M&A

M&A Roundup

Macquarie Bank and Duquesne Light Holdings; Li Ka-shing and PCCW; Peabody Energy Corp. and Excel Coal; Nissan, Renault and General Motors; Sydney F...
Helen ShawJuly 6, 2006

•An investor consortium led by Macquarie Bank of Australia has agreed to acquire Pittsburg-based energy company Duquesne Light Holdings for $1.59 billion. The investors will also assume $1.26 billion of long-term debt and $148 million of preferred and preference shares. The deal, which is subject to regulatory approval, is expected to close in the first quarter of 2007.

•Li Ka-shing, head of Hutchison Whampoa, plans to establish a new company to launch a private bid for the core media and telecom assets of telecom services operator PCCW, which is controlled by his son, Richard Li. Observers believe his bid would be supported by the Chinese government, which opposes foreign ownership of the assets.

•St. Louis-based Peabody Energy Corp. has agreed to acquire Excel Coal, an Australian company, for $1.34 billion in cash. The combined company creates one of the largest coal companies in Australia. The deal, which is subject to regulatory approval, is expected to close in the fourth quarter.

•Billionaire Kirk Kerkorian, General Motors’ largest individual shareholder, has proposed an alliance between GM, Nissan Motor Co., and Renault. General Motors Corp. management is expected to discuss the proposal on July 7 at a regularly-scheduled board meeting. Nissan and Renault have stated they would pursue the alliance only if GM is willing.

•Shareholders of the Sydney Futures Exchange voted in favor of a $3.39 billion merger with the Australian Stock Exchange. The Australian Stock Exchange launched its initial, friendly offer for the futures exchange in March, but encountered resistance from Sydney Futures Exchange shareholders, who demanded changes in price and management structure. The stock exchange, which maintained the price of its offer, agreed to give the chief executive position to Robert Elstone, the head of SFE.

•Inco, the second-largest nickel producer worldwide, won European antitrust approval to purchase Falconbridge, a Canadian rival, after agreeing to sell a refinery in Norway. The approximately $17.6-billion acquisition, which was announced last fall, is the linchpin of a recent $35.4-billion friendly bid for both companies by U.S. copper producer Phelps Dodge Corp. The combination of the three companies could thwart a hostile bid for Inco by Canada-based Teck Cominco and a takeover bid for Falconbridge by Switzerland-based Xstrata.

•Millicom International Cellular, a Luxembourg-based mobile services operator, has canceled the company’s sale after it failed to receive attractive offers. Millicom had initiated a strategic review in January and hired Morgan Stanley as a financial adviser. The company said it had been in advanced discussions with a potential buyer, but declined to name the bidder.