Notable Mergers and Acquisitions of the Day 09/30: (BPY)/(BPO) (ACTV) (PM) (CHRM)
"The Offer provides an attractive opportunity for BPO shareholders to exchange their common shares for an interest in our flagship global property company and cash," said Ric Clark, Chief Executive Officer of Brookfield Property Group. "The combination of these leading commercial real estate platforms will create a diversified portfolio of best-in-class real estate for investors seeking attractive risk-adjusted returns, through income and capital appreciation."
"In addition, we believe this transaction will consolidate our global office properties under one platform and substantially increase Brookfield Property Partners' public float which should help accelerate our growth strategy," said Clark.
The Offer price represents a premium of 17% to the 30-day volume weighted average price of BPO shares on the New York Stock Exchange and 16% to the 30-day volume weighted average price of BPO shares on the Toronto Stock Exchange, and a 15% premium to the closing price of BPO shares on September 27, 2013 on each of those exchanges.
Based on the current trading price of Brookfield Property Partners' limited partnership units, the transaction is valued at $5 billion. If Brookfield Property Partners increases its 51% ownership in BPO to 100%, it will be one of the largest global commercial real estate companies, with $45 billion of assets and ownership comprising over 330 million sq. ft. of office, retail, industrial and multi-family assets in key global gateway markets on four continents.
If sufficient BPO common shares are tendered, Brookfield Property Partners intends to acquire any common shares which remain outstanding following the tender offer through a compulsory acquisition or other statutory transaction on the same basis as the Offer. In this event, BPO public shareholders would own approximately 27% of the outstanding limited partnership units of Brookfield Property Partners (including Brookfield Asset Management's ("Brookfield") redeemable partnership units on a fully-exchanged basis).
Brookfield Property Partners intends to finance the cash portion of the Offer through an acquisition facility with a syndicate of banks. In order to refinance the facility, Brookfield Property Partners will consider a number of alternatives, including asset sales, asset level debt financings and issuances of corporate debt, preferred stock and/or equity. To support the transaction, Brookfield and its affiliates have agreed to forego any Equity Enhancement Fee in respect of the acquisition facility which would otherwise by contract be payable to it.
The Offer will be subject to customary conditions including, among other things, that Brookfield Property Partners has determined, acting reasonably, that no material adverse effect exists or has occurred. The Offer will not include a minimum condition with respect to the number of common shares tendered, and Brookfield Property Partners will acquire any or all of the common shares that are tendered to the Offer.
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* ACTIVE Network (NYSE: ACTV) announced that it has entered into a definitive agreement to be acquired by Vista Equity Partners (“Vista”), a leading private equity firm focused on investments in software, data and technology-enabled businesses, in an all cash transaction valued at approximately $1.05 billion.
Under the terms of the agreement Vista will commence a tender offer to acquire all of the outstanding shares of ACTIVE’s common stock for $14.50 per share in cash, representing a premium of approximately 111% to ACTIVE’s year to date average closing stock price. The ACTIVE Board of Directors unanimously recommends that ACTIVE stockholders tender their shares in the tender offer.
Any shares not tendered in the offer will be acquired in a second-step merger at the same cash price as paid in the tender offer. Closing of the transaction is conditioned upon, among other things, satisfaction of a minimum tender condition, expiration or termination of any waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976, receipt of funding under Vista’s financing agreements and other customary closing conditions. ACTIVE expects the transaction to close before the end of the fourth quarter of 2013. Upon the completion of the transaction, ACTIVE will become a privately held company.
Citi is serving as financial advisor to ACTIVE. BofA Merrill Lynch is serving as financial advisor to Vista. DLA Piper LLP (US) is acting as ACTIVE’s legal advisor. Kirkland & Ellis LLP is acting as Vista’s legal advisor. BofA Merrill Lynch, RBC Capital Markets, and BMO Capital Markets Corp. have agreed to provide debt financing in connection with the transaction.
For further information regarding the terms and conditions contained in the definitive merger agreement, please see ACTIVE’s Current Report on Form 8-K, which will be filed in connection with this transaction.
ACTIVE Network plans to release its third quarter earnings after market close on Wednesday, October 30, 2013 and does not intend to hold a conference call to discuss earnings given the announced sale of the company.
* Philip Morris International, Inc. (NYSE: PM) entered into a definitive agreement to acquire 49% of the shares of United Arab Emirates-based Arab Investors-TA (FZC) (“AITA”) for $625 million.
Through its acquisition of 49% of the shares of AITA, PMI will secure an almost 25% economic interest in the Société des Tabacs Algéro-Emiratie (“STAEM”), a joint venture which is 51% owned by AITA and 49% by the Algerian state-owned Société Nationale des Tabacs et Allumettes SpA, the market leader. STAEM, with which PMI has had a successful partnership since 2005, manufactures and distributes under license PMI’s Marlboro and L&M brands, which together hold a significant share of the international trademarks sold in Algeria, placing PMI’s brand portfolio as the second largest in the market. This equity investment in AITA will provide PMI with enhanced earnings from Algeria and is projected to be accretive to PMI’s earnings per share as of 2014.
* Charm Communications Inc. (Nasdaq: CHRM) ("Charm" or the "Company"), a leading advertising agency in China, today announced that its board of directors has received a preliminary non-binding proposal letter dated September 30, 2013 (the "Proposal Letter") from Mr. He Dang, the chairman of the board of directors (the "Founder"), Merry Circle Trading Limited, a British Virgin Islands company controlled by the Founder ("Merry Circle"), Honour Idea Limited, a British Virgin Islands company owned by the Founder ("Honour Idea" and, collectively with Merry Circle, the "Founder Shareholders"), and CMC Capital Partners HK Limited (collectively, the "Consortium") to acquire all of the outstanding shares of the Company not currently owned by the Founder Shareholders in a "going private" transaction (the "Transaction") at a price of US$4.70 in cash per American Depositary Share of the Company ("ADS", each ADS representing two (2) Class A ordinary shares of the Company), or US$2.35 in cash per Class A ordinary share of the Company, and US$2.35 in cash per Class B ordinary share of the Company, subject to certain conditions.
According to the Proposal Letter, the acquisition is intended to be financed by debt and/or equity capital and the Consortium has been in discussions regarding potential debt financing with China Merchants Bank (the "Bank"), which has expressed interest in financing the proposed acquisition. Furthermore, the Proposal Letter specifies that the Consortium's proposal constitutes only a preliminary indication of its interest and is subject to negotiation and execution of definitive agreements relating to the proposed Transaction. A copy of the Proposal Letter is included at the end of this press release.
The Company's board of directors intends to form a special committee of disinterested directors to consider the proposal and cautions the Company's shareholders and others considering trading in its securities that the board of directors has just received the proposal and has not made any decisions with respect to the Company's response to the proposal. There can be no assurance that any definitive offer will be made by the Consortium or any other person, that any definitive agreement will be executed relating to the proposed transaction, or that this or any other transaction will be approved or consummated.
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