Prologis takes Liberty

BY Richard Summerfield

Prologis Inc has agreed to acquire its rival, industrial real-estate firm Liberty Property Trust, in an all stock deal valued at around $12.6bn, including the assumption of debt.

Under the terms of the deal, Liberty shareholders would receive 0.675 times a Prologis share for each unit they hold, about $61 a share. The deal is expected to close in the first quarter of 2020.

The deal is expected to generate immediate savings of around $120m from administrative costs, operating leverage, lower interest expense and lease adjustments, the companies said in a statement. The acquisition will also bolster Prologis’ presence in a number of target markets, such as Lehigh Valley, Chicago, Houston, Central PA, New Jersey and Southern California.

In order to complete the deal, Prologis has announced that it plans to dispose of approximately $3.5bn of assets on a pro rata share basis. This includes $2.8bn of non-strategic logistics properties and $700m of office properties.

“Liberty and Prologis represent two of the finest teams of real estate professionals and two of the finest portfolios of industrial real estate ever assembled,” said Bill Hankowsky, chairman and chief executive of Liberty. "The joining of these two platforms at this moment, when industrial logistics has become so pivotal to the new economy, will further the industry’s ability to support the nation’s supply chain and enhance value creation for our combined shareholders. It is a testament to Liberty’s outstanding teams of professionals, both present and past.”

“Liberty’s high-quality logistics real estate will strengthen our portfolio as well as our customer roster,” said Eugene F. Reilly, chief investment officer at Prologis. “We are also excited about the caliber of talent at Liberty and expect a number of their employees to join us to help manage the portfolio and execute on capital deployment.”

“Liberty’s logistics assets are highly complementary to our US portfolio and this acquisition increases our holdings and growth potential in several key markets,” said Hamid R. Moghadam, chairman and chief executive at Prologis. “The strategic fit between the portfolios allows us to capture immediate cost and long-term revenue synergies.”

The companies have also identified future synergies with the potential to generate approximately $60m in annual savings, including $10m from revenue synergies and $50m from incremental development value creation.

News: Prologis to buy warehouse rival Liberty in $12.6 billion deal

Cision taken private in $2.74bn deal

BY Richard Summerfield

An affiliate of private equity firm Platinum Equity is to acquire public relations and software company Cision Ltd in a deal worth $2.74bn.

Under the terms of the deal, which has been unanimously approved by Cision’s board members, Platinum Equity will acquire all outstanding shares of Cision for $10 per share in cash, representing a 34 percent premium over Cision’s stock over a 60-day period ending on 21 October, the day before the deal was announced.

The deal, which is expected to close in Q1 2020, will see Cision become a wholly owned entity of the Platinum Equity affiliate. There had been rumours that Cision had been in negotiations with potential new private equity owners since around March.

“This transaction will provide shareholders with immediate and substantial cash value, while also providing us with a partner that shares in our commitment to customers and employees and can add strategic and operational value,” said Kevin Akeroyd, chief executive at Cision. “Based on our extensive engagement with Platinum over the past several months, we are confident that Platinum's support will enable Cision to execute on its strategy and next phase of growth.”

“Cision has a long history of leadership providing software and services to public relations and marketing communications professionals and has developed a growing portfolio of earned media management offerings for the world's leading brands,” said Jacob Kotzubei, a partner at Platinum Equity. “Platinum looks forward to nurturing Cision's core business, supporting and anticipating the diverse needs of the company's customers, and driving new opportunities for innovation. As a private company, Cision will be able to make strategic investments for sustainable and profitable growth, while remaining agile and focused on operational excellence. We are excited to partner with Cision's management team as it embarks on this new chapter.”

According to a statement announcing the deal, Cision may solicit alternative acquisition proposals from third parties during a ‘go-shop’ period from the date of the agreement until 12 November 2019.

News: PR Newswire owner Cision to be taken private for $2.74 billion

$930m biopharma deal sees Alexion acquire Achillion

BY Fraser Tennant

In a transaction that could see it strengthen its position as a leading provider of treatments for rare blood disorders, US biopharmaceutical company Alexion Pharmaceuticals is to acquire fellow biopharma firm Achillion Pharmaceuticals for $930m.

The definitive agreement will see Alexion get its hands on Achillion’s two experimental treatments for the rare blood disorder, paroxysmal nocturnal hemoglobinuria (PNH). Alexion has dominated the market for some years with its flagship drug Soliris.

“Alexion has demonstrated the transformative impact that inhibiting C5 can have on multiple rare and devastating diseases,” said Ludwig Hantson, chief executive of Alexion. “However, we believe this is just the beginning of what’s possible with complement inhibition. Targeting a different part of the complement system – the alternative pathway – by inhibiting Factor D production addresses uncontrolled complement activation further upstream in the complement cascade, and importantly, leaves the rest of the complement system intact, which is critical in maintaining the body’s ability to fight infection.”

Alexion’s acquisition of Achillion is subject to the approval of Achillion shareholders and satisfaction of customary closing conditions and approval from relevant regulatory agencies, including clearance under the Hart-Scott Rodino Antitrust Improvements Act.

“We have established great momentum – discovering and advancing several small molecules into clinical development that have the potential to treat immune-related diseases associated with the alternative pathway of the complement system,” said Joe Truitt, president and chief executive of Achillion. “Having already demonstrated proof-of-concept and proof-of-mechanism with our lead candidate, danicopan (ACH-4471), in PNH and C3G, respectively, we believe there is significant opportunity for Factor D inhibition in the treatment of other diseases as well.

“Alexion is an established leader in developing medicines for complement-mediated diseases, and we look forward to working together to accelerate our objective of bringing novel therapies to patients as quickly as possible and ensuring that the broad promise of this approach is fully realised,” he continued. “We thank our employees, investigators and partners for their incredible work and commitment.”

Pending approvals, the transaction is expected to close in the first half of 2020.

News: Alexion fortifies rare blood disorder drugs business with Achillion deal

Hong Kong abandons LSEG offer

BY Richard Summerfield

Hong Kong Exchange and Clearing (HKEX) has pulled the plug on its unsolicited $39bn offer for the London Stock Exchange Group (LSEG) after it became clear that it had failed to convince LSEG’s investors and management of the benefits of a merger between the two.

HKEX, the world’s largest capital-raising venue in five of the past 10 years, had made an £83.61 per share offer for LSEG which would have required LSEG to abandon its agreed $27bn deal to buy the data and trading group Refinitiv.

HKEX’s offer was flatly rejected by LSEG, which said that HKEX’s offer fell “substantially short” of an appropriate valuation. In a published letter to HKEX, LSEG said there was “no merit in further engagement”. As a result, the Hong Kong bourse withdrew its offer.

Following its initial approach , under UK takeover rules HKEX had until Wednesday 9 October to make a binding offer for LSEG, but having withdrawn its offer is now unable to pursue a renewed deal for at least six months.

“The board of HKEX continues to believe that a combination of [LSEG] and HKEX is strategically compelling and would create a world-leading market infrastructure group,” HKEX said in a regulatory statement. “Despite engagement with a broad set of regulators and extensive shareholder engagement, the board of HKEX is disappointed that it has been unable to engage with the management of LSEG in realising this vision, and as a consequence has decided it is not in the best interests of HKEX shareholders to pursue this proposal.”

At the weekend, reports emerged which suggested that HKEX had been told by LSEG’s shareholders to increase its takeover offer to £90 a share, a 22 percent premium on LSE’s recent share price of £73.80.

In a statement, LSEG said it remained “committed to and continues to make good progress on its proposed acquisition of Refinitiv”. LSEG’s shareholders will vote on the Refinitiv deal in November, with the deal expected to close in the second half of 2020.

News: Hong Kong bourse pulls plug on $39 billion play for London Stock Exchange

M&A deal leaks plummet, reveals new report

BY Fraser Tennant

The number of M&A deal leaks has fallen for two years running, a decline driven entirely by the Asia-Pacific (APAC) region, according to a new Intralinks report.

The ‘2019 M&A Leaks Report’, a study carried out annually by Intralinks in association with the M&A Research Centre at the University of London’s Cass Business School, found that, after peaking at around 9 percent of announced M&A transactions in 2013, worldwide deal leaks have declined in recent years.

The report also notes that the decline in M&A deal leaks has occurred at the same time as increased regulations and enforcement actions by financial regulators against different forms of market abuse, including deal leaks – and there is undoubtedly a connection between increased regulatory attention and the decline in leaks.

Among the report’s other key findings, worldwide, the rate of M&A deal leaks fell in 2018 for the second consecutive year, and 7.4 percent of deals in 2018 involved a leak of the deal prior to its public announcement, compared to 7.9 percent in 2017 and 8.6 percent in 2016.

The fall in the overall worldwide rate of deal leaks in 2018 was driven solely by the APAC region, where leaked deals declined to 7.9 percent from 10.8 percent the previous year.

Furthermore, both the Americas and the Europe, Middle East and Africa (EMEA) regions saw increases in the rate of deal leaks in 2018 of 0.5 and 0.4 percentage points, respectively. APAC remains the region with the highest rate of deal leaks, followed by the Americas at 7.6 percent and EMEA at 5.8 percent.

“Deal leaking is down, but the stakes remain high,” said Philip Whitchelo, vice president of Intralinks. “In 2018, the difference in the median target takeover premium for leaked deals compared to non-leaked deals was an average of an extra $68.1m accrued to the shareholders of the targets in deals that leaked. This was the highest ‘leak premium’ difference for three years.”

Finally, for the 10 regions with the most M&A activity, the top three for deal leaks in 2018 were Hong Kong, Japan and the US. The bottom three countries for deal leaks in 2018 were the UK, Australia and France.

Report: 2019 M&A Leaks Report