M&A Roundup: Week Ending May 4

Natural-resources and banking deals accounted for a majority of last week's top ten, but only one private-equity buyout was among them.
Roy HarrisMay 9, 2007

As this week has started, North America is awash in deals and deal proposals, including big ones in the media (Reuters/Thomson Financial) and metals-and-mining industries (Alcoa/Alcan). In short, it’s a lot like last week, when the same industries dominated the M&A news.

In one divergent theme for the week ended May 4, though, private-equity buyouts were overshadowed among the top ten.

In what appears to be a steady march toward a 2007 record for M&A, last week’s largest deal was the management buyout of Cablevision Systems Corp. by the Dolan family, its controlling shareholders, for $22.5 billion. The private-equity LBO among the leaders was the $7.1-billion deal for U.S. Foodservice Inc. by Kohlberg Kravis Roberts & Co. and Clayton Dubilier & Rice Inc., according to data provided to CFO.com by mergermarket. (News Corp.’s. $5-billion offer for Dow Jones wasn’t included in the report, which concentrates on announced deals.)

This Monday’s Alcoa offer for Alcan, which the Canadian aluminum maker said it would consider, continued the year’s frenzied global activity in natural resources. In the oil and gas fields last week, Eni Petroleum Co. struck a deal to buy the Gulf of Mexico assets of Dominion Resources Inc. for $4.7 billion, while Husky Energy Inc. will buy Lima Refining Co. from Valero Energy Corp. for $1.9 billion. Meanwhile, Sweden’s SSAB Svenskt Stal AB agreed to buy Ipsco Inc. for $8.4 billion, and Moscow’s Norilsk Nickel MMC bid $4.1 billion for LionOre Mining International Ltd.

The financial services section again registered strong dealmaking, accounting for four of last week’s top ten. JP Morgan advised four deals, the leader for the week.

Charles Dolan family to buy Cablevision Systems for $22.5 billion

Terms call for a $36.26-a-share price for Cablevision that contains a premium of 10.99 percent.
Seller financial advisor: Morgan Stanley; Lehman Brothers
Bidder financial advisor: Bear, Stearns & Co.; Merrill Lynch
Seller legal advisor: Sullivan & Cromwell; Willkie Farr & Gallagher
Bidder legal advisor: Shearman & Sterling (advising Bear Stearns and Merrill Lynch); Skadden Arps Slate Meagher & Flom; Debevoise & Plimpton

SSAB to buy Ipsco for $8.4 billion

The definitive agreement, at $160 a share, is at a 7.7-percent premium.
Seller financial advisor: Goldman Sachs; RBC Capital Markets
Bidder financial advisor: Greenhill & Co.; Handelsbanken Capital Markets
Seller legal advisor: Davies Ward Phillips & Vineberg (advising Goldman Sachs); Davis Polk & Wardwell; Osler Hoskin & Harcourt; Sullivan & Cromwell (advising Goldman Sachs)
Bidder legal advisor: White & Case; Bennett Jones

Clayton Dubilier & Rice and KKR to buy U.S. Foodservice from Royal Ahold NV for $7.1 billion

Clayton Dubilier and KKR, which won the auction for U.S. Foodservice, get a 50 percent stake each in the company, together contributing equity in the range of $2 billion to $2.5 billion, with the balance being infused through debt. Completion is expected in the second half of 2007.
Seller financial advisor: JPMorgan; Goldman Sachs
Bidder financial advisor: Citigroup; Deutsche Bank; Morgan Stanley; Rabobank
Seller legal advisor: White & Case
Bidder legal advisor: Debevoise & Plimpton; Simpson Thacher & Bartlett

Eni Petroleum to buy Dominion Resources’ Gulf of Mexico asset package for $4.76 billion

Eni acquires exploration and production assets $4.8 billion cash, including exploration assets valued at $680m. The transaction will increase the equity production and enhance Eni’s Gulf portfolio, and aligns with Eni’s strategy of acquiring hydrocarbon reserves and production in key areas. Completion is expected on or before July 2.
Seller financial advisor: JPMorgan; Lehman Brothers; Juniper Advisory
Bidder financial advisor:Morgan Stanley
Seller legal advisor: Baker Botts; McGuireWoods
Bidder legal advisor: Bracewell & Giuliani

Norilsk Nickel to buy LionOre for $4.1 billion

Norilsk made an unsolicited public counteroffer of $19.37 a share for all outstanding LionOre shares, providing a premium of 13.5 percent. The offer provides a premium of 16.2 percent over Xstrata’s original $15.99 bid, announced in March.
Seller financial advisor: JPMorgan
Bidder financial advisor: UBS
Seller legal advisor: McCarthy Tetrault
Bidder legal advisor: Hogan & Hartson; Goodmans

Deutsche Boerse AG to buy International Securities Exchange for $2.42 billion

The definitive agreement calls for $67.50 a share in cash, providing a premium of 47 percent.
Seller financial advisor: Evercore Partners; Merrill Lynch
Bidder financial advisor: Deutsche Bank; JPMorgan
Seller legal advisor: Milbank Tweed Hadley & McCloy
Bidder legal advisor: Morgan Lewis & Bockius; Clifford Chance (Advising JPMorgan)

Husky Energy to buy Lima Refining from Valero for $1.9 billion

Husky is looking to enhance returns to shareholders through the integration of the Lima refinery with future growth of heavy crude oil and oil sands production, while Valero is focusing on the operation of its core business. The sale, which needs regulatory approval, is expected to close during the second quarter.
Seller financial advisor: Deutsche Bank
Bidder financial advisor: Internal
Seller legal advisor: Baker Botts
Bidder legal advisor: Akin Gump Strauss Hauer & Feld

National City Corp. to buy MAF Bancorp for $1.84 billion

The definitive agreement is for $56 a share in National City common stock, with the exchange ratio being based on the average closing price of National City for the 20 trading days immediately preceding Federal Reserve Board approval of the transaction. The offer provides a premium of 39.48 percent.
Seller financial advisor: Keefe Bruyette & Woods
Bidder financial advisor: Not Available
Seller legal advisor: Vedder Price Kaufman Kammholz
Bidder legal advisor: Jones Day

Wells Fargo & Co. to buy Greater Bay Bancorp for $1.45billion

Greater Bay Bancorp has signed a definitive agreement to be acquired by Wells Fargo & Company. Terms: Between 0.7247 and 0.8858 shares of Wells Fargo will be exchanged for each share of Greater Bay. The deal is valued at $28.50 per share of Greater Bay as long as the average Wells Fargo share price is between $32.175 and $39.325 for the 10 consecutive trading days ending on the trading day immediately preceding the EGM. If the share price exceeds these parameters, a maximum of 0.8858 or a minimum of 0.7247 shares will be exchanged for each share of Greater Bay. The offer provides a discount of 3.5 percent based on Greater Bay’s closing share price on 03 May 2007 of $29.54. The transaction is expected to close in the 4th quarter of 2007.
Seller financial advisor: Sandler O’Neill & Partners
Bidder financial advisor: Wells Fargo & Company
Seller legal advisor: Wachtell Lipton Rosen & Katz; Manatt Phelps & Phillips
Bidder legal advisor: Internal

Citigroup Inc. to buy BISYS Group Inc. for $1.37 billion

The definitive agreement is for $11.85 a share plus a special dividend of 15 cents a share, a premium of 4.62 percent.
Seller financial advisor: Bear, Stearns & Co; Merrill Lynch
Bidder financial advisor: Citigroup
Seller legal advisor: Paul Weiss Rifkind Wharton & Garrison; Skadden Arps Slate Meagher & Flom
Bidder legal advisor: Cleary Gottlieb Steen & Hamilton

source: mergermarket