Notable Mergers and Acquisitions of the Day 01/14: (HWD) (FLO) (AZK)

January 14, 2013 10:04 AM EST
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* Harry Winston Diamond Corp (NYSE: HWD) has entered into an agreement to sell its luxury brand diamond jewelry and timepiece division, Harry Winston Inc., to The Swatch Group Ltd. for US$750 million plus their assumption of up to $250 million of pro forma net debt.

The Swatch Group, with its unparalleled combination of expertise in both engineering and brand management, is the perfect home for such a prestigious brand. Under the terms of the purchase agreement, the Company has agreed to trade under a new name as of the time of closing of the transaction and will therefore change its name to Dominion Diamond Corporation. The Company will retain an ongoing relationship with The Swatch Group, one of the world's largest buyers of polished diamonds, in sourcing polished diamonds for them. The two companies will also explore the opportunities for a joint diamond polishing venture bringing together the manufacturing and diamond expertise of the two companies.

After repayment of debt this transaction will net the Company US$750 million. Rothschild advised the Company on the transaction and provided a fairness opinion.

The transaction is subject to receipt of a variety of regulatory approvals and other customary closing conditions.

* Flowers Foods, Inc. (NYSE: FLO) announced it has signed two asset purchase agreements with Hostess Brands, Inc. as the "stalking horse bidder" for certain Hostess assets. One of the agreements provides for the purchase by Flowers of the Wonder, Nature's Pride, Merita, Home Pride and Butternut bread brands; 20 bakeries; and approximately 38 depots for a purchase price of $360 million. The other agreement provides for the purchase by Flowers of the Beefsteak brand for $30 million.

The transactions are subject to a court-approved bankruptcy process being initiated by Hostess. If Flowers' "stalking horse" bids are approved by the bankruptcy court, the bids would then be subject to a competitive auction process to be held several weeks from now. The company would expect to close the transactions shortly following court approval if it is selected as the winning bidder. The transactions also are subject to regulatory clearance.

Based on the current bid price, Flowers Foods would expect the transactions to be accretive to earnings in 2013. Flowers Foods plans to finance the transactions th

* Alamos Gold Inc. (NYSE: AGI) announced that it has commenced an offer to acquire Aurizon Mines Ltd. (AMEX: AZK) for approximately C$780 million in cash and shares. The Offer will remain open until 5:00 p.m. (Toronto time) on February 19, 2013 unless withdrawn or extended. Alamos has also applied to list its common shares on the New York Stock Exchange under the symbol "AGI".

Under the terms of the Offer, Alamos proposes to acquire all of the outstanding common shares of Aurizon for consideration value of C$4.65 per Aurizon Share. Each Aurizon shareholder can elect to receive consideration per Aurizon Share of either C$4.65 in cash or 0.2801 of an Alamos Share, subject in each case to pro-ration based on a maximum cash consideration of C$305,000,000 and maximum number of Alamos Shares issued of 23,500,000.

The Offer reflects a premium of approximately 40% based on the closing price of C$3.33 for the Aurizon Shares on the TSX on January 9, 2013, and a premium of approximately 37% based on the volume-weighted average price of the Aurizon Shares on the TSX for the 20 trading days ended January 9, 2013.

Full details of the Offer are included in the formal Offer and take-over bid circular that will be filed today with securities regulatory authorities (together with all related documents). Alamos will formally request an Aurizon security holder list today. The take-over bid documents will be mailed to Aurizon shareholders.

As of today, Alamos owns 26,507,283 Aurizon Shares, representing over 16% of the issued and outstanding Aurizon Shares.

The Offer will be fully financed and will not require approval by Alamos shareholders. The Offer will be open for acceptance for at least 35 days following the mailing of the take-over bid circular and will be subject to customary conditions, including there being validly deposited under the Offer such number of Aurizon Shares which, together with Aurizon Shares directly or indirectly owned by Alamos and its affiliates, constitutes at least 66 2/3% of the total outstanding Aurizon Shares (calculated on a fully diluted basis), Aurizon shall not have adopted a shareholder rights plan, subject to certain limited exceptions, no material adverse changes, and receipt of all necessary governmental or regulatory approvals and other customary unsolicited offer conditions.

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