Nordstrom Shares Jump on Going Private

Nordstrom Family members have formed a group to explore the possibility of acquiring 100% of the shares outstanding

Shares of department store operators Macy’s, J.C. Penney and Kohl’s are all rising on the news

 

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Shares of Nordstrom Inc. $JWN are higher after the high-end department store said it was exploring a “going private” deal.

Nordstrom, Inc. (JWN) is a leading fashion specialty retailer based in the U.S. Founded in 1901 as a shoe store in Seattle, today Nordstrom operates 354 stores in 40 states, including 122 full-line stores in the United States, Canada and Puerto Rico; 221 Nordstrom Rack stores; two Jeffrey boutiques; and two clearance stores. Additionally, customers are served online through Nordstrom.com, Nordstromrack.com and HauteLook. The Company also owns Trunk Club, a personalized clothing service serving customers online at TrunkClub.com and its seven clubhouses.

The company said member of the Nordstrom family, including Co-Presidents Blake Nordstrom, Peter Nordstrom and Erik Nordstrom; Chairman Emeritus Bruce Nordstrom; President of Stores James Nordstrom and Anne Gittinger, have formed a group to explore the possibility of acquiring 100% of the shares outstanding. Bruce Nordstrom owned 15% of the shares outstanding as of March 17, and Gittinger owned 9.2% of the outstanding shares.

The filing states that prior to agreeing to form the group, Blake Nordstrom and Peter Nordstrom requested that the independent members of the company’s board consider and approve the formation of the group for purposes of a Washington state statute, which, subject to certain exceptions, prohibits a “significant business transaction” between a Washington publicly traded corporation and a 10% or greater group or a corporation affiliated with such a group over a five-year period from formation of the group.

On June 7, a special committee of the board comprised of the independent members of the board approved in advance the formation of the group for purposes of the Moratorium Statute.

In connection with the approval of the Moratorium Statute Waiver, the special committee required that the members of the Nordstrom family who are part of the group enter into a letter agreement with the company containing certain non-disclosure, non-use and standstill provisions.

The standstill provisions of the letter agreement prevent the members of the group from taking certain actions from the date of the letter agreement until January 31, 2019. The letter agreement provides that, after January 31, 2019, the group automatically disbands and may no longer rely on the Moratorium Statute Waiver.

Shares of department store operators Macy’s (M), J.C. Penney (JCP) and Kohl’s (KSS) are all rising on the news.

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SciClone sold for $605 Million

SciClone Pharmaceuticals provides therapies for oncology, infectious diseases, and cardiovascular disorders

It’s lead product is ZADAXIN, which is used for the treatment of hepatitis B and hepatitis C viruses

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#SciClone Pharmaceuticals $SCLN and a consortium consisting of entities affiliated with GL Capital Management GP Limited, Bank of China Group Investment Limited, or BOCGI, CDH Investments, Ascendent Capital Partners and Boying announced that they have entered into a definitive merger agreement under which the Buyer Consortium will acquire all the outstanding shares of SciClone for $11.18 per share in cash.

SciClone Pharmaceuticals, Inc. provides therapies for oncology, infectious diseases, and cardiovascular disorders in the People’s Republic of China, the United States, and Hong Kong. Its lead product is #ZADAXIN, which is used for the treatment of hepatitis B and hepatitis C viruses, and certain cancers, as well as for use as an immune system enhancer.

The transaction will be funded by the Buyer Consortium through a combination of equity financing to be provided by the Buyer Consortium and debt financing, and is not subject to a financing condition.

The transaction, which was unanimously approved by SciClone’s board, values the company at approximately $605M, on a fully diluted basis, and represents a premium of 11% over SciClone’s closing stock price on June 7, 2017 and a premium of 16% over its ten-day volume-weighted average closing stock price.

The transaction, which is expected to close this calendar year, is subject to approval by SciClone stockholders and other customary closing conditions.

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Browsers Ad Blocking Moves Stocks

The ad-blocking feature, which could be switched on by default within Chrome, would filter out certain online ad types deemed to provide bad experiences for users as they move around the web

Large social media websites, including Facebook and Twitter, should benefit from new efforts by Apple and Google to prevent advertisers and publishers from tracking Internet users’ activities

 

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#Alphabet Inc.’s #Google is introducing an ad-blocking feature in the mobile and desktop versions of its popular Chrome web browser. The ad-blocking feature, which could be switched on by default within Chrome, would filter out certain online ad types deemed to provide bad experiences for users as they move around the web. Apple’s #Safari has announced a similar move.

Large social media websites, including Facebook (FB) and Twitter (TWTR), should benefit from new efforts by Apple (AAPL) and Google (GOOG, GOOGL) to prevent advertisers and publishers from tracking Internet users’ activities on their browsers, according to #MorganStanley. Amazon (AMZN) and digital game makers could also be boosted by the changes being made by Apple and Google, according to the firm’s analyst.

Conversely, the firm believes that retailers, small e-commerce companies, and online travel agencies could be hurt by the changes. The news is “not positive” for Criteo (CRTO), which tracks and analyzes users’ browsing behavior, Morgan Stanley added.

Other analysts, however, were more quicker to defend Criteo, with #JPMorgan, #Cowen, and Jefferies saying the stock’s decline yesterday in the wake of Apple’s announcement was overdone.

WINNERS:

The anti-tracking initiatives will make online platforms less attractive to advertisers in the shorter term, contended Morgan Stanley analyst Brian Nowak. Over the longer term, however, the changes will make user data more valuable, boosting Facebook, Twitter and #Snap (SNAP), the analyst stated. Additionally, more advertisers could turn to #Amazon in an effort to connect with its user base, while digital game makers #Zynga (ZNGA) and #Activision (ATVI) could benefit from similar trends, according to Nowak.

POTENTIAL LOSERS:

Based on the browser changes, small e-commerce companies such as eBay (EBAY) and Etsy (ETSY) could find it harder to compete against Amazon, while online travel companies may have to pay more to acquire customers, Nowak stated. The two major online travel companies are Priceline (PCLN) and Expedia (EXPE).

CRITEO OUTLOOK:

The changes announced by Apple and Google are “not positive” for #Criteo, Nowak warned. “It will be important to monitor” the company’s efforts to work around the changes and to increase its focus on advertising within apps, he wrote.

More upbeat on Criteo was #Jefferies analyst Brian Fitzgerald. Apple’s browser probably only accounts for less than 1.5% of Criteo’s revenue, and that percentage is “rapidly shrinking,” he stated. Noting that desktop ads only accounted for 37% of Criteo’s revenue in the last quarter of 2016, down from 53% in December 2015, the analyst says that Criteo “is already quickly mix-shifting away from desktop browsers and away from Safari specifically.” He recommended buying Criteo’s stock on weakness. Similarly, JPMorgan analyst Doug Anmuth does not expect Criteo’s results to be affected much by the changes being made by Apple and Google. He thinks that the decline in Criteo’s stock yesterday was overdone and kept an Overweight rating on the name.

Finally, Cowen analyst Thomas Champion says that Criteo’s exposure to Apple’s browser “seems limited,” so he believes that the risk to Criteo’s revenue should be “mitigated.”

Champion thinks that the decline in Criteo’s stock yesterday appeared to be overdone, and he reiterated an Outperform rating on the name.

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Albany Molecular Is For Sale

PE Firm Carlyle Group is in talks to purchase Albany Molecular

Albany Molecular $AMRI is a contract research and manufacturing company

 

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Albany Molecular Research $AMRI is a contract research and manufacturing company. The Company operates through Discovery and Development Services (DDS), Active Pharmaceutical Ingredients (API), Drug Product (DP) and Fine Chemicals (FC) segments.

Reuters reports that private equity firms GTCR LLC and Carlyle Group LP $CG are in talks to team up and jointly acquire Albany Molecular. Negotiations are ongoing, and there is no certainty that the talks will lead to Albany Molecular Research being taken private, the report said.

Drug manufacturers are under pressure to lower drug costs and that has created M&A activities in the sector. Other stocks in the sector that might be looked as potential take over targets include: #Cambrex Corporation $CBM , Charles River Labs. $CRL , Emergent Biosolutions $EBS . TESARO $TSRO , the oncology-focused biopharmaceutical company, recently announced that it is shopping itself.

AMRI last traded at $19.91.

The Carlyle Group L.P.  $CG is a diversified multi-product global alternative asset management firm. The Company operates in four segments: Corporate Private Equity (CPE), Real Assets, Global Market Strategies (GMS) and Investment Solutions. Corporate Private Equity advises its buyout and growth capital funds, which pursue various corporate investments of different sizes and growth potentials.

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Gigamon is For Sale

Gigamon makes software that is installed in large data centers to boost the flow of traffic

Elliott Management owns 15% of shares and has encouraged firm to sell

 

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After activist investor Elliott Associates recently reported a roughly 15% economic exposure in shares of #Gigamon $GIMO and encouraged the company to undertake a strategic review process, the software maker has begun working with Goldman Sachs $GS to talk with companies and private equity firms interested in acquiring it, according to Reuters.

Gigamon Inc. develops and delivers solution that delivers visibility and control of data-in-motion traversing enterprise, federal, and service provider networks in the United States, rest of Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company offers traffic intelligence applications that provide controls for traffic selection, forwarding, manipulation, modification, de-duplication, SSL decryption, correlation, sampling, and generation of flow records.

Gigamon could attract interest from Hewlett Packard Enterprise (HPE), F5 Networks (FFIV) and PE firm Thoma Bravo, which previously bought Riverbed Technology, according to the report.

Needham analyst Alex Henderson estimated that a fair value for Gigamon is in the $50-$55 range.

Elliott has succeeded in pushing many technology companies to sell themselves in recent years, including Mentor Graphics, LifeLock Inc and Qlik Technologies.

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D.R. Horton to acquire 75% of Forestar Group

D.R. Horton to acquire 75% of Forestar Group for $16.25 per share cash

Forestar would remain a public company to ensure continued access to capital

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D.R. Horton (DHI) announced that the company has submitted a proposal to the Board of Directors of Forestar Group (FOR) to acquire 75% of the currently outstanding shares of Forestar for $16.25 per share in cash.

The $16.25 per share value represents a 14% premium over the purchase price to be paid to the Forestar stockholders pursuant to the existing merger agreement between Forestar and affiliates of Starwood Capital Group.

#Forestar Group Inc. operates as a real estate company. The company engages in the acquisition, entitlement, development, and sale of real estate, primarily residential and mixed-use communities. It also sells commercial tracts; residential lots primarily to homebuilders; undeveloped land through its retail sales programs, as well as operates commercial real estate and income producing properties, such as a hotel and multifamily properties.

Under the proposed transaction, Forestar would remain a public company to ensure continued access to capital to support the increasing scale of the business. D.R. Horton believes continuing Forestar stockholders will have the opportunity to participate in significant value creation through a strategic relationship with D.R. Horton that would help Forestar grow organically into the leading residential land development company in the United States, selling developed residential lots to #D.R.Horton and other #homebuilders.

Forestar would be led by new executive chairman Donald Tomnitz, who served as CEO of D.R. Horton for over 15 years, and a strong management team that is expected to include Forestar’s experienced professionals.

The transaction would be effected through a merger of a newly formed, wholly owned subsidiary of D.R. Horton with Forestar. The Merger would have a cash election feature in which Forestar stockholders would have the right to elect, for each share of common stock held, either to receive $16.25 per share in cash as merger consideration, or to retain such share of the surviving entity. Cash and stock elections will be prorated, as appropriate, such that 75% of the shares of Forestar common stock outstanding before the Merger are converted into the $16.25 per share cash consideration.

Following the Merger, D.R. Horton would own 75% of the outstanding Forestar Successor shares, and existing stockholders would own 25% of the outstanding Forestar Successor shares. Forestar would remain a public company, and its common stock will trade on the NYSE. D.R. Horton has the cash and other immediately available capital to fund the approximately $520M investment.

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Scientific Games Options Are Active!

Yesterday 8,000 contract of January $25 Call options traded at $3.10 for $2.48M

Today 2,000 contracts of January $22 Call options at $4.50 each for $900k

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#ScientificGames Corporation $SGMS develops technology-based products and services, and associated content for the gaming, lottery, and interactive gaming industries worldwide. Its Gaming segment sells new and used gaming machines, electronic table systems, video lottery terminals (VLTs), conversion game kits, and spare parts; and slot, casino, and table-management systems, as well as leases VLTs and electronic table games.  It is also involved in supplying player loyalty programs.

The company holds its Annual Shareholders meeting on June 17th in Las Vegas. A review of the Company’s 14-a, its proxy statement, does not show any extraordinary items to be discussed at the meeting. Routine corporate actions such as confirmation of directors and its CPA are on the agenda. The company is scheduled to report its Q2 quarterly results on or about August 7th.  It reported its first quarter results on April 27th. It reported revenue of $725.40 and its EPS of  (-$1.14) was 42 cents below the estimates.

Price Action

$SGMS last traded at $23.60. It has a 52-week trading range of $8.07 – $24.55.

SGMS call options have been very active lately.

Option Action

  • Yesterday, a trader purchased 8,000 contract of January $25 Call options at $3.10 each. That is a bullish bet of $2.48 million.  Open Interest on the contract is 9,112 contracts.
  • Today, a trader purchased 2,000 contracts of January $22 Call options, $4.50 each for a total bullish bet of $900,000. Open Interest on the contract is 11,524 contracts.
  • Another trader today purchased 350 contract of October $22 call options at $3.60 each. That is a bullish outlay of $126,000. Open Interest on the contract is 19,709 contracts.

Based on the amount of money that is bet on this stock, we could speculate several reasons for the bet. The obvious guess would be that the company is a takeover target. Another speculation would be that the company may receive a new contract.

Whatever the news or event may be, someone is placing large long term bullish bets that SGMS is heading higher.

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Qdoba Moves Jack In the Box

Jack In the Box would net $223M from the sale of Qdoba

After Qdoba sale, Jack in the Box’s free cash flow would rise to 6%

 

The shares of fast food chain owner Jack in the Box (JACK) are climbing after Wells Fargo upgraded the stock and Oppenheimer said the company’s risk/reward ratio will be “intriguing” if it can sell Qdoba.

Jack in the Box announced on May 17 that it was exploring strategic alternatives for #Qdoba, it’s burrito chain.

UPGRADE:

Wells Fargo analyst Jeff Farmer upgraded Jack in the Box to Outperform from Market Perform, arguing that the stock does not fully reflect the benefits that the company will obtain from selling Qdoba.

Estimating that the company would net $223M from the sale of Qdoba, the analyst predicted that it would repurchase $423M of its stock in the wake of the deal, lowering its share count by 14%.

Moreover, following a deal, $Jack in the Box’s EBITDA margin would increase by 10.5 percentage points and its return on invested capital would rise by over three percentage points, Farmer estimated. He raised his price target on the shares to $125 from $114.

INTRIGUING:

The risk/reward ratio of Jack in the Box’s stock is “intriguing,” assuming the company sells Qdoba, contended analyst Brian #Bittner.

Selling Qdoba would enable Jack in the Box to more effectively lower its costs and debt levels, Bittner believes.

After unloading Qdoba, Jack in the Box’s free cash flow would rise to 6% before share buybacks, versus the average of its peers of 4%-5.5%, the analyst stated.

Additionally, Jack in the Box can benefit from its delivery initiatives and discount deals, as well as commodity inflation that could force its competitors to scale down their discounts, Bittner believes. He kept a $125 price target and an Outperform rating on the shares.

PRICE ACTION: In midday Friday trading, Jack in the Box (JACK) rose 2.3% to $109.32. Note that the quick service restaurant sector has been outperforming other parts of the Restaurant sector.

Other stocks to watch: MCD, QSR, WEN, DPZ, YUM, and SONC.

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Pinnacle Foods Could be Sold

Three years ago, Pinnacle Foods agreed to a takeover of $4.3 billion by Hillshire Brands. That deal was canceled after Hillshire agreed to sell itself to Tyson Foods.

 Hillshire was led at the time by Sean Connolly, who is now chief executive of Conagra. 

Reuters reports that ConAgra Brands (CAG) has approached Pinnacle Foods (PF) for a takeover.

Conagra’s approach to Pinnacle Foods took place in the last few weeks. There is no assurance that Pinnacle Foods will choose to walk down the alter, or that Conagra will pursue a potential deal further, the report said.

Pinnacle Foods operates through four segments: Frozen, Grocery, Boulder, and Specialty. The Frozen segment offers brands such as the Bird’s Eye,  Van de Kamp’s, Mrs. Paul’s, Lender’s, Celeste, Hungry-Man, and Aunt Jemima names. The Grocery segment brands include the Duncan Hines, Vlasic, Wish-Bone, and Mrs. Butterworth’s.

Conagra Brands, Inc. (CAG) operates as a food company in North America. It operates through five segments: Grocery & Snacks, Refrigerated & Frozen, International, Foodservice, and Commercial.  The company markets its products primarily under the Healthy Choice, Hunt’s, Slim Jim, Reddi-wip, Alexia, Blake’s, Frontera, Bertolli, P.F. Chang’s, and Marie Callender’s brands.

What Goes Around, Comes Around

Three years ago, Pinnacle Foods agreed to a takeover of $4.3 billion by Hillshire Brands. That deal was canceled after Hillshire agreed to sell itself to Tyson Foods Inc for $7.7 billion.  Hillshire was led at the time by Sean #Connolly, who is now chief executive of Conagra.

Connolly’s second attempt at an acquisition of Pinnacle Foods underscores the need for further consolidation in the frozen food and condiments sectors, as sales continue to decline with consumers opting for healthier choices.

Conagra has been seeking to reinvent itself since selling its private label unit for $2.7 billion in 2016 to focus on its branded food business. Last year it spun off its $6.9 billion frozen potato business, Lamb Weston Holdings Inc. This week it agreed to sell its Wesson oil brand to Folgers coffee maker J.M. Smucker for $285 million.

Conagra has a market cap of $17 billion while Pinnacle has a market cap of less than $8 billion.

Price Action

PF shares last traded at $62.31. It has a 52-week trading range of $42.09 – $66.50

CAG last traded at $39.78. CAG has a 52-week trading range of $33.08 – $41.68.

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Praxair to merge with Linde

Linde and Praxair produce and distribute industrial gases

The combined company is expected to benefit from approximately $1.2B in annual synergies and cost reductions

 

 

Linde (LNEGY) has signed a legally binding business combination agreement with Praxair (PX) governing the terms and conditions of a merger of equals between the two companies.

The agreement provides for a combination of the businesses of the Linde group and the Praxair group under a publicly traded new holding company, which will bear the Linde name.

The new holding company will be incorporated in Ireland while its principal governance activities, including board meetings, will primarily be based in the United Kingdom.

Group corporate functions will be appropriately split between Danbury, Connecticut and Munich, Germany.

The company will apply for an admission for the trading of its shares on the New York Stock Exchange and on the Frankfurt Stock Exchange and will seek inclusion in the S&P 500 and the DAX 30 indices.

Praxair will become a subsidiary of “New Holdco” through a merger and Linde will become a subsidiary of New Holdco through a public exchange offer to all shareholders of Linde.

Linde shareholders will be offered 1.54 shares in New Holdco for each Linde share and Praxair shareholders will receive one share in New Holdco for each Praxair share.

Upon completion, former Praxair shareholders and former Linde shareholders will each own approximately 50% of the outstanding shares of New Holdco. The membership in the board of directors of New Holdco will also be split 50:50.

Linde’s current Chairman of the Supervisory Board, Wolfgang Reitzle, will become Chairman of the new holding company’s board. Praxair’s current Chairman and CEO, Steve Angel, will become CEO and a member of the board of #NewHoldco.

The management team of New Holdco will also be appropriately split between #Linde and #Praxair executives.

The combined company is expected to benefit from approximately $1.2B in annual synergies and cost reductions, targeted to be achieved in approximately three years following closing. The figures include existing cost reduction programs already initiated by the two companies, including an amount of approximately $310 million from Linde’s existing LIFT program.

“Linde understands that the combined company intends to achieve the total amount of synergy and efficiency savings irrespective of the allocation to the respective underlying drivers,” the company noted.

The expected one-time costs of achieving these cost reductions and synergies are estimated to be approximately $1B including transaction costs. The consummation of the business combination is subject to certain conditions, including the acceptance of the exchange offer to Linde shareholders by a minimum of 75% of the outstanding Linde shares. Closing of the transaction is expected to occur in the second half of 2018.

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Deere to acquire Wirtgen Groupin for $5.2B cash

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Deere to Buy Wirten Group for $5.2B

Deere & Company $DE has signed a definitive agreement to acquire the #Wirtgen Group, a privately-held German company that is a manufacturer worldwide of road construction equipment.

The purchase price for the equity is EUR 4.357 billion in an all-cash transaction. The total transaction value is approximately EUR 4.6 billion, or $5.2 billion based on current exchange rates, including the assumption of net debt and other consideration.

The Wirtgen Group had sales of EUR 2.6 billion in the year ending December 31, 2016.

Deere expects the transaction to be accretive to earnings per share and currently expects to fund the acquisition from a combination of cash and new equipment operations debt financing.

The Wirtgen Group has a global footprint with approximately 8,000 employees and sells products in more than 100 countries through a large network of company-owned and independent dealers.

Deere (DE) plans to maintain the Wirtgen Group’s existing brands, management, manufacturing footprint, employees and distribution network.

The combined business is expected to benefit from sharing best practices in distribution, customer support, manufacturing and technology as well as in scale and efficiency of operations. The transaction has been approved by Deere’s Board of Directors.

The purchase is subject to regulatory approval in several jurisdictions as well as certain other customary closing conditions.

The companies said they expect to close on the transaction in the first quarter of Deere’s 2018 fiscal year.

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Blackstone to sell Logicor to China Investment

China Investment Corporation (CIC) is in advanced negotiations to acquire Blackstone’s European logistics platform for over $13.4 billion.

Blackstone originally considered steering Logicor to an IPO, Deal could be announced this week

If completed, the transaction would mark Europe’s largest-ever real estate deal. 

 

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China Investment Corporation (CIC) is in advanced negotiations to acquire Blackstone’s European logistics platform for over $13.4 billion.

China’s sovereign wealth fund has reportedly moved ahead of rivals in the pursuit of the Logicor warehouse portfolio, after formal bids having been submitted by last Thursday.

CIC is now said to be scheduled to sign a deal for Blackstone’s (BX) giant’s 630 European distribution centers within the next two to three days. If completed, the transaction would mark Europe’s largest-ever real estate deal.

In March, Blackstone began shopping Logicor to institutional investors including CIC, #Singaporean warehouse group Global Logistics Properties (GLP), and a joint venture between Singapore’s #Mapletree Investments and #Temasek Holdings. The sale of the 146.4 million square foot warehouse platform would mark the biggest logistics property deal in history.

CIC is said to benefit from its close relationship with #Blackstone.  In January 2014, CIC purchased London’s Chiswick Park office complex from Blackstone for over $1.28  billion.

Blackstone originally considered steering Logicor to an IPO, but is reported to have shelved that option in favor of a trade sale, aggressively driving the bidding process forward over the past few weeks. A trade sale would potentially achieve a higher price while allowing Blackstone to dispose of the business in a faster and more efficient manner than an #IPO.

Logicor was founded by Blackstone’s real estate business in 2012 and has rapidly grown into one of Europe’s largest warehousing specialists, with modern logistics facilities in 17 countries across the continent. Investors continue to pile into the logistics real estate sector amidst a boom in online retail, soaring prices and relatively high yields compared to other property asset classes.

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Ensco to buy Atwood Oceanics

Offshore driller Ensco to buy is rival Oceanis for $10.72 per shares

The combined company will have a market cap just shy of $7 billion

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Offshore driller Ensco Plc $ESV said it would buy smaller rival Atwood Oceanics Inc $ATW in an all-stock deal valued at about $839 million.

Atwood shareholders will receive 1.6 Ensco shares for each Atwood share.

The deal, which values each Atwood share at $10.72, represents a premium of 32.6 percent to the company’s Friday close.

Ensco expects to realize annual pre-tax expense synergies of approximately $65 million for full year 2019 and beyond. The combination is expected to be accretive on a discounted cash flow basis.

The transaction will join two leading offshore drillers – combining long-established histories of operational, safety and technical expertise with high-quality assets that cover the world`s most prolific offshore drilling basins.

The acquisition will strengthen Ensco`s position as the leading offshore driller with exposure to deep- and shallow-water markets that span six continents.  Upon closing, Ensco will add six ultra-deepwater floaters, including four of the most capable drillships in the industry, and five high-specification jackups. The combined company will have a fleet of 63 rigs, comprised of ultra-deepwater drillships, versatile deep- and mid-water semisubmersibles and shallow-water jackups, along with a diverse customer base of 27 national oil companies, supermajors and independents.

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CardConnect Sold for $15 per share

Payments solution company #CardConnect $CCN agreed to be acquired by #FirstData $FDC for $15.00 per share in cash.

The transaction is expected to be modestly accretive to First Data’s EPS in the first full year post-closing

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CardConnect to be acquired by First Data

CardConnect CCN is a provider of payment processing and technology solutions and is one of First Data’s largest distribution partners. It processes approximately $26 billion of volume annually from about 67,000 merchant customers which are served by CardConnect’s large base of distribution partners. CCN closed at $13.65. FDC closed at $16.64.

First Data FDC will commence a tender offer to acquire all of the outstanding CardConnect common stock for a purchase price of $15.00 per share in cash. The aggregate transaction value is approximately $750 million, including repayment of CardConnect’s outstanding debt and the redemption of CardConnect’s preferred stock. First Data intends to fund the transaction with a combination of cash on hand and funds available under existing credit facilities.

First Data Corporation provides electronic commerce solutions for merchants, financial institutions, and card issuers worldwide. It operates through three segments: Global Business Solutions, Global Financial Solutions, and Network & Security Solutions. The Global Business Solutions segment offers retail point-of-sale merchant acquiring and e-commerce services; and mobile payment services and Webstore-in-a-box solutions, as well as its cloud-based Clover point-of-sale operating system. FDC has a market capitalization of $15.3 billion.

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