Metue.com

Patience is a virtue, especially in private equity.  Since November 2006, Bain Capital and Thomas Lee Partners have been trying to buy and privatize outdoor advertiser and radio station operator Clear Channel.   The $19.5b leveraged buyout offered was approved by shareholders ($39.20/a share) but it’s been stuck in regulatory limbo. 

Recently, there’s been an increase in speculation the deal was close to falling apart. The skepticism has hurt the stock price. The stock is trading near $35, a significant discount to the $39.20 buyout price. Now there may be a positive shift.

Click to Read More

After 8 months, Sam Zell is finally in control of the Chicago Tribune and the rest of the Tribune companies. The $8.2b buyout of the newspaper and media conglomerate that operates the LA Times, Chicago Tribune, and twenty three TV stations around the country closed Thursday without a hitch. Shares ceased trading at the close of market.

The second cash installment for the leveraged buyout was provided by JP Morgan Chase, Merrill Lynch, Citibank and Bank of America.

Including the assumption and repayment of existing debt, the LBO will have a value in excess of $14b.

In consideration of the substantial debt load, Standard and Poors and Fitch both lowered the corporate credit rating. Click to Read More

In July, Gemstar-TV Guide announced it was reviewing “strategic alternatives” including the possibility of selling the company.  Fast forward to December, they’ve now found their buyer.

Macrovision, the content protection and Digital Rights Management (DRM) company,  grabbed the bulk of Friday’s headlines and much of the stock market’s ire after announcing they’d pay $2.8b to acquire the once powerful TV Guide brand and Gemstar’s other properties.

The deal represents an approximate 29% premium of July share value for Gemstar and a 6% premium over Thursday’s closing price.

Click to Read More

Last week at the Reuters Media Summit someone asked EA’s CEO John Riccitiello his thoughts about M&A prospects for the gaming industry moving forward.  It was a fair question, as head of EA he’s a qualified expert on the gaming industry, as a former partner at private equity firm Elevation Partners, he’s well educated and informed about M&A mechanics.  Part of John’s  measured answer was “Is it ripe (for mergers), or has it already been picked? I would argue that it’s been largely picked."

Those remarks underscore just how surprising Sunday’s announcement that Activision and Vivendi Games intend to merge was.  When the two companies said they’d merge to form an $18.9b company, a gaming company with a market cap even bigger than EA (approx. $17.4b) some jaws were definitely hanging slack.

This morning, Vivendi and Activision provided more details which opened a window on the structure and presumed opportunity.

Click to Read More

While consumers are thinking about gifts to buy for the holidays, Walt Disney Company is getting their shopping lists in order too. Looking to potentially heat things up in the acquisition market, Disney has organized several executives into a specialized Mergers and Acquisitions (M&A) division.

The group, division, or whatever loose title its given, is not necessarily a formal restructuring. Disney’s looking to consolidate management tasks and improve strategic communication in anticipation’s of increased spending. It’s about efficiency. Day to day responsibilities for those involved may go largely unchanged.

First reported by Tech Crunch, and later confirmed by other sources, the group will be run by Kevin Mayer, Disney’s executive vice president of Corporate Development. It’s unclear if he’ll take a new title or adjust his current operational responsibilities.

Click to Read More

Corporate M&A activity is a little like addictive behavior. Once a company sets down the road to grow by acquisition, chances are they won’t stop at just one hit.  For Discovery Communications, parent of TV’s Discovery Channel, TLC and others, the M&A road leads to a convergence of TV and internet initiatives. It seems they’re on it and happy to pay the tolls along the way.

Monday, Discovery Communications announced they’d agreed to buy privately held How Stuff Works, the informative and educational website property for a price reportedly near $250m.

HowStuffWorks is very much what their name describes.  Click to Read More

Electronic Arts, again under John Riccitiello, is a different animal than they were before he left in 2004.  As a company, they’re now getting more streamlined, more efficient. They’re increasing their focus on alternative revenue streams (casual gaming, dynamic games, online gaming).   They’re also increasingly breaking out a pen to sign a partnership or opening the checkbook to acquire assets. 

Not even a weeks ago, EA bought SCI – bringing technology tools for online gaming.  Now they’re acquiring content assets with the purchase of VG Holdings Corp. (“VGH”) – the owner of game studios Bioware and Pandemic.

Announced Thursday afternoon, EA will pay up to $620m in cash plus allocate  up to $155m in equity for delivery subject to performance milestones.   EA will also loan VG Holding Corp up to $35m through closing. 

Click to Read More