M&A Roundup

Euroenxt and NYSE Group; Pitney Bowes and Cerberus Capital Management; Xstrata, Falconbridge, Inco, and Teck Cominco; Virgin Group and Morgan Stanl...
Helen ShawMay 18, 2006

• Hedge fund manager Atticus Capital, a stakeholder in cross-border European exchange and derivatives operator Euronext, has expressed its willingness to consider a merger between Euronext and the NYSE Group. Euronext has also been in talks with Deutsche Börse and Chicago Mercantile Exchange Holdings.

• Pitney Bowes has agreed to sell its capital services external financing business to an affiliate of private equity firm Cerberus Capital Management for about $745 million net of expenses. The deal is expected to close within three months.

• Swiss copper mining company Xstrata has offered to acquire the 80 percent of Canadian nickel mining company Falconbridge it does not already own, valuing the company at just over $18 billion. Meanwhile, Canadian miner Inco has raised its offer of $15.3 billion for Falconbridge to approximately $17 billion. Inco, in turn is the subject of a hostile takeover attempt by Teck Cominco, which will proceed only if Inco withdraws its offer for Falconbridge.

• Virgin Group has sold its remaining stake in record label V2 Records to Morgan Stanley for an undisclosed amount. Richard Branson, founder of V2, will retain his 5 percent ownership. In 2002, Morgan Stanley had purchased a 47.5 percent stake in the label.

• Vivendi has rebuffed a demand by stakeholder Sebastian Holdings to split itself up. The French media and telecom group has also denied that Sebastian Holdings offered to buy it for approximately $49.8 billion.

• Debt collection company NCO Group has received an $889 million offer from chairman and chief executive officer Michael Barrist and a hedge fund partner, One Equity Partners II, owned by JPMorgan Chase. The deal would be financed with $815 million in debt and $388 million in equity; the buyers would also assume $314 million of NCO debt. The company has not stated when its board will consider the deal.

• Qwest Communications International has agreed to purchase privately held OnFiber Communications for $107 million in cash and the option of up to $35 million in stock at closing. Through the deal, Qwest would acquire fiber broadband assets in major U.S. metropolitan areas. The deal, which is Qwest’s first acquisition, is expected to close in the third quarter.

• First Avenue Networks and privately held FiberTower have announced that they will merge in an all-stock deal worth $1.5 billion. The new company, which will retain the FiberTower name, will be one of the largest operators of wireless transport services in the United States. The deal is expected to close in the third quarter, subject to regulatory approval.

• Marathon Oil expects to sell its oil and production operations in western Siberia to a subsidiary of OAO Lukoil, the largest oil company in Russia, for $787 million. The deal, subject to regulatory approval, is expected to close in mid-July.