Microsoft is considering a bid for Yahoo, Reuters reports, citing sources close to the situation. A number of other companies including buyout shops Providence Equity Partners, Hellman & Friedman and Silver Lake Partners, and Chinese e-commerce giant Alibaba and Russian technology investment firm DST Global, are also thought to be looking at Yahoo, the sources say. Yahoo is readying financial pitch books for potential buyers. Meanwhile the FT reports that Microsoft is set to win Brussels’ approval for its planned $8.5bn (€5.9bn) acquisition of online telephone service Skype, despite its previously strained relations with European competition authorities and complaints from would-be rivals over Microsoft “bundling” the software with Windows. The US Federal Trade Commission approved the deal in June.
Carlyle Group and Hellman & Friedman have teamed up to buy Pharmaceutical Product Development for $3.9bn in cash, amid rising private equity group interest in healthcare, says the FT. PPD is a contract research organisation for pharmaceutical, biotech and medical device companies. As these sectors have cut their R&D, they have outsourced more of it to companies such as PPD, which had $1.47bn in net revenue last year. The deal represents a 30 per cent premium above PPD’s closing share price last Friday and the company’s stock price jumped 25.6 per cent to $32.22 in early trading on Monday. Lauren Migliore, analyst at Morningstar, said private equity groups had been circling the contract research organisation sector because such companies would be in greater demand as drugmakers looked to replenish their pipelines as patents neared expiry.
Breaking pre-market news on Thursday,
- Glencore to raise $9bn-$11bn in London IPO — statement. Read more
Daikin Industries, Japan’s largest air-conditioner maker, is in talks to buy US-based Goodman Global from Hellman & Friedman, reports Bloomberg citing a person familiar with the matter. The US buyout fund is negotiating a revised proposal after rejecting an offer of about Y300bn ($3.6bn) this year from Daikin. The talks could still fall apart and an agreement may not be made until next year, the person said. However, a deal could result in Japan’s biggest foreign buyout since at least 2008 and help Daikin overtake United Technology Corp’s Carrier unit as the world’s largest air-conditioner maker. Hellman & Friedman acquired Goodman two years ago for $2.6bn.
Nielsen, the TV and consumer measurement firm, is to hold an beauty parade of advisers for what promises to be one of the largest US flotations in recent years. The current owners, a s six-strong private equity consortium, are hoping for an enterprise value of up to $21bn, the FT reports.
At least seven private equity firms and two trade bidders are poised to submit first round bids in the next week for Interactive Data Corporation, the financial data group majority-owned by Pearson, owner of the FT. Likely first round bidders include KKR, Carlyle, Hellman & Friedman, Bain Capital, Apollo, Permira and Providence. Interested trade bidders include Thomson Reuters and McGraw-Hill. Offers could come in at 15-25% above IDC’s Jan 14 share price of $25.40, say bankers, valuing the company at $2.7bn to $2.9bn.
Actually, it almost certainly will disappoint.
One of the first large UK initial public offerings since the outbreak of the financial crisis is on track to close on Friday, but is likely to raise less money than first planned. Read more
Gartmore, the fund management group equally owned by management and buy-out group Hellman & Friedman, aims to register flotation plans with the UK’s FSA as early as next week. The group has appointed Morgan Stanley and Citi to advise it on completing an IPO by year-end. Analysts estimate the company could be floated at more than £500m, earning Roger Guy, the star fund manager who has a sizeable stake in the group, a huge pay-out.
Barclays is in talks about selling asset management arm Barclays Global Investors for about $10bn, with potential bidders including US money manager BlackRock. The talks follow an initial auction for iShares, BGI’s exchange-traded funds unit, which Barclays agreed to sell to buyout group CVC for $4.2bn last month. Under a “go-shop” provision of that sale, Barclays can seek alternative bidders for iShares until June 18. For BlackRock, buying BGI would massively boost its ETF business. BC Partners and Hellman & Friedman, meanwhile, are both considering a counter-bid for iShares.
Goldman Sachs is working on a bid for iShares, the securities lending and exchange-traded funds business being auctioned by Barclays. Bids, due by Friday, could put a value ofup to $6.5bn on iShares. Goldman and at least three other parties have expressed interest in iShares including buy-out group Bain Capital and a consortium led by Hellman & Friedman. Fund manager Vanguard is also thought to be interested.
Hellman & Friedman is putting together a group of private-equity groups that may bid for Barclays’ iShares unit in a transaction valued at as much as $5bn, reports Bloomberg. Barclays has set a deadline for offers for the end of this week and, according to the WSJ, may finance as much as 80% of the purchase price of iShares. Bain Capital and rival buyout firms TPG and Apax Partners also are suitors for iShares, the WSJ added.
Bain Capital and Hellman & Friedman on Monday agreed to acquire Neuberger Berman, the crown jewel of Lehman Brothers Holdings, for $2.15bn. The deal comes weeks after a sale could have helped Lehman avoid collapse. The wealth management firm will become the centrepiece of a new company called Neuberger Investment Management, with more than $230bn in assets. George Walker, who headed investment management for Lehman Brothers, will become chief executive of the firm, and Joe Amato will head Neuberger Berman, the firm’s largest operating unit. The portfolio managers will own a significant stake in the company. One concern of potential buyers was to retain the managers, who have seen the value of their equity holdings in Lehman drop. The sale announcement did not clarify the fate of all the operations that were part of Lehman’s asset management division; the transaction does not include certain hedge funds or Lehman’s direct private equity and real estate investment businesses.
Lehman Brothers’ plan to sell its investment-management division has been held up by wrangling over how to run the business and pay fund managers, reports Bloomberg. The bankrupt securities firm had aimed to announce the sale to Bain Capital and Hellman & Friedman by last week, said people familiar with the matter. Sticking points include the new company’s management structure, compensation at the Neuberger Berman fund unit and valuing Lehman’s private-equity assets. Lehman is working to close the deal this week. Both sides want to complete a transaction before too many employees leave, reducing the division’s value. Prior to filing for bankruptcy on Sept 15, Lehman had hoped to keep a minority stake in the business, which oversees $273bn in mutual funds and private equity, and has now sold its US investment bank and European operations as it liquidates.
Bain Capital and Hellman & Friedman, the US private equity groups, have teamed up to bid for the rump of Lehman Brothers’ investment management arm, which includes the Neuberger Berman asset management business, and its $35bn private equity business. Barclays last week agreed to acquire the private investment management arm of the business, leaving assets estimated to be worth less than Lehman’s earlier $5bn asking price. The moves follow Nomura’s deals this week to buy Lehman’s European and Middle Eastern equity and investment banking businesses and its entire Asian business. The asset management businesses are not part of the bank’s bankruptcy, but Lehman has put them up for sale and needs buyers in the next few days or risks losing clients and valued employees. Senior executives at the private equity arm are also considering a management buy-out of their division in case its planned sale falls through.
Lehman Brothers has told three private equity firms – KKR, Hellman & Friedman and Bain Capital – that they remain in the bidding for its asset management arm even though the investment bank has yet to make a final decision on whether to sell the unit, reports the FT. Lehman is considering options to raise cash before its earnings report next month – including selling a stake in itself or selling all or part of its asset-management arm or its commercial property portfolio. Lehman has been soliciting bids from buyout firms to gauge interest in its asset management arm, and has told KKR, Hellman and Bain have been told by Lehman that their bids are high enough to go forward, while Blackstone and Carlyle have been eliminated from the informal auction.
A Dubai sovereign wealth fund has teamed up with Blackstone and others aiming to buy Informa from under the noses of a rival private-equity consortium, reports the FT. Providence Equity Partners, Carlyle and up to recently, Hellman & Friedman, were well advanced in attempts to buy the UK business publisher and events company in a deal which, at £3.2bn, would be the largest private equity buyout since the onset of the credit crunch. But in a blow to the consortium, Hellman & Friedman has walked away from participation. The Dubai World Trade Center, one of the largest events organisers in the Middle East, joined the second approach, on which due diligence began Tuesday.
Informa has received a tentative 506p-per-share approach from a buyout consortium which would value the UK trade fairs and scientific journals business at £3.4bn including debt, the company said Tuesday night. If successfully completed, the approach from Providence Equity Partners, Carlyle Group and Hellman & Friedman would rank as the world’s largest private equity bid since leveraged finance markets seized up late last summer. Informa confirmed a report of the approach on FT Alphaville but cautioned that discussions were at an early stage and there was “no certainty” that an offer would be made. The consortium is understood to have attached a number of conditions to its proposal, which was made to the Informa board on June 26.
Getty Images, the world’s largest distributor of stock photos, video and other digital content, is to go private after its board accepted a $2.4bn buy-out from private equity firm Hellman & Friedman. Getty shareholders will receive $34 in cash for each outstanding share – a 55% premium to Getty’s share price before its announcement last month of a possible sale. However, the offer remains well below the $95 level the shares reached in December 2005.
Hellman & Friedman agreed to buy Goodman Global, a US manufacturing company, for $2.65bn including debt, in an LBO that will mostly be financed by non-traditional sources. Hellman was able to garner $1.6bn in funding from GSO Capital and Farallon Capital, two hedge funds, as well as GE Commercial Finance and European banks Barclays and Calyon. Lex notes that Goodman’s shares fell more than 10 per cent in the two weeks ahead of the deal. Perhaps the unusual set of financing sources being used kept the deal under wraps better than has sometimes been the case?
Computer Services Group, the UK back-office software company, has been snapped up as part of a merger plan just four weeks after it left the stock market in a £91m deal. Hellman & Friedman, the private equity group, bought both CSG and Iris Software from HgCapital, the UK mid-market private equity group, in a deal with an enterprise value of £500m.
Just days after Hellman & Friedman agreed to sell portfolio company DoubleClick to Google for $3.1bn, the San Francisco-based private equity firm announced on Tuesday it had raised $8.4bn for its latest private equity fund and would acquire Catalina Marketing, whose technology is used to create coupons at retail checkout counters, for $32.50 per share, or about $1.7bn. The new fund, the firm’s sixth, gives it plenty of ammunition for more deals – representing more than half the $16bn that Hellman & Friedman has raised since 1987, reports the New York Times DealBook.
Takeover talks between TXU and a buy-out team led by Blackstone have fallen apart, dashing hopes that a bidding war would erupt over the largest private equity deal yet planned. Since late February, the Texas power company has been searching for bidders willing to pay more than the $45bn, including debt, offered by KKR and TPG. The most credible alternative was a team composed of Blackstone, Carlyle and Hellman & Friedman, which had hired advisers to study TXU’s confidential financial information. But TXU on Monday threw cold water on the chances of a counterbid before the April 16 deadline for the 50-day period in which the seller is open to rival offers.
A consortium of leading private equity groups has moved much closer to mounting a rival offer to trump the $45bn takeover of TXU, the Texas-based energy group, by private equity groups KKR and TPG. If this consortium tables a formal offer for TXU, it could create a bidding war for the largest private equity deal on record, and a new milestone for competition among the world’s largest buy-out firms, which have so far rarely sought to break up each other’s deals. People familiar with the matter say Blackstone, Carlyle and Hellman & Friedman may approach the TXU board with a proposal in coming weeks. However, they cautioned that several obstacles remained and there was no guarantee that any offer would materialise. Blackstone, Carlyle and H&F declined to comment. KKR and TPG agreed to buy TXU for $69.25 per share, or $45bn including debt, last month, and accompanied the deal with a campaign to garner support for the transaction among environmental groups and politicians. Merrill Lynch, which is advising the Blackstone consortium along with lawyers at Skadden Arps, could put some equity into the deal as well as the three private equity groups, according to one person close to the talks.
The first signs of political opposition to TXU’s $45bn buy-out by private equity firms emerged on Tuesday as state senators in Texas moved to force the buyers to gain local approval of the deal. In a 9-0 vote, a Texas senate committee pushed forward legislation that would grant a broader authority to the state’s utilities regulator on mergers and acquisitions. TXU continued to sound out private equity groups and rival energy companies to gauge their interest in a bid to trump the KKR and TPG deal. The company’s bankers have contacted several buy-out groups — including Apollo Management, Blackstone, Carlyle, Hellman & Friedman and Warburg Pincus, according to people familiar with the matter.
Two of the biggest shareholders in Nasdaq, which was soundly trounced in its hostile £12.43 per share bid for the LSE over the weekend, have issued strong statements of support for its chief executive — and his firm refusal to increase the offer. Patrick Healy, managing director at Hellman & Friedman, and a member of Nasdaq’s board, said: “We support Nasdaq’s price discipline.” Glen Hutchins — co-founder of Silver Lake Partners, which owns around about 10 per cent of Nasdaq’s shares, and is a member of its board, said that chief executive Bob Greifeld, chief executive, has the strong support of shareholders, who applaud his firm refusal to offer as much for the LSE as many of its shareholders wanted. Nasdaq conceded defeat on Saturday, after its bid attracted support from just 0.44 per cent of LSE shareholders. The LSE is on Monday expected to unveil trading figures for January, showing an unusually strong start for the year.
The global private equity industry is forecast to raise $500bn in 2007, about $70bn more than last year’s record, according to Private Equity Intelligence (Prequin). The group’s forecast underlines private equity’s continuing surge, in terms of both the amount of capital investors are willing to devote to the asset class as well as record deal-making activity. Prequin believes there are 916 funds conducting roadshows that are targeting $396bn, compared to 688 funds seeking $223bn this time last year. Almost a dozen so-called mega-funds are still marketing — including KKR ($16.6bn), Apax (€8.5bn), Goldman Sachs Capital Partners ($10bn) and Thomas H Lee ($9bn) — while three groups, Hellman & Friedman, Providence Equity and Silver Lake are all after $8bn.