Filed under: International markets, Competitive strategy, Ford Motor (F), India, Headline news, Tata Mtrs Ltd (TTM)

It was reported long ago that Ford Motor (NYSE: F) was shopping its Jaguar and Land Rover brands. Today it finally announced it has shut the deal to sell these premier British brands to Tata Motors (NYSE: TTM) of India for $2.3 billion. Ford, which has been losing money, found its share price way down, closing yesterday at $5.96 (now up a few cents in premarket trading) and was in need of a cash infusion.

Tata Motors, having just introduced a low-end $2,500 vehicle to the Indian market, is now filling out the upper end of the spectrum by bringing these two well known British brands to a country with a tradition and heritage long ago saturated with British “imperialist” remnants like cricket and tea time. If Jaguar and Land Rover are to be revitalized, then Tata Motors probably has a superior chance of success than most.

Ford bought Jaguar for $2.5 billion in 1989 and Land Rover for $2.7 billion in 2000. Nine months ago I posted Chasing Value: Tata Motors LTD - patience, patience, GOT IT! and now Tata has got it! What it hopes to do with these brands is gain some international credibility, based on a solid Indian foundation.

Tata’s stock shut yesterday at $17.36, up slightly on the rumors. It is about midway between its 52-week low of $14.71 and its high or $21.30. This deal could send both companies forward humming a new tune. I would even speculate more wildly just for fun that in this world of expanding markets, integrated economies and corporate consolidation, Ford and Tata Motors could one day find reason to unite.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: We own shares in TTM.

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Filed under: GS Capital Partners, Private equity industry, Shareholders, Public or private?

There has been quite a bit of buzz around the trends in special purpose acquisition companies, or SPAC’s, of late. In fact, it seems that about two of each three IPO filings that get filed are from SPAC’s. These SPAC IPO’s offer the public essentially a call option to participate in private equity that’ll end up being publicly traded stocks. Ultimately, these will become operating companies or within 24 to 30 months investors will receive their cash back minus a few percentage points.

Attention is still being given to the fact that J.W. Childs Acquisition I Corp. was filed to raise $200 million. This was two weeks ago too. Some have asked if J.W. Childs is testing the water here or if this is because they would have trouble raising a private equity fund on their own. If you want a confusing explanation, the answer is “both and neither.”

SPAC’s are changing as well. In the past, Goldman Sachs (NYSE: GS) has avoided SPAC’s and blank check offerings. The reason is that the stigma behind these from the 1990’s wasn’t a good one. All things change in time. Goldman Sachs just filed for its SPAC initial public offering this week. They also made the terms slightly more tight than most other underwriters.

Opinions on traditional private equity firms going into SPAC launches vary already and they will vary only more in the future. But this strategy makes life easier for the private equity firm. For starters, they don’t have to go run through all the hoops associated with raising a private equity fund. They don’t have to use their own sales or biz0dev team to go spend the 90 to 180 days or longer due diligence period. This grants them to make the brokerage underwriting firm go do the leg work and grants them to distribute units that are publicly traded to retail and/or institutional clients. It also gives the private equity firm a two-year time frame as breathing room to go pick their deals.

Arguably, it even allows the firms to go through other private equity firms’ portfolios to see if there are businesses or units that can be purchased that would have otherwise been stuck as a buried entity.

There are many critics of SPAC’s and traditional blank check IPO’s. But this may be a trend you don’t have to like. You just have to accept it for what it is.

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Filed under: GS Capital Partners, Private equity industry, Shareholders, Public or private?

There has been quite a bit of buzz around the trends in special purpose acquisition companies, or SPAC’s, of late. In fact, it seems that about two of each three IPO filings that get filed are from SPAC’s. These SPAC IPO’s offer the public essentially a call option to participate in private equity that’ll end up being publicly traded stocks. Ultimately, these will become operating companies or within 24 to 30 months investors will receive their cash back minus a few percentage points.

Attention is still being given to the fact that J.W. Childs Acquisition I Corp. was filed to raise $200 million. This was two weeks ago too. Some have asked if J.W. Childs is testing the water here or if this is because they would have trouble raising a private equity fund on their own. If you want a confusing explanation, the answer is “both and neither.”

SPAC’s are changing as well. In the past, Goldman Sachs (NYSE: GS) has avoided SPAC’s and blank check offerings. The reason is that the stigma behind these from the 1990’s wasn’t a good one. All things change in time. Goldman Sachs just filed for its SPAC initial public offering this week. They also made the terms slightly more tight than most other underwriters.

Opinions on traditional private equity firms going into SPAC launches vary already and they will vary only more in the future. But this strategy makes life easier for the private equity firm. For starters, they don’t have to go run through all the hoops associated with raising a private equity fund. They don’t have to use their own sales or biz0dev team to go spend the 90 to 180 days or longer due diligence period. This grants them to make the brokerage underwriting firm go do the leg work and allows them to distribute units that are publicly traded to retail and/or institutional clients. It also gives the private equity firm a two-year time frame as breathing room to go pick their deals.

Arguably, it even allows the firms to go through other private equity firms’ portfolios to see if there are businesses or units that can be purchased that would have otherwise been stuck as a buried entity.

There are many critics of SPAC’s and traditional blank check IPO’s. But this may be a trend you don’t have to care about. You just have to accept it for what it is.

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Filed under: Madison Dearborn Partners, Providence Equity Partners, Private equity industry

BCE Inc. (NYSE: BCE) is recently down 80 cents to $35.26.

BCE, Canada’s largest telecommunications company, announced on June 30, 2007, that it concurred to be acquired by an investment arm of Ontario Instructors Pension, Providence Partners and Madison Dearborn Partners for an announced deal price of $42.75 per share. The Federal Communications Commissions cleared the deal on Dec. 20.

BMO Capital Markets states, “we reiterate our view that BCE stock could trade down to $27 should the deal break and trade in the $30 range on a seasoned basis.” BCE May option implied volatility of 48 is above its 26-week average of 31 according to Track Data, suggesting more massive movement.

M&A Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

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