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dealReporter Risk Arbitrage Weekly Overview 15 October 2010 - 28 October 2010

Deal Reporter
28/10/2010

dealReporter Risk Arbitrage Weekly Overview 15 October 2010 - 28 October 2010

  • On Monday the 18th the Royal Bank of Canada announced an agreement to acquire Bluebay Asset Management for GBP 4.85 per Bluebay share. The offer represents a premium of 29.1% to the GBP 3.75 closing price before the deal was announced. An additional proposed dividend of 7.5p will be paid, amounting to a total of GBP 4.925. The irrevocable undertakings by Bluebay directors represent about 20.5% of the share capital.
  • Last week Draka announced that they had received a non-binding and non-solicited bid by Nexans, after the bidder had previously announced it was in discussion with Draka regarding an offer at EUR 15 per share. These discussions were held with the support of the main shareholder Flint Beheer BV. As a result S&P placed Nexans’ BB+ long term rating on negative credit watch. Yesterday morning Draka announced its view that the offer by Nexans substantially undervalued the company. Today Nexans expressed that it was still open to discussions with Draka despite the target Board’s refusal.
  • Last week Leighton Holdings announced it was applying for minority shareholder protection as a controlling stake in the company currently held by Hochtief would be impacted if ACS were to be successful in gaining control of Hochtief. The Australian regulators denied a separate application by Hochtief to force ACS to make a bid for Leighton Holdings as part of its offer. Hochtief responded it intended to take the matter to the Australian Takeover Panel. On Tuesday this week Leighton Holdings filed three applications with the Australian Takeover Panel regarding the potential ownership changes resulting from a ACS – Hochtief transaction.
  • On Tuesday the 19th, DataCash announced that its scheme of arrangement with Mastercard had been sanctioned by the courts. The second court hearing approved the capital reduction on Thursday 21st and the scheme became effective on Friday 22nd with all DataCash shares ceasing trading on the AIM.
  • Last week Deutsche Postbank announced that it was recommending the offer by Deutsche Bank to its shareholders. This was followed by the publication of a letter from Deminor to the BaFin complaining about minority shareholder protection in the Postbank takeover offer. According to the communication the disclosure of information in the Deutsche Banks offer document was incomplete and incorrect, especially in respect to gaining a controlling stake. As such it breached the legal requirements. Consequently Deminor requested the Bafin take action on the matter and stated that they reserved their right to take the matter further to the EC commission.
  • On Thursday last week Banco Guipuzcoano issued a report on Banco Sabadell’s offer. The Board unanimously backs the offer. The following Monday the trade unions, whose opinion had not been included in the report issued by the bank, announced their opposition to the offer by Banco Sabadell.
  • On Thursday Konecranes announced that whilst it intended to focus on organic growth, it would not rule out acquisitions. However the company stated that given the negative reaction from DEMAG to its approach, as well as the steep increase in the share price of the potential target company thereafter, had reduced the likelihood of a combination of the two companies. On Friday DEMAG announced that it had appointed Jens Tischendorf, partner at Cevian Capital, to the Supervisory Board of DEMAG Cranes AG.
  • Bank of Cyprus announced on Friday the end of the subscription period for its EUR 345m rights issue with a subscription ratio of 95.4% having been achieved. The Bank stated that it intended to place the rights not exercised by their holders during the subscription period..
  • This Tuesday the deal between BRIT Insurance and Apollo Management, through the specially formed Achilles, went live. The offer will entitle BRIT shareholders to GBP 10.45 in cash plus a contingent value payment of up to GBP0.25. A further GBP 0.30 capital distribution will also be paid to shareholders registered before the 22 October.
  • Banco Popolare announced that it approved the plan for a rights issue of a total of EUR 2bn on Tuesday. The company stated that it was possible that this would be carried out in a couple of tranches.
  • On Tuesday Reckitt Benckiser announced that all antitrust conditions to its deal with SSL had now been waived as the European Commission had decided not to initiate proceedings and Ukraine’s Antimonopoly Committee had granted its approval.
  • On Tuesday Hexagon updated on its intention to launch a SEK 6.5bn rights issue to finance its acquisition of Intergraph. The subscription period will run during the first half of December. Further details as to the subscription price and ratio are yet to be decided.
  • On Tuesday it was announced that the OFT was considering Travis Perkins offer to divest stores in areas of potential overlap and competition on concern regarding the combination with BSS. The OFT stated that the main area of concern was the specialist plumbing sector as well as some local areas. Travis Perkins and BSS responded by stating that they did not believe that the remedies would impact the planned combination of the companies.
  • Seloger.com announced yesterday morning that it rejected the offer by Axel Springer due to its inconsistency with the companies’ interests. The Board considers the price of EUR 34 per share to not be reflective of the intrinsic value of Seloger.com.
  • Iberia announced it was to seek shareholder approval on the 28, 29 November for its merger with BA for which the merger shareholder document was published yesterday morning.
    • application/pdf iconPress Release 28 Oct 2010.pdf
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