Thursday, February 28, 2008

Richelieu Hardware will consider more acquisitions in 2008

Richelieu Hardware, the listed Canadian hardware retailer, stated in an annual report released on 27 February that it will consider buys in the coming year.
The company stated: "We will carefully select the best acquisition opportunities according to our criteria of profitability and long-term growth."
The company stated it had annual revenue of CAD 436.7m (USD 449.5m) during 2007.

Google hires Credit Suisse to advise on potential Yahoo stake - rumor

Google has hired George Boutros of Credit Suisse on a potential acquisition of just under 20% of Yahoo, potentially disrupting Microsoft’s bid, according to a report on Techcrunch. The blog cited sources with knowledge of the deal saying Boutros was hired the day after Microsoft’s bid. However, only one source reported that Boutros may be advising on acquiring a stake in Yahoo. The goal of such a deal could be to delay any merger with Microsoft in order to buy Google time to react to the change in the competitive landscape.
The blog cautioned that arbitrageurs had not yet heard any rumor regarding an upcoming offer from Google. Henry Blodget at Silicon Alley Insider wrote that such a move could be possible, despite the high cost of Yahoo’s stock. Blodget pointed out that Google currently has USD 14bn in cash, and would still have considerable reserves if it decided to take a blocking stake. Furthermore, Google pulled a similar trick with AOL when Microsoft and Yahoo were considering bids for the Time Warner unit.
Kara Swisher at All Things Digital wrote that such a move would be detrimental to Google anyway, both because of the expense of Yahoo stock and the shareholder lawsuits that would likely result from the play.

TransCanada Corporation mulling acquisitions

TransCanada Corporation, the Canadian energy services firm, stated in its annual report released on 27 February that it will consider using buys for growth.
The company stated that it is pursuing the development of greenfield and brownfield pipeline projects to grow its North American pipeline and related infrastructure business, which includes frontier natural gas pipeline projects such as the Mackenzie Gas Pipeline (MGP) and the Alaska Pipeline as well as crude oil pipeline projects to meet the growing demand for transportation of Alberta oilsands production.
The company stated that other possible avenues of growth include the following: "acquiring synergistic natural gas transmission assets that complement TransCanada’s existing core regions; acquiring partners’ interests in associated pipelines to enhance strategic control, profitability and value; and acquiring stand-alone gas transmission enterprises in new regions of North America where critical mass and solid competitive advantage can be established".
The company stated that, in addition, it is also pursuing the development of natural gas pipeline infrastructure and associated LNG regasification terminals in Mexico and aims to grow pipeline earnings from PipeLines LP through acquisitions and organic growth.
The company reported CAD 1.22bn (USD 1.25bn) in net income from continuing operations for the year ended 31 December 2007.

Electronic Arts standing on USD 26 offer; CFO says Take Two's undervaluation argument is unrealistic

Electronic Arts (EA) is standing firm on Sunday's offer of USD 26 per share to acquire rival Take Two Interactive Software, said CFO Warren Jenson in an interview. Calling the number "hugely pre-emptive," he said Take Two's demand for a higher bid was unrealistic.
Jenson declined to comment on whether management has discussed offering more. Take Two's stock price was USD 17.36 last Friday before the offer was publicly disclosed.
Earlier this week, a top Take Two shareholder told this news service that USD 30 per share was a more realistic price. He cited the upcoming 29 April release of Grand Theft Auto 4 and other cost-cutting measures that Take Two has said have not yet been recognized by the market.
"It's a dance, right," said EA's Jenson of Take Two's rejection of the offer. "There's not a shred of historical evidence to show that is the case," he said of assertions that Grand Theft Auto 4 sales would dramatically change Take Two's value.
As the seventh version of the game, Jenson said there is plenty of data to predict sales. While he said EA may not dramatically increase its US and UK sales, it could in more far-flung markets such as Spain or Russia.
"They're [EA] very serious here," said Kaufman Brothers analyst Todd Mitchell. "They took some money out of short term investments and put it into cash." Still Mitchell said he remains unconvinced a deal will close as the Take Two acquisition is not an imperative for EA.
"If they overpay for this thing, people are going to smell desperation," he said.
EA's Jenson said it may drop the size of its bid if Take Two does not act quickly enough.
Speaking Wednesday afternoon, he warned that the pressure is on to finish a deal in order to integrate Take Two's management into EA in time for this year's holiday season. The period can account for some 40% of video game sales, he said.
"We just don't need both," he said in reference to overlap in EA's and Take Two's management. Creative personnel may be a different story.
Rockstar Games – the Take Two publisher of the Grand Theft Auto series – is a "significant part of this transaction," said Jenson. Yet the value of Rockstar is said by some to be tightly aligned with Dan Houser, its president, and his brother, Sam Houser, vp creative.
"Everyone acknowledges the Housers are the glue that keeps this [Grand Theft Auto] together," said Michael Pachter, an analyst with Wedbush Morgan Securities.
But it is unclear whether the two would be willing to move to EA – particularly with a contract that is said to give them a cut of gross revenues from Take Two's Grand Theft Auto sales. "The myth is they get 15% of revenues," said Pachter, "I think that's probably right."
With that standard dangling before employees – and a history of building controversial themes such as sex into Grand Theft Auto – Pachter questioned whether EA would want the two in-house. Earlier this week, Pachter publicly suggested that EA split Rockstar off into a separate company to avoid some of these issues.
"The analysts see Rockstar and they see risk," said EA's Jenson. "We see Rockstar and we see opportunity."
While he said he had some understanding of the Housers' contracts, he declined to specify what that was.
Instead, he said he believed that the Housers would be comfortable working within EA.

Wednesday, February 27, 2008

Microsoft acquires YaData

Microsoft today announced an agreement to acquire Israel-based YaData, a provider of advanced tools for the discovery of unique customer segments. According to a report in The Globes citing sources, the price tag is between USD 30m and USD 40m.
YaData’s technology will enable Microsoft to provide its advertisers with richer targeting capabilities so they can connect with their audience in more efficient and engaging ways, at the same time providing its customers more relevant and focused ads. The YaData team will join Microsoft's Israel R&D center in Herzliya and YaData’s solutions will be deployed through Microsoft’s Advertiser and Publisher Solutions group.
"The purchase of YaData brings the Israeli R&D center into the field of online advertising, which is undoubtedly one of Microsoft’s most strategic fields,” said Moshe Lichtman, President of the Microsoft Israel R&D Center. “This is a great example of how Israeli technology has considerable value that is contributing to our most important areas of development. In recent months, I have become familiar with YaData's top quality personnel, and I am convinced that their contribution to the Israeli R&D center and to Microsoft globally will be significant."
YaData, founded in July 2006, is headquartered in Tel Aviv, Israel and has received funding from Israeli venture capital funds Giza and Ofer Hi-Tech. The company's solutions provide marketing managers with the tools necessary to automatically identify and target specific customer groups. YaData's technology will be integrated into Microsoft's Advertiser and Publisher Solutions group and will add advanced behavioral targeting tools and capabilities to Microsoft's online advertising platform. The addition of YaData’s technology will help Microsoft’s efforts to improve advertisers' ROI and to provide more focused and relevant advertising, tailored to specific client needs. In addition, the integration of YaData’s solutions with Microsoft will help improve Internet content creators’ ability to monetize their inventory.
“YaData fully believes in the potential of behavioral targeting to enhance the value of online advertising for publishers, advertisers and users,” said Amir Peleg, chief executive officer of YaData. “Microsoft has the resources to unlock the potential in YaData’s technology and create a truly innovative online advertising solution. We’re excited to see what the future holds.”
Microsoft is committed to providing best-in-class audience segmentation and targeting without using personally identifiable information. As YaData’s technology is incorporated into Microsoft’s advertising platform, Microsoft will continue to adhere to its high standards for the protection of consumer privacy. The acquisition is subject to certain closing conditions, including receipt of required regulatory approvals. It is expected to close after the required regulatory approvals are received.

RealNetworks could use cash to pursue M&A - research report

RealNetworks Inc., a Seattle, Washington-based digital media company, could pursue acquisitions with cash, Bear Stearns said on 27 February.
"Real has ~USD 3.15/share in net cash," said Kunal Madhukar, Bear Stearns' digital media analyst, in a research report focusing on developments at management meetings held yesterday. "Uses of cash include potential acquisitions especially if valuations become more attractive in a weakened economic environment, as well as to ensure major partners (like Verizon) are comfortable with liquidity. However, share buybacks remain an alternative use of funds."
Real's market cap is USD 900.7m.

Tim Hortons may use M&A for growth

Tim Hortons, the listed Canadian donut and coffee chain, will consider using M&A for growth, according to an annual report released on 26 February.
The company stated: "We intend to evaluate other potential mergers, acquisitions, joint ventures, investments, strategic initiatives, alliances, vertical integration opportunities and divestitures when opportunities arise or our business warrants evaluation of such strategies."
The company stated it had CAD 1.25bn (USD 1.25bn) in revenue during 2007.

Tuesday, February 26, 2008

Dell a potential takeover target - report

Dell, the listed Round Rock, Texas-based computer and peripherals manufacturing company, is a potential takeover target, according to Investor's Digest of Canada.
In a report from the 29 February edition of the investment advisory, analyst Larry MacDonald cited a previous report in which a columnist indicated that Dell was among a group of eight businesses that warranted the takeover-candidate status.
However, the report noted that Dell, though its stock is relatively inexpensive, is still an improbable takeover candidate.
Dell's market cap is USD 45.58bn.

Monday, February 25, 2008

Electronic Arts could try to replace Take-Two board to get deal done - report

Electronic Arts, the listed, Redwood City, California-based video game maker whose USD 2bn offer for Take-Two was rejected, could try to replace the board, reported the New York Times. Take-Two is a listed New York-based developer, marketer, distributor and publisher of interactive entertainment software games and accessories.
The unsourced portion of an article looking at the deal, reported that Electronic Arts could opt to launch a proxy contest to replace Take-Two's board to get a deal done. According to the report, Electronic Arts' chief executive John Riccitiello will have to convince investors to accept the offer over the next several weeks as well as convince employees that Electronic Arts will respect the independence of Take-Two's game developers.

Friday, February 22, 2008

Microsoft could be more successful with Yahoo bid if it pays cash - report

Microsoft, the Washington listed software company, could be more successful in its bid for Yahoo if it pays cash, reported the Wall Street Journal. The unsourced report, part of the paper's Breaking Views column, speculated that if Microsoft were to pay USD 44.6bn in cash for California listed Yahoo, and financed part of the deal with debt, that may please Microsoft shareholders because of the tax benefits associated with it. As for Yahoo shareholders, they may prefer cash to Microsoft's shares. The report noted Microsoft should have little trouble selling to debt involved in a deal to investors.

Phillips, Hager & North Investment Management to be acquired by Royal Bank of Canada

Royal Bank of Canada (RY on TSX and NYSE) announced that it entered into a definitive agreement to acquire Phillips, Hager & North Investment Management Ltd (PH&N), according to a 21 February press release.
The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close on or about 30 April 2008.
Under the terms of the agreement, PH&N shareholders will receive 27m RBC common shares, with a portion deferred until three years after closing. The transaction is not expected to have a material impact on earnings per share in the near term.
"We've chosen to join forces with RBC because of the many benefits it affords PH&N clients, especially with respect to the kinds of investment opportunities they will need to be successful over the long term," said John Montalbano, the president of PH&N. "RBC has the commitment and resources to leverage our strengths with institutional, private client and mutual fund clients. In all, it's a great result for our clients, for the two companies, and for our people who have made PH&N the success it is today."
"Success in our business is always driven by the quality of our people. We are thrilled that such a talented and committed team is joining us at RBC," said Gord Nixon, the chief executive officer of RBC.
"Together, our vision is to be a clear leader among Canadian-based asset management companies, and to continue to grow our global capabilities in investment management for institutional, retail and high net worth clients," said George Lewis, the group head of RBC Wealth Management and currently CEO of RBC Asset Management.
Third-party rankings and surveys position PH&N highly for both performance and client service - two competitive strengths shared by RBC. "This transaction leverages the respective strengths and growth opportunities of two leading asset management companies," said Lewis. "We are extremely proud of the success of RBC's industry leading investment performance, most recently reflected in our receipt of the 2007 'Best Overall Fund Group' award in Canada from Lipper Inc., for delivering consistently strong risk-adjusted performance relative to peers."
With combined assets under management in Canada exceeding $160bn (based on RBC's and PH&N's respective year-ends), the two businesses will form one of the largest private sector asset managers in Canada. Specifically, the transaction:
- Will create one of the largest private client investment counselling businesses in Canada with market strengths coast-to-coast, and notably in Western Canada;
- Will make RBC one of the top five managers in the Canadian institutional market for defined benefit and defined contribution pension plans;
- Will significantly extend RBC's existing leadership in the Canadian retail mutual fund market; and
- Is expected to be seamless for clients, and create significant benefits in terms of advice, expertise and investment options.
Said Lewis: "We want to be the first choice for every client in Canada with asset management needs. With this announcement, we have an even stronger team, a larger playing field, and a well diversified, stable business mix, with strengths and talent across all asset classes, client segments and distribution channels of asset management."
Montalbano will become the CEO of the combined organization comprising PH&N and RBC's asset management business. Upon closing, PH&N will become part of RBC Wealth Management. In the new organization, Brenda Vince, the president of RBC Asset Management, will lead the combined mutual fund and high net worth businesses. Dan Chornous, currently CIO of RBC Asset Management, will be the CIO of both PH&N and RBC Asset Management. PH&N's Hanif Mamdani will be head of alternative investments for both PH&N and RBC Asset Management. Damon Williams will continue to be head of institutional management at PH&N, which will remain headquartered in Vancouver.

SABMiller interested in further growth opportunities

SABMiller, the international brewing company, is interested in looking for further growth opportunities in developing markets, according to Business Day.
The report, which cited SABMiller spokesperson Nigel Fairbass, noted that the company could be interested in opportunities in Asia as well as southeastern Asia.
Citing an industry analyst, the report noted that the brewer could also look at growth prospects in Mexico and Russia. The report noted that a potential acquisition of Femsa, the Mexico-based beverage company, could provide SABMiller with access to the Brazilian market.
The sector analyst also reasoned that Carlsberg could be a possible target for SABMiller as Carlsberg could be overextending itself as a result of its bid for Scottish & Newcastle.
Fairbass was cited as saying that SABMiller concentrated on the premium sector in Russia and that there is not a significant following of beer brands in Russia.

Thursday, February 21, 2008

Rio Tinto/BHP Billiton: Competition concerns will be evaluated around iron ore, uranium and coaking coal - report

Competition concerns regarding the takeover bid by BHP Billiton for Rio Tinto would be evaluated around iron ore, uranium and coaking coal, the Sydney Morning Herald reported. The unsourced report in the paper's Xchange column said it was not yet certain that BHP would need to divest assets in order to gain regulatory approval. The article noted that Anglo American's chief executive, Cynthia Carroll, commented she could be keen on purchasing assets that would need to be sold by BHP/Rio to get competition regulator approval. The paper said NSW or Queensland-based coal mines and iron ore mines in the Pilbara were likely desired assets.
Rio Tinto’s market capitalisation currently stands at GBP 85.78bn.

Google rumored to acquired Bigmir)net for USD 100m - report

Google, the listed Mountain View, California-based internet giant, has been rumored to have acquired Bigmir)net, the Ukrainian portal, for USD 100m, TechCrunch reported, citing local press reports.
The blog reported that Bigmir)net is a version of, which was a site that Google reportedly was interested in acquiring. had a valuation of USD 1bn.
TechCrunch reported that Quintura said Bigmir)net was launched in September 2000 and reported its 2006 revenue was USD 15m.

Canadian National Railway: Government could be contemplating changes in ownership limits - report

Canadian National Railway, the listed Montreal, Quebec-based entity, could see the Government of Canada change ownership caps, the National Post said.
An unsourced section of a 21 February report focusing largely on possible changes to Canada's airline sector foreign-ownership regulations noted that the federal government could makes changes to Canadian National ownership limits. Under the current rules, no single investor can own more than 15% of the company's outstanding stock. According to the report, the government will not press ahead with any changes until a current review of the country's foreign-ownership and competition regulations is completed.
Canadian National's market cap is USD 25.42bn.

Agrium could pursue large acquisitions next year

Agrium, the listed Calgary, Alberta-based agriculture retailer and fertilizer entity, could pursue big acquisitions next year, according to the Calgary Herald.
Mike Wilson, CEO of Agrium, said in the 21 February news report that the company, which is buying listed Greeley, Colorado-based rival UAP Holdings, could seek out large acquisitions between the second half of next year and 2010.
He explained that his company, which could pursue opportunistic acquisitions if suitable large targets are not found, will hold off on imminent transformational buys until it has "integrated" UAP.
In the report, Wilson discussed his company's plans to grow and to pick up additional market share in the US market.

Air Canada shareholder ACE's majority stake more appealing as gov't entertains possible review of foreign-ownership laws - report

ACE Aviation Holdings could more easily unload its 75% stake in Air Canada now that the federal government is believed to be open to taking another look at the country's airline industry foreign-ownership rules, the National Post said.
The 21 February report cited unidentified sources as saying that the government of Canada has been seriously considering upping foreign-ownership caps in the airline sector, though it likely will not move on that front until a current review of the country's foreign-ownership and competition regulations is completed.
The report noted that Robert Milton, chief executive officer of listed Montreal, Quebec-based ACE, previously said that pension funds and private equity companies have already expressed an interest in listed Dorval, Quebec-based Air Canada. He added that Air Canada could end up being picked up by a US player. However, the current rules would prevent a US rival from acquiring in excess of 49% of Air Canada's equity and over 25% of its voting stock. Unidentified senior Ottawa-based sources said in the report that the federal government's desire to review foreign-ownership regulations in the airline industry is motivated by a strategy to inject Canada's airline sector with additional investment while not giving foreign interests complete control over the sector.

ING Groep may not sell ING Canada

ING Groep, the listed Amsterdam, Netherlands-based company that recently sold its Mexican property and casualty insurance unit, is unlikely to sell ING Canada, according to a report in the National Post.
Charles Brindamour, chief executive of ING Canada, was cited in the 21 February news report as saying that ING Groep will more likely than not opt for keeping its 70% interest in ING Canada, though the listed Toronto-based P&C insurance entity is "not core" to the parent company's business.
ING Canada's market cap is CAD 4.59bn (USD 4.53bn).

Wells Fargo plans to make around 15 buys this year

Wells Fargo, the California listed bank, plans to make around 15 acquisitions this year, reported the San Jose Mercury News. The report, citing comments Wells Fargo chairman Richard Kovacevich made on Bloomberg TV, noted that Kovacevich said the prices of targets have come down enough for Wells Fargo to increase its pace of buys. The report noted that targets will likely be bigger than Wells Fargo's recent buys. Wells Fargo has a market capitalization of USD 102bn.

Staples mulling raising its offer for Corporate Express - report

Staples, the Massachusetts-listed office supplies retailer, is mulling raising its offer for Corporate Express, reported the Boston Herald. The unsourced article in the paper's Ticker section reported that Staples is mulling making a higher bid, after Dutch stationery distributor Corporate Express rejected its offer. Staples has a market capitalization of USD 16.2bn.

Wednesday, February 20, 2008

Yahoo embraces new severance plan to fight off Microsoft - report

Yahoo, the Sunnyvale, California listed Internet company, that is fighting a hostile bid from Microsoft, embraced a new severance plan to try to fight off Microsoft, reported the Boston Herald. The unsourced report, part of the paper's Ticker section, reported that Yahoo is offering severance plans that pay employees for as long as two years. Microsoft made a USD 44.6bn offer for Yahoo.

Motorola completes Soundbuzz acquisition; Motorola, RIM exchange lawsuits - report

Motorola, the Schaumburg, Illinois-based electronics company, completed its announced acquisition of Soundbuzz, the Chicago Tribune reported.
The newspaper cited information from Motorola regarding the purchase of the digital music provider, based in Singapore.
The Chicago Sun-Times, meanwhile, reported that Motorola and Research In Motion, which makes BlackBerry handheld devices, have sued each other. RIM, based in Waterloo, Ontario, and Motorola have collaborated as well as competed over a number of years, the news report said.
Each company is claiming the other is using technology without the permission of the other, the report said. It cited a Motorola spokesperson as saying the complaint by RIM has not been reviewed.