September 12, 2005
Another M&A Monday
Today three major merger and acquisition transactions were announced.
First, eBay (NASD: EBAY) has agreed to pay at least $2.6B for Skype. (AP article can be found here) If Skype hits certain performance goals over the next 3 years, the value of the deal could increase to $4.1B. Skype is a leader in VoIP, which allows people to make phone calls over the internet. On CNBC this morning, Meg Whitman noted how the addition of Skype will allow users of eBay to make phone calls with potential customers or buyers to takedown barriers that make buyers and sellers uneasy. Also, Whitman noted that the deal could allow more detailed transactions, such as real estate, to be done quicker and easier over eBay, because the use of VoIP will allow customers to discuss details without being forced to do so over email. Finally, Whitman discussed a translating service which would allow eBay customers to increase the efficiency of transactions completed between people who do not speak the same language.
Second, Oracle Corp (NASD: ORCL) has agreed to buy Siebel Systems, Inc. (NASD: SEBL) in a deal valued at $5.85B. (AP article can be found here). According to the terms, Oracle is offering $10.66 per Siebel share, which is a 16.8% premium over Siebel's close on Friday. On CNBC, it was reported that the deal will comprise of 30% of Oracle stock and 70% cash, and the final closing price will be determined 10 days before the close of the transaction. This is an interesting deal because Oracle is purchasing a company in Siebel which had one of the tech bubble's greatest arcs. In 1997, Siebel shares traded at a split adjusted $2 a share and traded higher than $120 in 2000. And today, Siebel is being bought out at $10.66 a share.
Finally, Wachovia Corp (NYSE: WB) has decided to make a bet in the auto loan business and has agreed to acquire Westcorp (NYSE: WES), an automobile finance company and WFS Financial Inc. (NASD: WSFI) for nearly $4B in stock. (Reuters article can be found here). After completion of the deals, Wachovia will become the ninth largest auto loan originator in the country. Wachovia will pay $3.42B for Westcorp, which owns 84% of independent auto-finance company WSF Financial. Wachovia will pay $490M for the remaining 16% of WSF Financial's shares. Under the terms of the deal, Wachovia would be paying a 4.5% premium for Westcorp and a 14% premium for the remaining shares of WSF Financial.
September 12, 2005 | Permalink
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