All in a week - potential paper merger, power megadeal, Disney, Paramount, Zeekr and Shein's IPOs, BigCommerce, and much more
Happy Friday!?
This week, yours truly was first to report that Brazilian pulp and paper company Suzano has approached U.S.-based International Paper to express interest in an all-cash acquisition that would be worth almost $15 billion.
The approach comes less than a month after International Paper agreed to buy British packaging firm DS Smith for $7.2 billion, beating out a rival bid from London-listed Mondi. This deal, which is scheduled to close by the fourth quarter of 2024, could be disrupted were Suzano to press ahead with its bid for Memphis-based International Paper.
Suzano has communicated its $42-per-share offer to International Paper's board of directors verbally, and could submit a formal bid soon. International Paper is poised to reject Suzano's offer as inadequate.
Suzano, the world's largest pulp manufacturer, is in talks to line up debt financing to support its bid, and has informed International Paper that the offer would be conditional on the latter abandoning its deal with DS Smith.
Suzano said in a securities filing that it has neither signed any agreement with International Paper for a potential business combination nor has any decision been made by the company's management in respect to a potential deal.
International Paper's shares jumped as much as 12% on the news before paring some gains. Shares of Suzano, which has a market value of 77.6 billion reais ($15.33 billion), closed down more than 12% in Brazil. DS Smith's shares in London fell as much as 7.3% before reversing most of those losses to close down about 1%.
Elsewhere, David French broke news on Calpine’s plans to explore strategic options - ?the investment firms that took the U.S. power plant operator private six years ago are exploring options that include a company sale, an initial public offering or a stake divestment at a valuation of about $30 billion, including debt.
The deal deliberations come as data centers powering artificial intelligence and extreme weather, such as heat waves driven by climate change, spur electricity demand in some of Calpine's key markets, including Texas, where it operates 12 power plants.
Energy Capital Partners, Access Industries and CPP Investments, which acquired Calpine for $17 billion in 2018, are having early-stage talks with investment banks about their exit options. A transaction would likely happen late in 2024 or early in 2025.
Milana Vinn scooped that BigCommerce, the e-commerce software maker that used to be backed by SoftBank, is exploring a sale after attracting takeover interest.
BigCommerce has become an acquisition target after losing 90% of its market value in the four years since its initial public offering. It has struggled to compete against larger rival Shopify.
The Austin, Texas-based company has asked investment bank Qatalyst Partners to solicit interest from potential buyers that include private equity firms.
I teamed up with Dawn Chmielewski to scoop that Walt Disney and Comcast are seeking to hire a financial adviser to resolve a dispute over how to value the 33% stake in streaming platform Hulu that the former will acquire from the latter.
The move is in accordance with a deal the companies struck for Hulu last year. It is an action their contract foresees if JPMorgan Chase, which provided a fairness opinion on Hulu for Disney, and Morgan Stanley, which provided such an opinion for Comcast, are too far apart in their valuation assessments.
JPMorgan has valued Hulu for Disney at close to $27.5 billion, which is the floor valuation for Hulu that the companies had set as part of their 2019 "put-call" agreement. Morgan Stanley valued Hulu for Comcast at more than $40 billion.
Disney and Comcast are now in talks to hire an investment bank that will independently value Hulu.
Dawn and I later also wrote about the latest developments Paramount Global, which is attempting to sell itself – Paramount is in talks about opening its books to a consortium of Sony Pictures and buyout firm Apollo Global Management that is interested in acquiring the U.S. media company.
Advisers to both sides are discussing the terms of a confidentiality pact that allows the exchange of commercially sensitive information. Doing so would pave the way for Apollo and Sony to firm up their $26 billion offer and challenge a rival bid from David Ellison's Skydance Media.
A special committee of Paramount's board that is evaluating the company's options allowed an exclusivity period to lapse in its deal discussions with Skydance last week.
Echo Wang was first to report that Chinese electric vehicle maker Zeekr Intelligent Technology priced its U.S. IPO at the top of its indicated range to raise $441 million.
Zeekr, which is the premium brand of Chinese automaker Geely, upsized its IPO to sell 21 million American Depositary Shares at $21 per share. The IPO gives Zeekr a fully diluted valuation, which includes securities such as options and restricted stock units, of $5.5 billion. The company closed orders from investors a day earlier in the bookbuilding process because of strong demand.
And last but not least, Julie Zhu, Greg Roumeliotis and Kane Wu put out a terrific exclusive earlier on Friday on Shein’s latest plans for a stock market listing – the fast-fashion giant is stepping up preparations for a London listing after its attempt to float itself in New York faced regulatory hurdles and pushback from U.S. lawmakers.
The online fashion retailer plans to update China's securities regulator on the change of the IPO venue and file with the London Stock Exchange (LSE) as soon as this month. Shein, which was valued at $66 billion in a fundraising last year, started engaging with the London-based teams of its financial and legal advisors to explore a listing on the LSE early this year.
The China-founded fashion company has also approached London-based fund managers for introductory meetings ahead of the planned float.
And here’s the best of the rest from the Reuters corporate finance file from the past week:?
As markets dial down expectations for U.S. interest rate cuts this year, America's largest corporations are poised to rely more heavily on their stock and a bulging cash hoard instead of expensive debt to finance acquisitions.
Japanese steelmakers have raised concerns with Australian authorities that BHP Group could become too dominant in the global supply of coking coal if it goes ahead with a takeover of Anglo American.
Svea Herbst-Bayliss reported that activist hedge fund Ancora Holdings has secured enough support from Norfolk Southern shareholders to win some seats on the U.S. railway operator's board of directors. The company announced the nominees the following day, confirming the scoop.
Hedge fund AREX Capital Management is seeking seven board seats at Enhabit, arguing that new directors are needed to help reverse poor financial performance at the U.S. home health and hospice provider, people familiar with the matter said
Energy giant Shell is in talks with Saudi Arabia's state-owned Saudi Aramco to sell its gas station business in Malaysia, the second-largest such network in the country, four industry sources aware of the discussions said, and a deal could be worth up to $1 billion.
China's Sinopec is in discussions with Pembina Pipeline for a liquefied natural gas (LNG) offtake agreement and equity stake in the Canadian company's proposed Cedar LNG project, two sources with knowledge of the matter told Reuters.
China International Capital Corp (CICC) may reduce its investment banking headcount by at least 10% this year, two people with knowledge of the matter said, as a capital market downturn and sluggish economy darken prospects.
Law firm Paul, Weiss, Rifkind, Wharton & Garrison is hiring a top dealmaker Jim Langston from rival firm Cleary Gottlieb Steen & Hamilton as a partner in its M&A practice.
?
Thank you for reading this week’s edition. Please do share the newsletter with anyone you think might find it useful.
Have a wonderful weekend!
Best,
Anirban?
· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · ·?
Anirban Sen
Editor in Charge, U.S. Mergers & Acquisitions
Reuters News
Thomson Reuters
?