Broken deals
While certain high-profile banking deals have been confirmed (Wells Fargo's bid for Wachovia has passed federal approval), in other fields the deals seem to collapsing. The New York Times Dealbook section ("A Day of Broken Deals," 10/13/08) spots this trend.
Among the almost-concluded acquisitions that have fallen on hard times just this week are:
- United Technologies has dropped its $2.8 offer for ATM (and vote machine) maker Diebold
- Semiconductor maker Vishay Intertechnology's hostile bid $1.7 billion for rival International Rectifier
- Solid waste leader Waste Management has pulled the plug on its $6.7 billion offer for rival Republic
- Generic drug maker King Pharmaceuticals withdrew its $1.6 billion hostile bid for rival Alpharma,
- Pharmaceutical company Bristol Myers Squibb looks like it has dropped its $6.5 billion bid for biopharma company Imclone (famous from the Martha Stewart insider trading trial)
All of these were preceded earlier in the year by the biggest hostile bid of all:
Microsoft's $47 billion bid for Yahoo, that looked like it would be renewed, looks like it has been dropped. As of today, the market capitalization of Yahoo is $18.6 billion!
For many companies, this is the worst time to make a deal. Credit is hard to get (so stock swaps rules), but stock prices of both buyer and seller are depressed so it's harder to negotiate a price agreeable to buyer and seller. And most companies need all the cash and credit they can get simply to maintain day-to-day operations.
No doubt, this is the snd of teh furious deal making of the last two decades.
