Without a real blockbuster announcement, dealmaking last week had to rely on the end of the three-month News Corp.-Dow Jones saga for excitement. The second-largest agreement in the week ended Aug. 5 — valued at $5.5 billion — helped total activity reach $23.6 billion, but that was half the prior week’s total.

Experts have been predicting that tight credit would curtail the record pace of both private-equity and strategic M&A that prevailed in the first half, and those predictions seemed valid, according to data provided to CFO.com by mergermarket. Among the top 10 North American deals, leveraged buyouts accounted for only $1.37 billion in acquisitions, far off the pace of previous weeks.

Marathon Oil Corp.’s $6.17-billion agreement to by Western Oil Sands Inc. was the largest deal. The largest LBO was Citadel Capital’s $786–million purchase of Rally Energy Corp.

Marathon Oil to buy Western Oil Sands for $6.17 billion

The definitive agreement calls for Houston-based Marathon to pay $33.28 a share, or 0.5932-share of Marathon stock per share of Calgary, Alberta-based Western, a premium of 4 percent. Both boards have approved the merger. Western engages in exploiting the mining and in-situ recoverable bitumen reserves and resources found in oil sands deposits. Marathon explores for, produces, and markets crude oil and natural gas worldwide. The acquisition agreement requires Western to spin-off WesternZagros, its wholly-owned subsidiary with interests in Kurdistan, prior to closing, which is early in the fourth quarter.
Seller financial advisor: Goldman Sachs; TD Securities
Bidder financial advisor: Deutsche Bank
Seller legal advisor: Macleod Dixon; Paul Weiss Rifkind Wharton & Garrison; Blake Cassels & Graydon
Bidder legal advisor: Bennett Jones; Baker Botts; Miller & Chevalier Chartered

News Corp. to buy Dow Jones & Co. for $5.52 billion

The long battle for control of the Wall Street Journal, Barron’s, and online and other Dow Jones properties ended with a definitive agreement at $60 per share a premium of 65.2 percent. News Corp. will appoint to its board a member of the Bancroft family, which controls two-thirds of the Dow Jones voting shares, or another mutually acceptable person. The transaction is expected to close in the fourth quarter. On May 1, Dow Jones confirmed receipt of an unsolicited offer from News Corp., which is controlled by global press magnate Rupert Murdoch. Concern over editorial independence split Dow Jones’ controlling Bancrofts, and an investment group voiced opposition and proposed to address editorial issues and help Dow Jones expand its digital media businesses by taking a 25-percent stake, offering $60 per share to shareholders and gaining two board seats. However, News Corp. was able to garner enough support from some Bancrofts after reaching an editorial agreement that provides for the a five-member special committee to assure the continued journalistic and editorial integrity and independence of Dow Jones’ publications and services.
Seller financial advisor: Goldman Sachs; Merrill Lynch
Bidder financial advisor: Allen & Company; Centerview Partners; JPMorgan
Seller legal advisor: Fried Frank Harris Shriver & Jacobson; Simpson Thacher & Bartlett; Wachtell Lipton Rosen & Katz
Bidder legal advisor: Hogan & Hartson; Skadden Arps Slate Meagher & Flom

Fiserv Inc. to buy CheckFree Corp. for $3.93 billion

Under the definitive agreement, Fiserv, a provider of information management systems and services to the financial and insurance industries, will pay $48 a share for CheckFree, a 30.3-percent premium. CheckFree provides financial electronic commerce services and products to organizations around the world. Fiserv expects to realize more than $100 million in annualized cost savings and more than $125 million in revenue synergies. For 2008, the transaction is expected to be accretive to Fiserv’s underlying cash earnings per share. It is expected to close by Dec. 31.
Seller financial advisor: Goldman Sachs
Bidder financial advisor: Credit Suisse
Seller legal advisor: Wachtell Lipton Rosen & Katz
Bidder legal advisor: Sullivan & Cromwell

Verizon Wireless Inc. to buy Rural Cellular Corp. for $2.61 billion

The definitive agreement calls for Verizon Wireless, a joint venture of Verizon Communications and Vodafone Group Plc, to pay $45 a share, a premium of 41.5 percent. Rural Cellular is a wireless communications service provider focusing primarily on rural U.S. markets. Verizon provides communications services. Vodafone Group Plc is engaged in providing voice and data communications services for both consumer and enterprise customers. The transaction is expected to close in the first half of 2008.
Seller financial advisor: Bear, Stearns & Co; Falkenberg Capital
Bidder financial advisor: JPMorgan
Seller legal advisor: Skadden Arps Slate Meagher & Flom; Moss & Barnett; Lukas, Nace, Gutierrez, & Sachs
Bidder legal advisor: Debevoise & Plimpton; Skadden Arps Slate Meagher & Flom

Schneider Electric SA to buy Pelco for $1.22 billion

Pelco’s agreement with Schneider Electric, the French power and control company, also offers the net present value of a tax benefit, representing $320 million.The acquisition is expected to reinforce the existing security platform of Schneider Electric, which recorded sales of EUR 155 million in 2006. Upon completion, Pelco will operate within the building automation business unit of Schneider Electric, and will be in charge of its present Fire & Security Product Division. Pelco’s headquarters and operation will remain in Clovis, Calif., while the company name and the Pelco brand will remain unchanged. The transaction is expected to close by October 2007.
Seller financial advisor: Not Available
Bidder financial advisor: Morgan Stanley
Seller legal advisor: Winston & Strawn
Bidder legal advisor: Cravath Swaine & Moore; Bredin Prat

British Columbia Investment Management Corp. to buy Canadian Hotel Income Properties Real Estate Investment Trust for $1.12 billion

The definitive agreement calls for the unincorporated open-ended trust, focused on acquiring and operating upscale and mid-market, full-service hotels, to be purchased by British Columbia Investment for $17.91, a premium of 33.9 percent. B.C. Investment is an investment fund manager with assets under administration of $83.4 billion as of March 31. The transaction is expected to close during the fourth quarter. On March 28, Canadian Hotel Income Properties REIT announced that it had establishes special committee to review strategic and structural alternatives.
Seller financial advisor: Avington International; Bentall Capital
Bidder financial advisor: CIBC World Markets
Seller legal advisor: Lawson Lundell Lawson & McIntosh; Blake Cassels & Graydon
Bidder legal advisor: Fraser Milner Casgrain; Koffman Kalef

Citadel Capital to buy Rally Energy Corp. for $786 million

The definitive agreement calls for Rally Energy, an oil and gas exploration, development, and production company with activities in Egypt and Canada, and pre-production and exploration activities in Pakistan, to be bought for $6.91 a share, a premium of 14.8 perecent. Citadel Capital is a private equity firm focused on investment opportunities in the Middle East and North Africa region. An NPC affiliate has entered into an acquisition financing facility with Citi as mandated lead arranger and lender of $450 million.
Seller financial advisor: Tristone Capital
Bidder financial advisor: Citigroup
Seller legal advisor: McCarthy Tetrault
Bidder legal advisor: Osler Hoskin & Harcourt

New Mountain Capital LLC to buy Oakleaf Global Holdings Inc. from Charterhouse Group International Inc. for $655 million

Private equity firm New Mountain agreed to acquire waste management services company Oakleaf from Charterhouse Group International Inc. another private equity firm. The Oakleaf sale reflects the last stage of a Charterhouse Entrepreneur-focused build-up strategy. In partnership with Charterhouse, Oakleaf completed six add-on acquisitions between 2004 and 2007, expanding service offering and diversifying its customer base. The company has more than 450 employees. The transaction is expected to close in mid-August.
Seller financial advisor: Robert W Baird & Co
Bidder financial advisor: Internal
Seller legal advisor: Proskauer Rose
Bidder legal advisor: Fried Frank Harris Shriver & Jacobson

Allen-Vanguard Corp. to buy Med-Eng Systems Inc. for $568 million

The Canadian manufacturer of equipment for dealing with hazardous devices and materials definitively agreed to pay C$6.85 a share for Med-Eng Systems Inc., a Canadian manufacturer of explosive ordnance disposal equipment.The transaction is expected to close by 31 August 2007.
Seller financial advisor: CIBC World Markets
Bidder financial advisor: Genuity Capital Markets
Seller legal advisor: McCarthy Tetrault
Bidder legal advisor: Lang Michener

The Walt Disney Co. to buy Club Penguin from New Horizon Interactive Ltd. for $350 million

Media giant Disney agreed to buy Club Penguin, an online portal for kids, from New Horizon Interactive Ltd, Club Penguin’s Canada based creator and operatorn completion of the transaction, Club Penguin will be renamed as Disney’s Club Penguin. The three Club Penguin founders, Lane Merrifield, Dave Krysko, and Lance Priebe, will join Disney and remain a part of the unit’s senior management teamt. Club Penguin CEO Merrifield will become an executive vice president of Disney Internet Group, reporting to its president. The acquisition is in line with Disney’s strategy of leveraging technology to create and deliver global entertainment globally, and to help consolidate its position in the kids and families’ online virtual worlds space around the globe.
Seller financial advisor: Montgomery & Co.
Bidder financial advisor: Internal
Seller legal advisor: Latham & Watkins
Bidder legal advisor: Skadden Arps Slate Meagher & Flom; McMillan Binch Mendelsohn; Irell & Manella

source: mergermarket

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