March 31, 2025 | Technology | North America | Active
Juniper Networks / Hewlett Packard : Antitrust Risks and Break Price Analysis
HPE’s $14bn acquisition of Juniper is a landmark deal in enterprise networking, but it is facing significant regulatory risk in the US. The Department of Justice (DoJ) has moved to block the proposed merger, with a lawsuit filed on 30-Jan-25, arguing that it would hurt competition, drive up prices, and slow innovation, specifically in the enterprise wireless LAN (“WLAN”) market. The case will be heard in the US District Court for the Northern District of California, with an expedited trial scheduled to begin on 9-Jul-25. The merger agreement includes an $815m reverse termination fee, and the termination date is currently 9-Oct-25. In this report, we assess the DoJ’s case as slightly stronger overall, particularly on market share and HHI statistics, and its theory of Juniper as a “maverick” competitor. However, the case is far from clear-cut. Our analysis indicates that the outcome will likely depend on whether the DoJ can persuade the court to accept its narrow, US-specific market framing, which would give it the benefit of a structural presumption of harm. If it can do so, the burden will shift to HPE to prove that the deal won’t hurt competition – a high bar that merging parties rarely meet. We assess the strength of both sides’ arguments, drawing on past merger cases and views from antitrust lawyers. The case raises familiar tensions seen in past deals: whether the government can successfully define a narrow market, and whether removing an aggressive pricing rival like Juniper is enough to justify blocking the deal. Much will depend on how the judge weighs structural indicators like market concentration, alongside real-world evidence, from customer complaints to internal documents. We also consider two alternative outcomes: settlement and termination. On settlement, there’s little sign of movement so far. HPE has made clear ...
March 13, 2025 | Consumer Discretionary | North America | Active
Walgreens Boots Alliance / Sycamore Partners : Deal Insight
On 6-Mar-25, US pharmacy giant, Walgreens Boots Alliance (“Walgreens”), announced that it has agreed to be bought by private equity firm Sycamore Partners, as the struggling retailer looks to go private to reverse years of financial decline. Under the transaction terms, Walgreens shareholders will receive $11.45 per share in cash and a non-transferable Divested Asset Proceed Right (“DAP Right”) worth up to $3 per share, tied to the future monetisation of Walgreens’ debt and equity interests in its VillageMD subsidiary. The cash component represents a 29.4% premium, while the total consideration, including the DAP Right, implies a 63.3% premium over Walgreen’s undisturbed price on 9-Dec-24. Walgreens is currently reviewing its options for VillageMD and overseeing the monetisation process is a committee comprising of representatives from its board, including Chairman Stefano Pessina, and Sycamore. Akin to a contingent value right (“CVR”), target shareholders will receive one DAP Right per share upon deal completion. The board has approved the transaction, with two directors recusing themselves. Pessina, who will re-invest his 17% stake into the acquiring entity, and John Lederer, CEO of Staples, a Sycamore portfolio company, did not participate in discussions or voting. Sycamore has obtained a $2.5bn equity commitment letter and has secured an asset-based revolving credit facility for $5bn, a senior secured first-in-last-out term loan of $2.5bn, a receivables purchase facility for $1.0bn, and other commitment letters from a consortium of lenders, including Wells Fargo, Citigroup, Deutsche Bank, Goldman Sachs, JPMorgan Chase, UBS, Mizuho Bank, and PNC Bank. The sponsor has also entered into voting and reinvestment agreements with Pessina and his holding company. The merger agreement contains customary clauses on representations, warranties, covenants, and MAC with specific exclusions for war and pandemics. There is also a 35-day ‘go-shop’ period, ending on 10-Apr-25. Closing is contingent on shareholder approval, from the holders of a majority of outstanding shares, as well as from holders of a majority of outstanding shares excluding those affiliated with Pessina and Sycamore. A preliminary proxy will be filed within three business days after the go-shop period ends (i.e., by 15-Apr-25). The deal is also subject to regulatory clearances, including HSR, foreign antitrust and investment clearances, EU foreign subsidies regulation (FSR) approval, and under certain healthcare notification laws. HSR notification will be ...
February 27, 2025 | Financials | Europe | Active
BP Sondrio / BPER : Deal Insight
On 6-Feb-25, Italy’s fourth-largest bank, BPER Banca, announced a voluntary public exchange offer for its smaller rival, Banca Popolare di Sondrio (“BP Sondrio”), adding to a series of recent public bank M&A in the country. The merger ratio is 1.450 BPER shares for each BP Sondrio share, implying an offer price of €9.527 per share based on the previous day’s closing prices – a 6.6% one-day takeover premium. Prior to completion, the companies can pay dividends corresponding to their FY’24 profits, where Bloomberg estimates that BP Sondrio and BPER will distribute €0.80 and €0.60 per share, respectively, both around May 2025. Any further dividends will lead to an adjustment to the ratio. BPER aims to acquire at least 50% of BP Sondrio shares to gain de jure control over the bank, but it can waive this if it secures at least 35% of the share capital. If it acquires more than 90% of BP Sondrio, it will not restore a free float sufficient for regular trading, and at 95% ownership, BPER will pursue a squeeze-out. The exchange offer’s effectiveness is conditional on: (i) antitrust approvals, (ii) a 50% + 1 BP Sondrio share minimum acceptance, (iii) no material change in BP Sondrio’s business, (iv) no transactions by BP Sondrio that could jeopardise the deal, (v) receipt of prior authorisations without conditions, (vi) no unfolding of material fact that could prevent the deal, and (vii) a customary MAC. BPER may waive any of the above in whole or in part, and, as stated above, BPER reserves the right to partially waive the minimum acceptance condition, provided it secures 35% + 1 BP Sondrio share, a threshold condition that can’t be waived. Additionally, the transaction requires BPER shareholder approval for a related capital increase and, as such, an EGM will be held on 18-Apr-25. BPER filed the offer document with Consob on 26-Feb-25 and has submitted all necessary applications to the ECB, the Bank of Italy, IVASS, and other relevant authorities. These approvals cover not only the direct acquisition of BP Sondrio but also the indirect acquisition of Banca della Nuova Terra, as well as the acquisitions of subsidiaries Factorit, Alba Leasing, Unione Fiduaciaria, and Polis SGR, alongside certain by-law amendments. Consob will approve the offer document only after receiving all required authorisations. Separately, BPER has submitted applications concerning (i) concentration control, (ii) “golden power” approval from the Italian government, (iii) FINMA’s approval for BP Sondrio’s Swiss subsidiary, and (iv) any other necessary regulatory clearances. The bank confirmed that it has also provided all required communications, requests, and pre-notifications to the competent authorities. The offer document will only be published when Consob approves it, potentially in ...
February 26, 2025 | Consumer Discretionary | Europe | Active
Just Eat Takeaway / Prosus : Deal Insight
On 24-Feb-25, Prosus, the Dutch technology investor and subsidiary of South Africa’s Naspers (NPN SJ), announced an agreement to acquire Just Eat Takeaway.com (“JET”) in an all-cash deal valued at €4.1bn. Structured as a public tender offer, Prosus is offering €20.30 in cash per JET share, cum-dividend, which implies a 63.3% one-day takeover premium. JET’s board unanimously recommends the offer and JET’s CEO and board members, collectively holding 8.1% of the target, have agreed to tender their shares into the offer. Prosus said it plans to finance the acquisition using its existing cash resources. The offer is subject to a 95% minimum acceptance threshold that will be lowered to 80% if JET shareholders approve the resolutions necessary for an asset sale and liquidation. Prosus retains the right to unilaterally reduce the threshold to 67%, thus providing it with flexibility to close the deal. If Prosus secures at least 95% of JET, it will initiate a statutory squeeze-out procedure, and if it obtains at least 80% but less than 95%, the companies have agreed to execute a post-closing asset sale transaction. This entails transferring all JET’s assets and liabilities to Prosus at the same price per share as the offer. Subsequently, JET would be liquidated, with a distribution to shareholders equal to the offer price, net of applicable taxes and without interest. The asset sale and liquidation requires approval by JET shareholders. Prosus has committed to several non-financial covenants, including maintaining JET’s headquarters in Amsterdam, retaining key brands, and supporting the company’s previously communicated strategy. The buyer has also pledged not to pursue a break-up of JET and to fund its growth initiatives, with no material workforce reductions, and plans to offer retention and incentive arrangements to JET’s employees and management. These covenants will remain in effect for two years post-closing, and two independent JET supervisory board members will oversee compliance. Otherwise, the offer is subject to customary conditions, including the absence of a material breach of the merger agreement and no MAC. JET will pay a €41m termination fee if it terminates the agreement to accept a superior offer; Prosus will pay €410m if the deal fails due to regulatory reasons. Prosus has identified certain regulatory jurisdictions requiring approvals, including the EU and the UK, and intends to engage with regulators promptly. JET needs to complete the works council consultation process before proceeding with the offer, which it intends to initiate “as soon as feasible.” The tender offer will only launch in ...
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 ...