Xstrata Okays Takeover, Best Buy Founder Faces Deadline: M&A Weekly Recap

Here’s your Cheat Sheet to this week’s M&A headlines:

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It is anticipated that News Corporation (NASDAQ:NWS) will announce during the week that it will purchase a 49 percent interest in the YES Network from the New York Yankees and its partners. Such a transaction could value the Network at $3 billion, according to an inside source to Reuters. The move was designed to permit News Corp to ultimately buy control of the channel which broadcasts Yankees baseball and Brooklyn Nets basketball to some 15 million subscribers. Meanwhile, the current deal will enable te company to share in the profits, says The New York Times, which first supplied the particulars. Goldman Sachs Group (NYSE:GS) and Providence Equity own 40 percent.

A very large hedge fund is apparently betting that Canada will finally okay the proposed acquisition of Nexen (NYSE:NXY) by Cnooc Limited (NYSE:CEO. Paulson & Co. and mutual fund firm Franklin Resources number among non-Canadian investors who bought shares in Nexen in the third quarter, according to regulatory filings. However, the shares were bought prior to Canada’s rejection of a $5.2 billion offer by Petroliam Nasional for Progress Energy Resources Corp. (PRQNF.PK)) on October 19th, which has since soured the prospects for the Nexen deal.

The number-two solar wafer producer, LDK Solar Co. (NYSE:LDK), has divested approximately 25.3 million shares to the partly state-owned Heng Rui Xin Energy Co. at 86 cents each. A statement issued Sunday said that the number of share marked a 19.9 percent interest in the seller which is based in Xinyu, China.

United States Steel Corporation (NYSE:X) on Sunday rejected a Saturday newspaper article which alleged that it had divested its Slovak unit to the Ukrainian miner and steel producer Metinvest. U.S. Steel spokesperson Jan Baca said that, “The situation from earlier this week has not changed.” The unit is an important supplier for Slovakia’s surging car industry as the Slovak economy depends upon the sector which is fueling it even in spite of the current regional crisis. Meanwhile, the steelmaking giant ThyssenKrupp (TYEKF.PK) says that it has no interest in the company.

The Sydney-based, top grain handler GrainCorp (GNCLF.PK) last week turned down a bid from Archer-Daniels-Midland Co. (NYSE:ADM), the top corn producer in the world. Though the amount was A$2.7 billion, or $2.8 billion, GrainCorp pronounced the offer at A$11.75 per share ‘undervalued’ and as the company’s Chief Executive Alison Watkins told a local TV program on Saturday, “We’ve got a great strategy that we’re confident is going to be very appealing to our shareholders,” referring to a new growth plan that is thus far not detailed.

In a Sunday press release, Cisco Systems (NASDAQ:CSCO) said that it will purchase the privately-held cloud networking firm Meraki for around $1.2 billion in cash and retention-based incentives. The latter provides mid-market customers with easy-to-utilize on-premise networking solutions which they may centrally manage from the cloud. The transaction should close in the second quarter of the buyer’s fiscal year 2013.

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Botox producer Allergan (NYSE:AGN) might trade its obesity division for a unit from the closely held SkinMedica as it considers the sale of the former and the purchases the latter. The company will enlarge its skin care repertoire by the $350 million transaction with SkinMedica, whose products include a prescription treatment for decreasing female facial hair along with lotions to shrink the appearance of wrinkles. Allergan Chief Executive Officer David Pyott commented that, “The acquisition will allow us to expand our product portfolio to better meet the needs of our existing base of physician customers and their patients.”

Spain has established what is called a ‘bad bank’ as a vehicle through which to unload toxic real estate assets that have sandbagged banks’ balance sheets from the time of the property crash. This move was a condition of the country’s receipt of as much as €100 billion, or $127 billion, of assistance in a European financial sector bail-out. At this time, at least three of Spain’s top banks will buy a stake in the vehicle or are mulling such a move. Banco Santander (NYSE:SAN) plans a stake to show that healthy firms will participate and number two Banco Bilbao Vizcaya Argentaria (NYSE:BBVA) was still deciding as of Saturday as is Banco de Sabadell (BNDSK.PK).

Best Buy Co. (NYSE:BBY) founder Richard Schulze faces a looming deadline to review the firm’s financials as a part of his proposed takeover and he is now collaborating with three private-equity firms, including Cerberus Capital Management, in conducting due diligence. According to inside sources who wish to remain anonymous, Schulze has requested an additional 30 days for the procedure, even though he and the advisor firms have been evaluating the data since September. The company granted him 60 days for a proposal upon his announcement that he would bid as much as $26 a share on August 6th. Apollo Global Management (NASDAQ:APO) and KKR & Co. (NYSE:KKR) had at one time considered making bids, but sources say now that the companies are not likely to work with Schulze on an offer.

Is a deal getting closer? Cnooc Limited (NYSE:CEO) accepts the management and employment conditions as laid out by the government of Canada as the giant company tries for approval of its $15.1 billion purchase of Nexen (NYSE:NXY), say inside sources. In October, Alberta Premier Alison Redford put forth conditions for approval of the deal and now negotiators for the Canadian government have adopted many of them, among which include guarantees that a minimum of one half of Nexen’s board and management positions be held by Canadians.

Almost 80 percent of Xstrata’s (XSRAF.PK)(XSRAY.PK) shareholders have okayed the $31 billion takeover by the commodities trader Glencore International (GLCNF.PK), but a “golden handcuffs” retention plan for the firm’s key managers was not approved. The overall approval for the transaction came on the second of two resolutions. The first resolution would have approved the retention plan, but was not passed as it fell short of the necessary 75 percent threshold.

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Yahoo! (NASDAQ:YHOO) is said to be one of the companies that is looking hard at Lions Gate Entertainment Corp.’s (NYSE:LGF) TVGuide.com, the online entertainment listings, video and news site and mobile application, in a view towards a possible acquisition. Deadline Hollywood reported early Tuesday that the site’s owner was in “advanced negotiations” to divest it for approximately $20 million to one strategic bidder. Other sources opine that a deal, if any, is not in advanced stages as of now. However, Yahoo Chief Executive Marissa Mayer has said that Yahoo was looking at smaller acquisitions through which to round out its product repertoire, especially in the area of mobiles.

Reckitt Benckiser’s (RBGPF.PK) higher bid for the American vitamins producer Schiff Nutrition International (SHF) has prompted the German drugmaker Bayer (BAYZF.PK) to abandon its efforts along that line, saying that, “Bayer AG’s Board of Management has decided not to propose any increase” to its offer, according to a filing with the Securities and Exchange Commission that was published Tuesday. Reckitt’s offer topped Bayer’s agreed $1.2 billion bid to buy Schiff with its own offer of $1.4 billion. The filing added that, “Entering a competitive bidding process in response to the November 18 Proposal (Reckitt’s bid) would result in a price outside Bayer’s set financial criteria.”

Petronas announced Tuesday that it is again extending the closing date of its bid for acquisition of Progress Energy Resources (PRQNF.PK) while it waits for the Canadian government to okay the deal worth some C$5.2 billion. December 30th will be the new date. In October, it extended the deadline to November 30th, following the rejection of the transaction by the Canadian government which pronounced that it was not likely to bring a “net benefit” to Canada.

The French waste and water group Veolia Environnement (NYSE:VE) finalizes the divestiture of its American solid waste unit to ADS Waste Holdings at a price of $1.9 billion. The transaction gained approval by United States regulators last week, assuming the completion of certain asset disposals. The sale will help Veolia reduce its net debt by approximately $1.84 billion as it promised to sell off €5 billion, or $6.4 billion, in assets by the end of 2013.

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The genetic sequencing firm Illumina (NASDAQ:ILMN) reports that its peer Complete Genomics (NASDAQ:GNOM) has turned down its takeover offer of approximately $114 million, or $3.30 per share, as was revealed on Friday. In September, the latter had agreed to be acquired for $3.15 per share by BGI-Shenzhen, but in a Wednesday filing, Illumina said that its offer was superior and was neither dependent on financing nor subject to government approval as a foreign investment.

The leading MEMS solution supplier MEMSIC (NASDAQ:MEMS) reported in a Wednesday release that its board received an unsolicited non-binding acquisition proposal from IDG-Accel China Growth Fund II for all outstanding shares of common stock not currently owned by IDG or its affiliates for cash at $4 per share. The firm’s board has set up a special committee comprised of its three independent directors in reaction to the offer.

Petroliam Nasional, or Petronas, which is again hoping for approval of its $5.2 billion purchase of Progress Energy Resources (PRQNF.PK), is now proposing a public offering of its shares within five years as a concession to Canada, says an inside source, which added that Petronas has offered to sell Progress Energy shares three to five years subsequent to the closing of the takeover. However, last month’s rejection of the original acquisition has led to doubts concerning the openness of Canadian Prime Minister Stephen Harper’s government to foreign investment and especially as to whether this is a harbinger of difficulty for the now famous proposal by Cnooc Limited (NYSE:CEO) to buy Nexen (NYSE:NXY).

The Australian metals producer Talison Lithium (TLTHF.PK) will commence discussions with Chengdu Tianqi Industry Group Co. so as to see if that firm’s $807 million acquisition offer is superior to a rival bid by the American chemicals supplier Rockwood Holdings (NYSE:ROC), which agreed in August to purchase Talison for C$6.50 per share. On Tuesday, Rockwood issued a statement in which it was affirmed that it marks its final offer.

The European Commission has ruled that the American industrial manufacturer Eaton Corporation’s (NYSE:ETN) proposed $11.8 billion acquisition of the electrical equipment producer Cooper Industries (NYSE:CBE) should not harm competition on the Continent. The purchase marks Eaton’s largest ever such move and is expected to broaden its range of electrical products, like lighting and wiring devices, into markets such as mining, gas and utilities, and oil, and will also reinforce its footprint in emerging markets.

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Italy’s Fiat Industrial’s (FNDSF.PK) improved $1.5 billion offer has the okay of its United States tractor and construction machinery division, CNH Global (NYSE:CNH), towards a transaction that will form the third-largest capital goods group in the world by sales. Fiat’s new bid was increased by around $300 million in a cash dividend to the prior bid that was all in shares and will permit the company to purchase the 12 percent of CNH it doesn’t already hold. The company hopes that a combined entity will draw a higher valuation from investors, who up until now have appraised CNH over Fiat.

Mohawk Industries (NYSE:MHK), an American producer of ceramic tiles, is said to be in advanced discussions to acquire the Italian ceramics maker Marazzi Group, according to two inside sources. One reported that, “The talks are in an advanced stage with due diligence ongoing, though it is still not completely sure if the deal will go through,” with the other commenting that the firms were to the point of evaluating the final details such as the price which is thought to be approximately $1.2 billion.

General Electric Company (NYSE:GE) is in discussions to purchase the Italian defense firm Avio SpA from Cinven, which turned down a prior bid from two private-equity funds, say inside sources, who add that CVC Capital Partners and Clessidra SGR do not intend to revise their bid of around €3 billion, or $3.9 billion, for Avio. This leaves GE alone to pursue the takeover. However, Cinven might possibly hold an IPO of Avio in 2013, according to the same sources.

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In a Friday press release, BreitBurn Energy Partners (NASDAQ:BBEP) reported that it will purchase oil properties lying principally in the Belridge Field in Kern County, California at a price of about $40 million in cash and 3,013,561 common units representing limited partner interests in the Partnership. The transaction should close later in 2012.

Founder Rob McEwen of Goldcorp (NYSE:GG) announced Thursday that his McEwen Mining (MUX) might divest its copper project Los Azules in Argentina and use the proceeds to help finance the firm’s plan to become one of the largest gold producers in the world. On November 15th in New York, McEwen remarked that “all the big players” in the copper industry have shown interest in the Los Azules deposit and arms of the Chinese government have been in contact.

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