In the telecommunication consolidation arena, Comcast’s offer to buy Time Warner Cable (“TWC”), leads the charge for mega-mergers. As with the recently announced AT&T and DirecTV merger, consumers fear the effects of such a merger on the quality and cost of TV and Internet services, while pro-business groups view the merger as a win for business. As Comcast-TWC awaits regulatory approval, consumer advocacy groups are trying to stop the merger while many speculate about the effects the merger will have on the telecommunications market.
Consumers v. Big Business Part II: Comcast and Time Warner Cable
Consumers v. Big Business Part I: AT&T and DirecTV
In what appears to be the year of telecommunication consolidations, AT&T has just joined the race to becoming the country’s largest Internet and TV provider by announcing a bid for DirecTV. Such a merger—marrying the largest U.S. wireless company and the largest U.S. satellite television provider—would propel AT&T to the No. 2 spot in the telecommunications arena, behind a combined Comcast and Time Warner Cable (“TWC”), for which a merger is still pending. This deal, if approved, has been commended by some as a win for business in the United States, while condemned by others as a loss for consumers.
Poison Pills in the Era of Shareholder Activism
Shareholder activism is the way in which shareholders leverage their equity stake to put public pressure on a corporation’s behavior. In his keynote address at the 2014 Berkeley Center for Law, Business and the Economy, and Berkeley Business Law Journal Shareholder Activism Symposium, Larry Sonsini, Chairman of Wilson Sonsini Goodrich & Rosati, declared that there has been a noticeable shift from a director-centric model to a shareholder-centric model. Until recently, shareholders were fighting defensive measures and managerial successions. Nowadays they are engaged in battles over corporate sales, spinoffs or corporate sustainability.
Comcast and TWC Take Next Step in Proposed Merger
In February, the number one and number two cable providers in the US (Comcast and Time Warner Cable respectively) announced a proposed merger whereby Comcast would acquire TWC. The cable giants have already filed the Hart-Scott-Rodino notification with the DOJ, and on Tuesday, 8 April, they took another step towards completion of the merger by filing Applications and Public Interest Statement with the FCC. The merger must receive approval from both the DOJ and the FCC to proceed. The DOJ’s primary inquiry will be related to anti-trust concerns, whereas the FCC will seek to find that the merger achieves benefits that can only be reached by the combination of the two companies.
An “Icahn-ic” Move: Mike Ashley’s Attempt to Block a Private Buy-Out of House of Fraser PLC, the 165 year old UK Department Store
Does Mike Ashley, the UK billionaire businessman and owner of Sports Direct International PLC (and perhaps more famously Newcastle United soccer team), aspire to become the UK protégé of Carl Icahn, the US activist shareholder? Increasingly so, if recent events are anything to go by, but there remain differences between the two as wide as the Atlantic ocean itself, not least their comparative net worth.
Delaware Court of Chancery Finds Financial Advisor Liable for Aiding and Abetting Fiduciary Duty Breaches
On March 7, 2014, Vice Chancellor Travis Laster of the Delaware Court of Chancery found a financial advisor liable for aiding and abetting breaches of fiduciary duties by the board of Rural/Metro Corporation in connection with the company’s 2011 sale to an affiliate of Warburg Pincus LLC.
Valuing Tech Acquisition Deals: Signal of a New Trend or a Recurring Tech Bubble?
Tech start-ups are proliferating around the world. They introduce technology to every aspect of our lives, from the way we communicate, to the way we care about our health, to the way we store our data. As a result, almost one third of the recent NYSE and NASDAQ IPO filings involved a tech-related corporation. However, when it comes to evaluating their potential, there is plenty of extravagancy involved, and some may say, accidentally turns young start-up founders into millionaires.
Update: Comcast Announces Cable Industry Megamerger
Last fall, talks circulated within the cable industry about a potential buyout of Time Warner Cable (TWC). Last week, Comcast proposed a $45.2 billion dollar, all-stock, friendly bid for TWC. This merger would combine the two largest cable service providers in the country, which immediately raises antitrust concerns.
The Rise of the M&A Advisory Boutique and Independent Firms
As the years go by, more and more boutique and independent firms gain market share in the industry of M&A advisory. Last year, for instance, boutique and independent firms accounted for 30 percent of all fees relating to financial advisory in completed transactions, a jump from 28 percent in 2012 and 25 percent in 2011.
Transaction Advisors: The Growth of Appraisal Litigation in Delaware
An uptick in investors exercising their appraisal rights under Delaware law has gone largely unnoticed in recent years, overshadowed by increasing M&A litigation. An emerging trend reveals that hedge funds and money managers are purchasing the stock of target companies, post-deal announcement, in order to exercise appraisal rights.