Bank on Banking » Acquisition

Merger News: Sprint to Buy Virgin Mobile

IBanker — Fri, 31 Jul 2009 01:29:43 +0000

Refusing to give up, Sprint has taken yet another big step towards either complete failure, competitive wireless player with the $483 million acquisition of Virgin Mobile announced two days ago. Just how smart of a move is this, only time will tell. We can tell, however, that the acquisition price values Virgin Mobile at $5.50 per share, or a 31% premium over the previous day’s closing price. Although a few analysts think it is a good move, and a decent price, I’m not as convinced. There is tremendous competition in the wireless phone business right now, and a 31% bump in a stock that has already been on the rise the past several days (probably due to rumors), based on big anticipated cost savings (back office, marketing and network costs), and a continuing dominance in the pre-paid minute business, seems just a bit ambitious. But hey, I haven’t seen the numbers, projections, plans or meetings, so maybe it is a huge find and a bargain.

Regarding the new company, Sprint will keep the Virgin Mobile name, and retain its chief executive, who will continue to run the business. The plan is for Virgin Mobile to remain its own brand with its own name, only now coupled with deeper pockets and increased support from its soon-to-be parent, Sprint-Nextel.

Sprint Takes Another Crack At It

Merger News: BlackRock Makes Their $13.5 Billion Move!

IBanker — Fri, 12 Jun 2009 02:17:49 +0000

As you can probably tell from the title, BlackRock has agreed to purchase Barclays’ asset management unit, BGI, for $13.5 billion to become the world’s largest money manager through the largest merger in the fund-management industry. BlackRock will pay $6.6 billion and cash, and the remaining $6.9 billion in stock (approximately 37.8 million shares) to finance the acquisition. Of the $6.6 billion, $2.8 billion will stem from the sale of equity to institutional investors and another $2 billion will come from, surprise, surprise, loans from Barclays and other banks – now that’s having your cake and eating it too. The transaction, considering the stock portion of the deal, will give Barclays a 19.9% stake in BlackRock For more information on the merger, see the article below, as well as my previous post on the merger.

BlackRock to Buy Barclays Asset Management Fund

Merger News: Blackrock Frontrunner For Barclays Asset Management Unit

IBanker — Sat, 06 Jun 2009 21:14:13 +0000

With hopes held high that the M&A market will come booming back (although May was the worst single month in over 10 years – on a fee basis – for merger and acquisition activity, See Article), I think that it is a good time to start a Merger News category to compliment the general In the News category – what are your thoughts? Before anyone asks, I will not be covering every M&A deal in the market, or even anywhere close to every deal (I am but a single man after all). Instead, when I happen to spot an M&A deal that looks interesting, a deal that I think will be a good interview conversation piece, or one that I think will have a strong impact on the market, I’ll absolutely put a quick recap together for the site. If anyone knows of any deals that they think would be of interest to the rest of the readers, by all means shoot me an email with your recap, or just the parties involved and if it looks good, I’ll be sure to post it as well. Now, onto the deal at hand.

BlackRock Inc has both shown an interest in, and is the leading bidder to purchase, the asset management unit of Barclays Plc, Barclays Global Investors (“BGI”), for more than $10 billion. The talks are in the early stages, and there is no exclusivity agreement between Barclays and BlackRock at this point. In fact, the Bank of New York Mellon Corp has also expressed a potential interest in the asset management unit. A purchase by BlackRock would bring their total assets under management up to $2.81 trillion dollars, and help them to expand their presence outside of the U.S.

After passing on government assistance, and suffering nearly $19 billion in credit losses and writedowns, Barclays’ capital ratios lag behind those of RBS and Lloyds and, as such, Barclays needs to raise fresh capital. Barclays is rumored to be expecting around $12 billion for BGI, and may intend to hold a 20% stake in the unit post acquisition – if BlackRock, or any other firm for that matter, is willing to swallow that pill, then this would be the largest acquisition in the fund-management industry to date.

Blackrock: We Want It!