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Weekly M&A Digest - November 17, 2017

John Shipman | November 17, 2017

A compendium of highlights and observations from the week’s notable M&A news, compiled by Merrill Corporation which facilitates the sharing and disclosure of financial information in transactions such as these.

Fox draws more buyout interest from big media names

On the heels of word that Disney was recently in talks to buy most of 21st Century Fox, Comcast, Verizon and even Sony have now also shown interest in at least some of Fox’s assets, reports said. Word of Disney’s unsuccessful attempt to broker a transaction with Fox helped spur interest from the other companies, the Wall Street Journal noted.

The latest reports of large media-industry buyout discussions come amid the backdrop of an AT&T-Time Warner merger that faces a potential court battle as US Justice Department officials scrutinize the deal over antitrust concerns. In 2014, 21st Century Fox itself tried to buy Time Warner for about $80 billion, but dropped the effort after Time Warner showed no interest, and Fox’s stock price took a beating.

Emerson hopes third time's a charm with Rockwell Automation

Emerson Electric made a third bid to buy Rockwell Automation, following two unsuccessful merger attempts made since this summer. In a letter sent to Rockwell CEO Blake Moret, Emerson offered to buy the company for $225 a share -- 60 percent in cash, 40 percent in stock – for a total of about $29 billion. That enhances an October proposal for $215 a share, and an approach at $200 in August.

Along with this higher offer, Emerson has also shifted tactics a bit by making its intentions more high-profile. “Over the past several months, we have attempted to engage with you privately regarding a business combination,” CEO David Farr wrote in his letter to Rockwell’s Moret, suggesting the private approach wasn’t cutting it. To help make its case, Emerson also posted a PowerPoint presentation on its website titled, “Emerson + Rockwell Automation: A Compelling Value Creation Opportunity for Shareholders.” In earlier reports, Rockwell was said to be questioning Emerson's ability to successfully integrate previous mergers.

weekly mergers and acquistions

Mattel cool on Hasbro's acquisition ambition

Hasbro made an offer to buy weakened rival Mattel, sources told the Wall Street Journal, a deal which would combine the US’s two biggest toy makers. No deal terms were mentioned, and the companies declined to comment. Prior to the news, Mattel’s market capitalization was about $5 billion, with its shares down nearly 50 percent this year.

Reuters subsequently reported that Mattel spurned the deal, citing sources who said the maker of Barbie dolls and Hot Wheels cars told Hasbro the offer was too low and doesn't sufficiently account for a potential block from regulators on antitrust concerns. In late October, Mattel suspended its dividend and planned to speed up cost-cutting measures following worse-than-expected quarterly results.

Qualcomm says ‘No thanks’ to Broadcom

Few were shocked that Qualcomm rejected Broadcom’s unsolicited overture to buy the rival chipmaker for $105 billion, scotching for now what would be largest-ever deal in the technology sector. The board unanimously decided Broadcom's bid “significantly undervalues” Qualcomm, the company said.

Broadcom isn’t backing away, saying it remains fully committed to pursuing the transaction. That raises expectations the dynamic will now turn hostile. “It remains our strong preference to engage cooperatively with Qualcomm’s board of directors and management team,” Broadcom CEO Hock Tan said, in a statement rich in subtext.   

Brookfield's GGP bid looks a little low

Brookfield Property Partners and GGP confirmed speculation that Brookfield is seeking to purchase the roughly 66 percent of the Chicago mall owner it doesn’t already own for $23 a share in cash or 0.9656 of a BPY unit. Bloomberg reported last week that Brookfield was in early talks to buy the remainder of GGP.

Following official word of the bid, analysts indicated it was a low-ball offer, valuing GGP at $21.8 billion. Brookfield, as of Sept. 30, maintained that its stake implied a valuation of $26.5 billion, Bloomberg noted. “And on a conference call last month, Brookfield’s chief financial officer, Bryan Davis, said the shares were worth about $30,” the news provider added.

Meredith said to bring Kochs' backing in latest Time bid

Persistence may also work for Meredith after two prior failed attempts to acquire Time Inc. since 2013. In this latest go-around, reports say Meredith has some high-powered help -- the backing of billionaires Charles and David Koch, who have tentatively agreed to inject at least $500 million in the attempt to acquire the parent of Time magazine, Sports Illustrated and People.

Bloomberg said Meredith was among several bidders for Time earlier this year, and offered as much as $2 billion at the time. Time’s recent market capitalization was around $1.3 billion. Magazine publishers such as Meredith and Time have struggled to adapt to declining print advertising and circulation revenue.

Uber can proceed with Softbank investment

Uber has corralled its internal strife enough to enable a multi-billion SoftBank investment to proceed. Former Uber CEO Travis Kalanick and venture capital investor Benchmark reached an agreement over control of the board and the terms of SoftBank’s potential investment, which could be worth as much as $10 billion, Reuters said.

Now, there’s a couple important details to iron out. A statement from SoftBank Investment Advisors on behalf of CEO Rajeev Misra suggested there’s still plenty of work to be done. “By no means is our investment decided," the statement said. "We are interested in Uber, but the final deal will depend on the tender price and a minimum percentage shareholding for SoftBank.”

Buffalo Wild Wings reportedly gets buyout offer

Roark Capital Group offered to buy Buffalo Wild Wings for more than $150 a share, or $2.3 billion, a Wall Street Journal story said. The private equity firm currently holds stakes in well-known brands that include Arby’s, Carvel, Hardee's and Cinnabon.

The bar & grill chain has been under pressure from activist investor Mercato Capital Management, which had agitated for the company to become more profitable, franchise more stores and replace its chief executive, WSJ noted. Mercato in June won three board seats and Buffalo Wild Wings’ longtime CEO Sally Smith said she would retire by year end.

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