Merger and acquisition activity goes on in the ASX with a renewed offer being made for Treasury Wine Estates Ltd (ASX: TWE), and the anticipated merger of two junior oil producers being thrown awry by a higher offer from a third party.
The third piece of news concerns one of Australia’s largest casino and resort companies, Crown Resorts Ltd (ASX: CWN), who finally hit the jackpot and purchased a much sought-after block of land on Las Vegas Boulevard for the princely sum of $280 million.
Treasury Wine Estates
Treasury has received a revised offer to acquire all of its shares at $5.20 each from Kohlberg Kravis Roberts and Co. L.P. and Rhône Capital L.L.C. after the consortium’s earlier bid of $4.70 per share was rejected back in April.
Treasury Wine Estates has granted a period of non-exclusive due diligence to the bidding consortium, and notes that there is no certainty the offer will be accepted.
Based on Treasury’s recent performance and prospects I’d say the bid is as good as it is likely to get and will deliver reasonable value to most shareholders.
Roc Oil Company Limited (ASX: ROC)
The announcement of a $0.69 per share cash bid for Roc Oil from Hong-Kong listed company Fosun International Limited (HKG:0656) has put an end to the widely expected merger between Roc and fellow oil producer Horizon Oil Ltd (ASX: HZN).
While the merger would have created a company with solid earnings and highly complementary resources, Horizon has bowed to Fosun’s superior bid, noting its understanding of Roc’s preference to accept a cash offer to generate the best value for its assets.
There are a number of conditions to the takeover, like Foreign Investment Review Board (FIRB) approval, a greater than 50% shareholder take-up of the offer, and no materially adverse changes to Roc Oil between now and October 19.
Crown has finally landed a vacant, undeveloped site on Las Vegas Boulevard (‘The Strip’) with support from Oaktree Capital Management and expects to begin construction in 2015.
It’s the latest step in a dance that has seen Crown acquire interests in a number of premier locations around the world – London, Macau (through a subsidiary) and now Las Vegas.
With the building expected to open in 2018, the Las Vegas casino opening should coincide well with improving global business conditions and I expect it to become an important part of Crown’s earnings going forwards.
So there you have it, the three most promising looking developments on the ASX so far this week. While you’re keeping on top of the latest market news, make sure you check out The Motley Fool’s newest report into our Top Dividend Stock for 2014/15.
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Motley Fool contributor Sean O'Neill doesn't own shares in any company mentioned.
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