Latest Reports

February 22, 2024 | Real Estate | Europe | Active

Redrow / Barratt Developments : Deal Insigth

Barratt Developments, the UK’s largest homebuilder, has entered into a definitive agreement to acquire its smaller rival, Redrow, in a £2.5bn all-share deal, aiming to bolster its position and capitalise on the anticipated long-term recovery in the UK housing market. Per the companies’ Rule 2.7 announcement made on 7-Feb-24, Redrow shareholders will receive 1.44 new Barratt shares for each Redrow share, and based on the previous day’s closing prices, this implies a value of 763p per Redrow share and a 27.2% one-day takeover premium. Both merger parties’ boards unanimously intend to recommend the deal to their respective shareholders, and upon closing, Barratt shareholders will own 67.2% of the combined company, with Redrow shareholders owning the remaining 32.8%. The merger is structured as a UK scheme of arrangement, whereby at least 75% in value of Redrow shares must approve the scheme at the court meeting, and 75% of those in attendance must approve at an EGM. As well, the relative sizes of the companies makes this a Class 1 transaction, meaning that 50% of Barratt shareholders need to vote at a separate EGM. Regulatory conditions include approval from the UK CMA, where Barratt has committed under the Cooperation Agreement to exert all reasonable efforts to secure approval from the antitrust regulator. The scheme document will be released “in due course,” with the companies noting that the Takeover Panel has granted an extension of the deadline for its posting. The document will be published concurrently with a Barratt shareholder circular and prospectus, both of which require approval from the FCA. The companies anticipate that the three will be published by mid-April 2024, with shareholder meetings scheduled for ...


February 19, 2024 | Consumer Discretionary | Asia | Active

Lawson / KDDI : Deal Insight

On 6-Feb-24, Japan’s second-largest mobile carrier, KDDI, entered into a partnership agreement with Mitsubishi (8058 JP) to jointly control Lawson, Japan’s third-largest convenience store chain. Mitsubishi, which currently owns 50.06% of Lawson, will maintain its shareholding, while KDDI seeks to offer minority shareholders JPY 10,360 cash per share. Lawson’s board has revised the dividend forecast for its fiscal year and has decided to not distribute further dividends. The takeover offer will ultimately lead to 50% pro forma stakes for each of KDDI and Mitsubishi. KDDI’s current ownership of Lawson stands at only 2.1%, and through the public tender offer’s 20.0% one-day takeover premium, it hopes to achieve a 14.43% minimum acceptance condition, a number that would enable KDDI and Mitsubishi to jointly hold at least two-thirds of Lawson (given the 50.06% at Mitsubishi plus 2.11% at KDDI). If two-thirds is achieved, the offerors will then pursue a two-step consolidation to ultimately buy out minorities. In addition to the minimum acceptance condition, antitrust clearances are needed from regulators in Japan, China, South Korea, and the EU. The parties indicated that they have begun advance preparations and will consult with relevant authorities from the date of announcement. As is customary with Japanese tender offers, the acceptance period will only be launched after the companies secure all regulatory approvals and fulfil other customary conditions. Lawson’s board is obliged to provide a unanimous opinion in favour of the offer, with the consent of all disinterested directors, and this opinion must remain consistent. Accordingly, on 6-Feb-24, Lawson’s board expressed its support for the offer and indicated its intention to recommend that shareholders tender their shares. The board will reaffirm its opinion when the acceptance period commences. According to the preliminary timeline, the companies anticipate launching the tender offer “in or around” April 2024, with a subsequent squeeze-out expected to be completed by ...


February 13, 2024 | Health Care | North America | Active

Catalent / Novo Holdings : Deal Insight

On 5-Feb-24, Catalent, a manufacturing subcontractor for Novo Nordisk’s (NOVOB DC) popular obesity drug Wegovy, has agreed to be acquired by Novo Holdings, the parent company of Novo Nordisk, for $63.50 per share. The offer represents a 16.5% one-day premium and a 39.1% premium over Catalent’s closing price on 28-Aug-23, the day before the target’s board initiated a strategic review of its business. Shortly after the acquisition completes, Novo Holdings intends to sell three of Catalent’s more than 50 fill-finish sites, located in Anagni, Italy, Bloomington, Indiana, and Brussels, Belgium, to Novo Nordisk, for $11bn. Novo Holdings controls Novo Nordisk through voting and share capital stakes of 77.7% in and 28.1%, respectively. The transaction has been unanimously approved and recommended by Catalent’s board and has garnered support from Elliott Management, a key Catalent investor (2.2%), which has entered into an agreement to support and to vote in favour of the deal. The merger agreement includes a no-shop clause along with customary fiduciary-out provisions. Additionally, it contains standard clauses covering representations, warranties and covenants, as well as a MAC with specific carve outs for war and pandemics. Conditions include Catalent shareholder approval (50%) and regulatory clearances. Notification under HSR and the initiation of the regulatory processes, including to the CMA, will be made within 20 business days (by 6-Mar-24). Critically, HSR clearance is also needed for Catalent’s sale of three fill-finish sites to Novo Nordisk. The companies plan to submit a briefing paper to the UK CMA, and if requested, they will submit a draft merger notice to the regulator within 30 business days of a request. A burdensome clause imposes restrictions on the companies, prohibiting them from taking any ...


February 09, 2024 | Consumer Discretionary | Asia | Ended

Vinda / APRIL Group : Deal Insight

On 14-Dec-23, Vinda International (“Vinda”), a diaper maker listed on the Hong Kong stock exchange and incorporated in the Cayman Islands, received a HKD 26.1bn pre-conditional offer from Indonesian billionaire Sukanto Tanoto. The offer was made through Tanoto’s privately-held entity, Asia Pacific Resources International Limited (APRIL) Group, at HKD 23.50 cash per Vinda share, reflecting a 13.5% premium over the previous day’s closing price. Vinda stated it does not intend to declare any dividends prior to the offer completing. However, in the event of such a distribution, the consideration will be adjusted downward, accordingly. The offer is conditional on four pre-conditions that need to be fulfilled prior to a 15-Sep-24 long-stop date: (i) approvals from relevant antitrust regulators, including China’s SAMR and the Taiwan Fair Trade Commission (Taiwan FTC); (ii) clearances under applicable laws of the People’s Republic of China (PRC); (iii) no other legal impediments during the fulfilment of pre-conditions (i) and (ii); and (iv) the receipt of option letter from Essity, a Swedish tissue maker (ESSITYB SS) and one of Vinda’s major shareholders. Concerning the latter condition, on 18-Dec-23, the companies confirmed that Essity issued the option letter to Vinda on 15-Dec-23, thereby satisfying condition (iv). Separately, APRIL is not aware if there are any consents or approvals needed for pre-condition (ii), which refers to the clearance under laws of PRC. Pre-conditions (i) on antitrust and (iii) on no legal impediments are not waivable. On 5-Feb-24, the companies announced that SAMR was notified under a simplified procedure on 19-Jan-24. Further, they communicated that, according to their legal adviser, a pre-condition previously anticipated from the Japan Fair Trade Commission is not required, but they will need clearance from the Taiwan FTC, however. Accordingly, a requisite notification with the Taiwan FTC was made on ...


February 09, 2024 | Health Care | Europe | Active

MorphoSys / Novartis : Deal Insight

On 5-Feb-24, Swedish drug maker Novartis agreed to acquire German cancer drug developer MorphoSys for €2.7bn. Under the business combination agreement and subject to the German Takeover Act, Novartis will launch a voluntary public takeover offer to acquire MorphoSys for €68 per share, an 89.3% premium to the target’s undisturbed price on 25-Jan-24, before media speculation emerged. Merger agreement clauses regarding representations, warranties, and covenants are mostly customary, with MAC carve-outs for war and pandemic situations. Regulatory filings will be submitted within 15 business days, by 26-Feb-24, and the offer document is expected to be published “at a later date”, pending approval from the German regulator, BaFin. In accordance with US securities law, Novartis will file the offer document and a tender offer statement on Schedule TO, while MorphoSys will file a recommendation statement on Schedule 14D-9 with the SEC. Novartis estimates that submitting the offer document and BaFin’s review – the regulator has a review period of 10 business days, extendable by an additional five business days – will take approximately four to eight weeks. Following the publication of the offer document, MorphoSys’s management and supervisory boards will issue a joint reasoned statement, containing their recommendation to shareholders. Of note, the agreement includes a ‘no-shop’ on MorphoSys, along with customary fiduciary out provisions, while the termination fee is €50m and the RTF is €100m. Once launched and per German Takeover law, the acceptance period must be open for at least four weeks and shall not exceed 10 weeks. Novartis anticipates the initial offer period will last for four weeks, and two week additional acceptance period will follow. The offer will be subject to ...


February 06, 2024 | Consumer Discretionary | Europe | Active

Kindred Group / La Francaise des Jeux : Deal Insight

On 22-Jan-24, French gaming company La Française des Jeux (“FDJ”) announced a takeover offer to acquire its Swedish peer, Kindred Group, through an all-cash offer, aiming to create the second-largest gaming operator in Europe. The SEK 130 per share consideration values Kindred at SEK 28.0bn (€2.5bn), representing a 24.4% premium over the previous day’s close on 19-Jan-24. The offer is cum-dividend and will be adjusted lower for any dividends that Kindred distributes. Kindred’s board concluded a strategic review of the company in April 2023, followed by a competitive bidding process. Consequently, the board unanimously recommends its shareholders to accept the offer, a decision supported by a fairness opinion from Jefferies. The tender offer is subject to a 90% minimum acceptance condition. Certain Kindred shareholders – Corvex Management (16.6%), Premier Investissement (4.0%), and Eminence Capital (3.5%) – collectively hold 24.2% and have entered into undertakings to accept the offer and vote in favour of an amendment of the articles of association. This vote will permit a shareholder controlling 90% of voting rights to require minorities to transfer their shares to the owner, essentially enabling FDJ to squeeze out at 90%. Critically, each of these irrevocables is hard, and remain in place “irrespective of whether a higher competing offer is made.” However, the irrevocables terminate if the offer is not declared as unconditional before 31-Dec-24, which can be extended to 22-Jan-25 if the offer period is prolonged. Similarly, Nordea (1.5%) and Veralda Investment (2.3%) have ...


January 26, 2024 | Technology | North America | Active

Ansys / Synopsys : Deal Insight

On 16-Jan-24, Synopsys, a chip design software developer, reached an agreement to acquire Ansys, a business and consumer software developer, through a cash and stock transaction. The mixed consideration consists of $197 in cash plus 0.345 Synopsys shares for each Ansys share. Based on the previous day’s close (12-Jan-24), the deal valued Ansys’ shares at $367.57, reflecting a mild, one-day premium of 6.1%. On 22-Dec-23, Reuters had reported that the companies were in talks, so, based on undisturbed prices on 21-Dec-23, the takeover premium was 28.7%. At closing, Ansys shareholders will own 16.5% of the merged entity, while Synopsys shareholders will retain the remaining 83.5%. The deal requires approval from Ansys shareholders (50%), but a Synopsys shareholder vote is not required. Regulatory conditions include HSR (notification by 30-Jan-24), as well as specific antitrust and foreign investment approvals. The companies must also make appropriate notifications under the National Industrial Security Program Operating Manual (NISPOM) Rule, which involves notifying the Defense Counterintelligence and Security Agency (DCSA). A notable amendment to the NISPOM Rule, proposed by the Defense Department on 13-Dec-23 (comment period ends 12-Feb-24), seeks to address the protection and reproduction of classified information for contractors operating under a special security agreement. A reasonable best efforts clause in the merger agreement requires the companies to ...


January 25, 2024 | Technology | Asia | Active

Shinko Electric Industries / JIC-led Consortium : Deal Insight

On 12-Dec-23, Japanese government investment vehicle Japan Investment Corp (“JIC”) announced its intention to acquire Fujitsu’s (6702 JP) chip-packaging unit, Shinko Electric Industries (“Shinko”), through a tender offer. Should it succeed in taking Shinko private, JIC will own 80% of the company alongside co-investors Dai Nippon Printing (7912 JP, 15% of pro forma control) and Mitsui Chemicals (4183 JP, 5%). The JPY 5,920 per share offer price represents a 13.0% one-day premium and an 18.9% premium to the target’s undisturbed price on 31-May-23, the day before Bloomberg reported that Fujitsu was exploring a sale of Shinko. The consortium has entered into a master agreement to acquire Fujitsu’s 50.02% stake in Shinko for JPY 4,218.1 after the tender offer completes. As such, the group seeks to acquire 49.98% through the tender offer; the minimum acceptance threshold is 16.65%. The tender offer will be launched within 10 business days after the fulfilment of all conditions and is set to be open for 20 business days, expected to commence “in or around late August 2024.” Regulatory approvals include antitrust clearances from Japan, China, and South Korea, and potentially from Vietnam. Additionally, foreign investment clearances, most likely from the US (a notification with CFIUS will be made), are required. Consistent with Japanese take-private transactions, the offer is subject to a recommendation from the target’s special committee and, similarly, Shinko’s board needs to provide a unanimous opinion in favour of the offer when the tender offer commences. Fujitsu is bound by a non-solicitation agreement with a fiduciary-out clause. In the event of a third-party proposal, Fujitsu may accept the counterbid but is obliged to notify JIC. Additional conditions include the absence of legal impediments and Fujitsu’s compliance with ...


January 16, 2024 | Energy | North America | Active

Southwestern Energy / Chesapeake Energy : Deal Insight

In the wake of a series of oil and gas deals in 4Q’24, Chesapeake Energy sustained the industry’s M&A momentum by signing a definitive agreement on 11-Jan-24 to acquire its rival, Southwestern Energy, through an all-stock merger. The terms stipulate that Chesapeake will offer 0.0867 of its shares for each SWN share, which values SWN at $7.4bn, or $6.69 per share, based on the previous day’s closing. The consideration implies a slight 2.9% discount versus SWN’s previous day’s close of $6.89 on 10-Jan-24, and a 4.5% premium to the target’s share price on 4-Jan-24, the day prior to Reuters reporting on a potential deal. Speculation of a combination first emerged through a Reuters report in mid-October 2023, prior to which SWN shares were trading slightly lower, at $6.77 on 16-Oct-23. Chesapeake shareholders will own approximately 60% of the combined company, while SWN shareholders will hold the remaining 40%. The composition of the 11-member board will consist of seven members from Chesapeake initially and four from SWN. Leading the firm will be Chesapeake’s current CEO, Nick Dell’Osso, and the new headquarters will be in Oklahoma City, where Chesapeake currently operates. The deal has been approved by ...


January 12, 2024 | Technology | North America | Active

Juniper Networks / Hewlett Packard : Deal Insight

On 9-Jan-24, Hewlett Packard Enterprise (“HPE”) agreed to acquire networking gear maker Juniper Networks (“Juniper”) for approximately $14bn, or $40 per share in cash. The offer price represents a 32.4% takeover premium to Juniper’s undisturbed price on 8-Jan-24, before media reported a possible deal. Juniper is permitted to continue paying its regular quarterly dividends moving forward, so long as these do not exceed $0.22 per share. The deal received unanimous approval from both companies’ boards, and conditions to closing include antitrust approvals, including under HSR and from the EC and other foreign jurisdictions, foreign investment clearances, and a Juniper vote (50%). An HPE shareholder vote is not required. The preliminary proxy is expected to be filed within 20 business days, by 7-Feb-24. The merger agreement contains customary clauses on representations, warranties, covenants, and MAC, with specific carve-outs for pandemics and war. A reasonable best efforts covenant stipulates that the companies must offer appropriate remedies to address antitrust concerns, and such remedies could include ...



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