Thursday, May 31, 2012

Reuters: Mergers News: KPN opposes America Movil offer, to review German ops

Reuters: Mergers News
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KPN opposes America Movil offer, to review German ops
Jun 1st 2012, 05:42

AMSTERDAM, June 1 | Fri Jun 1, 2012 1:42am EDT

AMSTERDAM, June 1 (Reuters) - Dutch telecoms group KPN , target of Mexican tycoon Carlos Slim's telecoms group America Movil, on Friday advised its shareholders not to accept the Mexican offer to obtain a stake in KPN.

KPN said in a statement the offer of 8 euros per share or about $3.25 billion in total, was too low, and it would review "strategic options" for its German operations E-Plus to create "superior value" for all its shareholders.

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Reuters: Mergers News: UPDATE 1-KPN opposes America Movil offer, to review German ops

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UPDATE 1-KPN opposes America Movil offer, to review German ops
Jun 1st 2012, 06:03

Fri Jun 1, 2012 2:03am EDT

* KPN repeats America Movil offer is too low

* KPN to review options for German unit E-Plus

* KPN has talked to Chinese, Middle East investors-paper

AMSTERDAM, June 1 (Reuters) - Dutch telecoms group KPN , target of Mexican tycoon Carlos Slim's telecoms group America Movil, on Friday advised its shareholders not to accept the Mexican offer to obtain a stake in KPN.

KPN said in a statement the offer of 8 euros per share or about $3.25 billion in total, was too low, and it would review "strategic options" for its German operations E-Plus to create "superior value" for all its shareholders.

America Movil, controlled by billionaire Slim, wants to raise its stake to up to 27.7 percent, and on Wednesday launched its offer to obtain the shares it does not yet own. On Thursday it raised its stake to 5.01 percent from 4.8 percent earlier.

"We are convinced America Movil is not offering a fair premium for gaining significant influence over KPN," KPN Chief Executive Eelco Blok said in the statement.

KPN said America Movil's ownership of 27.7 percent of the company would "deprive other KPN shareholders of (a) merger and acquisition premium".

KPN is actively looking for investors in China and the Middle East who want to own a substantial stake of the company, Dutch paper Het Financieele Dagblad reported on Friday, citing unnamed sources.

KPN's Chief Financial Officer Eric Hageman spoke to Chinese sovereign wealth fund China Investment Corp at the start of this year, the paper said, citing the sources.

A KPN spokesman declined to comment.

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Reuters: Mergers News: UPDATE 1-Australia's ASX considering bid for Link

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UPDATE 1-Australia's ASX considering bid for Link
Jun 1st 2012, 00:56

Thu May 31, 2012 8:56pm EDT

* Deal could be Asia's top PE stake sale so far this year

* PE firms KKR, Bain, Blackstone also interested-sources

MELBOURNE, June 1 (Reuters) - Australia's bourse operator, ASX Ltd, said on Friday it may buy share registry Link Market Services from Pacific Equity Partners in a deal that could be worth as much as $1.36 billion and pit ASX against global buyout firms.

A successful deal by Pacific Equity Partners (PEP), Australia's top private equity firm, will be Asia's biggest sale of a private equity stake so far this year and may spur more buyout shops to cash in on their investments.

Other interested bidders for Link include global private equity firms Bain Capital, Blackstone Group L.P., Carlyle Group, U.S.-based Hellman & Friedman, and KKR & Co L.P. , sources with direct knowledge of the matter said previously.

PEP, which has hired Goldman Sachs to advise on the deal, bought Link from ASX seven years ago and has made about 20 acquisitions since 2005, including buying the U.S. business American Stock Transfer & Trust Co (AST). Link manages more than 10 million accounts in Australasia.

ASX, which last year agreed to a takeover by Singapore Exchange only to see that turned down by Australian regulators, said it signed a confidentiality agreement to receive information on Link "ahead of a formal sale process."

"There is no certainty that ASX will participate in a transaction or that any negotiations or due diligence that could result in a transaction will be undertaken by ASX," the bourse operator said.

Last month, PEP started an auction for Link Group, which includes Link Market Services and AST, that could value the company at as much as A$1.4 billion ($1.36 billion) including debt, sources told Reuters. Link competes with Computershare In Australia.

PEP plans to retain a small minority stake in the company sources said previously. Link's latest annual earnings before interest, tax, depreciation and amortisation are estimated to be between $120 million-130 million, the sources said.

PEP had looked at options including an IPO, the sources said, but is selling the stake instead due to weak markets that have forced a near two-year drought of big IPOs in Australia and cancellation of offerings globally.

On Thursday, London luxury jeweller Graff Diamonds ditched its $1 billion initial public offering adding to a chill that Facebook's botched IPO has cast over an already moribund global market for new listings from Hong Kong to New York. The global racing giant Formula One may also delaying its Singapore IPO, according to reports on Friday.

UBS is advising ASX on the deal one of the sources told Reuters while a media report said KKR has hired Morgan Stanley and Macquarie.

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Reuters: Mergers News: Australia's ASX says considers bid for Link

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Australia's ASX says considers bid for Link
May 31st 2012, 23:17

MELBOURNE, June 1 | Thu May 31, 2012 7:17pm EDT

MELBOURNE, June 1 (Reuters) - Australia's bourse operator, ASX Ltd, said on Friday it is considering making a takeover bid for private-equity owned share registry Link Market Services, in a deal that could be worth as much as $1.36 billion.

Pacific Equity Partners, Australia's largest private equity firm, bought Link from the ASX seven years ago and has made about 20 acquisitions, including the U.S. business American Stock Transfer & Trust Co.

The ASX said in a statement it has signed a confidentiality agreement to receive information on Link "ahead of a formal sale process", which is being run by Goldman Sachs and Pacific Equity Partners.

"There is no certainty that ASX will participate in a transaction or that any negotiations or due diligence that could result in a transaction will be undertaken by ASX," the bourse operator said.

Last month, PEP kickstarted the auction for Link Group, which includes Link Market Services and AST, that could value the company at as much as A$1.4 billion ($1.36 billion) including debt, sources told Reuters. Link competes with Computershare.

A successful deal will make it Asia's biggest private equity sale so far this year and may spur more buyout shops to cash in on their investments.

Interested bidders for the asset include global private equity firms Bain Capital, Blackstone Group L.P., Carlyle Group, U.S.-based Hellman & Friedman and KKR & Co L.P. , said the sources, who had direct knowledge of the matter.

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Reuters: Mergers News: UPDATE 1-Cequence Energy to buy Open Range for C$97 mln

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UPDATE 1-Cequence Energy to buy Open Range for C$97 mln
May 31st 2012, 21:57

Thu May 31, 2012 5:57pm EDT

May 31 (Reuters) - Cequence Energy Ltd said it will buy Open Energy Corp in an all-stock deal that values the oil and gas company at about C$97 million, as it looks to tap into liquids-rich natural gas assets in Alberta.

Open Range stockholders will get 1.065 shares of Cequence for each share they own.

Based on the closing price of Cequence's stock on Thursday, the offer stands at nearly C$1.30 a share -- 26 percent higher than Open Range's closing on the Toronto Stock Exchange.

Cequence said it expects the deal to add about C$57 million to its cash flow on a pro-forma basis and allow it to develop properties in the Deep Basin in west central Alberta.

The combined company is expected to produce about 11,200 barrels of oil equivalent per day (boe/d) on average in 2012 and exit the year at 15,000 boe/d.

Open Range's CEO Scott Dawson will join Cequence's board and the combined company is expected to be headed by Cequence's CEO Paul Wanklyn.

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Reuters: Mergers News: Lazard buys its Brazilian investment banking JV

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Lazard buys its Brazilian investment banking JV
May 31st 2012, 21:50

NEW YORK | Thu May 31, 2012 5:50pm EDT

NEW YORK May 31 (Reuters) - Lazard Ltd said it bought out the remainder of its Brazilian investment banking joint venture and hired a former president of the Central Bank of Brazil, as it looks to bolster its operations in the country.

The investment bank did not disclose what it paid for the assets of the Brazilian venture, previously known as Signatura Lazard. It said venture founders Marcelo Lyrio and Jean Pierre Zarouk will remain managing directors and co-heads of Lazard's Brazilian investment banking operations, based in São Paulo.

Lazard also said it hired Henrique Meirelles, who was president of Brazil's central bank from 2003 to 2010, as Chairman, Lazard Americas. Meirelles will advise senior management regarding important international initiatives, the company said. He will also be based in São Paulo.

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Reuters: Mergers News: UPDATE 4-Canada's CGI to buy Logica to create global IT firm

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UPDATE 4-Canada's CGI to buy Logica to create global IT firm
May 31st 2012, 21:13

Thu May 31, 2012 5:13pm EDT

* Agrees to 105-pence-a-share offer for Anglo-Dutch firm

* Logica backs bid, saying it will create global scale group

* Logica's shares up 69 pct, CGI shares also jump on TSX, NYSE

By Paul Sandle and Euan Rocha

LONDON/TORONTO, May 31 (Reuters) - Canada's top IT services firm, CGI Group Inc , agreed to buy larger Anglo-Dutch rival Logica Plc for $2.64 billion on Thursday, a move that more than doubles its size, broadens its clientele and pushes it firmly into Europe.

The deal, funded with debt and a C$1 billion ($965 million) cash infusion from CGI's largest shareholder, Caisse de dépôt et placement du Québec, will let Montreal-based CGI vastly expand its European client base, while also catering to the needs of its many North American clients that do business in Europe.

The new firm will rank No 6 in the world and will be in a better position to compete against rivals including IBM, Accenture, Cap Gemini, Tata Consultancy and Infosys.

"The transaction at hand appears to offer immediate earnings accretion, especially given the established position of Logica in the European market where CGI can leverage relationships to sell its products to clients," Desjardins Capital Markets analyst Maher Yaghi wrote in a note to clients.

CGI shares rose 14 percent to C$23.95 in Toronto, while its New York-listed shares rose 13.7 percent to $23.21. Logica's shares closed 69 percent higher at 110.9 pence, well above the offer price on hopes of a rival bid emerging.

CGI Chief Executive Michael Roach played down concerns about the company's expansion into Europe at a time when euro zone countries are mired in economic woes.

"The vast majority of Logica's revenue is derived from Europe's largest economies - these include the UK, Germany, France and the Nordics, which are attractive markets," he told analysts on a conference call.

A sale of Logica, expected to close by September subject to shareholder and regulatory approvals, would be the latest in a trend of British technology groups being snapped up by richer North American rivals.

Banking IT company Misys is being bought by private equity group Vista, and last year U.S. technology giant Hewlett Packard Co acquired software company Autonomy.

The Logica deal will more than double CGI's annual revenue and number of employees, taking sales to C$10.4 billion and staff numbers to 72,000 in 43 countries, CGI said.

CHALLENGING MARKET

Logica, which issued a profit warning and outlined plans to slash 1,300 jobs late last year, has been hit hard by Europe's economic problems, as clients shelved technology upgrades.

Logica Chief Executive Andy Green said the company needed scale to compete for more multinational contracts, and its position had been weakened by uncertainty in Europe.

"We are in a competitively intense industry and it's a globalizing one where scale has become an ever more important factor in both cost competitiveness and in service," he said.

But Societe Generale analyst Richard Nguyen said the deal presents risks for CGI and could compress profit margins. He noted that CGI enjoys a margin of almost 15 percent on earnings before interest and taxes (EBIT), while Logica's margins are in the 6.5 to 7 percent range.

Nguyen said this could dilute EBIT margin and narrow the trading multiple premium that CGI enjoys against its peers.

Cormark analyst Richard Tse said the takeover benefits CGI, as it not only broadens the company's geographic presence, but also its industry exposure.

"One of the main criticisms we hear most often on CGI Group is its heavy exposure to government," said Tse, noting that the deal will reduce CGI's government exposure to 18 percent from 42 percent.

Excluding acquisition and integration costs, the deal is expected to boost CGI's earnings by 25 percent to 30 percent.

The deal also allows Quebec pension fund Caisse to raise its stake in CGI. Caisse will get 46.7 million subscription receipts exchangeable into new Class A shares in CGI at C$21.41. It will own 25.1 percent of CGI subordinate shares when the deal closes.

CGI will draw C$650 million from an existing credit facility and use C$2 billion in debt to fund the deal. The debt package is being arranged by CIBC, National Bank of Canada and Toronto-Dominion Bank.

BIG PREMIUM

Logica investors will receive 105 pence in cash for each share, a 60 percent premium to Wednesday's closing price, under the deal, which is backed by Logica's board and the holders of 18.2 percent of the stock.

"We think this is a good deal for Logica shareholders given the long-term structural challenges the group faces," said Roger Phillips of Merchant Securities. "We feel the CEO's strategic plan has failed to work and so the business is in a state of strategic drift."

Investec analyst Julian Yates believes that a rival bid for Logica cannot be ruled out.

"Indian players may be seen as counter-bidders but this would represent a material strategic risk considering the cultural and business focus differences," he said.

Most analysts, however, dismissed the odds of a rival bid.

"We do not see any counter-offers from an offshore vendor, a European or global peer or a private equity player," said Daud Khan, an analyst with Berenberg Bank. He noted that Logica was too large for some of its Indian rivals to swallow and would be too much of a distraction for some North American and European rivals at this time.

Logica was advised by Rothschild, Bank of America Merrill Lynch and Deutsche Bank, while CGI was advised by Goldman Sachs.

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Reuters: Mergers News: RPT-UPDATE 3-Malone and Karmazin face off for Sirius XM control

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RPT-UPDATE 3-Malone and Karmazin face off for Sirius XM control
May 31st 2012, 21:23

Thu May 31, 2012 5:23pm EDT

* Liberty files new FCC petition for control

* Liberty asks for more board seats

* Liberty intends to convert half of shares to common

* Sirius XM says was not informed of board request

By Liana B. Baker

May 31 (Reuters) - Liberty Media Corp's John Malone and Sirius XM Radio Inc's Mel Karmazin are using the regulatory system to go to war over control of the satellite radio company.

Liberty, which already holds five of 13 Sirius XM board seats, said in a regulatory filing Thursday morning that it wants to take over a majority of Sirius' board--a disclosure Malone made without informing Karmazin.

Sirius XM shot back in its own regulatory filing Thursday afternoon that it has been in discussions with Liberty about transactions related to Liberty's stake in the company but had not reached an agreement or been informed of Liberty's plans to shake up the board.

Sirius XM's filing further noted that new directors could not be added to its board without a special meeting that can only be called by two current directors or the chief executive. A proposal can also be made at the annual meeting, but that is at least a year away. Meanwhile, replacing the entire board would "require the consent of a majority of our outstanding common stock," Sirius XM said.

Both companies did not respond to requests for comment on Thursday.

Liberty's new plan is "very likely to succeed," Lazard Capital Markets analyst Barton Crockett said in a research note. With control of the board, "Liberty may retain its stake long enough to transition to a new CEO," Crockett said.

Malone, a cable industry pioneer who Al Gore famously derided as "Darth Vader," is no stranger to battles with media titans. The reclusive billionaire has faced off with News Corp's Rupert Murdoch numerous times, and in 2008 nearly brought a two decade-long friendship with Barry Diller to an end by trying to gain control of his IAC Corp. Liberty, which held a large stake in IAC at the time, ultimately failed in its bid, but made Diller endure an ugly court battle in the process.

Englewood, Colorado-based Liberty in its filing Thursday also asked the U.S. Federal Communications Commission to reconsider a May 4 refusal of Liberty's previous application to take control of Sirius. Liberty said it plans to convert half of its preferred shares to common stock and hold about 32 percent of outstanding shares.

Earlier this month, Liberty raised its stake in Sirius to 46.2 percent from 40 percent as it bought another 60.35 million shares but did not announce its plan to convert to common stock until Thursday.

NOT GOOD AT BEING NO. 2

Malone's attempt to gain control of Sirius goes to the heart of Karmazin's biggest fear as a corporate executive--not being in control of his own destiny.

The Sirius XM leader rose to fame in media and Wall Street circles as the CEO of Infinity Broadcasting and CBS Corp . But, after merging CBS with Viacom Inc, Karmazin felt stifled as the second-in-command under the combined company's controlling shareholder, Sumner Redstone. Karmazin, known for his hard-charging sales techniques, repeatedly clashed with Redstone and quit after just three years.

"I'm not really good at working for somebody. I just could not be a No. 2," Karmazin admitted to Reuters last year.

Earlier this month Karmazin said he would "protect the rights" of Sirius's shareholders and would not want Malone seizing the company without paying a premium.

Gabelli & Co analyst Brett Harriss said Malone does not necessarily want to push out Sirius management. Instead, he thinks Malone, who holds a PhD in mathematics and is known for his Byzantine deal structures, may simply be trying to design a complicated deal with Sirius XM to save on taxes.

"It doesn't mean Mel (Karmazin) will leave but it means that Liberty will control the board and Liberty and Sirius can put together a Reverse Morris Trust transaction," Harriss said.

Such a transaction could allow Liberty to spin out its Sirius stake and combine it with the rest of the company as a way to distribute Sirius shares to Liberty Media shareholders in a tax-efficient manner, according to Harriss.

Malone engineered a similar deal in 2009 with satellite TV operator DirecTV.

Liberty owns stakes in a variety of businesses, including book retailer Barnes & Noble Inc, concert promoter Live Nation Entertainment Inc, and cable television company Discovery Communications Inc.

In 2009, Liberty became the largest shareholder in Sirius after it floated the company a $530 million loan to help it avoid bankruptcy. Terms of that deal allowed for Liberty to convert the loan into preferred shares.

The company Liberty rescued in 2009 is in much stronger shape four years later, thanks in no small part to Karmazin. It has gained a key foothold in the vehicles market, which is seeing a rebound, with its radios in 70 percent of new cars in the United States. The company, which serves as the radio home for shock jock Howard Stern, ended last quarter with an all-time high 22.3 million paying users.

Sirius XM shares were unchanged at $1.89, while Liberty fell 0.7 percent at $83.08.

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Reuters: Mergers News: Chesapeake must sell $7 billion in assets-Moody's

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Chesapeake must sell $7 billion in assets-Moody's
May 31st 2012, 21:12

HOUSTON | Thu May 31, 2012 5:12pm EDT

HOUSTON May 31 (Reuters) - Chesapeake Energy Corp, the U.S. oil and gas company facing a funding shortfall this year and next, must sell at least $7 billion in assets to avoid breaching a loan covenant, analysts at Moody's Investors Service said on Thursday.

Decade-low natural gas prices and hefty spending have left Chesapeake to fill a shortfall that Moody's estimates at nearly $6 billion in 2013. The company is also facing corporate governance issues and some of its largest investors are calling for major changes.

"Even $7 billion in asset sales could place Chesapeake's covenant compliance for its revolving credit facility in some doubt and the company would still face a significant funding gap in 2013," Moody's said in a note.

The company would "gain far more covenant headroom" with the sale of an additional $10 billion in asset sales this year, the analysts said.

Any sales total below $7 billion will likely lead to a credit rating downgrade from its current Ba2 rating, Moody's said.

Earlier this month, Chesapeake secured a high-interest $4 billion term loan from its investment bankers, an amount that is expected to be repaid with the proceeds from planned asset sales of up to $11.5 billion.

So far, Chesapeake has put its 1.5 million acres in the Permian Basin up for sale along with a half a million acres in Colorado and Wyoming. The company is also searching for a joint venture partner in the Mississippi Lime basin.

This year, Chesapeake's cash flow shortfall is expected to be more than $10 billion, according to Moody's.

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Reuters: Mergers News: CORRECTED-UPDATE 2-Martin Marietta loses appeal of Vulcan bid ruling

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CORRECTED-UPDATE 2-Martin Marietta loses appeal of Vulcan bid ruling
May 31st 2012, 20:38

Thu May 31, 2012 4:38pm EDT

* Delaware high court affirms lower court decision

* Ruling ends proxy contest for Vulcan board in 2012

By Tom Hals

DOVER, Del., May 31 (Reuters) - Martin Marietta Materials Inc on Thursday lost what may have been a last-ditch effort to pursue its $4.5 billion hostile bid for rival Vulcan Materials Inc.

Delaware's five-member Supreme Court, in a brief oral ruling after hearing arguments from both sides, let stand a May 4 decision by the state's Court of Chancery that barred Martin Marietta for four months from pursuing its bid and proxy contest for Vulcan's board.

The decision blocks Martin Marietta from proposing nominees for Vulcan's board of directors at Vulcan's annual stockholders' meeting on Friday, effectively postponing any proxy contest until next year. Martin Marietta had proposed candidates for each of the four seats up for election on the 10-member board.

Martin Marietta, based in Raleigh, North Carolina, made an unsolicited, all-stock takeover offer for Birmingham, Alabama-based Vulcan last December, in a bid to become the world's largest producer of sand, gravel and other construction materials. Vulcan rejected the bid and said Martin Marietta had violated confidentiality agreements in preparing to make the offer.

"We will abide by the ruling of the Delaware courts. Beyond that we have no further comment," said a Martin Marietta spokeswoman.

Vulcan said in a statement it welcomed the ruling.

Earlier this week, investment analyst Garik Shmois, who follows the companies for Longbow Research, told Reuters that he doubted Martin Marietta would continue to pursue its bid if it failed to overturn the lower court ruling.

Martin Marietta stock was down 58 cents, or about 0.85 percent, at $67.11 in afternoon trading, while Vulcan was down 50 cents, or 1.4 percent, to $34.52.

In his May 4 ruling, Delaware Chancellor Leo Strine found that Martin Marietta's hostile bid and proxy contest breached confidentiality agreements the two companies signed in 2010 when they engaged in friendly merger talks. As punishment, he barred the bid and proxy contest for four months.

The proxy contest was central to Martin Marietta's bid strategy and it had said it wanted the support of Vulcan's board for its bid. Because Vulcan has a staggered board, it would take Martin Marietta at least two years to seize control of its rival's boardroom.

The Delaware Supreme Court heard an hour of arguments on Thursday. After a 20-minute recess, Chief Justice Myron Steele announced the lower court ruling was affirmed and that a written order would be entered later.

Martin Marietta's lawyer, Robert Zimet of law firm Skadden, Arps, Slate, Meagher & Flom, argued to the justices that Strine had erred by essentially interpreting their confidentiality agreement to include a standstill agreement.

Such a provision would prevent either party from pursuing a hostile takeover after they had exchanged confidential information as part of friendly merger talks.

Those friendly talks broke down in the middle of last year over disputes about potential cost savings and over the issue of who would run a combined company.

Theodore Mirvis of law firm Wachtell, Lipton, Rosen & Katz, which represented Vulcan, argued that the point of confidentiality agreements was to prevent information that was given to a rival from being used in a hostile attack.

"Confidentiality agreements are not suicide pacts," Mirvis told the court.

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Reuters: Mergers News: JacksonNationalLifeInsurance/BRIEF (URGENT)

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JacksonNationalLifeInsurance/BRIEF (URGENT)
May 31st 2012, 20:26

Thu May 31, 2012 4:26pm EDT

May 31 (Reuters) - Jackson National Life Insurance Co: * Moodys affirms Jackson nationals ratings (a1 ifs) following acquisition

announcement of Swiss res reassure America * Rpt-moodys affirms jackson nationals ratings (a1 ifs) following acquisition

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Reuters: Mergers News: UPDATE 1-Wal-Mart probe not seen hurting foreign growth

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UPDATE 1-Wal-Mart probe not seen hurting foreign growth
May 31st 2012, 20:45

Thu May 31, 2012 4:45pm EDT

By Jessica Wohl

ROGERS, Ark. May 31 (Reuters) - Wal-Mart Stores Inc does not expect ongoing investigations into possible foreign bribery to impact new store growth internationally, Walmart International CEO Doug McMillon said on Thursday.

The world's largest retailer has been under fire from shareholders and activists after the New York Times reported in April that management at Wal-Mart de Mexico, or Walmex, allegedly orchestrated bribes of $24 million to help it grow quickly in the last decade and that Wal-Mart's top brass tried to cover it up.

"I'm not expecting any impact as it relates to new store growth, we'll see, only time will tell," McMillon told reporters gathered in Rogers, Arkansas.

"We're not going to tolerate a lack of compliance in any country around the world or at any level in the company," he said when asked about the investigations.

Wal-Mart would like to grow in Japan and would consider acquisitions to do so, he added.

For now, expanding into new countries is not the main focus, as Walmart International works on making improvements to businesses in growing markets such as Brazil and China.

In China, one issue is having stores with less-than-prime configurations, such as stores on more than one level or those with too many columns that impede how shoppers can make their way around the stores.

While Walmart will still grow "in an aggressive fashion" In China, the growth may be slower than it first anticipated as it works on finding space with better layouts, McMillon said.

Wal-Mart shares rose 0.6 percent to close at $65.82 on Thursday after rising as high as $66.66, the highest level since 2000. Wal-Mart was one of the few retailers posting gains during the session.

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Reuters: Mergers News: Canada minister unaware of any foreign bid for RIM

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
Canada minister unaware of any foreign bid for RIM
May 31st 2012, 19:39

Thu May 31, 2012 3:39pm EDT

OTTAWA May 31 (Reuters) - Canadian Finance Minister Jim Flaherty said on Thursday he did not know of any request to the federal government to review a possible foreign takeover bid of BlackBerry maker Research In Motion Ltd .

Ottawa would have to clear any foreign bid for RIM under its Investment Canada Act, deciding whether it would be of net benefit to Canada.

The company, which has hired bankers for a strategic review and to look for partnerships, warned on Tuesday it would likely report a shock fiscal first-quarter operating loss. It also said it plans to slash its workforce.

"I'm not going to speculate about it ... As far as I know, we haven't been asked to review any proposal for RIM under the Investment Canada Act," Flaherty told reporters in New Brunswick.

He also said RIM would have to reorganize without any help from the Canadian government.

"It's an important company for Canada. It has been a leading company for Canada in terms of research, development and innovation but it does need to reorganize itself. And that is something that we expect the leaders in that company to do on their own," he said, according to a transcript of his remarks.

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Reuters: Mergers News: Wal-Mart says bribe probe won't hurt international growth

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
Wal-Mart says bribe probe won't hurt international growth
May 31st 2012, 19:04

ROGERS, Ark. | Thu May 31, 2012 3:04pm EDT

ROGERS, Ark. May 31 (Reuters) - Wal-Mart Stores Inc does not expect ongoing investigations into possible foreign bribery to impact new store growth internationally, Walmart International CEO Doug McMillon said on Thursday.

The world's largest retailer has been under fire from shareholders and activists after the New York Times reported in April that management at Wal-Mart de Mexico, or Walmex, allegedly orchestrated bribes of $24 million to help it grow quickly last decade and that Wal-Mart's top brass tried to cover it up.

"I'm not expecting any impact as it relates to new store growth, we'll see, only time will tell," McMillon told reporters gathered in Rogers, Arkansas.

"We're not going to tolerate a lack of compliance in any country around the world or at any level in the company," he said when asked about the investigations.

Wal-Mart would like to grow in Japan, and would consider acquisitions to do so, he added

Shares of Wal-Mart rose 1.5 percent to $66.45 on Thursday afternoon. Wal-Mart was one of the few retailers posting gains during the session.

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Reuters: Mergers News: DEALTALK-Michael Klein helps Glencore, Xstrata finally tie knot

Reuters: Mergers News
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DEALTALK-Michael Klein helps Glencore, Xstrata finally tie knot
May 31st 2012, 18:58

Thu May 31, 2012 2:58pm EDT

* Advisers on Glencore, Xstrata to receive almost $200 mln for advice

* Banks on the deal will receive up to $130 mln in fees

* Xstrata to pay up to $80 mln to its financial advisers, Glencore up to $50 mln

* Banker sees independent adviser Klein receiving $15-$20 mln

By Victoria Howley

LONDON, May 31 (Reuters) - The Glencore-Xstrata merger represents a $200 million-dollar pay-day for bankers and other advisers at a time when blockbuster deals are few and far between. None, though, have played a more striking role than former Citigroup grandee turned independent go-between Michael Klein.

It was Klein's ability to get the two principals, Glencore chief executive Ivan Glasenberg and Xstrata's Mick Davis, to agree on a valuation which helped clinch the deal, said several bankers who advised on the mammoth mining and trading marriage.

"Both Ivan and Mick are very strong characters. To get them to agree on terms this time is an achievement. We think Klein deserves every penny," said one banker involved, adding that Klein's personal fee on completion could be $15-$20 million.

Weighing in last year, he earned the confidence of both men and helped them overcome the rivalries between two of the business's toughest dealmakers that had got in the way of previous efforts to merge the companies.

Commodities trader Glencore has had a 34 percent stake in Xstrata that dates back to the miner's early days as a Swiss infrastructure company.

Financial advisers working on the deal are set to share a total fee pot of $130 million, with a further $70 million slated for legal, accounting, public relations and other counsel, according to merger documents released on Thursday.

Bankers have long said that a full marriage between the two firms was inevitable. But Glencore, opaque to outsiders before its $11-billion initial public offering a year ago, had to build up a track record with analysts and a clear market valuation before Davis at Xstrata would revive merger negotiations in earnest, after years of on-again-off-again discussions.

The talks became serious when Klein got involved around the third quarter of last year, people familiar with the matter said.

According to a second banker, Klein's pivotal role was as an honest broker between the camps.

HONEST BROKER

Glasenberg and Davis already had strong ideas about how a deal should work and had prepared much of the ground themselves, the banker said. But what Klein brought in was his ability to play the detached observer, able to filter down to the essence each man's ideas and present them to the other.

"He was chosen for this role because he does not know Mick or Ivan well enough for the other side to cry 'bias'," the second banker said.

The banker said that Klein was especially helpful explaining the merits of Glencore's ideas to the Xstrata board. On occasion, Klein would also tell Glencore if it was pushing the envelope too far, the banker said, declining to elaborate on specific circumstances.

"I think Glencore will pay him a decent fee," the banker said. "They have a reputation for not paying very much for M&A advice, largely because they cook their own deals.

"But they will pay Klein, because he delivered value."

Klein, described by someone who knows him as either loved or hated by clients and at times "hyper-active", was a 23-year Citigroup veteran, who arranged Abu Dhabi Investment Authority's $7.5-billion capital injection in the firm in 2007.

He left the following year when he missed out on the top job of running the bank's combined investment bank and asset management business - the institutional clients group.

A few months after his departure, Klein was instrumental in Barclay's acquisition of Lehman Brothers, for which he earned a fee estimated by bankers involved at some $10 million.

BIG NAMES

Klein's slice of the fees in the Glencore-Xstrata deal will mean less compensation for the well-known individuals and the banking teams advising the two groups.

Citigroup, Morgan Stanley, Credit Suisse and BNP Paribas have worked for Glencore and Deutsche Bank , JP Morgan, Goldman Sachs, Nomura and Barclays for Xstrata.

According to banking sources, Credit Suisse, BNP Paribas and Barclays will receive less than the other banks because they were brought into the deal at a much later stage.

These banks were not credited as advisers when documents for the deal came out in February, but they will have been eager for a role because the combined company is expected to continue Glencore's opportunistic and lucrative acquisition strategy; even while working through the Xstrata deal, Glencore snapped up Canada's largest grain handler, Viterra, in a $6-billion, three-way acquisition.

Xstrata's decision to grant Barclays a mandate is said by bankers familiar with the deal to have come after a last-minute intervention from the bank's chief executive, Bob Diamond.

London's "mining king" Ian Hannam, the veteran rainmaker who resigned from JP Morgan last month to fight a 450,000-pound fine imposed by British regulators for passing on inside information, was also still involved in the transaction.

Davis has come to the defence of the former special forces soldier, who helped Xstrata to market a decade ago.

Teams at Citigroup and Morgan Stanley, including veteran advisers David Wormsley and Simon Robey, will get less than Xstrata's main advisers, bankers said, due to Glencore's traditionally more aggressive stance toward its bankers.

"Xstrata, a public company, has long-standing and deeper relationships with its advisers, so it has wanted to reward them appropriately," another banker said.

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Reuters: Mergers News: UPDATE 1-BC Partners gets offers for SGB Starkstrom-sources

Reuters: Mergers News
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UPDATE 1-BC Partners gets offers for SGB Starkstrom-sources
May 31st 2012, 18:55

Thu May 31, 2012 2:55pm EDT

* Strategic players submit first-round offers - sources

* China's State Grid among bidders - sources

* No private equity bids - sources

* BC Partners hopes to fetch up to 1 bln euros - sources

FRANKFURT, May 31 (Reuters) - Private equity firm BC Partners has attracted first-round offers for SGB Starkstrom, a manufacturer of power transformers, two sources close to the matter told Reuters.

BC Partners, which has mandated Goldman Sachs to organize the sale, hopes fetch up to 1 billion euros ($1.24 billion), the sources said on Thursday, adding that more bids could emerge.

"If the price is too low, BC Partners won't sell," one of the sources said, adding that the operating performance of SGB was strong and there was no need to rush the divestment process.

Among the handful of strategic bidders is China's State Grid , the sources said. No private equity investors have submitted offers, they said.

BC Partners and Goldman Sachs declined to comment. State Grid was not immediately available to comment.

SGB Starkstrom, a leading manufacturer for electricity power transmission devices, employs roughly 1,300 workers. In 2010, the Regensburg, Germany-based company posted sales of 580 million euros and a net profit of 13 million euros.

Originally, SGB Starkstrom was part of Germany's second-biggest utility, RWE. It was sold to private equity group HCP Capital Group in 2004 and then to BC Partners in 2008.

BC Partners started the sale process after being asked about the asset by several strategic players, the sources said.

While industrial conglomerate Siemens is unlikely to bid due to potential antitrust problems, peer ABB may express interest, they added.

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Reuters: Mergers News: BC Partn attracts offers for SGB Starkstrom -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
BC Partn attracts offers for SGB Starkstrom -sources
May 31st 2012, 18:10

FRANKFURT | Thu May 31, 2012 2:10pm EDT

FRANKFURT May 31 (Reuters) - Private equity firm BC Partners has attracted first-round offers for the manufacturer of power transformers SGB Starkstrom, two sources close to the transaction told Reuters on Thursday.

The investor, which has mandated Goldman Sachs to organize the sale, hopes fetch up to 1 billion euros ($1.24 billion), the sources said, adding that more bids could evolve.

Among the handful of strategic bidders is China's State Grid , while no private equity investors have handed in offers, they added.

BC Partners and Goldman Sachs declined to comment while State Grid was not immediately available to comment.

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