Elon Musk's bear hug; Franchise Group bids for Kohl's; Mobileye picks banks for blockbuster IPO; and much more
Happy Thursday!?
Never a dull moment on the M&A beat. Earlier today, billionaire entrepreneur Elon Musk took aim at Twitter with a $43 billion cash takeover offer, with the Tesla CEO saying the social media company needs to be taken private to grow and become a platform for free speech .
"I think it's very important for there to be an inclusive arena for free speech," Musk, already San Francisco-based Twitter's second-largest shareholder, said at a TED Talk in Vancouver when asked about his bid.
Musk made the bid on Wednesday in a letter to the board of Twitter - the micro-blogging platform that has become a global means of communication for individuals and world leaders - and it was made public in a regulatory filing on Thursday. His offer price of $54.20 per share represents a 38% premium to Twitter's April 1 close, the last trading day before his 9.1% stake in the social media platform was made public.
Musk, the world's richest person with a $273.6 billion fortune according to a Forbes tally, rejected an invitation to join Twitter's board on Saturday after disclosing his stake, a move analysts said signaled his takeover intentions as a board seat would have limited his shareholding to just under 15%. (Full Story )
Musk after his TED talk hinted at the possibility of a hostile bid in which he would bypass Twitter's board and put the offer directly to its shareholders, tweeting: "It would be utterly indefensible not to put this offer to a shareholder vote."
Twitter was evaluating the offer with guidance from Goldman Sachs and Wilson Sonsini Goodrich & Rosati, Reuters was first to report, citing a source familiar with the matter. Morgan Stanley is advising Musk. The company was also preparing a poison pill as a protective measure against Musk raising his stake as early as Friday, the source said.
Watch this space for more on Twitter and Musk. This fight is just getting started.
Elsewhere, my colleague Svea Herbst-Bayliss scooped that Franchise Group, owner and operator of retail stores such as The Vitamin Shoppe and Buddy's Home Furnishings, has entered the race for Kohl's with a $9 billion indicative offer.
Franchise Group has informed Kohl's it would be willing to pay $69 per share to acquire the department store retail chain, subject to due diligence.
Franchise Group's bid is not the highest offer, however. Luxury department store operator Hudson's Bay Company has indicated it is willing to pay at least $70 per share for Kohl's.
Another deal scoop came from Chibuike Oguh who reported that KKR was in advanced talks to buy cybersecurity firm Barracuda Networks from its private equity owner Thoma Bravo for around $4 billion, including debt. The deal was announced a few hours after our scoop on Tuesday .
California-based Barracuda, which manages the data security of its customers over the cloud on a subscription basis, was taken private by Thoma Bravo in 2017.
Meanwhile, my colleague Krystal Hu and I scooped that Intel’s Mobileye has tapped investment banks Goldman Sachs and Morgan Stanley to lead preparations for the initial public offering of the self-driving car unit.
The stock market flotation, which is set to launch later this year, could value Mobileye at as much as $50 billion. The amount to be raised in the IPO could not be learned immediately.
Mobileye's preparation is coming at a tough time for the IPO market. Stock market volatility triggered by a sell-off in technology stocks and Russia's invasion of Ukraine has forced several high-profile firms, including GoPuff and Chobani, to postpone their plans to go public this year.
The IPO freeze followed a record-breaking 2021 in which more than $300 billion was raised through flotations.
And finally, Greg Roumeliotis and Dawn Chmielewski scooped that a consortium led by U.S. radio station industry veteran Jeff Warshaw has offered to acquire Cumulus Media for close to $1.2 billion, including debt .
Warshaw has informed Cumulus, an Atlanta-based owner and operator of 406 radio stations, that he would be willing to take it private for $15 to $17 per share.
Cumulus shares were hovering around $11 before news of the bid emerged on Thursday afternoon.
Warshaw indicated he would be willing to pay more, subject to due diligence. Further details on Warshaw's consortium could not be learned.
At present, it is unclear how Cumulus will respond to the offer.
With that, here’s a quick recap of the other highlights of the Reuters corporate finance file this week:
Italy's Benetton family and U.S. investment fund Blackstone have proposed a 58 billion euro ($63 billion) buyout offer for Atlantia, to take it private and stave off rival interest for the airport and motorway operator.
Private equity firm Thoma Bravo will acquire SailPoint Technologies for $6.12 billion, the cybersecurity firm said, in the latest deal that underscores the heightened interest in the security software market.
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Cybersecurity software provider Datto said it would be taken private by security software company Kaseya for $6.2 billion in an all-cash deal funded by a consortium led by private equity firm Insight Partners.
Tesla CEO Elon Musk on Thursday stepped up criticism of the U.S. securities regulator, calling Securities and Exchange Commission officials "bastards" for bringing fraud charges against him over his 2018 tweets regarding taking the company private.
The White House on Thursday declined to comment on billionaire entrepreneur Elon Musk's $43 billion cash takeover offer for Twitter, saying market regulators operate independently from political leadership.
Britain's GlaxoSmithKline sought to bolster its cancer business by agreeing a $1.9 billion deal to buy U.S. drug developer Sierra Oncology, the latest move to fend off pressure from activist shareholder Elliott.
The activist investor that pushed to oust Peloton Interactive’s co-founder and leader in January is now criticizing its new chief executive officer, arguing he has not made enough changes and that the company should be sold now.
Activist investment firm Sachem Head cut its slate of director nominees at US Foods to five from seven, backing away from plans to try and take control of the food distributor's board.
Private equity firm Warburg Pincus has placed its portfolio company RimRock Oil & Gas up for sale, aiming to take advantage of the upswing in commodity prices to offload the Bakken gas producer.
Excelerate Energy Inc jumped 17.5% in its market debut on Wednesday, riding on investor demand for companies with exposure to liquefied natural gas (LNG) amid the Russia-Ukraine conflict and ending a lull in U.S. capital markets since the invasion.
Thank you for reading this week’s edition! Please do share the newsletter with anyone you think might be interested – feedback will be most welcome.
Enjoy the long weekend – Happy Easter to all of you!
Warm regards,
Anirban?
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Anirban Sen
U.S. M&A Editor in Charge
Thomson Reuters
Twitter: @asenjourno