it should not be     subject to the springing covenants in the next few quarters.                Relevant aspects of our assessment of the company's liquidity profile include:                   -- We expect the company's sources of liquidity to exceed its uses by        1.2x or more over the next 12 to 24 months;            -- Net sources would be positive even with a 15% drop in EBITDA; and              -- American Pacific would likely be able to absorb low-probability shocks    based on available liquidity.                         Recovery analysis         For the complete recovery analysis, see our recovery report on American           Pacific, published Feb. 24, 2012, on RatingsDirect.                 Outlook   The positive outlook reflects our expectation that the company will use the       divestiture proceeds to moderately reduce debt, thus improving its financial      risk profile. The outlook also reflects our belief that the company's improved    operating performance is sustainable over at least the next year, given its       new product development and increased backlog in the fine chemicals segment.                We could raise the ratings by one notch if the company moderately reduces debt    as we expect, and it is able to increase EBITDA margins by 100 basis points or    more above our expectations. In this scenario, we would expect FFO to total       adjusted debt to approach 20% and that free cash flow would be modestly           positive. We would also need to be more comfortable with the stability and        visibility of American Pacific's future revenue streams.                    However, there could be some volatility in quarterly results because of the       uncertainty regarding the timing of profits, particularly in the specialty        chemicals segment. We could consider a downgrade if the company cannot sustain    recent improvements in operating profitability because of unexpected business     challenges, such as the loss of a key customer. Based on our scenario     forecasts, we could lower the rating if organic revenues decline by 15% or        more from our expectations, coupled with a 300-basis point decline in EBITDA      margins. In this scenario, we would expect FFO to total adjusted debt to          decrease below 10%. We would also consider a downgrade if the remediation of      its environmental liabilities proves to be more challenging than we expect,       with the potential for larger cash outlays.                 Related Criteria And Research          -- Methodology and Assumptions: Liquidity Descriptors For Global     Corporate Issuers, Sept. 28, 2011              -- Criteria Methodology: Business Risk/Financial Risk Matrix Expanded,       May 27, 2009           -- Key Credit Factors: Business And Financial Risks In The Commodity And     Specialty Chemical Industry, Nov. 20, 2008                  Ratings List      Ratings Affirmed; Outlook Action                                                  To                 From   American Pacific Corp.     Corporate Credit Rating                B/Positive/--      B/Stable/--              Ratings Affirmed                    American Pacific Corp.     Senior Unsecured                       B                           Recovery Rating                       4                                             Complete ratings information is available to subscribers of RatingsDirect on      the Global Credit Portal at www.globalcreditportal.com. All ratings affected      by this rating action can be found on Standard & Poor's public Web site at        www.standardandpoors.com. Use the Ratings search box located in the left          column.  
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Reuters: Mergers News: UPDATE 1-KPN to kick off BASE sale in two weeks - sources

Reuters: Mergers News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
UPDATE 1-KPN to kick off BASE sale in two weeks - sources
Jun 8th 2012, 18:09

Fri Jun 8, 2012 2:09pm EDT

By Sophie Sassard and Victoria Howley

LONDON, June 8 (Reuters) - KPN will fire the starting gun on the sale of its Belgian BASE mobile phone business in about two weeks, people familiar with the matter said, as it tries to fend off a bid for the whole group from Carlos Slim's America Movil.

The Dutch telecoms group will send out sales information to private equity firms and a number of companies, including Belgium's third-largest cable company Telenet, four people said.

KPN hopes to raise 1.6 billion to 1.8 billion euros ($2.24 billion) from the disposal of BASE, Belgium's third-biggest mobile phone company, equal to 5.5 to 6.5 times estimated core earnings (EBITDA) for this year.

The people said that offers for the business were likely to fall towards the lower end or beneath the range, however, because BASE has been a well-run business, where there is less potential to create value.

"I do not think that BASE will sell for as much as Orange Switzerland," one of the people said. "And however much they get for it will not move the needle materially in the battle with Carlos Slim."

Blackstone, Cinven, Providence, Bain and KKR are among potential bidders, or could team up with Telenet to make an offer, other people said previously.

France Telecom completed the sale of Orange Switzerland to Apax for 6.5 times 2011 EBITDA in February.

KPN shareholders have until June 27 when America Movil's tender offer, priced at eight euros a share, for 27.7 percent of the company closes. The Dutch group is hoping that Telefonica will emerge as a white knight for its German business, E-Plus, which is valued at eight to 10 billion euros.

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Reuters: Mergers News: DuPont buys BAE unit, takes stake in U.S. start up

Reuters: Mergers News
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DuPont buys BAE unit, takes stake in U.S. start up
Jun 8th 2012, 17:48

Fri Jun 8, 2012 1:48pm EDT

* DuPont says deals will help it develop new products

* Sees overall market for protective materials at $1 bln

* BAE unit to be sold for $18 mln in cash

By Andrea Shalal-Esa

WASHINGTON, June 8 (Reuters) - DuPont Co said on Friday it had acquired a unit of Britain's BAE Systems Plc and taken a minority stake in a U.S. high-technology start up, Nanocomp Technologies Inc, to expand its portfolio of high-performance protection materials.

DuPont, maker of Kevlar and other advanced materials, will acquire Tensylon from BAE Systems for $18 million in cash, BAE Systems said. Tensylon makes a trademarked protective material that has both ballistic armor and commercial applications. BAE said it expected the sale to close in the third quarter of 2012.

DuPont said the new technology platforms would help it expand its existing business and develop new products for use in military, law enforcement and industrial applications. It put the overall market for such materials at more than $1 billion annually.

"This is the next phase in our plan to protect more people, critical processes and the environment from more hazards around the world," said Thomas Powell, president of DuPont Protection Technologies.

Nanocomp said the financial and strategic agreement with DuPont was "a very big deal" for the New Hampshire-based company, which uses lightweight and incredibly strong carbon nanotubes to build components for U.S. military and aerospace programs. It expects sales to exceed $20 million next year.

Nanocomp Chief Executive Peter Antoinette told Reuters that DuPont's investment would allow it to accelerate its expansion into new and bigger markets. It would be able to tap DuPont's experience in scaling new technologies for industrial use.

Neither DuPont nor Nanocomp gave financial details of the agreement.

"We're placing our bets with one of the ... if not THE premier material sciences corporations in the world," Antoinette said.

"It also puts a stamp of approval on the technology and the company," he said, noting that the carbon nanotubes had been looking for a big success in the industrial market for two decades. Now other companies would be more inclined to order parts or materials from Nanocomp, he said.

Antoinette said DuPont had agreed to assume a share of Nanocomp's $25 million Series C financing round that is due to close later this year. He said Nanocomp planned to remain independent, but could consider a public offering or a partnership with a larger company in several years.

Nanocomp said it will use the funding to expand its manufacturing capacity and underwrite market expansion, as it completes its transition into a new, 100,000-square foot production facility in Merrimack, New Hampshire.

Nanocomp makes yarn, wire, tape and sheet products using carbon nanotubes, which can absorb microwave or radar signals, and are incredibly conductive of electricity. It spins the tubes into materials that are used in everything from body armor to classified government satellites and wiring on airplanes.

The Department of Defense recently designated Nanocomp materials as "critical for national defense."

Powell said the government's drive for greater energy efficiency would increase demand for more lightweight and strong materials, such as those made of carbon nanotubes. He expected DuPont to expand its agreement with Nanocomp in coming years.

He said the current deal gave DuPont exclusive rights in the armor protection segment, and aerospace structures.

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Reuters: Mergers News: WRAPUP 3-Chesapeake shareholders rebuke board, seek changes

Reuters: Mergers News
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WRAPUP 3-Chesapeake shareholders rebuke board, seek changes
Jun 8th 2012, 18:22

Fri Jun 8, 2012 2:22pm EDT

* Hargis, Davidson tender resignations from board

* One in five shareholders backs executive compensation plan

* Shares up 2.6 percent in afternoon trading

By Anna Driver and Matt Daily

OKLAHOMA CITY, June 8 (Reuters) - Chesapeake Energy Corp shareholders delivered a sweeping rebuke of the company's Chief Executive Aubrey McClendon and its board on Friday, by rejecting two directors up for reelection in a reaction to a governance crisis that has engulfed the company.

The shareholders' vote came just hours after Chesapeake said it plans to sell its pipeline and related assets to Global Infrastructure Partners for more than $4 billion, as part of efforts to close a colossal $10 billion cash shortfall this year.

Chesapeake, the nation's second-largest natural gas producer, has been under fire from investors since Reuters reported that McClendon had arranged for more than $1 billion in personal financing - from a lender who is also a big source of funding for the company - in a situation that may put his interests at odds with those of shareholders.

The company said the two directors - V. Burns Hargis, president of Oklahoma State University, and Richard Davidson, a former chief executive officer of Union Pacific Corp - had tendered their resignations from the board after winning the backing of fewer than a quarter of the shareholder votes cast.

"It's an overwhelming opposition vote that represents the total collapse of investor confidence in the entire board," Michael Garland, head of corporate governance for the New York City comptroller, said after the annual meeting of investors.

Garland described the mood in the meeting as "subdued."

Shareholders also soundly rejected the company's executive officer compensation program, with only 20 percent backing the measure. However, that vote is only an advisory measure and is not binding.

"Obviously, we'll be studying the result of the vote today and see what needs to be done," McClendon told the investor meeting at the company's sprawling campus in Oklahoma City.

Security was tight at the meeting, with uniformed officers guarding entrances to the campus, and media banned from attending. Chesapeake said thrice as many investors as last year had registered to attend the meeting, which lasted just over an hour.

One shareholder, Gerald Armstrong, suggested to McClendon that his tenure at the helm may be coming to an end, and criticized the board for failing to heed shareholder votes in the past.

"Accountability is what it's all about, and it's time for a change," activist investor Armstrong said. "It's likely you (McClendon) might not be with us next year."

His comments were echoed by David Dreman, chairman of Dreman Value Management LLP which owns about 1 million Chesapeake shares, who reiterated on CNBC that McClendon should resign or be fired.

A representative of billionaire investor Carl Icahn praised the embattled CEO as being a "great oil and gas man," but said even McClendon needed tight supervision by a strong board.

McClendon said last month he will step down as chairman, and Chesapeake announced on Monday it will replace four of its current board members with directors chosen by its top shareholders - activist Carl Icahn and Mason Hawkins' Southeastern Asset Management. This would give shareholder-backed directors a majority on the board.

The new board members' names will be announced by June 22.

'DIFFERENT' COMPANY?

Shares of Chesapeake have lost about half their value over the last year as it seeks to convince shareholders that it is still a good investment, despite steep drops in profits and a spate of corporate governance scandals surrounding McClendon.

The company has been the fastest-growing gas producer in the United States in recent years, but a slump in natural gas prices earlier this year to their lowest in a decade shrank revenue that Chesapeake had planned to use to trim debt and to fund operations.

Chesapeake is planning to sell between $9.0 billion and $11.5 billion in assets this year to cover a $10 billion cash shortfall, including lucrative property in West Texas' Permian Basin.

At the meeting on Friday, McClendon sought to reassure shareholders, saying the company was entering a new phase where it will focus on producing oil and gas from about 10 basins, a departure from its "land grab" strategy.

"It will be a completely different company to invest in," McClendon said.

The company has said it expects to trim more than $3 billion of debt by the end of the year. Debt investors welcomed the announcement about the planned pipeline sale, pressuring the price of its credit default swaps, which are used to insure the company's debt against potential default.

Five-year credit default swaps tightened by 15 basis points to 687 basis points earlier on Friday. That means it costs $687,000 a year for five years to insure $10 million of debt.

Shares of Chesapeake were up about 2.6 percent at $18.32 on the New York Stock Exchange in afternoon trading.

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Reuters: Mergers News: UPDATE 1-Fiat CEO sticks to 2012 targets despite turmoil

Reuters: Mergers News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
UPDATE 1-Fiat CEO sticks to 2012 targets despite turmoil
Jun 8th 2012, 16:52

Fri Jun 8, 2012 12:52pm EDT

VENICE, June 8 (Reuters) - Italian carmaker Fiat's Chief Executive Sergio Marchionne stuck by the company's targets for 2012 on Friday, even though Europe faces a possible euro zone breakup that could cut car sales to less than 10 million vehicles from 13.1 million in 2011.

"We still have to see the number of June car sales but right now I see no reason to widen our target range," Marchionne said on the sidelines of an event organised by the Council for the United States and Italy.

Fiat, which controls U.S. automaker Chrysler, is forecasting net profit of 1.2 billion euros ($1.50 billion) to 1.5 billion euros for the full year, and a trading profit of between 3.8 billion euros and 4.5 billion euros.

Marchionne confirmed those targets despite a stagnant Italian economy and an uncertain outlook in Europe. U.S. growth has bolstered Fiat's bottom line, offsetting weakness in Europe and in Italy.

Marchionne, who is also head of the European car-makers association ACEA, said he was not forecasting a breakup of Europe's single currency, even though he said it was possible.

"If the euro disintegrates, European car sales could fall to below 10 million" from the 13.1 million cars sold in 2011.

Marchionne reiterated that Fiat plans to increase its stake in Chrysler by 3.3 percent from July 1, bringing it to 61.8 percent. Asked if Fiat had started talks to acquire the 42 percent stake in Chrysler it does not already own, he said: "We're not talking to anybody, but I plan to use the VEBA option."

VEBA stands for Voluntary Employee Beneficiary Association, which converted its debt into equity when Chrysler went through bankruptcy in 2009. It is responsible for the health care bills of United States auto workers.

He also confirmed the company's investment plan for Mirafiori, Fiat's flagship factory in Turin.

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Reuters: Mergers News: Chile Copec forestry arm buys Canada panel firm

Reuters: Mergers News
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Chile Copec forestry arm buys Canada panel firm
Jun 8th 2012, 17:24

June 8 | Fri Jun 8, 2012 1:24pm EDT

June 8 (Reuters) - Chilean conglomerate Copec's forestry arm Arauco said on Friday its Canadian unit would buy Canada's wood panel company Flakeboard for $242.5 million.

Copec, which owns the world's second-biggest wood pulp producer and third-largest commercial fishing company, and the main fuel distributor in Chile and Colombia, is on the lookout for more investment opportunities, CEO Eduardo Navarro told the Reuters Latin America Investment Summit last week.

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