BAA is struggling to get higher offers for its second largest UK airport Gatwick. Three rival consortia are expected to make bids on Monday, but the offers ale likely to be far below the UK airport operator’s earlier expectations.
Analysts are saying that these bids could be anywhere between £1.4bn and £1.5bn, well below £1.8bn, initially expected by BAA, a subsidiary of Ferrovial, Spain.
The valuation of Gatwick airport has gone down due to deterioration in operating performance, as passenger traffic has fallen sharply in last 6 months.
The bidders are also forced to increase equity levels in their bids since raising bank debts has become quite difficult. Debt levels are required to be restricted in order to get better investment-grade ratings from agencies.
The potential buyers of Gatwick are discouraged by the embarrassing collapse of Chicago Midway airport’s privatisation deal in the US. One of the expected bidders for Gatwick admitted that it failed to get finance to complete the deal which it had won for Chicago Midway in September.
Three groups bidding for Gatwick, include Manchester Airport Group, comprising of Borealis, Canadian Infrastructure Fund and the Greater Manchester Pension Fund; Lysander Gatwick Investment and Global Infrastructure Partners.
VT Group has decided to sell its 150-year-old shipbuilding business in order to take advantage of bargains which cash-rich companies are prepared to make in the current economic climate.
The group’s 45% stake in BVT Surface Fleet will be sold to, BAE, which is partner in a joint venture, for £ 380m earliest by July; the time VT will be able to exercise sale option approved by shareholders last year. Read the rest of this entry »
Abbott Laboratories is due to buy Advanced Medical Optics (AMO) for $1.4 billion. AMO specialises in optical equipment such as Lasik surgery devices and cataract correction hardware.
The deal, set to take place in the next two weeks, will help Abbott to increase their portfolio and presence in the US medical market. Abbott specialise in a number medical fields, including pharmaceutical and surgery based endeavours.
Advanced Medical Optics has been struggling to make ends meet, even though demand for specialist surgeries, such as Lasik surgery, is on the rise. Abbott has agreed to take on the debt and pay the additional costs making the total value of buyout $2.8 billion.
Abbott will become a significant competitor in the eye care market once the acquisition is completed. With the constantly increasing want for laser eye surgery to correct vision problems, Abbott is sure the deal is a good one for both parties.
Lasik surgery has become more and more popular, as celebrities and sportspeople worldwide have been endorsing the practice. It is being touted as cost-effective in the long term and hassle-free. With the surgery itself lasting an average of 10-15 minutes per eye. Due to technological advances in the field, the success rate has increased dramatically in recent years.
(Source: Finanacial Times Online)
The bookmaker William Hill, in a bid to expand its online gaming operation, is planning the acquisition of parts of software maker Playtech.
William Hill revealed that consumer downturn had so far not affected its growth, which was boosted by strong beginning of the Premier League foot ball season.
The part acquisition by William Hill to create the biggest sports betting and online gaming company of Europe includes marketing business, customer services and gaming websites of Playtech, the provider of online gaming software.
William Hill has also entered into 5-year software license agreement for poker and casino with Playtech, with provision to enter other product areas at later stage.
The new entity being created with combination of operations between William Hill and Playtech would be called William Hill Online, under control of William Hill and operated as a subsidiary.
William Hill Online is expected to generate net revenue of £190m for the year ending 31 December on pro forma basis. Playtech is getting 29% stake from William Hill in the new entity with an option to William Hill of acquiring its shareholding in 4 to 6 years.
William Hill has so far posted 9% uplift in total gross wins. Gross wins is the difference between amount won by the company and that lost by the punters. 7% increase in gross win boosted overall performance.
The lottery machine supplier Gamingking has agreed to a reverse takeover of the UK’s second largest amusement machines operator, Orb Holdings. Gamingking registered a fall in sales and profits on account of the credit crunch and smoking ban in private clubs. A capital reorganisation is slated after the completion of the takeover deal. Orb Holdings, also the owner of Sceptre Leisure and Regal Machine Sales would change its name to Sceptre Leisure.
Gamingking’s lottery offering will be expanded by the newly enlarged company into Orb Holding which serves 6,500 pubs. This will help in expansion of core market of Gamingking’s registered member’s club.
Gamingking is listed at Aim. It supplies gaming machines to 3,500 working men’s and private members’ clubs. It will be acquiring all the shares of Orb holdings.
New shares equivalent to 85% of the enlarged company would be held by Sceptre Leisure while 15% would go to Gamingking’s current share capital. Gamingking’s shares resumed trading on September 2 after the suspension at 1p last month.
According to its chairman, Douglas Yates, the combination of two companies would create cross-selling opportunities across a number of fronts. Gamingking is supplying lottery ticket vending machines to licensed premises and pubs after the lifting of prohibition under the Gambling Act 2005.
BAA has been approached by the Manchester airport owner for the purchase of Gatwick airport. It is learnt that Competition Commission is likely to force the sale of Gatwick this week. The Manchester Airport Group (MAG) has made this offer to Sir Nigel Rudd, chairman of BAA, ahead of a report from the Commission.
According to MAG chief executive, Geoff Muirhead, who is owner of the Humberside, East Midlands and Bournemouth airports, the group wants to add company value, for its shareholders, by acquiring more airports. He claims that MAG has a large number of skilled people with a good record of running airport operations.
However, MAG would not be able to buy Gatwick on its own, instead the company may have to team up with other investors. Gatwick airport is likely to cost up to £3bn. Other expected bidders include German construction group Hotchtief, Global Infrastructure Partners and Australian financial service group Macquaire. A provisional findings report by the Competition Commission into BAA will probably be issued on Wednesday or Thursday.
BAA, taken over by a consortium in 2006, was fully aware that it would have to sell its London airport after the publication of the Commission’s report. There is also a possibility that BAA may be forced to sell Stansted and one of its Scottish airports if the Commission deems it necassary for them to go under separate control. Ryanair boss is keenly interested in buying Stansted for £2bn. BAA did not comment.
Centrica, the owner of British Gas, is proposing a cash offer in its bid for British energy to counter government objection, which has 35% stake in the nuclear group. Centrica aims to buy more electricity and upstream gas business to minimise its dependence on the volatile energy markets.
Further to recent speculation, Centrica confirmed it is indeed in discussions with a third party for taking a minority ownership in British Energy, subject to several conditions, comprising this third party acquiring British Energy successfully and receipt of regulatory clearances.
If the third party does not proceed with an offer, or the firm’s discussions with them do not end in an agreement, Centrica might well consider a number of other alternatives regarding British Energy stake.
Centrica has no background of nuclear power generation. Centrica has insufficient cash, but its debts are relatively much lesser and it would be in a position to make an offer of cash and share for the British Energy. It would tap some of its shareholders, who are also investors in British energy, over the bid issue.
EDF’s £12bn cash bid was earlier rejected by British Energy’s largest shareholders Invesco and M&G terming 765p a share offer as very low.
BT Directories has purchased Ufindus, an online classified advertising company for £20m. Ufindus, which generated revenue of £14m last year, has 1.9 million listings in its portfolio and more than 20,000 small and medium sized business customers. The £20m acquisition from Iomart Group is aimed at expanding BT Directories’ business in community based services. The company recently launched BT Exchanges service to enable consumers to find, share and communicate with local businesses instead of just providing contact details of a company. Companies can make use of three main sites viz. SmileLocal, MoreUK and Ufindus and nearly 100 niche directories of specific trade sectors.
According to David Benjamin, the chief executive of BT Directories, Ufindus will play major role in development of BT Directories’ online portfolio. Its expertise and experience in online classified advertising will be exploited to access local classified product offerings, search traffic and new customers for BT’s fast growing business.
BT’s directories business was reduced by more than £2bn in 2001 due to sale of Yellow Pages by Yell. But with the introduction of a social-networking type model, the company is confident of significant growth in business. Ufindus offers business customers a website design service and its combined portfolio receives more than 9 million searches every month.
BAE System’s informal offer to buy the UK’s most sought after software company Detica, is likely to hot up the bidding race. The news resulted in soaring of Detica’s shares by 22p to 303p, raising its market capitalisation to £351m.
BAE, the biggest manufacturer of defence in Europe is more interested in Detica due to its reputation as a leading independent company which provides IT services in the UK government security.
Detica did not disclose the name of the bidder.
The squeeze in military expenditures has forced the big defence companies to target homeland security and adjacent areas for growth of the business. Detica’s inclusion in the Trusted Borders consortium earlier this year, enhanced its reputation in the industry. The consortium is led by US defence group Raytheon Systems which has been awarded a contract for the UK government’s next phase of e-borders programme.
Detica was entrusted to build analytic and intelligence systems that will provide pre-screening tools to British security forces to screen immigrants. The list of potential counter bidders for Detica includes L-3 Communications, America; European defence and aerospace group’s EADS, and Italy’s Finmeccanica.
According IS Research consultant, Ian Space, Detica’s strategic importance and experience from security and defence contracts make its position so strong that bidders would go to any extent to clinch a takeover deal.
BG Group has declared a £6.7bn ($13.15bn; 13.8 Australian dollar) hostile bid for Origin Energy. BG, demerged in 1997 from British Gas, has made the all-cash offer for one of Australia’s largest coal seam gas producers after the latter rejected a similar bid offer in May. If Origin shareholders approve the offer, it would lead to the second largest takeover of an Australian firm by a foreign company. Origin shares jumped on the news.
Last month, Origin had spurned BG’s offer after it stated its coal seam gas reserves were worth far more. Origin has estimated a 121 per cent increase in its reserves of coal seam methane.
Frank Chapman, the BG Group chief executive, stated the latest offer was a 48 per cent premium on Origin’s share price just before the bid was made and represented full and fair value for its proposed takeover target. Some analysts believe that BG has some room to manoeuvre. An analyst at Fat Prophets Fund management, Gavin Wendt, said: “Some Origin shareholders may well think long and hard about this, since this may not be the last offer on the table.”