Mergers and Acquisitions Recap: Deals and Rumors of the Week

Rio Tinto (NYSE:RIO) and Mitsubishi Corp. (NYSE:MTU) have proposed buying all remaining shares of Australian miner Coal & Allied (ASX:CNA) for A$1.49 billion, or A$122 a share, a 34% premium on the coal miner’s last share price. Rio Tinto and Mitsubishi already own 86% of the company.

Investing Insights: Gold Haters: Contrarian Investing Gone Wrong.

Warren Buffett’s Berkshire Hathaway (NYSE:BRKA) has bid $3.25 billion for Transatlantic Holdings (NYSE:TRH) in a deal that values Transatlantic shares at $52 each, a 15% premium to the company’s closing price Friday. Berkshire has outbid Validus Holdings (NYSE:VR) and Allied World Assurance (NYSE:AWH).

Capital One Financial (NYSE:COF) has agreed to buy the U.S. credit card business of HSBC Holdings (NYSE:HBC) for $2.6 billion in cash and stock. The deal with give Capital One over $30 billion in credit card loans. HSBC says the sale represents an 8.75% premium to the gross customer loan balances and the firm will record a post-tax gain of $2.4 billion.

Rumors are flying that mining giant BHP Billiton (NYSE:BHP) could be considering a bid for Lundin Mining (PINK:LUNMF). British newspaper the Daily Telegraph reported that BHP was rumored to be in talks with zinc producer Nyrstar, which has been previously linked to Lundin’s Zinkgruven mine in Sweden, over a joint bid for Lundin.

Wells Fargo (NYSE:WFC) has won an auction for Bank of Ireland’s (NYSE:IRE) $1.4 billion U.S. commercial real estate loan portfolio. Bank of Ireland sold the portfolio to Wells Fargo at almost face value as part of its efforts to cut its loan portfolio by about $43 billion by the end of 2013.

MMI Investments, which has a 4.9% stake in Check Point Systems (NYSE:CKP), has recommended the company pursue a sale. MMI believes that Checkpoint could be sold at a share price in the “low-to-mid $20s”, well above its current trading price of $14.17.

Bank of America (NYSE:BAC) is in exploratory talks with the principal investment funds of Kuwait and Qatar about selling part of the firm’s $17 billion stake in China Construction Bank Corp. (HKG:0939). BofA owns 10% of CCB’s Hong Kong-listed shares, and will be contractually free to sell those shares after August 29, which it would do in order to raise the $50 billion it needs to reach new Tier 1 capital requirements. BofA has also been talking to other investors in addition to the Kuwait Investment Authority and the Qatar Investment Authority.

General Motors (NYSE:GM) CEO Dan Akerson recently told a German newspaper that European brand Opel has the potential to be successful with its new cost structure, and that GM will not be selling. Akerman sought to quash rumors that GM would be divesting the Opel brand, which accounted for 13% of GM’s total sales last year. The German media has been speculating since June that the European unit might be sold, with Chinese automakers and Volkswagen AG (ETR:VOW) considered potential buyers.

SABMiller (LON:SAB) is set to renew its bid for Australian brewer Foster’s Group (ASX:FGL) later this month with a slightly higher offer. SAB is waiting for Foster’s full-year results on August 23. With beer profits expected to tumble, SAB hopes the fiscal year results will put pressure on Foster’s board to accept its current offer of A$11.2 billion, or a slightly larger cash offer. In the past few days, Foster’s share price has fallen below SABMiller’s bid level, making the offer more attractive.

Don’t Miss: Why Apple Needs to Replace Cisco on the Dow 30 Now.

Allied World Assurance’s (NYSE:AWH) accepted offer for Transatlantic Holdings (NYSE:TRH) was only about $70,000 above the hostile offer from Validus Holdings (NYSE:VR). At one point, Validus’s bid was nearly $400 million better than the Allied offer. At the time they were made, the Allied offer was worth $3.2 billion and the Validus offer was worth $3.5 billion. But since then, Validus has lost more than a fifth of its value. Both bids undervalue Transatlantic’s share price and book value. A late bid from Warren Buffett’s Berkshire Hathaway (NYSE:BRKA), valuing the company at $52 a share, places a 3.24% premium on Transatlantic’s current share price, which could allow the Berkshire bid to pull ahead.

More from The Cheat Sheet