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   Strategies & Market TrendsSpeculating in Takeover Targets

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From: richardred11/15/2013 1:47:25 AM
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Oil industry jobs, dealmaking expected to rise
Posted on November 14, 2013 at 1:21 pm by Collin Eaton in Deals, Jobs

(AP file photo/Reed Saxon)

HOUSTON — After two years of steady decline, hunger for oil and gas deals is picking up as economic uncertainties clear up around the world, according to an EY survey of industry executives released Thursday.

The percentage of oil and gas executives who expect to make a deal over the next 12 months jumped to 39 percent in October, up from 28 percent a year ago. While that’s still under the 48 percent peak the industry saw in October 2011, plans for oil and gas deals outpaced all but the industrial products and life sciences industries last month, according to the EY report.

EY, the new global brand for financial services provider Ernst & Young, surveyed 169 oil and gas executives in September for its Capital Confidence Barometer, which the firm has published for four years. More than 1,600 executives across a dozen industries responded to EY’s survey.

Renewed confidence in the global economy and a growing number of high-quality assets on the sales block are driving the industry’s instinct to acquire, and more potential buyers and sellers believe they can meet at a fair price and close a deal, the firm reported.

Help Wanted

As executives become more bullish on the global economy, 57 percent of the survey’s oil and gas respondents said they plan to boost hiring in the next 12 months, up from 34 percent in October 2012.

The industry’s expectations for increased economic growth jumped from 46 percent last year to 71 percent in October, but other measures, including confidence in stock market valuations and the market’s stability, dipped slightly. Views on corporate earnings stayed level with last year, with 36 percent of respondents expecting margins to improve.

Organic growth, the executives say, comes mostly (38 percent) from improving core products and focusing on existing markets, but 25 percent say advances in technology also have enabled companies to develop new products and markets, according to EY.

Cat and Mouse

Buyers told EY that market share gains in existing footprints were the main attraction to scooping up more assets, signaling an affinity for “bolt-on” acquisitions that fill strategic gaps in companies’ existing businesses. Seventy-five percent of the firm’s oil and gas sample said the number of good buys on the market should increase over the next 12 months, up from 44 percent last year.

Forty-six percent of the respondents said they see asset prices going up over the next 12 months, up from 33 percent last year, as sellers post more attractive targets. And more players — 21 percent, up from 12 percent last year — say they expect to see more large deals over $500 million in value.

The increase in price tags comes as companies use more cash to finance deals, a measure to offset the high debt used in building shale positions. The percentage of executives who see cash as the source of deal funding increased from 40 percent last year to 48 percent in October, as shareholders and management teams become more concerned about leveraging up.

After a significant ramp up in debt on the books, more oil and gas companies, EY reported, are focused on reducing interest costs and extending debt maturities.

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To: richardred who wrote (3502)11/15/2013 1:58:35 AM
From: richardred
   of 7071
Chalk up another EMM vendor acquisition: IBM bought Fiberlink. Here’s our take.

Written on Nov 15 2013
Filed under: IBM, Mobile Device Management, Enterprise Mobility Management
179 views, 0 comments

by Jack Madden

For a few years now, the constant refrain about the enterprise mobility management space has been that with so many vendors, it’s ripe for consolidation. So it shouldn’t be too much of a shock that yesterday we learned that IBM is buying Fiberlink, makers of the MaaS360 EMM suite.

IBM’s recent mobility efforts have centered around a suite of products called MobileFirst. I’m actually not too familiar with it, but according to the website it has all sorts of components, including development and planning services, analytics, security, and basic mobile device management through IBM Endpoint Manager for Mobile Devices (which came with the BigFix acquisition in 2010).

By acquiring Fiberlink, IBM is getting a wider set of mobile device and app management capabilities. Fiberlink may have a slightly lower profile than the likes of AirWatch and MobileIron, but they bring a fairly complete package none the less. For MDM, Fiberlink support iOS, Android (including a range of custom versions of Android), Windows Phone, Symbian, Mac OS, and Windows. For mobile app management, they have apps for email, browsing, and file syncing, along with a MAM SDK and app wrapping tool.

The question is now that Fiberlink will be part of IBM, will it become a product that only IBM-centric companies buy? IBM touted planned integration with the rest of its products, and as Gabe said earlier this week, “There are two types of companies in the world, those that love IBM and those that stay the hell away from them.” If that’s the case, Fiberlink could lose some visibility among the non-IBM crowd, but on the other hand as a part of the IBM, Fiberlink’s technology could now be put in front of thousands of new customers that might not have considered it before.

There’s also the fear that “IBM is where companies go to die,” but looking at other recent EMM acquisitions, most of the acquiring companies (Citrix and Symantec, for example) are putting a lot of work into their offerings, a necessity in the still young and fast-moving EMM space.

Surely IBM buying Fiberlink will set off another round of matchmaking speculation for other EMM vendors (AirWatch and MobileIron will top that list, of course), so get ready for that, too.

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From: richardred11/15/2013 10:54:46 AM
   of 7071
Merck KGaA says eyes acquisitions at all four units
DARMSTADT, Germany Thu Nov 14, 2013 5:30am EST

(Reuters) - Germany's Merck KGaA ( MRCG.DE) said it would look into possible acquisitions to strengthen all of its four business divisions - prescription drugs, non-prescription drugs, laboratory equipment and specialty chemicals.

"We have four sustainable business divisions that are set to grow organically, but for all four areas we have ideas for steps that go beyond that," Chief Executive Karl-Ludwig Kley told journalists at a press conference on Thursday.

"But the main point is the continuation of our financial discipline," he added.

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To: richardred who wrote (2603)11/17/2013 12:58:16 PM
From: richardred
   of 7071
2013 Medtech M&A Review: Conclusion and 2014 Outlook

Posted in Medical Device Business by MDDI Staff on November 15, 2013

Don't expect medtech M&A's to slow in 2014.

By Clyde A. Burkhardt

It’s likely that 2014 will also be a very active year for medical device and diagnostic mergers and acquisitions. The year may start off with a very large blockbuster transaction if Johnson & Johnson reaches an agreement to sell its diagnostics unit, which is focused on blood screening equipment and laboratory blood tests. Reportedly, a full-blown auction process is underway and a consortium of Danaher Corp. and Blackstone, one of the largest U.S. private equity funds, is competing against several other private equity funds. The price is reportedly in the range of $4 billion.

Many of the large potential buyers in medtech continue to have strategic growth plans that include making acquisitions to enhance their existing product portfolios with new products, and to diversify into medtech segments with good long-term growth prospects. Private equity investors have an estimated $500 billion in capital for acquisitions and many are very interested in acquiring medtech companies to use as platforms to build large companies organically and through additional acquisitions. Several private equity funds sold their medtech companies in 2013, and there will likely be additional private equity exits in 2014. Some of the private equity medtech exits over the past two years provided excellent returns for the investors, and that has attracted the attention and sparked the interest of other private equity funds.

Next year is also likely to bring additional divestiture activity, as some of the larger medtech companies continue to shed noncore or underperforming operations and redeploy the sale proceeds to grow their core businesses with the best growth potential or diversify by acquiring companies with favorable growth prospects. As some of the transactions discussed illustrate, many medtech buyers are interested in acquiring companies with leading-edge, next-generation products and therapies. A window of opportunity will remain open in 2014 for the owners of such companies to sell their businesses at attractive prices.

While the medtech industry in general faces many problems and challenges, including the Affordable Care Act, the mergers acquisition climate was healthy in 2013 and will likely remain healthy for most medtech segments in 2014.

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To: richardred who wrote (3527)11/21/2013 9:28:46 AM
From: richardred
   of 7071
Yahoo!: Can’t Rule Out Large Acquisitions, Says SunTrust

Shares of Yahoo! ( YHOO) are up $1.40, or 4%, at $36.03, continuing an after-hours run-up on the announcement the company extended its buyback allocation by $5 billion, and will issue $1 billion in convertible notes due 2018.

As I noted last night, Citigroup’s Mark May observed the move was not a surprise, and there others who also see this as a sensible move, including SunTrust Robinson Humphrey’s Rob Peck, who has a Neutral rating on the stock.

This morning Peck writes that it is “a prudent move by management, as the company works to turn around its core and return to revenue growth.”

Peck “would not rule out a large acquisition by Yahoo! as it seeks to balance its long term goals and near term excess balance sheet.”

“Companies such as Pinterest, Snapchat, Buzzfeed, and Business Insider as well as video ad-tech stack companies are frequently speculated as candidates.”

He’s still cautious about investing the stock, however, without further traction in the traditional ad business, even though he sees rising value, and rising payouts, in the prospective IPO of Alibaba Group Holding, the Chinese e-commerce firm in which Yahoo! maintains a minority investment:

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To: richardred who wrote (3537)11/22/2013 9:41:30 AM
From: richardred
   of 7071
Brace yourself for a mobile acquisition feeding frenzy

Image credit: Pixel Embargo/Shutterstock

November 20, 2013 7:30 AM
Jack Gold

Jack Gold is the founder and principal analyst at J.Gold Associates.

Consolidation will dominate a rapidly maturing mobile market over the next couple of years. Both IBM and Oracle made moves this past week. This is just the tip of the iceberg! If your enterprise is using mobile technology from a small vendor, expect big changes.

Last week, IBM announced its acquiring FiberLink MaaS360 — a company that provides a cloud-based Mobile as a Service management and security capability to some significant enterprise customers. It’s rumored that IBM paid as much as $300M for this company, although the actual amount has not been disclosed.

A couple of days later, Oracle announced it’s acquiring Bitzer Mobile, a mobile management and security company concentrating on the enterprise market. Coincidence? Not at all. The maturing of the mobile market means the major players all need to accumulate “critical mass”, or risk jeopardizing their hold on an enterprise’s infrastructure.

Over the past 18 months IBM has been buying up mobile oriented companies: Worklight (mobile app platform), UrbanCode (app development), and Trusteer (fraud detection/security). This is being done to supplement its own products (e.g., Endpoint Manager, Security Access Manager, Connection Manager), and its major infrastructure platform, WebSphere. IBM’s “bulking up” of its MobileFirst initiative through this acquisition spree and its own home-grown products have elevated it on the list of credible enterprise mobile infrastructure providers, although much integration work still needs to be done to make MobileFirst a seamless offering.

For its part, Oracle has been well behind the technology curve when it comes to mobility. Although it has puttered around the edges for years, it has lacked a credible mobile strategy, falling far behind its rivals, particularly SAP, who has gone through its own major technology acquisition phase over the past 2 years (and is hardily done with its acquisitions). With new mobile management in place, including from its biggest rival, it looks like Oracle is finally getting serious about being a credible mobile threat. Acquiring Bitzer is a first step in what I expect to be more acquisition oriented mobile enhancements that will help Oracle regain some competitive advantage for its infrastructure products and applications.

While IBM and Oracle clearly see the maturing of the mobile market as an opportunity to expand their reach and meet customer’s demand for improved mobile infrastructure, these acquisitions are an indication of seismic changes taking place in mobility that have broad implications for nearly all companies.

Most small mobile technology vendors will not independently survive beyond 2-3 years. That means enterprises with products installed from these companies will have to evaluate change/upgrades. In consolidating markets, some vendors remain in play for a number of years, but their ability to grow will be severely curtailed and their products will likely stagnate.

The big players will accelerate consolidation by buying more technology, especially related to security. If you have mobile products installed, your current vendor of choice may ultimately end up being part of IBM, SAP, Oracle, Cisco, Microsoft, Citrix, McAfee, etc. Smaller vendors not acquired will have a difficult future.

Mobile has gone mainstream and integrating mobility into all aspects of a company’s operations is key to long term success. All the large infrastructure vendors know this. The time when they could ignore mobility as a niche play not big enough to be noticed is over.

Cloud-based mobility solutions are now important to cloud-based infrastructure players. If you are a cloud vendor and you don’t have a significant mobile component, you are not a cloud player longer term. The major cloud vendors (e.g., IBM, Amazon, MSFT, SAP, etc.) are all acquiring mobile integrated solutions. Expect more acquisitions to come and more emphasis on cloud based mobility services.

Bottom Line: If you have a mobile installation (and if you don’t you’re at a serious competitive disadvantage), and have MDM, MAM, EMM or other mobile directed products from the many smaller niche players in the market, you may soon discover that your enterprise mobility vendor is being acquired.

A few pure mobile players of larger size (e.g., AirWatch, MobileIron) will survive. Many with unique technology (of which there are dozens) will be acquired, or simply fade. Consolidation over the next 1-2 years will be fast and furious. You have been warned

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To: richardred who wrote (2719)11/24/2013 8:46:53 PM
From: richardred
   of 7071
Novartis Sets $5 Billion Buyback as It Seeks Faster Growth (3)

By Eva von Schaper, Bloomberg News
Friday, November 22, 2013

Nov. 22 (Bloomberg) -- Novartis AG plans to buy back $5 billion in stock over two years and said it will expand in faster-growing areas of health care such as treatments for skin and heart diseases. The shares rose the most in a month.

The repurchases will begin immediately, the Basel, Switzerland-based company said in a statement before the company’s annual investor day in London today. Novartis will develop new business segments in dermatology, heart failure, respiratory illnesses and cell therapy, it said.

The buyback is encouraging investors that Novartis is more focused on providing a return to shareholders now that former Chairman Daniel Vasella has departed, Andrew Baum, a pharmaceuticals analyst with Citigroup Inc. in London, said in a note to clients. Baum said he hopes the company commits to providing further returns to shareholders as proceeds of any asset sales pump up the company’s cash holdings.

“We anticipate further increases in cash returns as the company divests non-core assets such as animal health over the next six to 12 months,” Baum said.

The buyback is part of a 10 billion-swiss franc ($11 billion) plan announced in 2008, of which more than three- quarters still remain. Part of the mandate was used to mitigate the effect of the 2010 purchase of eye-care unit Alcon on Novartis shareholders, Eric Althoff, a spokesman for Novartis, said in a telephone interview.

‘Nice Gesture’

“The market likes a buyback,” Michael Leuchten, an analyst at Barclays Plc in London, said by phone. “I’d say it’s a nice gesture, when you do the math they’re buying back 2.5 percent of their market capitalization over two years.”

Novartis rose as much as 2.6 percent to 74.25 francs in Zurich, the steepest intraday increase since Oct. 22, and was up 1.4 percent at 2 p.m. local time. The stock has returned 32 percent this year, compared with 28 percent for the Bloomberg Europe Pharmaceutical Index.

Novartis said it wants to save 3 to 4 percent of total sales over the next two years by focusing on procurement, consolidating research and reviewing its manufacturing sites. The company had $56.7 billion in sales last year.

Pipeline Review

The drugmaker also said a review of its pipeline will lead to more approvals and higher sales by 2017. Novartis’s stable of cancer drugs and sales are set to grow annually for the next five years, despite the anticipated loss of exclusivity on its cancer drug Gleevec, the company said.

The company is interested in bolt-on acquisitions of as much as $5 billion, Chief Executive Officer Joe Jimenez said in a phone interview today, with a focus on oncology, specialty medicines, dermatology and generics. Prices for biotechnology assets “have gone through the roof,” he said, making it more difficult to add value through an acquisition in that sector.

The Alcon unit is now set to grow at a mid- to high-single digit rate. The company said last month group sales would do better than previously expected. Europe’s biggest drugmaker by sales has begun a review of units such as its animal-health operation that lack global scale.

Novartis announced this month it would sell its diagnostics unit to Grifols SA for $1.68 billion, part of a strategic review of its market segments. The company now has three units with global scale, Jimenez said: pharmaceuticals, the eye-care business Alcon and the generics arm Sandoz. Novartis has said it wants its businesses to be among the industry leaders or it will consider divesting them.

The drugmaker has identified its animal-health business as a top candidate for a sale, people familiar with the matter said this month. Novartis is also considering selling its over-the- counter medicines unit and the vaccines operation, they said, although no final decision on those assets has been made.

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To: richardred who wrote (3114)12/5/2013 1:47:19 PM
From: richardred
   of 7071
Sold weighted position in Olin today, on recent strength. IMO mainly due to Dow's decision to put its chlorine division on the block. Dow's exit might be Olin's gain, but I think housing is calming down.

From memory OXY & OLN tried to merge their CA operations together at one time The FTC ruled against it.

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To: richardred who wrote (3332)12/15/2013 11:10:03 AM
From: richardred
   of 7071
GE Takeover Strategy Called Pivotal 2014 Issue by Morgan Stanley
By Tim Catts December 13, 2013

General Electric Co. ( GE:US) investors are looking for signs that the world’s largest maker of jet engines and medical scanners will embrace a more aggressive approach to acquisitions in 2014, according to Morgan Stanley.

Chief Executive Officer Jeffrey Immelt may earmark more money for deals next year as he makes progress toward his goal of shrinking GE’s finance unit, Nigel Coe, a Morgan Stanley analyst, said today in a note to clients. Immelt said in 2012 his focus was on “bolt-on” purchases of $4 billion or less.

GE’s mergers-and-acquisitions plans will be the most important topic at its annual winter meeting with shareholders and analysts on Dec. 18, Coe said. A faster M&A pace would signal Immelt’s interest in replacing profit from GE Capital’s consumer credit business, set for an initial public offering next year, by bulking up manufacturing.

Story: GE Turns to 3D Printers for Plane Parts
“The key question is whether GE will signal a shift up in M&A spend at its annual outlook meeting next week,” wrote Coe, who is baed in New York and has an equal-weigh rating on the shares. “We believe capital allocation in 2014 is a key debate for the stock.”

Seth Martin, a spokesman for Fairfield, Connecticut-based GE, said he couldn’t immediately comment on Coe’s note.

GE raised its quarterly dividend ( GE:US) by 16 percent to 22 cents a share today, payable on Jan. 27. The stock rose 1.2 percent to $26.86 at 3:29 p.m. in New York. The shares advanced 26 percent through yesterday, compared ( GE:US) with a 24 percent gain for the Standard & Poor’s 500 Index.

Coe projected that share repurchases may fall by 50 percent or more in 2014 from the $10 billion annual pace GE forecast for this year. That would leave more cash for M&A, he said.

In April, GE agreed to purchase Lufkin Industries Inc., a maker of oilfield machinery, for $3.3 billion to bolster its rapidly growing oil and gas division. In December 2012, it agreed to acquire Avio SpA’s aviation business for $4.3 billion, gaining control of a supplier of jet-engine components to its aviation unit.

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To: Glenn Petersen who wrote (3455)12/15/2013 11:22:48 AM
From: richardred
1 Recommendation   of 7071
5 takeover failures revisited

Peter Hodson | 13/12/13 3:02 PM ET

AP Photo/The Canadian PressBlackBerry in late September received a friendly $9 per share cash bid from Fairfax Financial and partners, only to see the bid collapse 42 days later

There likely were a few disgruntled shareholders of Patheon Inc. (PTI/ TSX) in October 2009 when Lonza Group terminated its planned $710-million acquisition of the company. The proposed price? US$3.55 per share, a 25% premium on the $2.84 that Patheon was trading at the day before the deal fell through.

Having a takeover disappear is likely never much fun. But I recently had reason to wonder if those shareholders had held on. That’s because JLL Partners Inc. — which started the bidding process rolling in 2009 — on Nov. 19 offered to buy Patheon for US$9.32 per share in cash. Four years later, 163% more in value and the deal looks done.

Maybe having a takeover fail is not so bad. With that in mind, let’s look at five prior collapsed deals and see how the targets are fairing nowadays.

Roche Holding AG in January 2012 offered US$6-billion, or US$51 per share in cash, for Illumina, a maker of integrated systems for the large-scale analysis of genetic variations and biological functions.

Illumina was not happy about the bid, and fought back hard. Roche terminated the deal in April 2012. Looks like the company was right to fight back: Its shares are now just under US$100, almost double what Roche wanted to pay. At Wednesday’s high of US$102.67, they were more than double the old takeover price.

Badger Daylighting Inc. (BAD/TSX)

Clean Harbours Inc. in April 2011 offered to buy Badger for $20.50 per share in cash. It was a friendly deal approved by Badger, but shareholders fought back and voted down the deal.

Today, it sure looks like Clean Harbours would have paid a bargain price. Badger this week traded at $84 per share, more than four times the proposed takeover price less than three years later. Badger, in the hydrovac industry, is up 169% this year on strong growth in its revenue and earnings.

Mart Resources Inc. (MMT/TSX-V)

Westoil Ltd. in August 2009 announced the $79-million acquisition of Mart in a cash bid of 14¢ per share. The deal fell apart 74 days later.

Today, Mart, an oil producer in Nigeria, sports a $458-million market cap and a $1.29 per share price. Interestingly, Mart’s annual dividend of 20¢ per share now exceeds the proposed takeover price of four years ago.

Yahoo Inc. (YHOO/Nasdaq)

In our most-famous example, Microsoft Corp. in February 2008 bid US$31 per share in cash and stock for Yahoo, a potential US$41-billion takeover. The deal was terminated after three months of wrangling. Microsoft in 2011 was widely rumoured to be back at the negotiating table for Yahoo, only this time at US$16.60 per share, reflecting lower prices after the financial crisis.

Today, though, is a different story: Yahoo shares — now trading near US$40 — are up more than 100% in the past year, and earnings growth is looking better. Instead of selling out, Yahoo has instead bought back lots of its own stock, including US$5.3-billion worth of shares since January 2012.

BlackBerry Ltd. (BB/TSX)

Alas, sometimes a failed bid means a lower price. Blackberry in late September received a friendly $9 per share cash bid from Fairfax Financial Holdings Ltd. and partners, only to see the bid collapse 42 days later.

Blackberry shares are now trading near their 15-year low in the low $6 range. Maybe, if shareholders are lucky, Blackberry shares years from now will be higher than the prior $9 bid.

Overall, however, the next time one of your companies receives a takeover bid, maybe you should pause first before jumping up and down with joy. You might — just might — be better off with no deal at all.

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