M&A Roundup

Mirant and NRG Energy; Dexia and DenizBank; ADC Telecommunications and Andrew Corp.; Marsh Supermarkets, Drawbridge, Cardinal, and MSH Supermarkets...
Helen ShawJune 1, 2006

• Power company Mirant sued the board of directors of its rival NRG Energy after it rejected Mirant’s unsolicited $8 billion bid, claiming that the NRG board breached its duty by not considering the offer. NRG refused to negotiate, according to reports, because it believed Mirant had allegedly obtained confidential information from its advisor Goldman Sachs. Goldman has ceased advising Mirant on its bid.

• Dexia, a Belgian financial services company, has agreed to purchase 75 percent of DenizBank, a Turkish bank with additional branches in Russia, for approximately $2.44 billion. Dexia plans to purchase the other 25 percent of DenizBank in the future.

• Broadband equipment manufacturer ADC Telecommunications has agreed to acquire communications equipment maker Andrew Corp. for $2 billion in stock. ADC shareholders would own 56 percent of the combined company. Subject to approval by regulators and shareholders, the deal is expected to be completed in four to six months.

• Marsh Supermarkets has received an unsolicited offer from Drawbridge Special Opportunities Advisors and Cardinal Paragon for $13.625 per share; on May 2, it had agreed to be acquired by MSH Supermarkets Holding for $11.125 per share. MSH, an affiliate of Sun Capital Partners, stated that it would allow Marsh to proceed with the new offer under certain conditions, including a $10 million breakup fee; Marsh rejected that overture, and its board has recommended that shareholders accept the MSH deal.

• New Jersey-based chemical company Engelhard has agreed to be acquired by German rival BASF for approximately $5 billion in cash. Engelhard had rejected two previous offers from BASF during the past five months.

• E-Trade has agreed to acquire Retirement Advisors of America for an undisclosed amount. The deal is expected to close in the third quarter.

• Japanese rail operator Hankyu Holdings has offered $3.5 billion in cash for Hanshin Electric Railway in a deal that would create Japan’s third-largest railway, by revenue. Before the offer’s June 19 expiration date, Hankyu plans to spend $1.6 billion to gain a stake of at least 45 percent of Hanshin; if unsuccessful, it will abandon its takeover bid.

• A consortium including Kinder Morgan company managers, Goldman Sachs, American International Group, and private equity firms has launched a $13.5 billion takeover bid for the oil and gas pipeline group. Including about $8 billion in debt, the $20.4 billion deal would be the largest-ever management buyout if it is accepted by Kinder Morgan.