4th Apr 2023 11:32
(Alliance News) - Early signs suggest April could be a busy month on the M&A front, with sizeable deals struck in the property, wealth management, beauty and entertainment sectors so far this week.
In mining, Glencore PLC eyed cutting a deal of its own, though it was rebuffed. Still, the prospect of dealmaking may give the sector a shot in the arm.
"The prospect of mega deals in the mining space has got investors excited, bringing a new lease of life to the sector which had previously been suffering from fears about weaker economic activity feeding through to reduced commodities demand," AJ Bell analyst Danni Hewson commented.
New York-listed Teck Resources Ltd on Monday said that it had received and its board unanimously rejected an "unsolicited and opportunistic" acquisition proposal from Glencore.
Glencore offered 7.78 of its own shares for each Teck Class B subordinate voting share, and 12.73 shares for each Teck Class A common share. This represented a 20% premium for both on the date of the offer.
Glencore said the merged company would have an estimated post-tax synergy value of between USD4.25 billion and USD5.25 billion.
Teck shares surged 20% to USD43.65 each in New York on Monday, giving it a market capitalisation of USD22.65 billion.
Glencore was up 2.6% at 464.40 pence in London on Tuesday for a GBP58.77 billion market cap.
"While its business combination proposal was rejected, Glencore is likely to be persistent in its pursuit for greater things which means one cannot rule out a higher offer," Hewson said.
"Teck's board said it wasn't contemplating a sale of the business at this time, yet there is a price for everything and so it all boils down to how much Glencore is prepared to pay."
Away from the mining sector, L'Oreal SA agreed to acquire Australian luxury cosmetics brand Aesop in a deal valued at around USD2.5 billion.
Aesop will join L'Oreal's Luxe Billionaire luxury brands umbrella, alongside the likes of Lancome, Yves Saint Laurent and Giorgio Armani.
"This is the group's biggest takeover in quite some time and suggests the strong faith management has in the new brand. This pivot towards a more luxury and hedonistic brand suggests L'Oreal is padding out its offering to help insulate against an increasingly tough market," Hargreaves Lansdown analyst Sophie Lund-Yates commented.
L'Oreal was up 0.5% at EUR417.70 each in Paris.
Elsewhere on Tuesday, Investec PLC and Ltd and Rathbones Group PLC agreed an all-share merger of Rathbones with Investec Wealth & Investment Ltd.
Investec W&I UK includes Investec's wealth and investment businesses in the UK and Channel Islands but excludes Investec Bank AG and Investec Wealth & Investment International (Pty) Ltd, which will remain wholly-owned subsidiaries of Investec.
The merger will create a UK wealth manager with around GBP100 billion of funds under management and administration, the two companies said.
"We last described Rathbones as 'Dull until it isn't'. Well it isn't dull now," analysts at Shore Capital Markets commented.
Rathbones rose 2.0% in London to 1,922.00p. Investec traded up 3.6% at 460.40p.
The probable acquisition of landlord Industrials REIT Ltd on Monday kicked off what has been a busy couple of days of deal-making.
US private equity investor Blackstone plans to acquire the property firm. Under the terms of a final offer, Industrials REIT would receive 168 pence per share in cash. The offer represents a premium of 42% to the Industrials REIT closing price of 118.0p on Friday. The deal would place an equity value on the company of around GBP495 million.
Shares traded 0.8% lower at 163.13p each in London on Tuesday morning.
Industrials REIT directors would recommend the terms of the deal, they said, should a firm offer be made.
Further afield, there was a tie-up in the US entertainment sector. World Wrestling Entertainment Inc and UFC parent Endeavor Group Holdings Inc will combine, creating a "global live sports and entertainment pureplay" worth more than USD21 billion.
The publicly-traded entity will be 51% owned by Endeavor.
By Eric Cunha, Alliance News news editor
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