January 31, 2025 | Technology | North America | Active
Aspen Technology / Emerson Electric : Deal Insight
On 27-Jan-25, Emerson Electric (“Emerson”) agreed to acquire the remaining outstanding shares of Aspen Technology (“AspenTech”) that it does not already own through an all-cash tender offer at $265.00 per share. Emerson currently holds 57.4% of AspenTech, following its initial 55% stake acquisition in 2022. In that transaction, Emerson contributed its industrial software businesses – OSI and Geological Simulation Software – along with $6.0bn cash in exchange for a majority holding in AspenTech. The current tender offer seeks to acquire the remaining 42.6% float. Emerson plans to finance the deal with cash on hand and debt, and the tender offer is subject to the satisfaction of customary closing conditions. Both boards approve the transaction, and the offer has been unanimously recommended by an AspenTech special committee. Emerson initially proposed acquiring the minority stake for $240 per share on 5-Nov-24, and two weeks later, AspenTech’s board formed a special committee to evaluate the non-binding proposal. The bid represents an 11.5% premium to AspenTech’s undisturbed price prior to its initial bid in November 2024. The offer includes a non-waivable condition that requires at least 50% of AspenTech shares held by minorities (“unaffiliated shares”) to be tendered and not withdrawn. Per the merger agreement, AspenTech is bound by a non-solicitation clause, subject to a fiduciary-out exemption. There is also a burdensome condition that restricts divestitures of any business expected to “materially and adversely affect” Emerson and its subsidiaries; to this end, AspenTech and its subsidiaries will not be considered subsidiaries of Emerson. The tender offer will be open for a minimum 20 business days and is expected to commence within 15 business days from the merger agreement date (i.e., by 14-Feb-25). Closing the offer may be ...
January 31, 2025 | Financials | Europe | Active
Mediobanca / Banca Monte dei Paschi di Siena : Deal Insight
On 24-Jan-25, Banca Monte dei Paschi di Siena (“MPS”), the partially state-owned Italian bank, announced a surprise unsolicited voluntary exchange offer for Mediobanca, one of Italy’s most prestigious financial institutions. However, on 30-Jan-25, Mediobanca firmly rejected the bid, stating in a press release that the proposal lacks industrial and financial rationale and threatens the bank’s identity. The board further emphasised that the offer does not align with Mediobanca’s strategic interests or values and called it ‘hostile’. The all-share bid offers 2.3 newly issued MPS shares for each Mediobanca share, worth €15.992 per Mediobanca share and representing a 4.9% premium to the prior day’s close. The proposed exchange ratio will be adjusted to account for any distributions from either party. To finance the acquisition, MPS plans to issue new shares, contingent on shareholder approval at a meeting scheduled for 17-Apr-25. Among conditions to closing are the absence of legal impediments and antitrust clearances. Regulatory submissions to the European Central Bank (ECB), the Bank of Italy, and other relevant authorities, are expected by mid-February, and following regulatory clearances, the offer period is expected to start in June / July 2025. The Mediobanca minimum acceptance will be 66.67% and the acceptance period is anticipated to be open for 15 to 40 days. MPS aims to close the transaction in 3Q’25. Conditions to Closing Prior to launching the offer, MPS requires “prior authorisations” – essentially regulatory pre-conditions – for the acquisitions of Mediobanca’s businesses, primarily from the ECB, the Bank of Italy, and IVASS, Italy’s insurance regulator. These approvals extend to all relevant industry-specific regulators, including ...
January 20, 2025 | Health Care | North America | Active
Intra-Cellular Therapies / Johnson & Johnson : Deal Insight
Johnson & Johnson (“J&J”) announced on 13-Jan-25 an agreement to buy Intra-Cellular Therapies, a biopharmaceutical company specialising in therapies to treat neuropsychiatric and neurological disorders. Target shareholders will receive $132 per share in cash, valuing the company at $14.6bn and implying a 39.1% one-day takeover premium over ITCI’s undisturbed trading price. Conditions to closing include regulatory clearances under HSR in the US (notification within 10 business days, i.e., by 27-Jan-25) and from other jurisdictions, as well as approval from ITCI shareholders (50%). The merger agreement contains customary clauses on representations, warranties, covenants, and MAC, with carveouts for pandemics and wars. ITCI is subject to non-solicitation provisions, with fiduciary-out exemptions. The clause on reasonable best efforts is also standard, with the merging entities agreeing to take “all actions that are necessary” to consummate the deal. The burdensome condition is not quantified but restricts the parties from divesting or separating any business that would result in “a material impairment to the overall benefits expected” from the deal. J&J will fund the deal through a combination of cash and debt. The termination fee is $475m, but there is no RTF. Completion has been ...
January 13, 2025 | Insurance | Europe | Active
Direct Line / Aviva : Deal Insight
On 23-Dec-24, British insurer Aviva signed a definitive agreement to acquire its smaller rival, Direct Line, in a £3.7bn cash-and-stock deal. The recommended offer was preceded by a possible offer announcement in late November and a subsequent put-up-or-shut-up (“PUSU”) under UK takeover rules, scheduled to end on Christmas Day. The accepted terms were the same as those proposed – 129.7p in cash and 0.2867 Aviva shares for each Direct Line share. The merger parties will continue to pay dividends in-line with their respective and existing dividend policies, and the Rule 2.7 announcement confirms that Direct Line shareholders will be entitled to certain distributions, namely (i) up to 5p per Direct Line share, to be paid prior to closing, and (ii) up to 2p per Direct Line Share, should the deal not close by the record date of Aviva’s FY’25 interim dividend (i.e. around late August 2025). Of note, Aviva’s next dividend (FY’24 final, 23p per share) will trade ex- on 27-Mar-25, per Bloomberg. Based on closing prices on 27-Nov-24, the last undisturbed date, the offer consideration including Direct Line’s 5p dividend is 275p per share, representing a 73.3% premium to Direct Line’s undisturbed price on 27-Nov-24. The consideration will lead to Aviva shareholders owning 87.5% of the combined entity, while Direct Line shareholders will hold nearly 12.5%. Aviva intends to fund the cash portion of the offer consideration from existing cash and has secured £1.85bn through a facility agreement. The deal is structured as a UK court-sanctioned scheme of arrangement that requires Direct Line shareholder approval at a Court Meeting (75% in value) and an EGM (75% of votes cast). The scheme document is expected to be filed during the first half of February 2025, with shareholder meetings anticipated in March 2025. Direct Line directors intend to unanimously recommend that shareholders vote in favour of the scheme. The deal is also subject to regulatory approvals, including CMA antitrust and approvals from the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA). Under the Cooperation Agreement, Aviva has agreed to use “all reasonable endeavours” to obtain ...
December 16, 2024 | Media | North America | Active
Interpublic Group of Companies / Omnicom Group : Deal Insight
On 9-Dec-24, advertising holding companies Interpublic Group and Omnicom announced a merger to address anticipated challenges to the industry from Big Tech and AI. Under the approved terms, IPG shareholders will receive 0.344 Omnicom shares for every IPG share, worth $35.58 per IPG share and offering target shareholders a 21.6% takeover premium. Post-merger, Omnicom shareholders will own 60.6% of the combined entity, with IPG shareholders holding the remaining 39.4%. Both companies will continue to pay their current quarterly dividends until closing, capped at $0.33 for IPG and $0.70 for Omnicom. In addition to shareholder approval (a 50% majority approval at both companies), the merger is conditional on regulatory approvals from over 15 jurisdictions, with the US, the EU and China being key. The companies have committed to using “reasonable best efforts” to secure approvals and to address legal challenges. Limitations on remedies, including divestments, will occur if they materially impact either party’s operations. The merger agreement includes standard provisions on representations, warranties, covenants, and a MAC, with carve-outs for war and pandemics. Both companies have agreed to non-solicitation clauses with fiduciary-out exemptions. John Wren will remain Omnicom’s Chairman and CEO post-deal, while IPG CEO Philippe Krakowsky will become Co-President and co-chair the Integration Committee. Three IPG board members, including Krakowsky, will join Omnicom’s current 11-person board, thus increasing its size, and the combined entity will retain ...
December 10, 2024 | Real Estate | Asia | Active
ESR Group / Starwood-led Consortium : Deal Insight
On 4-Dec-24, a consortium led by real estate private equity firm Starwood Capital Group announced an agreement to acquire Hong Kong-listed and Cayman Islands-incorporated ESR Group (“ESR”) for HKD 55.2bn ($7.1bn) via a scheme of arrangement under section 86 of the Cayman Islands’ Companies Act. ESR shareholders can elect (i) a cash offer of HKD 13.00 per share, (ii) one share in EquityCo per ESR share, or (iii) a mix of cash and shares. EquityCo is an unlisted holding company created on 3-Sep-24 for this transaction that is currently entirely held by the consortium members. Along with Starwood are Sixth Street and SSW Partners, with participation from the Qatar Investment Authority (“QIA”), Warburg Pincus, and ESR’s founders; each member with the exception of Sixth Street, to varying degrees, already owns a stake in ESR and, collectively, the consortium holds 39.91% of the target. The cash consideration implies a 30.0% premium over ESR’s closing price of HKD 10.00 per share on 10-May-24, before ESR publicly disclosed it received a non-binding proposal from the consortium, without disclosing terms. It also presents a 13.6% one-day premium (to 28-Nov-24, when ESR shares were suspended), and a 199.1% premium over ESR’s net tangible asset value per share (HKD 4.35) as on 30-Jun-24. The offer is cum-dividend, meaning that the consortium reserves the right to reduce the consideration for any dividend or return of capital. ESR has, nonetheless, confirmed that it has no plans to announce any dividend before the effective date. ESR has established an Independent Board Committee (IBC) of independent non-executive directors to evaluate the deal and an Independent Financial Adviser (IFA) will be appointed with the IBC’s approval. The consortium has also entered into exclusivity and standstill arrangements with ESR, to dissuade competing offers during this period. The deal is subject to the satisfaction of pre-conditions and conditions. Among the pre-conditions are clearances from ...
November 29, 2024 | Industrials | North America | Active
Summit Materials / Quikrete : Deal Insight
On 25-Nov-24, Summit Materials, a leading provider of construction materials, announced a definitive agreement to be acquired by privately-held rival Quikrete Holdings in a transaction valuing Summit at $11.5bn. Under the terms of the agreement, Quikrete will pay $52.50 per share, representing a 29% premium to Summit’s unaffected share price on 23-Oct-24. The boards of directors for both companies unanimously approved the merger. The transaction requires approval from Summit shareholders (50%), and Cementos Argos (CEMARGOS CB), a Colombian cement and concrete producer with ties to Summit and its largest shareholder (30.6%), has committed to vote in favour of the acquisition. The deal is conditional on receiving regulatory approvals, including antitrust clearances in the US and Canada. HSR is to be filed by 9-Dec-24, and undisclosed governmental consents are also required. Both companies have pledged to use their reasonable best efforts to satisfy all conditions and expedite the transaction. Summit has agreed to customary non-solicitation provisions, including fiduciary-out exemptions. Financing will come from a combination of Quikrete’s existing cash and new debt, and
November 27, 2024 | Financials | Europe | Active
Banco BPM / UniCredit : Deal Insight
On 25-Nov-24, UniCredit announced a €10.1bn all-share voluntary public exchange offer to acquire rival Italian lender Banco BPM (Banca Popolare di Milano), proposing 0.175 UniCredit shares per BPM share. The offer consideration values BPM at €6.657 per share, reflecting a modest 0.5% premium to its prior closing price, but a 14.8% premium based on its 6-Nov-24 price before BPM bid €1.6bn for asset manager Anima Holding (ANIM IM). A two-thirds minimum acceptance condition has been set, but UniCredit reserves the right to partially waive this condition as long as it secures at least 50% + 1 share. The offer is definitive, but unsolicited, and UniCredit expects to complete the offer by June 2025. BPM’s board has rejected the offer, and in a 26-Nov-24 release affirmed that the offer does not reflect “in any way the underlying profitability and the additional potential for value creation for Banco BPM shareholders.” Per UniCredit’s public exchange offer notice, the merger ratio will be adjusted for any dividends distributed by either company: “if, prior to the payment date… the Issuer and/or the Offeror pay(s) a dividend to its/their shareholders,… the Consideration shall be adjusted to take into account the deduction of the dividend distributed from the BPM Reference Price and/or the UniCredit Reference Price used in its determination.” The offer requires UniCredit shareholder approval and several regulatory clearances; a UniCredit shareholder meeting has been scheduled for 10-Apr-25, following a 24-Nov-24 board resolution. UniCredit will file notifications with the ECB and the Bank of Italy to secure authorisation for acquiring direct control of BPM and indirect stakes in the target’s subsidiaries, Banca Akros, Banca Aletti, and others. Regulatory approvals are also needed from Italy’s insurance industry regulator, IVASS, and from the Central Bank of Ireland, alongside Consob’s approval of the offer document. Before submitting the offer document to Consob, UniCredit will file applications with antitrust regulators, the Prime Minister’s office, under the Framework on Foreign Subsidies Distorting the Internal Market (FSR), FINMA, and other relevant authorities. The deal also hinges on obtaining unnamed antitrust approvals. We note that BPM’s network of branches only ...
November 21, 2024 | Industrials | North America | Active
Berry Global / Amcor : Deal Insight
On 19-Nov-24, consumer and healthcare packaging giant Amcor announced an agreement to acquire US rival Berry Global (“Berry”) in an all-share transaction valued at $8.4bn. Under the terms of the merger, Berry shareholders will receive 7.25 Amcor shares for each Berry share. At the time of the announcement the offer consideration valued the target at $73.59 per share, representing a 9.8% premium to the previous day’s closing price. Upon completion, Berry shareholders will own 37% of the combined entity, while the remaining 63% will be held by Amcor shareholders. The boards of both companies have unanimously approved the transaction and Amcor CEO Peter Konieczny will lead the combined entity; Berry’s chairman will be appointed as deputy chairman of Amcor, and Berry will nominate four directors to an expanded 11-member Amcor board. The deal is conditional on approval by both companies’ shareholders (50% approval) and regulatory clearances. Preliminary proxy statements are expected to be filed within 60 days of the merger agreement (by 18-Jan-25), with an HSR filing scheduled by 6-Jan-25. The merger agreement includes customary provisions on representations, warranties, covenants, and MAC, with specific carve-outs for events such as war and pandemics. Both companies are bound by non-solicitation clauses, which include fiduciary-out exemptions, and have agreed to “reasonable best efforts” clauses requiring them to take all necessary steps to secure approvals. Furthermore, the agreement requires the parties to defend against legal challenges, though remedies are limited by a burdensome clause restricting divestments to businesses generating net sales of no more than $550m during the 12-month period ending 30-Jun-24. The transaction is expected to close in mid-2025, and, for now, we assume 30-Jun-25 settlement. The long-stop date is 19-Nov-25, with a potential ...
November 07, 2024 | Technology | North America | Active
Altair / Siemens : Deal Insight
On 31-Oct-24, German engineering giant Siemens entered into a definitive agreement to acquire Altair Engineering for $10.6bn. Under the terms of the deal, Altair shareholders will receive $113 per share in cash, representing a premium of 18.7% over Altair’s undisturbed price on 21-Oct-24, before media reports revealed that Altair was exploring a sale. Siemens plans to fund the deal with its existing resources and strong balance sheet. The acquisition is subject to Altair shareholder approval (50% of votes) and antitrust clearances, including HSR and unspecified foreign investment approvals, as well as a 60-day ITAR notice to be filed with the DDTC. Siemens has secured a voting agreement with James R. Scapa, Altair’s CEO, and his affiliated entities and trusts, which collectively hold 53.6% of Altair’s shares. A preliminary proxy is expected to be filed within 35 days (by 4-Dec-24), and an HSR notification will be made within 10 business days (by 14-Nov-24). Altair is subject to non-solicitation restrictions, with a customary fiduciary out exception. The merger agreement, dated 30-Oct-24, contains customary clauses on representations, warranties, and covenants, including a MAC with specific exceptions for war and pandemics. The parties have agreed to “take, or cause to be taken, all actions (including defending any proceeding) and do, or cause to be done, all things necessary, proper, or advisable” to obtain regulatory approvals, with the caveat that any remedy does not result in a “burdensome condition,” which has not been defined in the merger agreement but exists in a non-public Company Disclosure Schedule. The companies expect the deal to close in 2H’25, against a long-stop date of ...