Archive for the m&a Category

Chinese raid on Rio could annoy BHP

Posted in m&a, merger & acquisition with tags , , , , , on February 2, 2008 by keronii

THE Chinese Government-owned resources group Chinalco and the US aluminium producer Alcoa have bought 12 per cent of Rio Tinto’s London-listed shares in a move that could block or severely complicate BHP’s plans to buy its rival.

The stake, worth £7.2 billion ($16 billion), was bought at a price that equated to a 4-for-1 offer from BHP, compared with its rejected 3-for-1 proposal. Rio shares rose 14 per cent in London last night on the news.

The stake is enough to block a hostile bid from BHP, which requires the support of 90 per cent of Rio shareholders, but by itself it could not block a scheme of arrangement for a friendly merger requiring 75 per cent support.

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Microsoft offers $50b for Yahoo!

Posted in m&a, merger & acquisition with tags , , , on February 2, 2008 by keronii

microsoft_yahoo_070504_ms.jpg

NEW YORK: Microsoft says it has offered to buy Yahoo! for $US44.6 billion ($49.86 billion) in cash and stock.

Microsoft said it had offered $US31 per share, which it said represented a 62 per cent premium above the company’s closing stock price on the Nasdaq on Thursday.

“We have great respect for Yahoo! and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market,” Microsoft’s Chief Executive, Steve Ballmer, said in a statement.

Yahoo! was not immediately available for comment.

Microsoft said it had identified four areas that would generate at least $US1 billion in annual synergies for the combined entity.

Yahoo! shares rose 56 per cent to $US29.95 in premarket trading yesterday following the announcement. US stock index futures also jumped after the news was released.

Microsoft said the deal would create a “more efficient” company with increased value for advertisers.

The move comes just three days after Yahoo! announced 1000 job cuts, and a 23 per cent drop in profits.

There have long been rumours that Microsoft and Yahoo! might one day merge. Both companies have been threatened by the growing dominance of Google.

Yahoo! was once the undisputed market leader for internet search, but now controls just 17.7 per cent of the US search market compared with Google’s 56.3 per cent.

Reuters, Guardian News & Media

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