First Data agrees to be sold to KKR for $29 bln (Reuters)
It's not the biggest deal of all time, so we're not even sure why it's newsworthy, but payment processor First Data Corp. will be taken private for $29 billion by KKR. The deal represents a pretty big premium -- 26% -- for company shareholders. The really good news, for us and the shareholders, is that the company has 50 days to solicit more offers, so there's a chance that we'll see a bidding war.
Google Joins Race to Buy DoubleClick (WSJ)
Before Google revolutionized online advertising, there was DoubleClick, the company that served up annoying banner ads that nobody ever clicked on -- still don't, really. But, by virtue of being (pretty much), the only game in town, the company scrapped up a meager existence. Last week, word emerged that Microsoft was interested in acquiring the company, as it hoped to goose its own online advertising ambitions. And now the Journal is reporting that Google may outbid Microsoft. This looks like a largely defensive move, as it hopes to cut Microsoft off before it can get going, even if it means acquiring something like DoubleClick.
Tribune favors Zell bid, pushes for more (Reuters)
Word is that at the moment, the Tribune Co. is really pulling for local Billionaire Sam Zell to win control of the company, but if things stand as they are, then the LA billionaires are going to take it. Last week, Burkle and Broad, who mainly want the LA Times it seems, came in with a $34 per share offer, besting Zell's $33, which was a pretty weak move, but that's how the game is played. Early indications are that this may be too rich for Zell's blood, and that he'll leave Burkle and Broad to deal with the winner's curse. Update: The Journal is reporting that Sam Zell has won! Congratulations to Sam Zell!!!
A $12 Billion Start for I.P.O.’s in 2007 (Dealbook)
Last week came word that the pace of M&A activity so far this year was well above last year's pace. Looks like the IPO market is giving banks another reason to smile -- so far the pace of IPOs is running 18% higher than last year at this time. Very impressive. What's really interesting is the return of the NASDAQ tech IPO, which everyone had been real nostalgic for. Now, good old networking companies are turning in nice first-day pops for their investors, even if they've yet to turn a profit. Just like the good old days.
EMI and Apple agree to drop DRM (Reuters)
As had been anticipated, Apple and music label EMI have announced their intentions to drop DRM from much of the company's music catalog, allowing buyers to purchase unencumbered MP3s that will play on any computer and device. DRM ostensibly is there to prevent illicit copying, but in practice it does no such thing. Rather, it simply annoys users and lessens the value of the track. Should be an interesting experiment, and if successful, expect the floodgates to open up.
AirTran Raises Midwest Bid Again (NYT)
Although there's a lot of talk about 'em, airline mergers remain incredibly rate. Anytime you hear an analyst predicting consolidation in this space, close your ears. But, deals can happen sometimes. Currently, discount airline AirTran is in the midst of a hostile takeover attempt of Midwest airlines (who?). All we know about Midwest is from their ads at the airport, where they tout how good their food is. Of course, AirTran is a heavy discounter, so we can't imagine they'll serve anything but peanuts if there were a buyout.
LSE mulls stake in Dubai exchange (Guardian)
With all of the M&A activity among stock exchanges as well as the general enthusiasm about all things Dubai, it's almost a surprise that news like this hasn't come sooner. Word is that the London Stock Exchange is interested in doing some sort of deal with the Dubai International Financial Exchange. It's not clear what such a deal would look like. Perhaps the two parties will collaborate on their underlying trading platforms, and later on down the road they may take equity stakes in one another, like blood brothers. Either way, expect a lot more of this down the road.
The embarrassment that is the Enron Task Force (Houston's Clear Thinkers)
Because it's never too late to talk about Enron, Tom Kirkendall has a nice, up-to-date writeup of the Enron Task Force's scorecard. You can disagree with some of his characterization, but he draws a compelling picture. What started off triumphantly -- a number of perp-walks that the media loved -- has turned into a bit of a mess, with several defendants winning reprieves, and many of the task force's actions deemed improver. Is it only a matter of time before Jeff Skilling walks a free man and starts his own energy hedge fund? Man, that would be great.
JPMorgan, Lehman, Merrill Seek New Manhattan Trading Space (Bloomberg)
A number of big banks are all seeking new trading space in Manhattan, which at least for now means that New York still has relevance and that trading operations won't be outsourced to India anytime soon. Supposedly, Merrill is interesting in getting some space in the tower that may one day be built at the World Trade Center location, although they'll probably be waiting for a long time for that. This reminds us of the time we took a field trip in high school to New York, and we were told that we'd get to walk on the Merrill Lynch trading floor. Of course we weren't expecting a room full of computers, but rather an actual trading floor, a la the screaming NYSE. So disappointing., but at least we got to punch in a trade, which the SEC would probably never allow these days.
How to Save the World (Oligopoly Watch)
The recent pet food recall has got people thinking about the cleanliness of our food chain, particularly as it comes after last year's spinach scare. Naturally, some people are slamming agribusiness, and the billions in subsidies it receives. Even if there's not a direct link, it's not a bad thing to be questioning why we need all of these subsidies. But, we'd also like to point out that the critics of agribusiness may be overstating their case. After all, the handful of incidents from the pet food and the spinach don't amount to a whole lot, particularly when you consider how much food is being consumed all the time -- it's almost a miracle that their aren't more deaths and mass sicknesses. So while subsidies ought to be reconsidered, the idea that it's the business-ification of food that's leading to all these recalls seems a bit of a stretch.