Another Permian producer on the block; How South Africa became Anglo's best defence against BHP; N-Able in take-private talks; and much more
Happy Friday!?
The next edition of DealTalk will be published on June 21, as yours truly is taking some time off.?
This week, David French was first to report that oil and gas developer Double Eagle is exploring a sale of its latest Permian Basin-based producer in a deal that could be worth more than $6.5 billion, including debt.
The Double Eagle team is expected to launch a sale process for the producer in the second half of this year.
Publicly listed oil and gas producers, including those already operating in the Midland portion of the Permian where Double Eagle Energy Holdings IV is located, are expected to be potential acquirers.
If the deal talks are successful, Double Eagle IV's sale would mark one of the largest transactions involving a privately-held U.S. energy producer during the past year.
Recent notable deals involving privately-owned producers include Diamondback Energy's $26 billion tie-up with Endeavor Energy and Occidental Petroleum's $12 billion cash-and-stock deal for CrownRock.
A deal would generate another huge payday for the team led by oil entrepreneurs Cody Campbell and John Sellers, who sold their third iteration of Double Eagle to Pioneer Natural Resources for $6.4 billion in 2021.
Double Eagle IV, which counts EnCap Investments as its biggest investor, has raised $2.3 billion in total funding since it was launched from investors including Apollo Global Management, Elda River Capital, and members of its management team.
Felix Njini and Clara Denina put together an excellent behind-the-scenes report on how South Africa played a key role in Anglo American’s defence against BHP.
Days after miner BHP launched its takeover bid for Anglo in April, the CEOs of both headed for South Africa, where a condition to divest Anglo's local platinum and iron ore assets was causing a political storm.
More than 20% of Anglo shares are held by South African investors, and the London-listed group's presence is deemed of national value in the country, where it was founded in 1917 and employs more than 40,000 people.
While Anglo CEO Duncan Wanblad appears to have so far succeeded in enlisting support for his new turnaround strategy, the trip did not work out as well for BHP, which had been caught on the back foot by details of the offer being leaked.
After it bowed out of the deal, more than half a dozen people, including investors and ex-mining executives, told Reuters that Anglo was able to rebuff BHP's approaches because the bigger group could not persuade key shareholders including South Africa's Public Investment Corporation to back it.
In his first public comments on the takeover bid, BHP CEO Mike Henry told investors at a mining conference in Miami that "our strong preference was to be able to hold these discussions with Anglo in private".
"Rather unfortunately, it got leaked," he added. "So the first thing I did was jump on a plane."
Henry flew to South Africa with his London banking advisors on May 1, hoping to calm investors after the April 24 leak. He also hoped to meet the government to fully communicate the strategy, a source familiar with matter said.
South Africa's government had been caught off-guard a month before an election by a takeover offer for a company deeply entrenched in the national economy, and mines minister Gwede Mantashe sharply criticised the plan to buy Anglo and spin off its South African assets.
The Australian miner had no intention of announcing the approach while South Africa was going through an election.
Henry has made no secret of his drive to get Anglo's giant copper mines in Latin America, where BHP also owns assets.
A former director of AngloGold Ashanti, once listed in Johannesburg, said Anglo had known BHP's demands that Anglo Platinum and Kumba Iron Ore be unbundled immediately if a deal went through would face opposition.
Elsewhere, yours truly teamed up with Milana Vinn to scoop that N-Able, a U.S. provider of information technology software with a market value of about $2.5 billion, is exploring a sale after attracting acquisition interest.
The Burlington, Massachusetts-based company, which counts two private equity firms - Silver Lake and Thoma Bravo - as major investors, is running a sale process in which peers in the software sector and private equity firms are participating.
One of its suitors is cybersecurity company Barracuda Networks, which is owned by buyout firm KKR. KKR acquired Barracuda from Thoma Bravo for about $4 billion in 2022.
N-Able's shares jumped nearly 10% following our scoop.
N-Able was spun out in 2021 from management software firm SolarWinds, which had been in turn acquired by Silver Lake and Thoma Bravo for $4.5 billion in 2016. The two buyout firms now each own about a third of N-Able.
And finally, Ron Bousso was first to report that Shell and Exxon Mobil are nearing an agreement to sell their jointly-owned gas fields in the southern North Sea to independent British producer Viaro Energy.
The potential deal is valued around $500 million. The sale of the Clipper and Leman Alpha field clusters would mark the latest step in a steady retreat of major oil and gas companies from the ageing basin in recent decades as they focus on newer and more profitable prospects.
For Texas-based Exxon, it would complete the exit from the North Sea, where it has been present since 1964. It sold most of its assets in the central and northern North Sea to Neo Energy in 2021.
U.S. rival Chevron is also selling its last remaining assets in the British North Sea.
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Viaro Energy acquired RockRose Energy in 2020 and has since then made several other deals in the British and Dutch North Sea. The company produces around 30,000 barrels of oil equivalent per day and has interests in over 30 fields, according to its website.
The sale of the Clipper and Leman Alpha fields would also mark the dissolution of the Esso joint venture between Shell and Exxon, which joined forces in the North Sea in 1965.
Shell remains one of the main producers in the North Sea, operating several fields including the Penguins redevelopment and holding a stake in the BP-operated Clair field.
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And here’s the best of the rest from the Reuters corporate finance file this week:?
There’s no third time lucky for Mike Henry. The BHP chief executive’s five-week pursuit of Anglo American ended on Wednesday when the London-listed group rejected the Australian miner’s request to extend talks about a $47 billion takeover. It’s an embarrassing setback for Henry, who appears to have misjudged his target’s openness to a deal. At least he preserved his reputation for financial discipline – and may yet get the chance to try again.
BHP Group's $49 billion bid for Anglo American may have failed but the move highlights how companies have been leading a charge to snap up UK assets as they seek growth in a relatively undervalued market, bankers and analysts said.
Amazon's computing unit AWS is in talks with Italy to invest billions of euros in the expansion of its data centre business in the country as part of the tech giant's effort to boost its cloud offer in Europe, four people familiar with the matter said.
While rivals are going big and risky, ConocoPhillips is taking a cheerful boogie board ride on oil’s merger wave. The $139 billion oil driller said on Wednesday that it has agreed to buy rival Marathon Oil for $23 billion, including the target’s net debt. Compared with some of its peers’ recent acquisitions, Conoco’s deal is pedestrian in all the right ways.
Jakob Stausholm risks fighting M&A battles with one hand tied behind his back. What's shackling Rio Tinto's boss is the company's dual primary listings in London and Sydney. Just three months ago he defended the structure. Since then, though, an activist investor as well as rival BHP's tilt at Anglo American have exposed its shortcomings.
T-Mobile US is taking to the back roads. The $200 billion telecom giant is buying its struggling mini-rival United States Cellular for $4.4 billion. The price rings a bell. Yet the target is tiny, mainly serves rural communities, and nevertheless likely will result in a tough regulatory path to clearance. While T-Mobile is an able acquirer, the mature industry leaves few good options for growth.
Alphabet's Google and augmented reality startup Magic Leap are forming a strategic technology partnership and working on building immersive experiences that blend the physical and digital worlds.
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Have a wonderful weekend!
Best,
Anirban?
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Anirban Sen
Editor in Charge, U.S. Mergers & Acquisitions
Reuters News
Thomson Reuters
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