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.”
Bill Gates, the third richest man in the world, perhaps knows very well knows about the British addiction of home improvement. He has acquired a stake in the largest carpet retailer, Carpetright, despite the gloomy picture of retail in the UK.
Cascade Investment, the investment company of the Microsoft founder, acquired 3 per cent stake in company and became the 15th biggest share holder of Carpetright. It was not clear how much did Cascade pay to Carpetright for the stake. Both refrained from disclosing the details. But a fair estimate, on the basis of last price before the announcement, the cost of more than 2m ordinary shares purchased by Gates works out to £15.6m which is a fraction of his fortune estimated to be £29.4bn by Forbes. Carpetright’s shares rose 12½p before closing at 793½p.
Lord Harris of Peckham, founder of Carpetright, owns 23 per cent of the shares. His son Martin Harris will take over as the new chief after he steps down next year. Mr. Gates stakes in Carpetright are not likely boost the already sagging business of the sector in the backdrop of falling consumer spending and crashing of housing market. Carpetright, headquartered at Purfleet in Essex, has 675 stores across the UK, Ireland, Belgium, Netherlands and Poland.
Associated British Foods (ABF) has announced the merger of its Ryvita business with Jordans to achieve high single digit growth of both the brands. ABF is one of the biggest food and retail international groups, whereas Jordans is the renowned manufacturer of breakfast cereals and cereal bars.
ABF’s finance director John Bason is confident that merger would boost Jordans’ sales internationally and all the sales channels for both brands will reap the benefit. He pointed out that Jordans stands the highest growth potential in Europe and North America.
ABF stake in the business will be 62 per cent. It had already acquired 20 per cent stake in Jordan last September. Mr. Bason is forecasting combined sales of £150m from financial year up to September 2009. Ryvita brand came into existence 80 years ago, whereas Jordans’ cereal business was started by Bill and David Jordan in 1972. The Jordan family would continue its association with the business. ABF would not close any of the manufacturing plants, but could cut down office staff in the administration.
Microsoft has stated it is considering a deal with Yahoo! that would not involve a full buyout of the firm. Microsoft’s previous offer to acquire Yahoo! for $33 a share, a figure that valued the firm at $47.5bn was turned down. Last week Yahoo! rebuffed billionaire investor Carl Icahn’s plan to oust the existing board over the failed merger. Now Microsoft reveals that it is discussing with Yahoo! ‘an alternative transaction’, but did not give any details.
So, what about the ’stockholder value’? In a statement, Microsoft stated it “is not proposing to make a new bid for acquiring all of Yahoo! at this time, but reserves the right of reconsidering that alternative”. It issued the statement, ‘in light of developments” since the firm withdrew its bid two weeks ago. Microsoft underlined a deal may or may not take place. After the statement Yahoo! confirmed it was looking at several ‘value maximising’ alternatives with Microsoft, and the firm would assess offers made by the latter.
The internet firm stated its board would evaluate each of the alternatives that also include any Microsoft proposal with a focus on maximising stockholder value.
Battle between Halliburton and Candover took a fierce turn when Umbrellastream, a Candover-led consortium of funds tabled £15.50 cash bid proposal within hours against the £15.25-a-share take-over offer from Halliburton. Halliburton started taking keen interest in Expro’s figures soon after Umbrellastream made a bid at £14.35 a share in April. It is reliably learnt that Halliburton’s Texan management is very much determined to clinch the deal and is coming back with a lucrative offer next week. The company however maintains that no such proposal is yet under consideration.
With the steep rise in oil prices ($135 a barrel), and the global hunt for sources of supply, Expro’s oil well production-testing technology is in great demand. Analysts feel that rising oil prices and high consumption are making Expro a golden goose and the bidders are feeling confident of extracting substantial synergies from a deal even after paying a high price. Expro’s shares closed at £16.26, up 85p, indicating expectations of a higher bid by the market.
Halliburton would hold further negotiations with Expro’s board. Finance director, Mike Speakman, said that it has so far not received firm offer from any company, except Umbrellastream. Halliburton has been involved in several controversies and is under investigation by the US Department of Justice. But, according a spokesman, these issues are irrelevant to its offer for Expro.
South African mobile operator MTN is showing keen interest in Indian super group Reliance Communications in global merger talks. Indian cellular giant Bharati Airtel recently withdrew from the race. MTN and Bharati had issues about the structure of a combined group. Bharati Airtel decided to pull out of the deal as MTN had proposed a structure which would have made Bharati Airt1el a subsidiary of the South African cellular company contrary to the agreed terms between the two firms. Sources have confirmed of Reliance Communiaction being the favourite to land MTN. After Bharati pulled out from its $50 billion merger deal Reliance Communications is said to have started negotiations for a possible tie-up with the South African major. According to industry experts the combination of Reliance Communication and MTN would create a global wireless juggernaut. Even larger than established market giants like AT&T. Vodafone started off with gusto with a 20-billion bid which it withdrew at a very early stage.
But the Indian giant Reliance Communications even have other plans. They have been the frontrunners in acquiring UK-based global virtue network operator – Vanco. Reliance Communications is fighting other biggies like AT&T, BT, T-System and NTT in fray. Although the final price of the deal is unknown, as Vanco stands at a $800 million market cap.
British Energy, UK’s biggest electricity producer has announced that it received several offers of takeover valuing at more than 10.8 billion pounds. The company is in negotiations with three parties: EDF a group made up of Germany’s RWE, Spain’s Iberdrola and France’s Suez.
It had received only one offer, from EDF, last Friday. That bid was less than 700 pence per share.
RWE and Iberdrola are now exploring possibility of making a joint bid.
Suez is also negotiating with British Energy but is unlikely to bid before completing merger with Gaz de France. Suez is keener in participating in UK power plant construction and is pursuing a co-operation agreement with British Energy. British Energy, Scotland, informs that approaches are at initial stage and will take several weeks for finalisation. AS regards Suez’s approach there would be no major investment from their side till merger with Gaz de France is completed..
British Energy did not comment on this stand of Suez. Its eight power plants are beset with technical problems since last 2 years. The company is likely to benefit from government’s plan of building more nuclear power plants to avert electricity shortages. Government is keen on building power plants, with minimum emission of CO2.
At the annual shareholder meeting, Google co- founder Sergey Brin stated YouTube and DoubleClick, an online advertising firm bought by the web search company earlier this year for £1.55bn, are still small businesses in comparison to its core business of search and advertising business.
“They (YouTube and DoubleClick) both have immense potential, but for it to be a sizable part of our revenue stream, you are going to have to wait at least about a couple of years,” stated Brin in response to a query about when these acquisitions would start making a noteworthy contribution to the firm’s bottom line. For record, Google bought YouTube in 2006.
The web search industry leader played a major role in the takeover battle between Yahoo! and Microsoft. During a two-week long test, it sold search advertisements on rival Yahoo! last month as part of the latter’s attempt to seek an alternative option to Microsoft’s hostile bid. Schmidt mentioned the trial run offered enough good reasons for the two companies to further discuss cooperation, but there was no deal signed yet.
UK energy firm BG Group, according to media reports, has offered almost 13bn Australian dollars ($12.1bn or £6.2bn) for Australia’s second biggest power retailer, Origin Energy. Analysts state that the Australian firm is attractive to BG owing to its valuable oil and gas production resources. These will certainly help it boost profit levels, especially at a time when margins in the traditional retail business are rather tight, observers point out.
BG has also announced a 78 per cent jump in profits for the first three months of the year 2008. The earnings were boosted by high oil and gas prices. Net profit for the quarter increased to £767m, smartly beating analysts’ forecasts. On Tuesday, oil giant Royal Dutch Shell had reported a 12 per cent rise in its first-quarter profits, whereas those at rival BP climbed 48 per cent. Shares in Origin jumped by almost 40 per cent on news of the offer! The Australian firm stated that it was yet to consider the bid. However, analysts stated it was unlikely that any other company would come up with a rival bid.
Thomas Cook has acquired UK-based luxury travel company Elegant Resorts, after paying an undisclosed sum of money. Elegant Resorts, formed in 1988 by Geoff Moss and Barbara Catchpole, is a Chester-based travel company that provides perfectly planned, exotic trips to the Caribbean and to Africa. It organised trips for 20,000 holidaymakers in 2007 itself. Its total gross assets amounted to ₤22.3 million.
Thomas Cook has made this acquisition from existing cash resources and they intend to run Elegant Resorts as a stand alone business, without changing the company’s current management team. Thomas cook’s chief executive Manny Fontela-Novoa said, “We are delighted to have secured this acquisition, which allows Thomas Cook to further enhance its position in this lucrative and growing segment of the leisure travel market. Elegant Resorts has a very strong brand name, associated with luxury, style and bespoke holidays and fully supports our strategic aim to become a leading independent travel provider.”
Thomas Cook had already bought over hotel booking website Hotels4u.com, earlier this year, in a deal amounting to ₤22 million. Thomas Cook itself already provides high end holiday solutions, like the one provided by Elegant Resorts, through its own brands Latitude and Thomas Cook Signature.