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   Strategies & Market TrendsSpeculating in Takeover Targets

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From: richardred11/13/2011 8:34:31 PM
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Universal/Sony to buy EMI

Universal and Sony reach deal to buy EMI for £2.5bn Famous British music business could be split into two in agreement that hands control to biggest rivals

EMI has sold its recorded music unit to Universal for £1.2 while the department goes to a Sony-led consortium for £1.3bn. Photograph: Getty Images

EMI, arguably the most famous corporate name in British music history, fell into the hands of its two largest rivals in two deals worth £2.5bn – a finale to a disastrous four-year period that saw the company loaded with debt by financier Guy Hands and rejected by bands like the Rolling Stones.

Universal Music, the world's biggest recorded music company, triumphed in an auction for EMI's recorded music business, with a £1.2bn bid for the label behind Coldplay, Tinie Tempah, and above all, the Beatles. Its offer was about £250m more than rival Warner Music.

It was the first part of a two-stage break-up of EMI, with the music publishing division, the home of the Motown catalogue, going to a consortium led by Sony – the world's second-largest music group. Sony reached agreement in principle to buy the division for £1.3bn, seeing off a bid from BMG Rights Management, a joint venture by Germany's Bertelsmann and the private equity group KKR.

EMI was put on the block by US bank Citigroup, which seized control of the company in February after it became clear that its owner, Guy Hands's company Terra Firma, could not contend with the £3.4bn debt taken on when he bought the business in 2007.

The double sale means that Citi will recoup about £2.5bn of its original loan. The bank also scooped a little over £200m in fees from the original loans to Terra Firma, meaning that its overall loss on those loans is a little less than £700m. Bank insiders characterised that as "a good result" given that EMI was bought at the height of the credit boom and is being sold in a downturn.

Universal's move for EMI means that the two companies will account for 38% of all recorded music sales worldwide. In some countries, such as France, that figure will be over 50%. Vivendi, Universal's owner, pledged to take on the regulatory risk in the deal. Chief executive Jean-Bernard Lévy said it would pay £1.1bn in 10 months' time and a further £100m on completion.

Simon Dyson, editor of industry newsletter Music & Copyright, said that he would "be very surprised" if regulators cleared the deal "without a lot of sell-offs" – and said that the overall market share level was perilously close to "the magic number for an outright no" for the Universal-EMI combination. Sony's deal for EMI's music publishing catalogue carries far fewer regulatory risks because Sony is a relatively small player.

Universal was quick to emphasise its commitment to EMI's musical heritage, with Lucian Grainge, the British chief executive of Universal Music, pledging to keep the historic Abbey Road studios where the Beatles and many other famous artists have recorded. "Abbey Road Studios are a symbol of EMI, a symbol of British culture, a symbol for the creative community of exactly what the company is and we are [now] part of," he said.

Universal said that it expected to save £100m a year in costs by combining operations with EMI. The company added that it was "very confident" that it would be able to get the deal through a regulatory investigation, which could take up to a year, saying that it expected "deep and fruitful dialogue".

To emphasise the point, Universal wheeled out Mick Jagger, who moved the Rolling Stones catalogue from EMI to Universal after a falling-out with Hands. The singer said Universal's move was "a very positive development and I particularly welcome the fact that EMI will once again be owned by people who really do have music in their blood".

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To: richardred who wrote (2214)12/28/2011 12:48:21 PM
From: richardred
   of 6521
For tax purposes, sold my position in Kodak at a big loss today. I don't see the company surviving in current form. I think NYSE rules will eventually have the stock DE-listed. Maybe some chances for the highest risk penny stock traders to make some bucks on trades.
Message 27670776

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To: richardred who wrote (2985)12/28/2011 4:52:44 PM
From: Cautious_Optimist
   of 6521
It always hurts to take those loses. My sympathies to you.

I'm okay, but I'd be a lot wealthier if I admitted defeat over 38 years of holding on to my losers too long, like SUNW or even (blush) WCOM. Others I care not to remember, in biotechs. I've waited for LUV (Southwest airlines) to go on a run or get scooped up, for almost 15 years.

I have only had one loser among many notable winners on the short side, I think it was a Wexler or Mr. Pink pick to short IBM maybe 10 years ago.. There is a lesson here somewhere.

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To: Cautious_Optimist who wrote (2986)12/28/2011 6:53:36 PM
From: Dale Baker
   of 6521
One of Pinkie's gems: Message 18085679

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To: richardred who wrote (2849)12/29/2011 12:18:15 AM
From: richardred
   of 6521
Took a big planned tax loss in TCCO .

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To: Cautious_Optimist who wrote (2986)12/29/2011 1:27:29 AM
From: richardred
   of 6521
>There is a lesson here somewhere.

I think that lesson is known by many here at SI and stated by many here in their own way. Some of my favorites. Diversify, discipline, diligence and allocate appropriately for your mistakes. Never fall in love with a stock.

>It always hurts to take those loses

Yes it does. I've also took a sizable loss in TCCO today. Although I'm not happy with taking losses. I accept it's part of investing. Personally I do take some big risks, but that's my *style. Even with these year end losses booked. 2011 was an exceptionally good profitable year for myself. Three successful takeouts in this board. MARTEK BIOSCIENCES CORP, SMART MODULAR TECHNOLOGIES, and EMS TECHNOLOGIES INC. The biggest realized gain however was a non takeout, UFPT TECHNOLOGIES.


A profitable NEW YEAR to all in 2012

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To: richardred who wrote (2941)1/12/2012 10:53:06 AM
From: richardred
   of 6521
Nice backlog for micro cap TAYD. Almost double from a year ago. Earnings up nicely. Looks like the lag from world earthquakes and some new construction has led to orders. Holding on to a core position for now.

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To: richardred who wrote (2873)1/12/2012 1:34:40 PM
From: richardred
   of 6521
Thu, Jan 12, 2012, 1:27pm EST - US Markets close in 2 hrs and 33 mins
KeyBank agrees to buy 37 upstate NY HSBC branches

BUFFALO, N.Y. (AP) -- First Niagara Bank has agreed to sell 37 HSBC branches to KeyBank as part of its purchase of HSBC's entire upstate New York retail network, the banks announced Thursday.

Cleveland, Ohio-based KeyBank will pay First Niagara a deposit premium of about $110 million, or just under 5 percent, for the branches in Erie, Niagara, Orleans and Monroe counties.

The purchase includes all 26 of the HSBC branches that First Niagara promised to divest in a November agreement with the Justice Department to satisfy antitrust concerns.

Buffalo-based First Niagara announced over the summer that it planned to buy 195 HSBC branches in New York and Connecticut in a $1 billion deal that will give First Niagara upstate New York's biggest market share, more than 20 percent, and expand its overall presence in the Northeast. Executives said about half of the acquired branches would be sold or divested.

"We're delivering on the plan we shared when we announced the HSBC branch acquisition last year, in spite of the very challenging operating environment," First Niagara President John Koelmel said in a statement. "The outcome will be another significant and positive step toward realizing our vision for establishing a regional leadership position in the Northeast."

After the acquisition, First Niagara Bank N.A. will have more than 400 locations in New York, Pennsylvania, Connecticut and Massachusetts, $30 billion in total deposits, $38 billion in assets and more than 6,000 employees, the company said.

The all-cash purchase of the HSBC branches is expected to close early this year, followed by the sale to KeyBank by late June, the banks said.

"This transaction is an exciting opportunity to strengthen our franchise in these attractive markets and, at the same time, build long-term shareholder value," KeyCorp. Chairman and Chief Executive Beth Mooney said. The company has assets of approximately $89 billion.

KeyBank said it will offer jobs to "substantially all" of the HSBC employees at the acquired branches.

The HSBC sale is sale is part of London-based HSBC Holding's strategy, presented to investors last May, to shift focus away from retail banking to commercial and corporate banking, and to target investment in high-growth economies.

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To: richardred who wrote (2940)1/13/2012 1:05:01 AM
From: richardred
   of 6521
Nestle Said to Vie With Danone to Buy Pfizer’s Baby-Food Unit
By Jeffrey McCracken, Jacqueline Simmons and Drew Armstrong
January 12, 2012 6:01 PM EST

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Nestle SA (NESN) and Danone SA (BN) made first- round bids for Pfizer Inc. (PFE)’s baby-formula unit, putting two of Europe’s largest food companies in competition for the division, people with knowledge of the matter said.

A tax-free spinoff is still an option for the company, said the people, who declined to be identified as the process is private. Pfizer had delayed sending out sale documents to examine whether that move would be better for investors, people with knowledge of the plans said in September.

Nestle had $8.3 billion in cash, cash equivalents and short-term investments as of June, more than twice as much as Danone’s $3 billion. The sale of the infant-nutrition business, whose revenue approached $2 billion in 2010, would allow Chief Executive Officer Ian Read to focus more on medicine development at Pfizer, whose drugs include the Lipitor cholesterol pill.

In addition to their cash, the companies’ investment-grade credit ratings may help them borrow funds for acquisitions. A representative for Vevey, Switzerland-based Nestle declined to comment, while two spokeswomen for Danone didn’t respond to requests for comment.

“The process of exploring strategic alternatives for Pfizer’s nutrition business is ongoing,” said Joan Campion, a spokeswoman for Pfizer. “We’re currently pursuing the activities associated with evaluating all options, including sale, spin-off or other transaction.” The company expects to announce a decision this year, she said.

Animal Health

Pfizer said in July that it would examine options for the operations, as well as the animal-health division. The New York- based drugmaker may fetch as much as $10.5 billion for the baby- food unit, the people said in July. Together, the two accounted for 8 percent of the drugmaker’s 2010 revenue.

“Investors will view this positively,” said Les Funtleyder, a health-care strategist and portfolio manager with Miller Tabak & Co. in New York, whose fund owns Pfizer shares. “The more capital return, the better,” he said of a potential sale.

Pfizer shares gained less than 1 percent to $21.99 yesterday. They have risen 20 percent in the past year.

Abbott Out?

Abbott Laboratories (ABT) said this week that it isn’t participating in the Pfizer process. The health-care company was among the parties that had expressed interest in the division, people with knowledge of the process said in July. The Abbott Park, Illinois-based company, which announced its own breakup in October, was still interested in bidding for the Pfizer unit then, said a person familiar with the matter.

Potential buyers, notably Nestle, may encounter antitrust issues in some markets, two of the people said. With the Pfizer operations, the Swiss food company would hold more than 60 percent of the market for baby formula in Australia, Mexico and elsewhere, they said. Danone would have as much as 80 percent of markets such as the U.K., Turkey and New Zealand and more than 70 percent in Ireland and Australia, said the people. Both companies could dispose of assets to meet antitrust requirements.

Pfizer gained the formula division through its $68 billion purchase of Wyeth in 2009. The unit, which makes the SMA Gold line of products for infants and children and Enercal supplements for adults, offers products in more than 60 countries, according to its website.

The nutrition business is ranked fifth worldwide by market share, according to Lee Linthicum, an analyst with Euromonitor International in London. That compares with the Middle East and Africa, and Asia, where it holds the No. 3 and No. 4 spots, respectively.

To contact the reporters on this story: Jeffrey McCracken in New York at; Jacqueline Simmons in Paris at; Drew Armstrong in New York at

To contact the editors responsible for this story: Jennifer Sondag at; Reg Gale at

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To: richardred who wrote (1068)1/13/2012 10:29:04 AM
From: richardred
   of 6521
Magna Steps Up Acquisition Hunt


Canadian auto parts maker Magna International Inc., flush with cash and with the support of its customers, is intensifying its global search for acquisition targets this year.

The company aims to scoop up smaller parts-suppliers in China and Europe if a slowdown in that region finally triggers a consolidation in the auto industry.

Chief Executive Don Walker said the number of calls from its automotive customers to consider potential targets is growing. Auto makers are spooked over the financial weakness of some companies that provide parts or technology, he said.

"The acquisitions are 100% our decision but I would say about 50% of this companies we consider are suggested by our auto maker customers," Mr. Walker said on the sidelines of the North American International Auto Show in Detroit on Thursday.

Magna, which made about 10 acquisitions around the world last year, is sitting on about $1.2 billion cash and feeling the heat from investors who want that cash to be put to use.

The company, meanwhile, needs to continue developing more cutting edge products to fuel its growth. Mr. Walker said he would only use the cash to buy suppliers and has no interest in buying a car maker.

Three years ago Magna was a member of a consortium that had German government backing for a deal to buy General Motors Co.'s European Opel auto unit; GM decided not to pursue the deal, concluding Opel was key to maintaining a global business.

The potential purchase stirred auto makers' ire with some saying they would move their proprietary business away from Magna if it became a competitor. In addition to supplying parts to auto makers, its Magna Steyr unit in Austria has assembled cars for PSA Peugeot Citroën, BMW AG and others.

"We will not become a competitor to our customers," Mr. Walker said.

Separately, Mr. Walker said he continues mulling a plan to build another Magna Steyr-like assembly plant somewhere else in the world.

Magna for years has talked about building another assembly plant but Mr. Walker said such a move appears more promising as auto makers continue talking about building and selling more lower volume niche cars.

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