Kroger in talks to buy Albertsons

Kroger in talks to acquire Albertsons in all-cash deal, CNBC says

Kroger (KR) is in talks to buy Albertsons (ACI) in an all-cash deal that it hopes can be announced as soon as tomorrow morning, CNBC’s David Faber reported on-air, citing his sources. He could not learn of the deal price being discussed, Faber noted. Earlier, Bloomberg also reported earlier that Kroger is in discussions to merge with Albertsons.

Shares of Albertsons (ACI) are up $2.45, or 10%, to $28.12 after both CNBC and Bloomberg said the grocer is in talks to merge with industry peer Kroger (KR), whose shares are down about 1% to $45.53.

Kroger (KR) is in discussions to merger with Albertsons (ACI), Bloomberg’s Michelle Davis reports. According to people familiar with the matter, an agreement could be reached as soon as this week, but caution that no final decisions have been made.

Albertsons Companies, Inc. engages in the operation of food and drug stores in the United States. As of February 26, 2022, it operated 2,276 stores under various banners, including Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, Acme, Shaw’s, Star Market, United Supermarkets, Market Street, Haggen, Kings Food Markets, and Balducci’s Food Lovers Market; and 1,722 pharmacies, 1,317 in-store branded coffee shops, 402 adjacent fuel centers, 22 distribution centers, and 20 manufacturing facilities.

The Kroger Co. operates as a retailer in the United States. The company operates combination food and drug stores, multi-department stores, marketplace stores, and price impact warehouses. As of January 29, 2022, the company operated 2,726 supermarkets under various banner names in 35 states and the District of Columbia.

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KnowBe4 receives buyout offer!

KnowBe4 confirms receipt of $24 per share proposal from Vista

KnowBe4 (KNBE) confirmed the receipt of a non-binding proposal from Vista Equity Partners to acquire all outstanding shares of the Company for $24 per share in cash.

KnowBe4, Inc. engages in the development, marketing, and sale of its Software-as-a-Service-based security awareness platform. The company provides a platform incorporating security awareness training and simulated phishing with analytics and reporting that helps organizations manage the ongoing problem of social engineering.

The company also offers Security Coach, a solution to address human behavior risks through human detection and response; and PasswordIQ that would be used to mitigate risk related to password hygiene issues, such as weak or breached passwords. It serves its customers directly through inside sales teams for enterprise and small and medium businesses, as well as indirectly through channel partners and managed service providers.

The proposal represents a 39% premium to KnowBe4’s closing price on September 16, 2022.

The Company’s Board of Directors regularly considers opportunities to enhance value for its stockholders.

In response to an inquiry from Vista, the Board formed a special committee of the Board, comprised solely of independent directors, to engage with Vista and take other actions that it deems appropriate, with the assistance of independent financial and legal advisors.

Consistent with its mandate, and in consultation with its legal and financial advisors, the Special Committee will carefully review the Vista proposal and other potential value creation opportunities to determine the course of action that it believes is in the best interests of KnowBe4 and its stockholders.

KNBE is up 29% to $22.30.

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AppLovin offers to buy Unity!

 ironSource drops as AppLovin’s Unity bid contingent on ironSource deal exit

Shares of ironSource (IS) are down 12%, to $4.16 in Tuesday morning trading after AppLovin (APP) announced it has submitted a non-binding proposal to the board of directors of Unity Software (U) to combine AppLovin with Unity in a stock-based transaction.

Under the terms offered, current Unity shareholders would receive approximately 55% of the outstanding shares of the combined company, with the Class A shares representing approximately 49% of the outstanding voting rights of the combined company.

AppLovin, which markets software platforms for app developers to help them find customers and bring in revenue, is offering gaming platform Unity an alternative to its recently announced a deal to buy IronSource.

The all-stock merger consideration payable in a mix of AppLovin Class A and Class C common stock would value Unity at $58.85 per share and $20B enterprise value, representing a 48% premium to the Unity share price as of July 12 and 18% to yesterday’s closing price based on the closing price of AppLovin’s Class A common stock on August 8, AppLovin stated.

The execution of a definitive merger agreement between AppLovin and Unity would be subject to approval by each company’s board of directors, the termination of the proposed acquisition of ironSource LTD, and other customary signing conditions, the company noted.

Previously, on July 13, Unity and ironSource had announced that they entered into a definitive agreement under which ironSource will merge into a wholly-owned subsidiary of Unity via an all-stock deal, where each ordinary share of ironSource will be exchanged for 0.1089 shares of Unity common stock.

Under the terms of that deal, current Unity stockholders will own approximately 73.5% and current ironSource shareholders will own approximately 26.5% of the combined company.

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JetBlue buys Spirit Airlines

JetBlue to acquire Spirit at $33.50 per share in cash or $7.6B enterprise value

JetBlue Airways (JBLU) and Spirit Airlines (SAVE) announced that their boards of directors have approved a definitive merger agreement under which JetBlue will acquire Spirit for $33.50 per share in cash, including a prepayment of $2.50 per share in cash payable upon Spirit stockholders’ approval of the transaction and a ticking fee of $0.10 per month starting in January 2023 through closing, for an aggregate fully diluted equity value of $3.8B and an adjusted enterprise value of $7.6B.

The transaction consideration of $33.50 per share implies an aggregate fully diluted equity value of approximately $3.8 billion and an adjusted enterprise value of $7.6 billion.

JetBlue expects to achieve $600M-700M in net annual synergies once integration is complete, driven in large part by expanded customer offerings resulting from the greater breadth and depth of the combined network.

The combined company is projected to have annual revenues of approximately $11.9 billion based on 2019 revenues. JetBlue expects the transaction to be significantly accretive to earnings per share in the first full year following closing.

JetBlue expects to maintain balance sheet flexibility with post-transaction leverage of 3.0-3.5x, well inside historical levels, and to continue its deleveraging trajectory as it captures synergies.”

“The completion of the acquisition is subject to customary closing conditions, including receipt of required regulatory approvals and approval of Spirit’s stockholders.

The companies expect to conclude the regulatory process and close the transaction no later than the first half of 2024.

The four largest carriers control more than 80% of the market. Creating a low-fare, customer-centric challenger with size and scale is the best opportunity to disrupt legacy carrier pricing in the current landscape.

Even as the fifth-largest carrier, JetBlue, with Spirit, would have only 9% market share, compared to 13% for the fourth-largest airline and 23% for the largest carrier.

After the combination and with its committed upfront divestitures, the largest seat share a combined JetBlue-Spirit will have in any of its largest metro areas is 40%, compared to the 57-91% share legacy carriers have in their largest metro areas.

The airlines will continue to operate independently until after the transaction closes and their respective loyalty programs remain unchanged and customer accounts will not be affected in any way.

Following completion of the acquisition, the combined airline will be based in New York and be led by Robin Hayes. As previously announced, Spirit has terminated its prior merger agreement with Frontier. JetBlue has terminated its previously announced all-cash tender offer to acquire Spirit common stock.”

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Silicon Motion sold for $8B

MaxLinear to acquire Silicon Motion for $114.34 per share consideration

MaxLinear (MXL) and Silicon Motion (SIMO) announced that they have entered into a definitive agreement under which MaxLinear will acquire Silicon Motion in a cash and stock transaction that values the combined company at $8B in enterprise value.

Combined revenues are expected to be more than $2B annually and are supported by the technology breadth to address a total market opportunity of roughly $15B.

The transaction is expected to generate annual run-rate synergies of at least $100M to be realized within 18 months after the transaction closes and is expected to be immediately and materially accretive to MaxLinear’s non-GAAP earnings per share and cash flow.

Under the terms of the definitive agreement, the transaction consideration will consist of $93.54 in cash and 0.388 shares of MaxLinear stock for each Silicon Motion ADS and $23.385 in cash and 0.097 shares of MaxLinear common stock for each Silicon Motion ordinary share not represented by an ADS.

Upon closing of the transaction, MaxLinear shareholders will own approximately 86% of the combined company and Silicon Motion stockholders will own approximately 14% of the combined company.

Based on the closing price of MaxLinear shares on May 4, the implied value of the total transaction consideration for Silicon Motion is $3.8B. MaxLinear intends to fund the $3.1B of cash consideration with cash on hand from the combined companies and fully committed debt financing from Wells Fargo Bank, N.A.

The transaction is not subject to any financing conditions and is expected to close by the first half of calendar 2023, pending satisfaction of customary closing conditions, including Silicon Motion shareholders’ approval and regulatory approvals in various jurisdictions.

Silicon Motion Technology Corporation designs, develops, and markets NAND flash controllers for solid-state storage devices. It offers controllers for computing-grade solid state drives (SSDs), which are used in PCs and other client devices; enterprise-grade SSDs used in data centers; eMMC and UFS mobile embedded storage for use in smartphones and IoT devices; flash memory cards and flash drives for use in expandable storage; and specialized SSDs that are used in industrial, commercial, and automotive applications.

SIMO last traded $96.52. MXL last traded at $44.26.

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Investor seeks sale of Everbridge

Ancora pushes Everbridge for sale, sees over $70 per share takeout value

Everbridge, Inc. (EVBG) operates as a software company, providing enterprise software applications that automate and accelerate organizations operational response to critical events in the United States and internationally. The company has a market cap of around $1.6B.

Ancora Holdings Group, which owns approximately 4% of Everbridge’s outstanding common stock, issued an open letter to the company’s board.

It states in part: “We have spent a considerable amount of time reviewing Everbridge’s corporate governance, executive compensation, operations and sales, and overall strategy.

Given the immense destruction of shareholder value that has occurred under the current leadership team, we call on the Board of Directors to commence an immediate exploration of strategic alternatives.

We believe Everbridge is dramatically undervalued at current stock prices, and a sale to a well-capitalized acquirer could deliver more than $70 per share, or a more than 90% premium, for shareholders based on recent valuation multiples for both public and private company peers…

We believe Everbridge is a valuable strategic asset addressing a mission critical need in a large market with vast upside potential.

We believe Everbridge is dramatically undervalued at current share prices, representing an attractive acquisition target to both strategic and financial buyers.

In our view, the issues the Company is facing are not structural, but rather self-inflicted due to incompetent leadership that has failed to execute.”

EVBG is up $3.53 to $40.12.

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LazyDays Receives Take Over Offer

B. Riley Financial proposes to acquire the retailer for $25.00 per share cash

In a letter to Lazydays CEO Robert DeVincenzi , Bryant Riley (RILY), Chairman, Co-CEO of B. Riley Financial stated, in part,

“This non-binding letter is intended to summarize the principal terms of a proposal by B. Riley Financial or a subsidiary thereof regarding its possible acquisition of Lazydays Holdings.

The possible acquisition of the outstanding capital stock of the company is referred to as the ‘Transaction’ and Buyer and the company are referred to collectively as the ‘Parties.’

As you know, we are one of the company’s largest investors holding over one million shares of common stock. First, we want to thank you for initially meeting with us in January and for taking the time to hear our thoughts on the company’s direction soon after the resignation of the company’s longtime CEO and Chairman.

We have also had constructive conversations with other board members. We acknowledge and support recent increases to the share buyback program, but note that the market continues to discount company’s ability to grow.

After significant analysis and diligence based on publicly available information, we have concluded that the company would be better served away from the glare of the public markets in an environment where the necessary investments in growth can be made without market fixation on short-term results.

We are proposing a take-private transaction at a healthy premium to the current share price. The purchase price would be $25.00 per share payable in cash.”

Lazydays Holdings, Inc. operates recreation vehicle (RV) dealerships under the Lazydays name in the United States. It provides RV sales, RV-repair and services, financing and insurance products, third-party protection plans, after-market parts and accessories, and RV camping facilities.

The company also operates the Lazydays RV resort at Tampa, Florida. 

Lazydays Holdings, Inc. (LAZY) is up 22% to $21.90.

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MoneyGram sold for $1 billion

The private equity firm will pay $11 a share for MoneyGram

Madison Dearborn Partners agreed to buy the company.

MoneyGram International, Inc. provides cross-border peer-to-peer payments and money transfer services in the United States and internationally. The company operates through two segments, Global Funds Transfer and Financial Paper Products. 

MoneyGram (MGI) has been a takeover target for years, as more people turn to online payments and away from old-school money-transfer services.

Chinese financial-services conglomerate Ant Group Co. agreed to buy MoneyGram in 2017, but walked away after pushback from regulators.

The acquisition by Madison Dearborn will enable MoneyGram “to accelerate the advancement of our digital growth strategy,” Chief Executive Officer Alex Holmes, who will continue to lead the firm after the deal is completed, said in the statement. “We will have greater opportunities to innovate and transform MoneyGram to lead the industry in cross-border payment technology and deliver a more expansive set of digital offerings.”

Remittances to most regions increased last year, aided by the economic recovery in the U.S. and Europe. Flows jumped almost 22% in Latin America and the Caribbean last year, 9.7% in the Middle East and North Africa, and 8% in South Asia, the World Bank said in November.

The MoneyGram acquisition, which includes a 30-day “go shop” period, is expected to be completed in the fourth quarter. Debt financing for the deal is being provided by Goldman Sachs Group Inc., Deutsche Bank AG and Barclays Plc.

MGI is up $1.77 to $10.72.

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Cedar Fair receives take over offer!

Cedar Fair jumps after Bloomberg report of SeaWorld takeover bid

SeaWorld Entertainment (SEAS) has offered to buy Cedar Fair (FUN) for around $3.4B or $60 per share, Bloomberg reports, citing people with knowledge of the matter.

Cedar Fair owns and operates amusement and water parks, and complementary resort facilities in the United States and Canada. Its amusement parks include Cedar Point located on Lake Erie between Cleveland and Toledo in Sandusky, Ohio; Knott’s Berry Farm near Los Angeles, California; Canada’s Wonderland near Toronto, Ontario; Kings Island near Cincinnati, Ohio; Carowinds in Charlotte, North Carolina; Kings Dominion situated near Richmond, Virginia; California’s Great America located in Santa Clara, California; Dorney Park & Wildwater Kingdom in Allentown, Pennsylvania; Worlds of Fun located in Kansas City, Missouri; Valleyfair situated near Minneapolis/St. Paul, Minnesota; Michigan’s Adventure situated near Muskegon, Michigan; Schlitterbahn Waterpark & Resort New Braunfels in New Braunfels, Texas; and Schlitterbahn Waterpark Galveston in Galveston, Texas. 

SeaWorld Entertainment operates as a theme park and entertainment company in the United States. The company operates SeaWorld theme parks in Orlando, Florida; San Antonio, Texas; and San Diego, California, as well as Busch Gardens theme parks in Tampa, Florida, and Williamsburg, Virginia. 

Cedar Fair Properties

The companies are working with advisers on the proposal and deliberations are ongoing, sources told Bloomberg.

It is unclear if the approach will lead to a transaction, they added.

Shares of SeaWorld are little changed at $59.29 following the report while Cedar Fair halted for volatility after jumping 11% to $55.59.

Six Flags Entertainment (SIX), which owns amusement parks like Cedar Fair, is up 5% to $41.60 following the report.

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Citrix Systems sold for $104 per share

Citrix to be acquired by Vista, Evergreen in $16.5B all-cash transaction

Citrix (CTXS) announced that it has entered into a definitive agreement under which affiliates of Vista Equity Partners, a global investment firm focused exclusively on enterprise software, data and technology-enabled businesses, and Evergreen, an affiliate of Elliott, will acquire Citrix in an all-cash transaction valued at $16.5B, including the assumption of Citrix debt.

Under the terms of the agreement, Citrix shareholders will receive $104.00 in cash per share.

The per share purchase price represents a premium of 30% over the company’s unaffected 5-day VWAP as of December 7, 2021, the last trading day before market speculation regarding a potential transaction, and a premium of 24% over the closing price on December 20, 2021, the last trading day prior to media reports regarding a potential bid from Vista and Evergreen.

In connection with the transaction, Vista and Evergreen intend to combine Citrix and Tibco Software, one of Vista’s portfolio companies.

Citrix makes software that workers use to log onto to their corporate programs virtually, a category of product extensively relied upon during the pandemic as businesses sought quick ways to keep remote workforces connected to central operations. Many are now planning permanent hybrid setups for home and office working, which is expected to grow the market for tools that help make this seamless.

As part of the transaction, Vista and Evergreen plan to combine Citrix with Tibco Software, an enterprise data management firm that’s one of Vista’s portfolio companies. The combination will create one of the world’s largest software providers, serving 400,000 customers, according to the statement.

Citrix shares are down 3.8% to $101.54.

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Kohl’s receives take over offer

The offer values the retailer at $9 billion

A group led by Acacia Research (ACTG), which is controlled by activist investor Starboard Value, offered to buy Kohl’s (KSS) for $64 per share in cash, a 37% premium to Friday’s closing price of $46.84 and an offer that values the department store operator at roughly $9B. There are no guarantees that the group will ultimately line up all the funding needed and make a firm offer, but the bidders told the company they have assurances from bankers about being able to get financing for the bid, sources added. 

Kohl’s (KSS) is fielding takeover offers from at least two suitors, CNBC’s Lauren Thomas and Leslie Picker reports. Sycamore is willing to pay at least $65 per share for Kohl’s, people familiar with the matter tell CNBC.

The offer from Sycamore came two days after Acacia Research (ACTG), which is backed by activist investment firm Starboard Value, offered to pay $64 a share for Kohl’s, sources said. According to the sources, Acacia and Starboard would likely partner with Oak Street Real Estate Capital to try and sell off Kohl’s real estate to raise more money.

Kohl’s confirmed that it has received letters expressing interest in acquiring the company. The Kohl’s board of directors will determine the course of action that it believes is in the best interests of the company and its shareholders. Shareholders are not required to take any action at this time. Kohl’s does not intend to further comment publicly on these matters unless it determines it is in the best interests of shareholders to do so.

Cowen

 Cowen analyst Oliver Chen raised the firm’s price target on Kohl’s to $75 from $73 and keeps an Outperform rating on the shares. The analyst said the potential bid implying 3.7x TTM EV/EBITDA appears very modest based on his leveraged buyout returns analysis. He said a transaction would likely require monetization of $3bn+ of real estate via a sale leaseback. He believes other strategic/financial bidders are possible.

Citi

Citi analyst Paul Lejuez keeps a Buy rating on Kohl’s with a $73 price target following reports that Starboard Partners and Acacia Capital made an unsolicited bid for the retailer at $64 per share. The analyst believes Kohl’s management is using appropriate strategies to drive value and that the Sephora partnership “is a game-changer.” However, he also believes Kohl’s is a “mispriced asset.” The company is a strong free cash flow generator, and it doesn’t seem to be getting credit by the market, “making it reasonable to consider offers,” says Lejuez.

Credit Suisse

Credit Suisse analyst Michael Binetti notes media reported that Starboard-backed activist Acacia (ACTG) has made a bid of $64/share for Kohl’s (KSS), and that other suitors are contacting Kohl’s as well. The focus seems aligned with another activist pushing Kohl’s to act more urgently to turnaround retail ops, but more importantly to significantly bolster shareholder cash returns via more aggressively exploring potential monetization of real estate assets, the analyst notes.

Binetti believes that the key question is whether Kohl’s will see a bidding war that could result in the stock running above the current activist’s bid at $64/share. Per conversations with real estate contacts, Kohl’s could certainly fetch higher valuations for its stores, the analyst contends. Activist plans typically focus on strategies like pulling forward monetization of real estate today, and Binetti does think there’s some merit to Kohl’s embracing a slightly more aggressive real estate strategy to bolster shareholder returns today. He has a Neutral rating and a price target of $70 on the shares.

KSS is up $15.84 to $62.68.

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