Anheuser-Busch Cos. (BUD) - InBev

September 5, 2008 (1:20p) - Status Report

The German Federal Cartel Office formally approved this transaction on August 20, 2008.

The UK Office of Fair Trading initiated a review for this transaction on August 28, 2008. The OFT has established a public comment period deadline of September 11, 2008. As there is no record of this deal with the European Commission, the OFT will likely be the primary European regulatory approval required. This case is not likely to be referred by the OFT to the EC for review, although this can not be completely ruled out at this time. OFT approval is currently expected in a late-September / early-October time frame.

InBev has scheduled a shareholder meeting associated with this transaction for September 29, 2008.

There continues to be the perception of this publication that the pending HSR second request is essentially a non-issue in terms of the deal being successfully completed. The FTC's interest remains believed to be "procedural" in nature, as opposed to being based in competition concerns. The bottom line here is that no antitrust issues exist in this proposed merger, so HSR clearance will ultimately be obtained without much difficulty or extremely lengthy delays. In a worst-case scenario, the FTC review would continue into December 2008 or January 2009.

*ImClone Systems (IMCL) - Bristol-Myers Squibb (BMY)

September 5, 2008 (12:40p) - Status Report

This proposed transaction remains somewhat of an enigma a month after the initial assessment. There are no substantial developments of note related to BMY's current offer, from either side, although there have been several scattered analytical pieces focusing on IMCL's "Erbitux" product use expansion as a catalyst for an increased offer. However, this is no revelation, as IMCL's pipeline products -- particularly "IMC-11F8" -- are the obvious rationale for BNY, or any party interested in IMCL.

This is increasingly looking to become yet another attrition situation, where both sides become entrenched in their respective positions with respect to the buyout offer. Clearly, IMCL, led by Carl Icahn, will not seriously consider the $60 per share offer at any point in the near future. Under the current and foreseeable future circumstances, nothing less than a $70 per share offer will be necessary simply to draw IMCL into negotiations. As BMY does not seem inclined to increase its offer to that level at this time, the stalemate could very easily continue for several months without any real developments.

$Longs Drug Stores (LDG) - CVS Caremark (CVS)

September 5, 2008 (10:20a) - Status Report

As widely reported, CTW Investment Group has joined other major LDG investors in openly questioning the valuation of this transaction -- particularly with respect to LDG's real estate holdings. This is precisely the type of shareholder concern discussed in the previous entry which could easily serve to force CVS to increase its current offer and/or disrupt the transaction in general.

Despite, LDG's subsequent (and rather tentative) claims that shareholders will ultimately accept the current offer, the legal and public shareholder problems are clearly escalating to the point where the company management must consider renegotiating with CVS. Failing this, LDG shareholder opposition is likely to continue to mount over the next several days and will almost certainly result in an extension of the tender offer into October.

This publication currently anticipates that CVS will indeed improve its offer to at least $73 to ensure the successful completion of this transaction.

*Take-Two Interactive Software (TTWO) - Electronic Arts (ERTS)

September 5, 2008 (9:05a) - Status Report

This entry will acknowledge the widely reported speculation over the last two days that ERTS may be considering abandoning its efforts with respect to TTWO.

These rumors are naturally not surprising and, in light of TTWO's strong quarterly earnings, it would be absolutely no major revelation if ERTS does indeed give up on this proposed transaction.

It has been suggested in previous entries by this publication that ERTS may make an offer around the $28 as a token gesture before completely walking away from this situation. However, it is now more than clear that any offer from ERTS, or any other entity, must exceed the $30 level in order to receive serious consideration from TTWO and its shareholders.

Despite this publications recent suggestions to the contrary, there is currently no indication the ERTS intends to increase its offer to an acceptable level.

CKX, Inc. (CKXE) - 19X, Inc.

September 4, 2008 (8:25a) - Status Report

Despite repeated efforts over the last several weeks, the companies have simply refused to provide any information related to this transaction. This is not terribly surprising given that the companies have not issued any substantial information on this deal in more than two month or, for that matter, any substantial information regarding the CKXE in general.

While there is no indication to suggest that this deal will not ultimately be successfully completed, there is absolutely no evidence to suggest motivation to move forward by either party. This is one of those situations where the complete lack of information can generally be interpreted as negative, particularly in terms of timing. In other words, there is currently no expectation that this deal will see any progress in the immediate future and therefore there is some mild expectation that the deal will not be completed.

Until information to the contrary is obtained, there is very little else to offer for this transaction.

Rohm Haas Co. (ROH) - Dow Chemical Co. (DOW)

September 3, 2008 (6:10p) - Preliminary Proxy Statement Filed

ROH filed the first amended proxy statement for this transaction with the SEC

ROH shareholder meeting details are not provided in the revised document.

The proxy discloses that a second request was indeed issued by the FTC in the HSR review. The second request occurred on August 29, 2008.

Regarding the European Commission notification, the proxy states the following:

"On September 1, 2008, Dow submitted an initial draft of the Form CO to the European Commission staff."

The Form CO is the standard notification document and will result in formal publication and a provisional decision date within the next few days. The first review deadline will fall roughly in the first week of October, which will almost certainly be followed by an extension into January 2009. Details of the EC review will be posted as they become publicly available.

$Sciele Pharma, Inc. (SCRX) - Shionogi Co.

September 3, 2008 (5:40p) - Initial Analysis

This is a very straightforward and essentially complimentary acquisition by Shionogi, based on the information available so far. Shionogi is a somewhat limited pharmaceutical company in that it is currently active in only six treatment areas, while focusing primarily in antibiotics. It currently offers six products in the "Infectious Diseases" (antibiotics) segment:

Avelox (moxifloxacin) Finibax (doripenem) Flomox (cefcapene pivoxil) Flumarin (flomoxef sodium) Tamiflu (oseltamivir) Vancomycin (vancomycin hydrochloride)

Shionogi also offers single products in the following treatment segments: "Crestorro"/rosuvastatin calcium (Metabolic Syndrome); "Imunace"/recombinant interleukin-2 (Anticancer); "OxyContin"/oxycodone (Neurology); "Claritin"/loratadine (Allergy) and "Dobutrex"/dobutamine (Circulatory).

In comparison, SCRX's product portfolio is as follows:

Cardiology/Diabetes		Women's Health		Pediatric
Sular (nisoldipine)		Prenate DHA (metafolin)		Allegra (fexofenadine hydrocholoride)
Nitrolingual (nitroglycerin sublingual spray)		Prenate Elite (metafolin)		Methylin
Altoprev (lovastatin)		Zovirax		Orapred (prednisolone sodium phosphate)
Fortamet (metformin HCl)
Triglide (fenofibrate)

Although it can be said that broad overlaps exist in the cardiology (Imunace)and allergy (Allegra Claritin) segments, there are no niche overlaps, nor any segment lacking intense competition from the major pharmaceutical players.

In short, this transaction will be of no interest to competition regulators, which most likely will be limited to the FTC. Early termination of the HSR review is fully anticipated in this case.

Assuming the initial tender offer statement is submitted to the SEC before the end of next week, Shionogi should have little difficulty completing the tender offer in 45 days or less.

NDS Group plc (NNDS) - News Corporation (NWS)

September 3, 2008 (3:45p) - Preliminary Proxy Statement Filed

NNDS has filed the initial proxy statement for this transaction with the SEC.

The proxy does not include any details regarding the NNDS Extraordinary General Meeting or the High Court meeting.

The proxy states the following regarding regulatory matters:

"Other than Council Regulation EC No. 139/2004 and the Israeli Restrictive Business Practices Law 5748-1988, we are unaware of any other material federal, state or foreign regulatory requirements or approvals that may be required to consummate the Proposed Transactions."

As of this entry, there is no record of this transaction on the EC's pending review list.

Based on this very quick initial proxy filing, it appears that the companies are attempting to expedite the various regulatory processes for this transaction. If this is indeed the case, it is naturally very likely that the transaction will move along very quickly, perhaps closing before the early/mid-December time frame projected originally.

Barr Pharmaceuticals (BRL) - Teva Pharmaceutical (TEVA)

September 3, 2008 (2:55p) - HSR Second Request Issued

The companies have announced the receipt of an HSR second request from the FTC. A TEVA press release states the following:

"The parties have been cooperating with the FTC staff since shortly after the announcement of the transaction and intend to continue to cooperate with the FTC to obtain HSR clearance as promptly as possible.

"The companies continue to expect that the transaction will close in late 2008..."

This publication continues to perceive a 2008 close for this deal as highly tenuous, despite the companies' experience with the FTC and the FTC's familiarity with the products and markets at issue in this combination.

TEVA's claim of "cooperating with the FTC staff" is essentially a given in this situation, so should not be viewed as a positive revelation. If the companies are to succeed in obtaining FTC consent within the next four months, it will require an extraordinary negotiating effort and rapid divestiture process. As noted previously, these efforts will intersect with at least one lengthy holiday season, perhaps two, and quite possibly may involved a transition within the FTC itself.

Therefore, this publication must conclude for the time being that the deal is more likely to slip into the first quarter of 2009, rather than close before the end of this year.

Eagle Test Systems, Inc (EGLT) - Teradyne, Inc (TER)

September 3, 2008 (11:15a) - Initial Analysis

This proposed merger is clearly a direct response to the recently completed LTXX-CMOS deal, which combined two direct competitors to both EGLT and TER in the "advanced testing equipment" (ATE) niche of the semiconductor industry. The fact that the LTXX-CMOS transaction raised absolutely no competition-related regulatory interest virtually assures that this deal will also be a non-issue for the FTC, or any other regulator.

Borrowing from the LTXX-CMOS file, the following chart shows the approximate market share data for the ATE segment:

ATE Market Share (c. 2005)

Advantest - 50%
Teradyne - 17%
Verigy - 14%
Credence - 7%
Others - 12%
 

This can be narrowed down the following niche overlap:

ATE, Linear Mixed-Signal IC
Advantest
Agilent Technologies
B F Goodrich Aerospace
Credence/LTX
DiagnoSYS Systems
Eagle Test Systems
GenRad
Geotest
Integrated Measurement Systems
LTX Corp
MiNT Systems
Racal Instruments
Schlumberger
Symtx
SZ Testsysteme
Teradyne
TMT
TRICOR Systems,
TSK America
Y-tek
 

It should be noted that the above list comes from the 2001 IMSC-CMOS deal. This list has obviously shortened due to consolidation over the last seven years. Nevertheless, this combination certainly does not threaten the competitive landscape in the ATE market -- on the contrary, regulators will likely view this as a positive development from the perspective of offering greater competition to Advantest and Credence in this rapidly consolidating industry. In short, this transaction, like the LTXX-CMOS deal, is very much a candidate for HSR early termination.

With respect to the SEC review, this deal already has the advantage of being all-cash. That, combined with EGLT's initial S-1 clearing almost exactly two years ago (9/14/06), suggests that SEC consent will be obtained very quickly in this case -- very likely via proxy review waiver.

Assuming the first proxy is filed in late-September, or very early October, it is entirely possible that the EGLT shareholder meeting and close can occur during by the third week of November 2008.

Corn Products International (CPO) - Bunge Limited (BG)

September 3, 2008 (10:00a) - HSR Expiration

BG has announced the expiration of the HSR waiting period for this transaction.

As disclosed in the first proxy statement, some non-U.S. regulatory conditions are involved in this transaction, including Competition Canada. It is currently believed that the Competition Canada review remains in progress, although this has not been confirmed by the companies at this time. Nevertheless, all regulatory approvals are fully expected well before the shareholder meetings are held.

Because of the somewhat late initial proxy filing and continuing SEC review, the closing projection remains late-October, or perhaps early-November of this year. However, if the proxy review is waived before the end of this week, the shareholder meetings and close may occur during the first week or two of next month. This is currently not perceived as the outcome for this transaction.

*Rio Tinto (RTP) - BHP Billiton (BHP)

September 3, 2008 (9:50a) - EC Status

As widely reported yesterday (9/2), the European Commission has suspended its review of this proposed transaction due to BHP's failure to submit requested information.

Although BHP is publicly down-playing this development as a standard review procedure, this is clearly not the situation for this review. There is very little chance the EC will move this review forward under the current circumstances, so the suspension will essentially allow the regulator to delay any substantial action until a formal agreement is reached or, more likely, BHP drops its hostile takeover efforts. Even if an agreement is reached between the two companies, the EC is not likely to consent to the combination without major conditions, if at all.

Thus, the EC suspension is yet another unsurprising event for this situation and in no way alters the overall perception that there is very little chance of this proposes transaction ultimately succeeding. The EC's next deadline will probably fall well into the first quarter of next year and even this deadline is unlikely to result in approval.

Rohm Haas Co. (ROH) - Dow Chemical Co. (DOW)

September 3, 2008 (9:05a) - Status Report

As of this update, the companies have not disclosed any information regarding the HSR review. However, a second request remains fully anticipated, and this will very likely be confirmed in the next proxy statement. A revised proxy should be submitted within the next few weeks, if not days, but this has also not been confirmed by the companies as of yet. Efforts will continue to obtain this information during the course of this week.

There is currently no record of this transaction with the European Commission. Presumably, the companies are engaging in preliminary discussion with the regulator at this time, which has become the preferred course of action in the more complex mergers in recent years. As this promises to be one of the more complicated reviews for the European Commission, it is clearly in the best interests of the companies to provide as much information as well as offer concessions before the initial merger notification is submitted. Naturally, this will likely result in a delayed initial filing, with the intention of preventing an extremely long ( four months) review period.

However, as discussed previously, the EC and/or HSR reviews for this transaction may very well push the close into Q2 2008 regardless of the companies' collective efforts.