The Rumor Mill: M&A Rumors Across Wall Street

Rumors are often more fun than the deals themselves. (See “DONE DEAL! M&A Activity of the Week“) So, here’s your Cheat Sheet to the top mergers and acquisitions in the rumor mill:

  • Here’s yet another update on the Sanofi-Genzyme saga:  after rejecting Sanofi-Aventis’ (NYSE:SNY) $18.5 billion ($69 per share) offer multiple times, Genzyme (NASDAQ:GENZ) might be starting to come around.  The two companies have reached a preliminary agreement under which Sanofi would acquire Genzyme.  Part of the contention involves Genzyme’s new MS drug, and under this particular agreement, Sanofi would obtain a contingent value right, or payouts based on the drug’s success.  The two will likely reach an agreement by February 15th, the deadline for Sanofi’s tender offer.  In the meantime, Sanofi raised its bid to the low $70s, which, along with the CVR, would give Genzyme a total valuation in the high $70s.
  • Turkey’s largest media group, Dogan Yayin, is generating quite a bit of interest, particularly from KKR (NYSE:KKR) and a mysterious Turkish partner.  Who is this Turkish partner? We don’t know, but according to one banker on the deal, if we did know, it would shake us to our core.  KKR and its partner want to get their hands on some of Dogan’s assets, since the media company is facing an uphill legal battle related to tax fines.  KKR is on the prowl, but other private equity firms, such as TPG, will bid as well.
  • DuPont (NYSE:DD), a U.S.-based chemicals manufacturer, claims that Danish food ingredient producer Danisco will either have to take or leave its approximate $8.4 billion offer, because it won’t fork over any more money.  The problem is, even though Danisco’s board recommended that shareholders accept the offer, quite a few of the company’s smaller shareholders aren’t too happy with the price.  SEB Asset Management, which owns approximately 2 percent of Danisco’s shares, already rejected the bid as too low.  It looks like Danisco’s board has a tough crowd to please!
  • Will J. Crew (NYSE:JCG) ever be acquired, specifically by TPG and Leonard Green? Not if its shareholders can help it, or at least some of them.  The problem is, these shareholders keep going back and forth:  last month, a group of investors, including a few pension funds, agreed to settle after filing claims that they were duped in the plans for the potential takeover.  Now these same shareholders claim that J. Crew has already violated the settlement terms by creating a “charade” of a go-shop period to solicit competing bids, so they’re screaming bloody murder.  It looks like no deal will happen without quite  a bit more drama.
  • Last year, Bank of America (NYSE:BAC) claimed it would sell insurer Balboa as part of its plan to raise money to return the bailout money.  Well, now it has a potential candidate:  QBE Insurance, Australia’s largest insurance group.  Bank of America will probably get between $1.5 billion and $2 billion, but QBE may fit the fence when it comes to financing the deal.  It may have to raise more capital, but this might be difficult considering the stocks miserable performance in the past couple of years.
  • Just when you thought RockTenn (NYSE:RKT) had Smurfit-Stone Container Corp (NYSE:SSCC), Third Point Capital, Royal Capital Management, and Monarch Alternative Capital in the bag, some of Smurfit’s hedge fund investors opened their big mouths.  (is it a coincidence that they all use “royal” names?), which together own about 9 percent of Smurfit, complained that RockTenn’s $28 per share bid was too low and that the sale would be unfair, as it didn’t follow an auction process.  They also expressed concern that Smurfit’s CEO would make out like a bandit when the deal closes.
  • Two private equity groups made second-round bids this past Wednesday for medical diagnostics company Beckman Coulter (NYSE:BEC), after a year on the bidding market.  The two competing bid come from: the Blackstone Group (NYSE:BX) and TPG Capital; and Apollo Management and the Carlyle Group.  If the deal goes through, it will be worth approximately $5 billion and will be one of the biggest leveraged buyouts since the beginning of the credit crisis.
  • We may have a classic case of jealousy on our hands!  Reliance Industries, an Indian energy giant, might make a competing bid for Atlas Energy (NASDAQ:ATLS) and shut out Chevron (NYSE:CVX) and its $3.2 billion bid from November.  You see, Reliance believes that it deserves the right to Atlas, given that it already has a $1.7 billion joint venture.  In a letter disclosed by Atlas, Reliance was allegedly the preferred company in the event of a merger, but Chevron went in and stole their thunder.

Interact: Which deals do you think will get done? Which are just PR from hedge funds and traders? Let us know in the comments below …

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