bloggingbuyouts

Ford Motor Co. (NYSE: F) is cutting production at its Volvo unit, according to The Wall Street Journal. The move, which could affect one-third of workers -- some 700 -- is seen as an attempt to cut the costs and losses at the upscale Swedish brand.

The question everyone is asking is whether this move is done in preparation for a sale. According to "people familiar with the matter" who discussed such things with the Journal, CEO Alan Mulally is interested in putting Volvo, whose sales have been declining, on the block. Of course, to analysts, Mulally sang a different tune last month, saying the priority is improve the Swedish auto maker operations "dramatically."

As Kirk Kerkorian's Tracinda Corp. continues to build its stake int he company, he may also have a thing or two to say on the matter.

For now, Volvo is cutting where it makes larger, less popular vehicles, and it plans to make fewer cars overall. But can this make Volvo more profitable to Ford, or at least more attractive to buyers? There are costs associated with producing a smaller number of vehicles, but with Volvo reporting 22,000 fewer vehicles sold during the first quarter, cutting production makes sense. Another matter Ford has to consider is the massive losses it suffered lately just from the kronor-dollar exchange rate.

It was nearly a year ago that speculation ran amok that German carmaker BMW could be interested in buying Volvo. Could it still be interested? Years back, Renault was interested too. With the credit crunch still crimping deals, and with some major players like private equity -- keeping in mind Chrysler's sale to Cerberus -- absent, it's likely such a sale could be postponed.

After selling its Land Rover and Jaguar units to India's Tata Motors Ltd. (NYSE: TTM) in a deal worth $2.3 billion, and Aston Martin for $848 million to investors led by David Richards, if Ford sells Volvo, it will be left only with Lincoln as its luxury line.

Well, maybe Icahn can save them from themselves. Who? Yahoo!'s board of course.

Seems Carl Icahn, whom earlier reports had considering moving in on Yahoo! Inc.'s (NASDAQ: YHOO) board, has made a decision. The billionaire activist investor, who has amassed some 50 million shares of the internet portal company to a 3.6% stake, is planning "to move ahead with plans to run a dissident board slate at Yahoo," according to Reuters.

A Reuters source said that already he has lined up at least 12 potential board candidates and could announce the slate as early as tonight, ahead of Thursday's deadline.

It's not just that Yahoo! has so offhandedly rejected Microsoft Corp. (NASDAQ: MSFT)'s attempts to buy it, but it's also -- and probably mainly -- the way the company has been managed for some time now. It's not just Jerry Yang, the current CEO, but his predecessor Terry Semel as well. Yahoo! has been behind the curve in technology and trend, not only losing market share in search, but mainly failing to capitalize on its assets and the traffic they generate.

Already following the early reports today, Yahoo shares finished the day up 2.18%. Now, in after-hours it's gaining another 1.5%. Yahoo! investors seem to put their trust in Icahn.

So The Wall Street Journal reports today -- according to its favorite "people familiar with the situation" sentence -- that wireless provider Sprint Nextel Corp. (NYSE: S) is considering spinning off or selling its Nextel unit. This is when I hear the screeching sound of a needle scraping a record. Say what? Should we play that again?

I guess I shouldn't really be that surprised since the $35 billion acquisition of Nextel Communications Inc. in 2005 has always seemed, to say it mildly, challenging. This would be, as the Journal puts it, "a dramatic acknowledgment" that the merger has actually been a failure.

Well, only Monday we heard that Deutsche Telekom AG (NYSE: DT) may be interested in Sprint. Could it be that either Deutsche Telekom demanded such an action, or that Sprint management decided such an action could entice DT to indeed go forward with an offer (despite the probable problems such a merger could face, as Jonathan Berr outlined in his post Monday)? Without Nextel, Sprint would rid itself of much debt. It is also considered to have better handsets and fewer dropped calls, making it a more attractive target.

The differences in corporate culture made the now three-year-old merger difficult and Sprint has lost subscribers while its competitors added them. Of course, the stock price has suffered as well, down over 60% since the merger. No wonder then that Sprint is looking to undo the merger. The Journal lists several options, including selling Nextel to a consortium of investors related to Nextel's founder Morgan O'Brien. Other possibilities of course include private equity firms, or a spin off of Nextel.

On Monday, Jim Cramer suggested to quickly buy business software maker BEA Systems before it gets a bid. Today, Oracle (NASDAQ: ORCL) indeed said it has proposed to buy BEA Systems (NASDAQ: BEAS) for more than $6.66 billion, or $17 a share, a 25% premium over Thursday's close. Yet, BEA shares are up over 32% to more than $18, suggesting shareholders expect an even higher bid to come.

SAP (NYSE: SAP) acquired Business Objects (NASDAQ: BOBJ) on Monday. Following the deal, many pundits, including Cramer, called the market of business intelligence hot. So the question now is how hot? Will BEA Systems see a proposal from SAP as it wants to give an answer to its rival's growth and thwart its plans for more? Maybe from International Business Machines Corp. (NYSE: IBM), as it might try to halt Oracle's advance into an area it is now dominant in, the middleware programs that connect server computers? Will Oracle simply increase its own proposal despite Oracle President Charles Phillips saying his company has made a "serious proposal including a substantial premium for BEA."

Despite BEA sales declining, now trailing IBM's, no doubt Oracle could use BEA's footprint in the middleware software biz, not to mention access to more customers. Perhaps it could lure some of those BEA customers that are now using SAP. BEA would also bring support fees. These are all good reasons for Oracle, which has grown remarkably well by growth (PeopleSoft notwithstanding).

No doubt, the signs were there. First, Carl Icahn had recently announced his stake in BEA Systems reached 13.22%. Of course, the line BEA executives have often used, "BEA is not for sale," is pretty much meaningless now with Icahn in the picture. Icahn has been pushing to have BEA sold. Then, SAP acquired Business Objects and pundits started calling for consolidation in the business, with BEA being on the short list. If you had listened to Cramer on Monday, you could have sold your BEAS shares 32% higher today. Not bad for a week.

BCE Inc. (NYSE: BCE) rose another nearly 4.5% today after The Globe and Mail reported a possible bidding war for BCE. The consortium of Canadian pension funds, led by Kohlberg Kravis Roberts & Co., might soon have two other groups considering the same deal.

To remind you, first there were rumors BCE is in talks with buyout firms. Then came a denial, followed closely by an acknowledgment: BCE is indeed considering taking the company private. Here are the reported players:

• KKR is considering taking control of one-third of the company with partners Canada Pension Plan Investment Board and two other pension funds, thus fulfilling the required majority Canadian ownership.
  
• Ontario Teachers Pension Plan is apparently assembling its own consortium and preparing to formally enter the bid process early next week. The group is said to be financed by Citigroup Inc. (NYSE: C) among others.
• And just to make shareholders happier, it is reported that two more U.S. private equity firms, giant Blackstone Group LP and Cerberus Capital Management LP, might form a third group. How this group would abide by the majority Canadian ownership law is still unclear, although Caisse de dépôt et placement du Québec might be shifting allegiances.
• Last time I also mentioned a possible merger between Bell (BCE) and smaller rival Telus Corp. (NYSE: TU). This might be more difficult from a regulatory point of view.
  

So far it seems that the groups are aligning themselves and preparing financing as "BCE has not prepared the data rooms that bidders need before deciding what they are prepared to pay."

After BCE closed up some 6% and Telus up over 3% during my last post, I was going to ask if you think hubby should sell his shares in both these companies. He wanted to sell all, I talked him down to selling half, but then he never got around to it. Lucky, or he would have missed today's 4.5% and 2.3% run for BCE and TU respectively.

Thank you Don for the FT link this morning.

The three Canadian telecommunication companies, BCE Inc. (NYSE: BCE), Telus Corp. (NYSE: TU) and Rogers Communications Inc. (NYSE: RG), are leading gains of telecommunication stocks following confirmed buyout talks.

Bell Canada, owned by BCE and the largest telephone company in Canada, has been rumored for the past month to have been talking to KKR and to Ontario Teachers about a possible offer to be taken private. Including today's gain, BCE has a market value of about C$30.8 billion ($27.3 billion), which would put the original rumored price of C$30 billion below its current market cap. Some mentioned C$40 per share as the magic number for a deal.

Of course, back when the rumors first started, BCE issued a denial, saying it had no plans to go private and wasn't in talks with buyout firms. Today is a different story. Today, the company issued a press release saying that it is reviewing its strategic alternatives and has entered into discussions with a group of leading Canadian pension funds to explore the possibility of taking the company private. Since the company needs to maintain a Canadian majority, Kohlberg Kravis Roberts & Co. will be a minority partner.

However, some analysts believe that a merger between BCE and smaller rival Telus is more likely to occur. According to Bloomberg, "That deal would value BCE at about C$42 a share, compared with the C$40 the company may get in a transaction with buyout firms." Even if regulators wouldn't allow such a merger, the prospects for Telus following such a deal are good.

Reuters expands on the Canadian pension funds involved here.

BCE shares are up over 6.6%, Telus shares are gaining nearly 3.5% and RG shares are rising 3.4%.

Since the story of private equity firm The Blackstone Group's potential initial public offering has been out only a couple hours, it is still very much developing. With so few details out, the implications are as yet unknown. Here is Tom Taulli's earlier piece on the subject.

From CNBC's Faber (you can watch the video here, partial transcript's here) we know that the Goldman Sachs Group Inc. (NYSE:GS) and Blackstone attorneys are preparing a prospectus. Preparing is one thing and filing is another, and yet Faber is quite adamant in his belief Blackstone will file within two weeks or by the end of March. Also, the decision to go public rests on Chairman and Chief Executive Stephen Schwarzman. Once again, an adamant Faber says "the decision has been all but made."

While Faber said that Blackstone's market value could be easily in excess of $20 billion according to bankers, MarketWatch points out that it isn't clear yet what kind of an IPO this would be. The shares could represent