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Deals: Buying American

In our M&A Roundup for the week ending May 25, the Saudis and Chinese make big investments; Alltel's LBO leads the pack.
Roy Harris, CFO.com | US
May 29, 2007

Foreign governments were buyers in two of last week's biggest deals. Saudi Basic Industries Corp. agreed to pay $11.6 billion for General Electric Co.'s GE Plastics Ltd., and China, through its State Investment Co., moved to purchase a $3 billion minority stake in private-equity concern Blackstone Group Holdings LLC.

The Chinese are taking the minority interest in conjunction with Blackstone's plans for an initial public offering for $4 billion. Blackstone's total value is $33.6 billion.

Activity in North America, however, was led by another in the year's long line of private equity buyouts: this one the purchase of telecom provider Alltel Corp. by TPG Capital and GS Capital Partners for $26.9 billion. It was the fifth-largest deal — and third largest LBO— of the year.

Overall, deals totaled $71.6 billion, boosting the value of North American M&A for the year to date to $827.9 billion, up sharply from $557.7 billion last year, according to data provided to CFO.com by mergermarket .

JPMorgan and Morgan Stanley both advised four of last week's top deals, although Morgan Stanley missed out on the Alltel LBO.

TPG Capital and GS Capital Partners to buy Alltel for $26.9 billion
The definitive agreement calls for a price of $71.50 per share, a premium of 9.6 percent. The transaction is expected to close in the fourth quarter or next year's first quarter.
Seller financial advisor: JPMorgan; Merrill Lynch; Stephens
Seller legal advisor: Wachtell Lipton Rosen & Katz
Bidder legal advisor: Akin Gump Strauss Hauer & Feld; Cleary Gottlieb Steen & Hamilton; Weil Gotshal & Manges

Saudi Basic Industries to buy GE Plastics from GE for $11.6 billion
The price includes assumption of liabilities. The acquisition is in line with SABIC’s strategy of growth and diversification, with the aim at making it one of the world’s leading manufacturing companies. Completion is expected in the third quarter, and is subject to customary closing conditions and regulatory approvals.
Seller financial advisor: Goldman Sachs; Lehman Brothers
Bidder financial advisor: Citigroup
Seller legal advisor: Weil Gotshal & Manges
Bidder legal advisor: Shearman & Sterling

Morgan Stanley Real Estate to buy Crescent Real Estate Equities Co. for $5.88 billion
The definitive agreement calls for a price of $22.80 per share, a premium of 5.5 percent. The transaction is expected to close in the third quarter of 2007.
Seller financial advisor: Greenhill & Co
Bidder financial advisor: Morgan Stanley
Seller legal advisor: Pillsbury Winthrop Shaw Pittman
Bidder legal advisor: Goodwin Procter; Jones Day

Hologic Inc. to buy Cytyc Corp. for $5.47 billion
The definitive agreement calls for a price per Cytyc share of $16.50 cash and 0.52 Hologic shares, or a total of $46.46 per Cytyc share, a premium of 32.5 percent. Closing is expected in the third quarter.
Seller financial advisor: JPMorgan; Morgan Stanley
Bidder financial advisor: Goldman Sachs; Jefferies & Company
Seller legal advisor: Hogan & Hartson
Bidder legal advisor: Brown, Rudnick, Berlack & Israels; Latham & Watkins (Advising Goldman Sachs); Richards Layton & Finger

Coca-Cola Co. to buy Energy Brands Inc. for $4.1 billion
The agreement provides Coca-Cola with a strong platform to grow its active-lifestyle beverages. The transaction is expected to be accretive to Coca-Cola's earnings per share in the first full year after completion.
Seller financial advisor: JP Morgan
Bidder financial advisor: Internal
Seller legal advisor: Debevoise Plimpton
Bidder legal advisor: Skadden Arps Slate Meagher & Flom

Nasdaq Stock Market Inc. to buy OMX AB for $3.67 billion
Nasdaq's recommendation is to acquire the entire share capital of OMX in a transaction conducted through a cash-plus-share tender offer. It will allow Nasdaq to leverage on the complementary business and will position Nasdaq as a leading global electronic trading platform.
Seller financial advisor: Morgan Stanley
Bidder financial advisor: JPMorgan
Seller legal advisor: Cleary Gottlieb Steen & Hamilton; Vinge
Bidder legal advisor: Cederquist; Skadden Arps Slate Meagher & Flom


Government of China (State Investment Co.) to buy a Blackstone stake) for $3 billion
The stake will be nonvoting common units, with the purchase price per common unit being 95.5 percent of the public offering price in Blackstone's planned IPO. The sale of the non-voting common units to the Chinese state company will close concurrently with Blackstone’s planned $4 billion IPO.
Seller financial advisor: Citigroup; Morgan Stanley; Merrill Lynch; Credit Suisse; Lehman Brothers; Deutsche Bank
Bidder financial advisor: Internal
Seller legal advisor: Simpson Thacher & Bartlett
Bidder legal advisor: Skadden Arps Slate Meagher & Flom

CEVA Group Plc (affiliate of Apollo Management) to buy Eagle Global Logistics Inc. for $1.95 billion
The definitive agreement calls for Eagle to be taken private by the portfolio company of private equity firm Apollo for $47.50 per share, a premium of 1.84 percent. The deal is expected to close in the third quarter.
Seller financial advisor: Not Available
Bidder financial advisor: Not Available
Seller legal advisor: Baker Botts
Bidder legal advisor: Not Available

iStar Financial Inc. to buy Fremont General (commercial real estate lending business) from Fremont Investment & Loan for $1.9 billion
The agreement calls for iStar to acquire for cash the lending business and a 30 percent stake in $6.5 billion worth loan portfolio of Fremont Investment & Loan. The acquisition is in line with iStar’s strategy of broadening its presence in the regional sector, where Fremont has a strong presence. The transaction, which is subject to customary closing conditions and approvals from Federal Deposit Insurance Corporation and the California Department of Financial Institutions, is expected to close by the summer.
Seller financial advisor: Credit Suisse
Bidder financial advisor: Internal
Seller legal advisor: Skadden Arps Slate Meagher & Flom
Bidder legal advisor: Katten Muchin Rosenman

Atlas Energy Resources LLC to buy DTE Gas & Oil Co. from DTE Energy Co. for $1.22 billion
The agreement is for cash, and is in line with Atlas Energy’s strategy to expand its reserve base and triple its average net daily production of natural gas. The transaction has been approved by the board of Atlas Energy and is subject to customary closing conditions and approval under the Hart-Scott-Rodino Act. The deal is expected to be completed on 30 June 2007.
Seller financial advisor: JPMorgan
Bidder financial advisor: UBS
Seller legal advisor: Hunton & Williams
Bidder legal advisor: Jones Day

source: mergermarket




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