M&A

M&A Roundup

Tabcorp Holdings and Unitab; Monsanto and Delta and Pine Land Company; Inco and CVRD and Teck Cominco; Jones Apparel Group; Ahold; Xstrata and Falc...
Helen ShawAugust 17, 2006

•Tabcorp Holdings, the largest gaming company in Australia, has retracted its $1.5 billion hostile bid for smaller rival Unitab Ltd. after a regulator ruled that the acquisition would reduce competition for future wagering licenses. The ruling results in one remaining bidder — Tattersall, whose bid was previously approved by the regulator. Unitab shareholders will vote on the $1.4 billion Tattersall bid on August 21.

•Monsanto has agreed to acquire Delta and Pine Land Company, the top supplier of cotton seeds in the U.S., for $1.5 billion in cash. After regulatory opposition to Monsanto’s 1998 bid for Delta and Pine Land, the St. Louis-based target sued Monsanto for not pursuing regulatory approval aggressively enough. This deal, which would give Monsanto control over half of the U.S. market for cotton seeds, is subject to regulatory approval.

•After Canadian nickel producer Inco welcomed discussions with Cia. Vale do Rio Roce (CVRD), its Brazilian rival that launched a hostile $17.7 billion cash bid, Teck Cominco, the Canada-based zinc producer, dropped plans to raise its $17.83 billion cash and stock bid for Inco. Meanwhile, the Inco board continues to endorse an offer by copper producer Phelps Dodge.

•Jones Apparel Group has called off its search for a buyer after almost five months of searching. The company, which has had declining profit for two years, hired Goldman Sachs Group in March to organize a deal. This year, the company has reduced jobs and closed a warehouse as part of its cost-cutting efforts.

•Hedge funds Paulson & Co. and Centaurus Capital, which, together own 6.4 percent of Dutch food retailer Royal Ahold, plan to begin a dialogue with Ahold and urge it to sell its U.S. assets. The funds assert that such a sale would improve Ahold’s market value by over one quarter, from the current $11 billion to $18 billion. Ahold stated it had no plans to respond to the hedge funds.

•Swiss mining company Xstrata has taken control of over 92 percent of Canadian miner Falconbridge, just one year after buying its initial stake. Xstrata has extended its all-cash offer for the remaining shares to August 25. The deal will make Xstrata the fifth-largest diversified mining company worldwide by market capitalization.

•CommScope Inc., a telecommunications equipment maker, has abandoned its rebuffed $1.7 billion offer for rival Andrew Corporation. In May, Andrew Corp. had agreed to be acquired by ADC Telecommunications in a deal that was originally valued at $2 billion, but after ADC shares dropped, the deal value fell to $1.3 billion. On August 10, Andrew Corp. ended its deal with ADC and rejected CommScope’s bid.

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