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   Strategies & Market TrendsSpeculating in Takeover Targets

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To: richardred who wrote (2343)8/25/2010 2:03:50 PM
From: richardred
   of 6147
Didn't see this company listed. New buy today TDC-TERADATA-Had a stub left over from NCR spin-off. Rounded-off and added.

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To: richardred who wrote (2220)8/26/2010 3:17:46 PM
From: richardred
   of 6147
New buy today on weakness- HUBG-Hub Group

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To: richardred who wrote (2337)8/27/2010 1:35:00 PM
From: richardred
   of 6147
UPDATE 7-HP raises 3PAR offer to $2 bln, trumps Dell bid

* HP raises offer to $30 per share from $27

* Dell had matched HP's previous bid

* 3PAR shares jump 24 pct to $32.28

* Analysts say HP stronger bidder, some warn on valuation (Adds comments from Dell and professor, background on execs, updates share prices)

By Ritsuko Ando and Soyoung Kim

NEW YORK, Aug 27 (Reuters) - Hewlett-Packard Co (HPQ.N) raised its offer for 3PAR Inc (PAR.N) to $2 billion, once again topping Dell Inc's (DELL.O) bid and showing it had plenty of ammunition in a bidding war for the data storage company.

HP's offer of $30 per share was the latest in a week-long volley of escalating bids, and came less than 3 hours after Dell announced 3PAR had accepted its bid of $27 per share, which matched HP's previous offer.

Analysts say HP may be the stronger bidder with $115 billion in annual revenue compared with Dell's $53 billion, and a more global sales force that could help 3PAR grow faster. HP's bids have also been bolder, while Dell has mostly moved to match its rival.

"It's strategically important to both companies. But given the bidding behavior, I feel like HP's in this to win it," said Dinesh Moorjani, analyst at Gleacher & Co.

Dell's prior agreement with 3PAR, however, allows it to match competing bids, and the company said it was assessing the latest move, which has raised 3PAR's valuations to what some analysts see as unreasonable levels.

"We'll act in the best interest of our customers and our shareholders, and the long-term value creation for both," said Dell spokesman David Frink.

3PAR shares were up 24 percent at $32.28 in early afternoon, indicating investors expect an even higher bid to emerge.

The shares had mostly traded at around $10 this year, until Dell announced its $18 per share bid earlier this month.

If it wins, HP would also need to pay the breakup fee of $72 million that is part of the Dell-3PAR deal. HP said that once the deal is accepted by 3PAR, it will close by the end of the year.

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To: richardred who wrote (2271)8/29/2010 8:54:47 PM
From: richardred
   of 6147
Friday bought a small position back in AIRT 8.80

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To: richardred who wrote (2306)8/29/2010 9:55:23 PM
From: richardred
   of 6147
A big one for a merger Monday.
Sanofi-Aventis offers $18.5 billion for Genzyme
Sanofi-Aventis discloses offer to buy Genzyme for $18.5 billion

Anne D'Innocenzio, AP Business Writer, On Sunday August 29, 2010, 7:52 pm EDT

NEW YORK (AP) -- French drug giant Sanofi-Aventis SA on Sunday publicly launched its $18.5 billion cash bid for American biotech firm Genzyme Corp. -- a move that follows months of rumored interest and failed attempts to bring Genzyme's management to the table.

Under terms of the proposed acquisition, Genzyme shareholders would receive $69 per share, representing a 38 percent premium over Genzyme's closing stock price of $49.86 on July 1. That's the day before speculation began to swirl that Sanofi was looking to buy an American drugmaker, possibly Genzyme, in a bid to help replace revenue being lost to mounting generic competition. Since then, the French company unexpectedly was faced with generic competition for its blockbuster injected anticlotting drug, Lovenox, which brought Sanofi $3.9 billion last year. Its blood thinner Plavix, the world's second-bestselling drug, has patent protection only until 2012.

Genzyme is considered attractive because it has promising drugs for high cholesterol and other disorders in late development and it already sells some lucrative drugs for rare genetic disorders. That's a hot niche as big pharmaceutical companies diversify beyond blockbuster pills that get slammed by cheaper generic rivals after several years. The Cambridge, Mass., company just received U.S. approval in late May for a new drug for Pompe disease, and its experimental biologic drug for multiple sclerosis is getting expedited review by the Food and Drug Administration.

Sanofi-Aventis is taking the bid public to rally shareholders after what it calls "several unsuccessful attempts" to engage Genzyme's management in talks. Sanofi-Aventis said it sent a detailed proposal on July 29 to management, which was flatly rejected on Aug. 11. The companies' financial advisers met last Tuesday, but Genzyme wasn't willing to start discussions, Sanofi-Aventis said.

In Sunday's letter to Genzyme Chairman, President and CEO Henri A. Termeer, Sanofi-Aventis CEO Christopher A. Viehbacher wrote that the company "was left with no other choice but to take our compelling proposal directly to your shareholders by making the terms public."

Genzyme officials couldn't be immediately reached for comment on Sunday. Analyst Steve Brozak of WBB Securities said Sunday that the bid is "just an opening salvo," and the deal certainly isn't going to "happen overnight."

Termeer "isn't going to go quietly," he added.

While Sanofi prefers to work with the board instead of launching a hostile bid, Viehbacher said on a conference call Sunday that "we are also prepared to consider all alternatives to complete this transaction." When asked whether Sanofi-Aventis would be prepared to raise the offer, Viehbacher called the current bid "compelling" and said the company doesn't see any need to "contemplate the next step" at this point.

"Sanofi-Aventis believes strongly in this acquisition and its strategic and financial benefits," Viehbacher said. "We remain focused on entering into constructive discussions with Genzyme in order to complete this transaction."

It's less certain how excited Sanofi-Aventis' investors are about the deal. Sanofi shares peaked in January at $41.59 but have been on a steady decline since the spring. The company's interest in Genzyme seemingly hasn't helped the stock, which dropped last week near its 52-week low of $28.01.

Viehbacher said Sanofi's global reach and resources would allow Genzyme to accelerate investment in new treatments, enhance penetration in existing marketing and expand further into emerging markets. It could also help counter Genzyme's well-documented manufacturing challenges.

"We could get them back on track," Viehbacher said.

Genzyme last month reported a sharp drop in second-quarter profit because of falling sales and charges partly linked to its manufacturing problems. Sales of two key drugs -- Cerezyme and Fabrazyme -- plunged because of viral contamination at a Genzyme facility in Allston, Mass., causing the company to halt production and leading to inventory shortfalls. Genzyme announced this past May that it had agreed to pay a $175 million penalty to federal regulators and is mapping out a plan for overhauling the plant. In the meantime, it has switched production to other plants.

Genzyme shares, which traded in the $80 range just prior to the 2008 market meltdown, have tumbled over the last two years amid the weak economy and its manufacturing problems. The stock bottomed in May at $45.39 but has been partly revived by deal talk and closed Friday at $67.62. Genzyme has said that Cerezyme production is back to normal levels and it plans to start increasing shipments of the drug this month. Shipments of Fabrazyme are expected to increase in the fourth quarter as well.

Like other major international pharmaceutical companies, Sanofi has increasingly been making deals to acquire small companies or rights to promising experimental drugs. The moves are aimed at offsetting inadequate progress from internal research programs and looming revenue declines as blockbuster drugs face generic competition.

Since he became Sanofi's CEO in December 2008, Viehbacher has arranged dozens of mostly mid-sized acquisitions. Those include a $1.9 billion March deal in which the company bought Tennessee-based Chattem Inc., maker of Gold Bond skin products and Icy Hot pain relief packs, in a strategy to expand its U.S. health care business.

Paris-based Sanofi-Aventis is the world's fourth-biggest pharmaceutical company, with 2009 revenue of about $35.5 billion. Genzyme booked 2009 net income of $422.3 million on revenue of $4.52 billion.

AP Business Writer Linda A. Johnson contributed to this report.

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To: richardred who wrote (2343)8/29/2010 11:04:24 PM
From: richardred
   of 6147
Google acquires Angstro, adds founder to team
Written by Andre "DVDBack23" Yoskowitz @ 29 Aug 2010 22:16

Google acquires Angstro, adds founder to team Google has acquired the Web start-up Angstro this week while also moving co-founder Rohit Khare to the Google team.

The search giant has been in an acquisition frenzy over the past few months, purchasing a plethora of sites and services that will help their upcoming assault on the social networking world and its champion Facebook.

Khare is a respected Internet researcher and entrepreneur.

Earlier in the summer, Google purchased the social gaming siteSlide, while recruiting its founder Max Levchin to become a VP of engineering for social media efforts. Levchin was the co-founder of PayPal.

Google has also invested $150 million in social gaming market leader Zynga.

The social networking service, dubbed "Google Me" internally is still in "stealth mode" and Google will not publicly discuss it.

Google versus Facebook has become a hot-topic in the tech world, with many believing Facebook will soon start its own advertising network to rival Google's AdSense, while Google prepares its full assault on the social networking world.

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To: richardred who wrote (2343)8/29/2010 11:12:41 PM
From: richardred
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Cisco May Be Making A Run For Skype

Cisco has made an offer to acquire Skype before they complete their IPO process, says one of our more reliable sources. We have not been able to confirm this rumor one way or another via other sources, which isn’t surprising. A company in lock down during the IPO process is usually even more tight lipped than normal.

But if true this would be one very big acquisition. Skype insiders are hoping for an out of the gate valuation of $5 billion or so, we’ve heard. Presumably Cisco would have to bidding in that range to make it interesting.

Google was also rumored to be sniffing around Skype, but antitrust concerns may have persuaded them not to make an actual offer.

More as this develops.

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From: richardred8/29/2010 11:19:36 PM
   of 6147
Bank of Brazil Looking for Banks to Buy in the United States
2010 - August 2010
Written by Bank of Brasil targets US, Chile, Peru, Uruguay and Colombia to expand
Sunday, 29 August 2010 22:39

Bank of Brazil Latin America's biggest bank by assets, Banco do Brasil, plans the acquisition of banks in Chile and the United States and is holding negotiations to further expand in Peru, Colombia and Uruguay, said Aldemir Bendine the bank's CEO.

Interviewed by daily financial newspaper Valor Econômico, Bendine said the bank targets to become a global conglomerate and is considering 17 possible acquisitions in the US including the purchase of at least two of them.

For this the Brazilian bank has hired Royal Bank of Canada to advice on the acquisition after an attempt in March to acquire Millennium BCP Bank failed for lack of a Federal Reserve license.

Banco do Brasil didn't receive Financial Holding Status from the Fed until April 13, two weeks after a rival acquired Millennium. The new status, following an application in 2007, gives Banco do Brasil the same privileges in the U.S. as a local bank.

Banco do Brasil is looking to expand in the US to cater to a growing number of Brazilian companies with operations in the country, as well as the 1.5 million Brazilians living there. The bank plans to provide commercial and investment banking services tailored to Brazilians, similar to its current offerings in Japan, where it has seven branches and 140,000 account holders.

"Given the expansion of the Brazilian economy, the strengthening of our currency and the surge in investments naturally the large financial conglomerates will have to expand overseas, and I'm not only talking about Banco do Brasil", said Bendine.

Banco do Brasil has signed a series of agreements with Bradesco, the second largest Brazilian bank regarding credit cards, insurances and a strategic association to expand in Africa, "but with no plans for consolidating both banks".

"Retail banking competition will continue as tough or even tougher; we are only interested in close links for overseas operations", added Bendine.

Banco do Brasil moved closer to Bradesco following the consolidation that created the largest private bank in Brazil when Itaú and Unibanco joined.

Bendine said that the bank was considering possible associations with local or international investment banks with the purpose of developing the shares market and creating an area of research and stock trading. A mortgage branch is also included in the plans in association with a major real estate development in Brazil.

Bendine forecasted that retail banking will continue to expand in Brazil in coming years with loans as percentage of GDP reaching 70% by 2015, well above the current 46%.

Banco do Brasil has one branch each in New York and Miami, and an office in Washington. The New York branch focuses on corporate clients and offers private banking, asset-management services and trade finance. The Miami office offers mostly private banking services and trade finance.

In April, Banco do Brasil made its first international acquisition, paying US$ 480 million for a controlling stake in Banco Patagonia SA, Argentina's third-largest bank by market value.

"Argentina is a priority for us because of the number of corporate clients we have there," said Bendine Two hundred companies in the corporate client portfolio have operations in Argentina, which also happens to be Brazil's third-largest trade partner after the U.S. and China.

In Europe, Banco do Brasil is reorganizing its eight units under its subsidiary Banco do Brasil AG in Vienna to cut costs and increase its capacity to generate business, he said.

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To: richardred who wrote (2347)8/29/2010 11:28:34 PM
From: richardred
   of 6147
Quattrone rises as tech bidding war escalates
Published On Sun Aug 29 2010

NEW YORK — It’s beginning to feel a lot like the 1990s—at least as far as technology mergers and acquisitions are concerned.

You have headline-grabbing takeovers such as Intel Corp-McAfee Inc, ambitious Internet IPOs such as Skype and, of course, there’s the amazing comeback of Frank Quattrone.

A superstar investment banker in the 1990s, Quattrone led some of the biggest tech initial public offerings of the era, including Inc and Cisco Systems Inc. His time at the top of the tech banking world, however, was short-circuited by charges he blocked an investigation into IPO kickbacks.

If there were any questions about whether Quattrone, 54, could successfully return to the frontline of investment banking after his five-year legal fight, they have been put to rest by his role in advising 3PAR Inc.

A once obscure data storage firm, 3PAR is now at the center of a $2 billion bidding war between powerhouses Hewlett-Packard Co and Dell Inc.

Quattrone has helped bring in bids that started at $18 a share last week, then rapidly progressed to $30 a share, a stunning three times 3PAR’s share price before the war began.

Bidding wars are extremely rare in the technology sector. The last notable one was when EMC Corp outbid NetApp Inc last year to buy Data Domain for $2.4 billion.

Data Domain’s adviser? Frank Quattrone.

“Frank is a tech guy. His passion is tech. So I’m not surprised he’s coming back; it’s what makes him tick,” Marc Odendall, who was head of Credit Suisse First Boston’s European Technology group under Quattrone, told Reuters.

“He’s very calm, he’s very thorough, he substantiates everything that underlines his recommendation,” added Odendall, who, since leaving CSFB, has worked in microfinance and served on the board of several nonprofit foundations.

Quattrone returned to the world of investment banking in 2008 after two trials failed to resolve his case and he ultimately reached a deal with prosecutors that allowed him to avoid a third.

He founded tech boutique Qatalyst Group in San Francisco two years ago and has since worked with Google Inc, Brocade Communications Systems Inc and Palm Inc, among others.

But it has been the 3PAR fight that has drawn Quattrone—known for his bushy mustache, garish sweaters and love for jazz and karaoke—back into the spotlight.

“Failing a total collapse of the deal, and that’s highly unlikely given the fervent interest and rising price, the only sure winner appears to be Frank Quattrone,” David Weidner, a columnist for MarketWatch and The Wall Street Journal, wrote Friday.

Dubbed “The Prince of Silicon Valley” in a recent biography by Randall Smith, Quattrone grew up in blue-collar South Philadelphia. He graduated summa cum laude from the University of Pennsylvania’s Wharton School and later from Stanford University’s business school.

He became a star banker at Morgan Stanley, moved to Deutsche Bank in 1996, and to Credit Suisse in 1998.

At Credit Suisse, his group racked up huge fees for underwriting IPOs and earned him $120 million in compensation one year. Bankers said Quattrone was known for promising to work personally on deals—an approach that is still benefiting him today.

“He has tremendous relationships. I don’t think there is anybody in technology banking who can match him page for page in the Rolodex,” said Brenon Daly, a financial analyst with The 451 Group, who knows Quattrone and works in the same San Francisco neighborhood.

“He’s quick to smile. He knows how to negotiate.”

Quattrone’s close business relationships have also caused trouble. Federal prosecutors alleged he dished out hot IPO shares to top executives known as “Friends of Frank,” in return for new business.

They later charged him with blocking a federal investigation, alleging he knew of probes into Credit Suisse’s IPO share allocations when he instructed colleagues in a Dec. 5, 2000 e-mail that it was “time to clean up those files.”

After Quattrone’s first trial ended in 2003 with a deadlocked jury, he was tried for a second time and convicted of obstruction and witness tampering. An appeals court later threw out the conviction.

In August 2006, Quattrone reached a deferred prosecution deal that meant there would be no third trial and, after abiding by the terms of the agreement for a year, he was allowed to rejoin the securities industry.

In March 2008, he established Qatalyst with Jonathan Turner, formerly global head of Credit Suisse’s Internet banking group; Adrian Dollard, former general counsel of Credit Suisse’s technology group; and Neil Chalasani, an investment banker at Evercore’s technology, media and telecom group.

Since then, it has steadily built its business and brought aboard other big-name technology bankers.

Earlier this year, for instance, Quattrone hired friend George Boutros, a Credit Suisse veteran who advised Sun Microsystems on its $7.4 billion sale to Oracle Corp and Google on its $1.65 billion acquisition of YouTube.

Quattrone’s bank appears to be winning influence at just the right moment, with the tech industry experiencing a surprising rush of deal making.

Gene Hodges, CEO of Websense Inc—a security software company seen as an acquisition target following Intel’s deal for McAfee—said Quattrone has an excellent reputation for knowing how to position a company.

“Mr Quattrone would be high on the list for anyone, especially after seeing the magic that he’s working here. He is doing himself a good favor for sure,” Hodges told Reuters.

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From: richardred8/29/2010 11:37:59 PM
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How To Profit From Mergers And Acquisitions

Holding shares in an acquisition target provides the most upside, as shareholders of Potash Corp. of Saskatchewan can attest.

By | 30.08.2010

Between the time that a merger is announced and when it is completed, there is often a difference between the merger price and the actual price that the company being acquired is trading at. This difference is an allowance for the risk that the merger will not be completed under the proposed terms.

As a simplistic example, let’s say Company A offers to acquire Company B. The terms of the deal will give shareholders of Company B one share in Company A for each share of Company B they currently hold. Shares of Company A are trading at $20 and shares of Company B are trading at $19. To realize this 5% profit, you would short shares of Company A at $20 per share and buy an equal amount of shares of Company B at $19 per share. Both transactions are necessary because you want to lock in the price differential between the two stocks. If you only buy Company B and the price of Company A falls to $19, you will not earn any profit.

The danger with this strategy is that the merger may not be completed. As a result, the scenario offers only a small reward, but big downside risk.

Investment banking companies, such as Goldman Sachs (GS) and Morgan Stanley (MS), profit by collecting fees from M&As. They are not “pure plays,” however, since their profitability also depends on other lines of business such as bond offerings, trading and wealth management. Thus, it is difficult to make an investment case for these firms simply because M&A activity has increased.

Holding shares in an acquisition target provides the most upside, as shareholders of Potash Corp. of Saskatchewan (POT:US) can attest. Literally overnight, the value of this stock skyrocketed. Unfortunately, it is impossible to predict which companies will actually become a merger target without insider information.

What you can do as a shareholder is look at industries where mergers are occurring and evaluate if there are any good investment opportunities in them. The key is to find stocks that would be good investments even if no acquisition offer were ever made; simply investing on the hopes of a merger is pure speculation. Secondarily, you want to evaluate the competition to assess if there is a potential buyer for the company.

A potential buyer has to have the size, financial means and desire to acquire the subject company. For instance, though Potash Corp. is tied to the global agriculture market, it has a limited number of potential buyers. The reason is that its market capitalization is large (currently in excess of $40 billion, thanks to the merger premium) and it operates mines. Thus, a would-be buyer would need to be big enough and have a reason to be involved in the mining business.

Keep in mind that if even there are potential buyers for a company you are invested in, there is never a guarantee that an offer will ever be made. If an offer is made, you will need to evaluate the acquiring company to determine if it makes sense to follow the merger to completion. Each deal is different: You will have to weigh the benefits of maintaining your investment against both the potential risks of the merger not being completed and the opportunity costs of not investing in another company.

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