Filed under: Deals, Products and services, Wal-Mart (WMT)

Retailer Wal-Mart Stores, Inc. (NYSE: WMT) will be adding the Olevia brand of consumer electronics to its shelves in the near future, as Taiwanese company Kolin announced this day. Olevia, a brand commonly seen in the electronics departments of rival retailer Target Corp. (NYSE: TGT), will help parent company Kolin try to increase shipments 50% in 2008, according to the company.

Does Wal-Mart really need another generic brand of flat-panel TVs on its shelves? The argument could be either way, although the TV display areas of all Wal-Mart Supercenters I’ve seen are packed full. It’s not like the Olevia brand carries weight like the Sony or Panasonic brand. Count the sales surge in flat-panel maker Vizio into the lineup and where will Olevia fit? In terms of pricing, at the very low end with bargain-basement brand names like Westinghouse, most likely.

Olevia’s 42-inch flat-panel televisions have reportedly been hot sellers in China as of the end of last year, which led to Wal-Mart asking for a supply of the brand’s flat-panel products. It’s unknown what size televisions will see daylight on the shelves of Wal-Mart and Sam’s Club stores in 2008, even though Kolin president Frank Li has stated his company has secured a contracted supply of 62-inch high-definition LCD panels from Sharp, one of its handful of vendors for flat-panel screens. Wal-Mart superior make room for those big flat-panels if indeed it intends to stock 62-inch sizes on those display walls. Maybe Sam’s can just suspend the displays from those high warehouse ceilings? Just a recommendation.

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Filed under: Deals, Products and services, Wal-Mart (WMT)

Retailer Wal-Mart Stores, Inc. (NYSE: WMT) will be adding the Olevia brand of consumer electronics to its shelves in the near future, as Taiwanese company Kolin announced this day. Olevia, a brand commonly seen in the electronics departments of rival retailer Target Corp. (NYSE: TGT), will help parent company Kolin try to increase shipments 50% in 2008, according to the company.

Does Wal-Mart really need another generic brand of flat-panel TVs on its shelves? The argument could be either way, even though the television display areas of all Wal-Mart Supercenters I’ve seen are packed full. It’s not like the Olevia brand carries weight like the Sony or Panasonic brand. Count the sales surge in flat-panel maker Vizio into the lineup and where will Olevia fit? In terms of pricing, at the very low end with bargain-basement brand names like Westinghouse, most likely.

Olevia’s 42-inch flat-panel TVs have reportedly been hot sellers in China as of the end of last year, which led to Wal-Mart asking for a supply of the brand’s flat-panel products. It’s unknown what size TVs will see daylight on the shelves of Wal-Mart and Sam’s Club stores in 2008, even though Kolin president Frank Li has stated his company has secured a contracted supply of 62-inch high-definition LCD panels from Sharp, one of its handful of vendors for flat-panel screens. Wal-Mart superior make room for those big flat-panels if indeed it intends to stock 62-inch sizes on those display walls. Maybe Sam’s can just suspend the displays from those high warehouse ceilings? Just a recommendation.

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Filed under: Deals, Private equity, Revlon (REV)

As the leveraged buyout market (LBO) tightens amid the backdrop of more pricey debt, deal makers are looking to ride new investment cars to make their minions money.

We’ve seen a surge in popularity in what’s called a “Special Purpose Acquisition Company,” or SPAC. Bloomberg had a good article this morning on advent of the SPAC and what’s happening in the industry as a whole. These companies, also called blank-check companies, are IPO’d after raising their funds. Once public, the founding management team needs to make an acquisition in a given time-frame. Shareholders decide on an individual basis whether they like the deal or not. If they enjoy it, great. If not, they tender their shares and receive their money back.

Essentially, it’s a hedged bet on management that their industry expertise will lead to a smart acquisition.

Bloomberg states that since the start of 2003, 144 blank-check companies have sold shares, raising $18.1 billion, with 13 of the deals coming before 2005, according to SPAC Analytics.

Some upcoming SPACs:
Nelson Peltz, who’s known for putting pressure on the managements of companies including ketchup-maker H.J. Heinz Co. (NYSE: HNZ) to improve shareholder value, is seeking $750 million for New York-based Trian Acquisition I Corp. The IPO is scheduled for Jan. 21. Peltz, 65, separately won clearance from regulators last week to buy a stake of New York-based insurance broker Marsh & McLennan Cos. (NYSE: MMC)

Bloomberg also mentions Ronald Perelman, the 65-year-old chairman of skin-care company Revlon Inc. (NYSE: REV) who has filed to raise $500 million for MAFS Acquisition Corp. The New York-based investor also brokers deals through his closely held holding company, MacAndrews & Forbes Holdings Inc., and M&F Worldwide Corp., which trades publicly.

Some SPACs of note:
GLG Partners (NYSE: GLG): the $528 million Freedom Acquisition Holdings Inc., took New York-based hedge-fund manager GLG Partners public on Nov. 2. GLG units rose 31 percent since the deal was announced in June.

Hicks Acquisition Company (AMEX: TOH) Thomas Hicks, the leveraged buyout pioneer and owner of the Texas Rangers of Major League Baseball, raised $552 million for Hicks Acquisition Co. I in September.

Jamba Juice (NASDAQ: JMBA): Services Acquisition Corp. International, sponsored by former Blockbuster Inc. Chief Executive Officer Steven Berrard, raised $138 million in June 2005 in an IPO underwritten by Broadband Capital Management LLC. In March 2006, the SPAC said it would purchase juice-smoothie retailer Jamba Juice Co.

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Author holds no position in the stocks mentioned.

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Filed under: Deals, Private equity, Revlon (REV)

As the leveraged buyout market (LBO) tightens amid the backdrop of more high-priced debt, deal makers are looking to ride new investment cars to make their minions money.

We’ve seen a surge in popularity in what’s called a “Special Purpose Acquisition Company,” or SPAC. Bloomberg had a good article this morning on advent of the SPAC and what’s happening in the industry as a whole. These companies, also called blank-check companies, are IPO’d after raising their funds. Once public, the founding management team needs to make an acquisition in a given time-frame. Shareholders decide on an individual basis whether they like the deal or not. If they like it, great. If not, they tender their shares and receive their money back.

Essentially, it’s a hedged bet on management that their industry expertise will lead to a smart acquisition.

Bloomberg states that since the begin of 2003, 144 blank-check companies have sold shares, raising $18.1 billion, with 13 of the deals coming before 2005, according to SPAC Analytics.

Some upcoming SPACs:
Nelson Peltz, who’s known for putting pressure on the managements of companies including ketchup-maker H.J. Heinz Co. (NYSE: HNZ) to improve shareholder value, is seeking $750 million for New York-based Trian Acquisition I Corp. The IPO is scheduled for Jan. 21. Peltz, 65, separately won clearance from regulators last week to buy a stake of New York-based insurance broker Marsh & McLennan Cos. (NYSE: MMC)

Bloomberg also mentions Ronald Perelman, the 65-year-old chairman of skin-care company Revlon Inc. (NYSE: REV) who has filed to raise $500 million for MAFS Acquisition Corp. The New York-based investor also brokers deals through his closely held holding company, MacAndrews & Forbes Holdings Inc., and M&F Worldwide Corp., which trades publicly.

Some SPACs of note:
GLG Partners (NYSE: GLG): the $528 million Freedom Acquisition Holdings Inc., took New York-based hedge-fund manager GLG Partners public on Nov. 2. GLG units rose 31 percent since the deal was announced in June.

Hicks Acquisition Company (AMEX: TOH) Thomas Hicks, the leveraged buyout pioneer and owner of the Texas Rangers of Major League Baseball, raised $552 million for Hicks Acquisition Co. I in September.

Jamba Juice (NASDAQ: JMBA): Services Acquisition Corp. International, sponsored by former Blockbuster Inc. Chief Executive Officer Steven Berrard, raised $138 million in June 2005 in an IPO underwritten by Broadband Capital Management LLC. In March 2006, the SPAC stated it would purchase juice-smoothie retailer Jamba Juice Co.

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Author holds no position in the stocks mentioned.

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Filed under: Deals, Management, Competitive strategy, Private equity, SLM Corp (SLM)

Having recently returned to the CEO’s role in the wake of a failed leveraged buyout, Sallie Mae (NYSE: SLM) Chairman and CEO Albert Lord will give up the chairman’s.

According (subscription required) to the Wall Street Journal, “Anthony P. Terracciano, 68 years old, with a history of finding capital for troubled companies — and a reputation for helping to sell them — will serve as chairman of SLM, also known as Sallie Mae, as he seeks to bolster its credit rating and investor confidence.”

Additionally, former executive Jack Remondi is returning to the company as vice chairman and CFO.

Part of the reason for Lord’s departure from the Chairman’s role might be his exceptionally poor handling of a current conference call that culminated in his rejoicing that they could “get the (expletive) outta here” because there were no more questions.

But questions still surround Mr. Lord. Why was he so eager to sell the company? Was he aware of troubles on the horizon and sought to dump the mess on someone else?

Investor perception of the company would probably strengthen considerable if Mr. Lord left entirely. But for now, separating the chairman and CEO jobs is always a good move for corporate governance.

Investors liked the news, sending the stock up more than 8%.

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Filed under: Deals, Private equity, Clear Channel Commun (CCU)

In November of 2006, Thomas H. Lee Partners and Bain Capital announced that they were pursuing a deal for Clear Channel Communications (NYSE: CCU). It took a few months to reach an agreement, but in Might 2007 buyout terms were reached, and shareholders approved the deal in September. The deal is worth nearly $20 billion, one of the largest buyouts in history.

As of noon this day, Clear Channel is trading at $33.94, a significant discount to the buyout price of $39.20. This recommends that there is considerable — and growing — skepticism about the deal. Concerns include the weak track record of current large buyouts as well as the uncertain prospects of commercial communications companies like Clear Channel, which face growing competition from internet-based services and MP3 devices.

The Financial Times, via MSN.com, is reporting that while bankers involved in the deal still think it will probably go through, there is some resistance. One banker is quoted as saying, “there are a lot of undercurrents, including the fact that the returns for the sponsors are terrible and the break-up fee isn’t massive.” The ‘not huge’ break-up fee is $500 million — not a small amount for your average music lover, but small enough when compared to huge losses on a $20 billion deal.

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Filed under: Deals, Management, Competitive strategy, Private equity, SLM Corp (SLM)

Having recently returned to the CEO’s role in the wake of a failed leveraged buyout, Sallie Mae (NYSE: SLM) Chairman and CEO Albert Lord will give up the chairman’s.

According (subscription required) to the Wall Street Journal, “Anthony P. Terracciano, 68 years old, with a history of finding capital for troubled companies — and a reputation for helping to sell them — will serve as chairman of SLM, also known as Sallie Mae, as he seeks to bolster its credit rating and investor confidence.”

Additionally, former executive Jack Remondi is returning to the company as vice chairman and CFO.

Part of the reason for Lord’s departure from the Chairman’s role may be his exceptionally poor handling of a recent conference call that culminated in his rejoicing that they could “get the (expletive) outta here” because there were no more questions.

But questions still surround Mr. Lord. Why was he so eager to sell the company? Was he aware of troubles on the horizon and sought to dump the mess on someone else?

Investor perception of the company would probably strengthen considerable if Mr. Lord left entirely. But for now, separating the chairman and CEO jobs is always a good move for corporate governance.

Investors liked the news, sending the stock up more than 8%.

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Filed under: Deals, Private equity, Clear Channel Commun (CCU)

In November of 2006, Thomas H. Lee Partners and Bain Capital announced that they were pursuing a deal for Clear Channel Communications (NYSE: CCU). It took a few months to reach an agreement, but in Might 2007 buyout terms were reached, and shareholders approved the deal in September. The deal is worth almost $20 billion, one of the largest buyouts in history.

As of noon today, Clear Channel is trading at $33.94, a significant discount to the buyout price of $39.20. This suggests that there is considerable — and growing — skepticism about the deal. Concerns include the weak track record of current massive buyouts as well as the uncertain prospects of commercial communications companies like Clear Channel, which face growing competition from internet-based services and MP3 devices.

The Financial Times, via MSN.com, is reporting that while bankers involved in the deal still think it will probably go through, there is some resistance. One banker is quoted as saying, “there are a lot of undercurrents, including the fact that the returns for the sponsors are terrible and the break-up fee isn’t big.” The ‘not huge’ break-up fee is $500 million — not a small amount for your average music lover, but small enough when compared to big losses on a $20 billion deal.

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Filed under: Deals, Microsoft (MSFT)

Microsoft Corp. (NASDAQ: MSFT) is on the acquisition path yet again, this time in Norway. The world’s largest software company said today that it will buy Norwegian data search firm Fast Search & Transfer (FAST) for $1.2 billion in cash. FAST’s board of directors has apparently put its unanimous support behind the deal and has recommended FAST shareholders do the same. A 90% shareholder approval is required before the deal can be closed. FAST shares are traded on the Oslo Stock Exchange.

FAST’s business is powering the backend of business search, which — ahem — sounds like what Google has gotten its paws into within the last two-plus years as well. Is this another attempt by Microsoft to “catch up” to Google, Inc. (NASDAQ: GOOG) in another market? It surely appears so. Microsoft is throwing so much cash around trying to feverishly catch Google in many areas that it’s hard to envision it’s not playing a game of averages. Google’s brand name is still hot on the tongues of consumers and market pundits. Is Microsoft’s? If not, it’s trying to regain some market notoriety, I suppose.

Jeff Raikes, Microsoft’s Business Division President, said “Enterprise search is becoming an indispensable tool to businesses of all sizes, helping people find, use and share critical business information quickly …the combination of Microsoft and FAST gives customers a new choice: a single vendor with solutions that span the full range of customer needs.” An all-in-one stop for business search shopping, eh? DnB NOR Markets analyst Trygve Lauvdal lauded Microsoft on the deal, praising FAST’s bright future and Microsoft’s acquisition with the company’s Oslo-traded share price being so low. All things considered, $1.2 billion is a pretty small market cap for a company deeply ensconced in the business search market.

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Filed under: Deals, Microsoft (MSFT)

Microsoft Corp. (NASDAQ: MSFT) is on the acquisition path yet again, this time in Norway. The world’s largest software company stated this day that it will buy Norwegian data search firm Fast Search & Transfer (FAST) for $1.2 billion in cash. FAST’s board of directors has apparently put its unanimous support behind the deal and has suggested FAST shareholders do the same. A 90% shareholder approval is required before the deal can be closed. FAST shares are traded on the Oslo Stock Exchange.

FAST’s business is powering the backend of business search, which — ahem — sounds like what Google has gotten its paws into within the last two-plus years as well. Is this another attempt by Microsoft to “catch up” to Google, Inc. (NASDAQ: GOOG) in another market? It surely appears so. Microsoft is throwing so much cash around trying to feverishly catch Google in many areas that it’s hard to imagine it’s not playing a game of averages. Google’s brand name is still hot on the tongues of consumers and market pundits. Is Microsoft’s? If not, it’s trying to regain some market notoriety, I suppose.

Jeff Raikes, Microsoft’s Business Division President, stated “Enterprise search is becoming an indispensable tool to businesses of all sizes, helping people find, use and share critical business information quickly …the combination of Microsoft and FAST gives customers a new choice: a single vendor with solutions that span the full range of customer needs.” An all-in-one stop for business search shopping, eh? DnB NOR Markets analyst Trygve Lauvdal lauded Microsoft on the deal, praising FAST’s bright future and Microsoft’s acquisition with the company’s Oslo-traded share price being so low. All things considered, $1.2 billion is a pretty small market cap for a company deeply ensconced in the business search market.

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