Tag Archive | "merger"

Netflix Shares Under Pressure After LVLT/GLBC Merger

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Shares of Netflix (NFLX) are down 2.9% at $228.11 in midday trading on  concerns that the merger between Level 3 (LVLT) and Global Crossing (GLBC) will hurt the movie streaming company.

Akamai Technologies (AKAM) and Limelight Networks (LLNW) typically compete with Level 3 to supply Netflix with elements of their streaming services.

Analysts say the acquisition of Global Crossing by Level 3 will lead to market consolidation, which could potentially give it more pricing power to pass on to consumers. This would, in turn, hit Netflix’s margins.

Netflix shares are down 3% at $227.94.

Akamai shares are down 2.6% at $36.38.

Limelight shares are down 2.6% at $7.11.

Article courtesy of Tech Trader Daily

FCC to approve Comcast-NBC merger with some conditions

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The Federal Communications Commission is set to approve the merger of cable TV company Comcast with NBC Universal, clearing the way for mega-merger to become a reality.

Julius Genachowski, chairman of the FCC, issued a draft order approving the merger on the condition that the combined company play fair with rivals. The approval is contingent on Comcast-NBC agreeing to share shows with competing cable and satellite TV providers. It would also ensure that competing content networks can get their programs on Comcast’s platform.

If completed, the merger would join the largest provider of broadband internet services with a giant in the TV, movie and broadcast station businesses. The deal is still subject to review by the Justice Department, which will assess whether the deal passes antitrust laws. The Justice Department hasn’t commented on the status of the review of whether the deal would hurt competition in the emerging video space.

The concern is that the merged company would use its power to retaliate against program providers and partners who do business with the company. The Justice Department attached similar restrictions on what Ticketmaster could do after it merged with Live Nation.

Public interest groups say they would be concerned if Comcast-NBC withheld NBC shows and movies from internet video platforms such as Netflix and Apple TV. The draft order from the FCC chairman will go before other commissioners. The reviews are expected to be completed in January.

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Article courtesy of VentureBeat » deals

Does anyone want to tell Yahoo that AOL wants to merge with it?

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AOL, at one time a leading Internet service provider, is looking to spin-off its dial-up operations and merge the remainder of the company with Yahoo, according to a report by Reuters.

This isn’t the first time rumors of a deal between Yahoo and AOL have cropped up. Just a few months ago, a number of private equity firms considered teaming up with AOL to purchase the search provider. Once again, Yahoo has yet to be contacted for discussions about the deal.

That seems to be a common theme in all of these discussions. Discussions about deals like these happen all the time, and most of them never see the light of day. But this is yet another in a long series of potential “deals” between AOL that haven’t involved the search giant. What, are they afraid Yahoo’s CEO Carol Bartz, with her penchant for swearing like a sailor, will chew the executives out beyond recognition?

Yahoo has been under pressure to improve its performance since Carol Bartz was appointed CEO in 2009. Bartz herself has come under criticism for mishandling relationships with important partners in Asia and allowing high turnover in Yahoo’s executive ranks.

AOL is also in the process of turning around its image to become a massive producer and provider of content, rather than Internet connectivity. The company has begun quickly offloading weaker assets like Bebo and picking up content providers like tech blogging site TechCrunch. Most of it hinges on Tim Armstrong, the newest CEO of the company, and his vision to make AOL the largest producer of content on the web.

That comes after a number of failed deals and attempts to diversify the company’s revenue. AOL was spun off from Time Warner after one of the craziest mergers of all time last year. AOL co-founder Steve Case said it was a mismatch in company personalities that led to AOL’s slow decline while it was a part of Time Warner. AOL originally played the part of the young and disruptive startup, but inevitably took up its parent company’s mentality of defending older revenue models, Case said.

AOL is currently valued at $2.7 billion, and reported operating income of $166.6 million in its most recent quarterly filing with the Securities and Exchange Commission. (It took a $1 billion goodwill-impairment charge in the quarter.) AOL has $391.6 million in cash, according to the filing. Yahoo, on the other hand, is worth $20.6 billion, and reported net income of $143 million in its most recent quarter.

The deal is reportedly maddeningly complicated and involves a number of potential suitors for the dial-up segment of AOL’s business. So, as always, take this one with a grain of salt.

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Article courtesy of VentureBeat » deals

Groupon spurns Google’s paltry $6B offer, makes $2B every year

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It’s official: Groupon makes a ridiculous amount of money. In fact, it makes more than enough to reject Google’s offer, worth somewhere between $5 billion to $6 billion, to buy the daily-deal company.

Groupon has reportedly called off the massive buyout offer from Google and apparently makes $2 billion in revenue year, according to a number of reports. The reports also indicate the site could file to go public next year.

The daily-deal space has exploded thanks to sites like LivingSocial and Groupon. Both Groupon and LivingSocial, as well as a host of imitators, now offer deeply discounted offers for services, meals, and group activities from local merchants who have previously struggled to reach new customers online. The sites make money by convincing businesses to offer steep discounts, and then selling those discounts directly to consumers and picking up the difference.

Both of those sites are living large right now. Groupon is the king of the hill, based on a recent Experian Hitwise blog post that showed that Groupon received 79 percent of U.S. visits among 81 group buying sites last week. It was valued at over $1 billion following a large round of funding in April. LivingSocial also recently confirmed an earlier VentureBeat report that it was receiving an investment from Amazon worth $175 million.

AllThingsD reported a few weeks ago that Google and Groupon were in talks, which sparked countless follow-up rumors. We argued that the Google-Groupon deal would inevitably be bad for the daily deal provider because it would rip the human element right out of the service. Deal sites have grown because they have a human touch. The sites rely on local salespeople who solicit merchants paired with city planners and writers who curate deals and market them with old-fashioned if well-written emails.

This would also be the second time Groupon has rejected a massive offer from a search giant. There were reports that Yahoo tried to purchase Groupon for as much as $4 billion, after rumors from earlier this month that the deal site was after more funding that would value it at $3 billion. And it’s also the second time Google has failed to pick up a potential daily-deal site in as many years, after it failed to buy Yelp last year.

Sorry guys. Better luck next year?

[Photo: ramblingmediaimages]

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Article courtesy of VentureBeat » deals

Write-Offs: 10.01.10

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$$$ Private Island Still Up For Grabs [WSJ]

$$$ Some 3,000 Millionaires Claim Jobless Benefits [Bloomberg]

$$$ Elko, Nev., the City the Recession Forgot [ABC]

$$$ BofA Exec Admits She Didn’t Read Foreclosure Papers [AP]

$$$ Morgan Stanley-Smith Barney Brokerage Merger Hits Snags, Delays [NetNet]



Article courtesy of Dealbreaker

Battle for Landry’s Restaurants Not Over Yet

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Tilman Fertitta, the CEO of Landry’s Restaurant’s, has finally persuaded the board of the seafood chain, which also owns the Golden Nugget in Las Vegas, to accept his new takeover offer of $24 a share, or $1.4 billion. Fertitta’s latest bid is higher than his previous $21 a share offer and vastly better than his $14.75 per share bid back in November. Shareholders sued to block that takeover.

But, it appears the battle between Landy’s and its shareholders isn’t over yet.

The stock is trading through the current bid by about 50 cents a share and some shareholders are still miffed at what they see as a weak go-shop provision in the merger agreement.

According to sources, the go-shop provision gives Fertitta the right to match or beat any competing offers that come in during the 45-day go-shop. While “matching rights” are common in certain go-shop provisions, some studies suggest they can chill the market for any competing offers.

Look for some of Landry’s shareholders, including Bill Ackman’s Perhsing Square Capital Management, to take issue with both the go-shop provision and Fertitta’s price. Pershing owns about 23 percent economic interest in Landry’s, but controls about 10 percent of the vote. Fertitta owns about 55 percent of the voting shares.

Still, the merger agreement requires a majority of the minority of Landry’s shareholders to approve the deal. Fertitta’s first bid for the company came in June 2008, but later that year, the board said Fertitta was having trouble financing the deal.

The credit markets have improved since then, so Fertitta may not have a problem financing the deal these days. Today’s deal is also a partial victory for Ackman, which bought the stock around $18 a share, but was accumulating shares when it was trading as low as $11. But, just because Bill is up on the investment doesn’t mean he won’t put up a fight. Stay tuned.

Article courtesy of Dealbreaker

Oracle Acquires Phase Forward For $685 Million

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Oracle (ORCL) today announced it was acquiring Phase Forward (PFWD) — a provider of electronic data capture and other technologies for clinical studies — for $685 million in cash, or $17 per share.

Oracle said combining Phase Forward with its own health sciences unit “is expected to enable researchers, clinical development professionals, physicians, regulators and patients to more effectively and securely capture, contribute, access and share data.”

In a note today, George Hill, an analyst for healthcare specialist Leerink Swann, calls the merger a “natural fit.” But he writes that “this price is less than impressive given that Phase Forward had more than $100 million of cash and short term investments on its balance sheet. We believe the price could reflect that growth prospects for the EDC [electronic data capture] market could be worse than widely believed.”

Shares of Oracle are down 20 cents, or 0.8%, to $26. Phase Forward is up 28%, or $3.72, to $16.80.

Article courtesy of BARRONS.com: Tech Trader Daily

Pegasystems To Buy Chordiant Software For $5/Share In Cash

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It’s Merger Monday.

Pegasystems (PEGA) this morning said it agreed to buy Chordiant Software (CHRD) for $5 a share in cash. Pegasystems focuses on business process management software; Chordiant sells CRM software and services. The deal is worth $161.5 million.

Chordiant had 2009 revenue of $76.3 million; it has $52.3 million in cash.

PEGA said the deal should be accretive by as much as 3 cents a share to 2010 earnings and as much as20 cents for 2011.

CHRD is up $1.17, or 30.7%, to $4.98; PEGA is up $1.45, or 3.9%, to $38.28.

Article courtesy of BARRONS.com: Tech Trader Daily