Sitting on the side lines...requires patience and will power

Things are rather quiet on the M&A front.

Market this year has been dominated again by action/speeches by central banks/fed.

Japan was particularly interesting with a meteoric rise from Dec till May. Although it came back a in the last week of May.

I believe the rise in indices around the world would continue into the 2nd half of the year, thus making Merger Arb strategies look less interesting.

Hopefully closer towards the end of third quarter, confidence will return to corporations to chart their growth through M&A actions (from an Asian markets perspective)

The End for Billabong?

Australian surfwear company Billabong International Ltd issued its third profit warning in six months as it revealed that potential takeover suitors had walked away from a deal.

Dell Privatization deal opposed by Carl Icahn

Activist investor Carl Icahn has taken a large stake in Dell in a move to get a large cash payout from the struggling PC maker.

Carl Icahn in renown for such actions, where he will buy a large enough stake to influence the boards decision or start a proxy battle. His infamous trophies includes Motorola, RJR Nabisco, Time Warner and etc..

It always interest me when Carl is mentioned as it always involves a longer saga that will unfold.

I am not advocating that anyone buy Dell shares or short Dell shares but just to sit on the sidelines and enjoy watching Mr Icahn make Mr Dell sweat before coming to terms with Mr Icahn.

If you feel you have to take a position, I would favor running alongside Mr Icahn than Mr Dell.

Chinese sovereign wealth backs Talison takeover in Australia

Author: Kip Keen
Posted: Monday , 25 Feb 2013 

HALIFAX, NS (MINEWEB) - 

China Investment Corporation, a Chinese sovereign fund that boasts around $500 billion in assets, threw its weight behind Chengdu Tianqi’s $847-million takeover of Talison Lithium, a major lithium miner listed in Canada and Australia.

The massive sovereign wealth fund is to buy a 35-percent stake in Chengdu Tianqi’s Australian subsidiary, Windfield Holdings, for $300 million, providing nearly half the remaining funds Chengdu Tianqi, a lithium processor, needs to takeover Talison through Windfield.

The other half, according to press releases issued by Chengdu Tianqi and Talison on Monday, is to come from three sources: Credit Suisse AG, the Industrial and Commercial Bank of China and Twenty Two Dragons. Chengdu Tianqi said each of these firms had respectively promised $200 million, $120 million and $50 million in loans to back the takeover.

As it already owns 19.9 percent of Talison, Chengdu Tianqi said the $670 million in funding commitments would completely cover its $7.50-a-share cash offer to Talison shareholders.

In showing its specific funding plans, Chengdu Tianqi satisfied a critical term in the ongoing takeover. Talison had set 5 PM (WST), February 25, as a deadline for Chengdu Tianqi to show it more details on how it proposed to fund the takeover. 

Talison, which owns the Greenbushes lithium mine in Australia, said on Monday that it confirms “Tianqi has provided the necessary documentary evidence in connection with its funding arrangements.”

Meantime the window of opportunity for Rockwood Holdings to jump back into the fray appears to be narrowing. 

Last year Chengdu Tianqi outbid Rockwood for Talison, but then, as reported by Mineweb, it emerged earlier this month that Rockwood still had its eyes on the Talison. Rockwood Chairman and CEO Seifi Ghasemi said it had yet to rededicate funds it had set aside for the failed Talison bid in case Chengdu Tianqi’s takeover failed.

If it did fail, then Ghasemi said Rockwood would consider going after Talison again.

Presumably Rockwood will now have its eyes fixed to the next critical deadline Talison has given Chengdu Tianqi: March 26. By the end of this business day Chengdu Tianqi is to have all funds on deposit for the takeover.