Penn National Gaming(PENN) - Fortress (FIG)
June 13, 2008 (10:35a) - Maine Harness Racing Status
The Maine Harness Racing regulator is currently waiting for the companies to provide the deal's final financing structuring before concluding its review and reaching a final decision. The MHR will not act until it receives all the necessary documentation and has had an opportunity to review the information.
Once this occurs, the MHR has the option of setting a hearing date at which time various issues would be discussed and finalized before issuing a decision or it may bypass a hearing via a consent order and issue the decision on a random date. At this time, the MHR is hoping to clear this case via a consent order but anticipates that a hearing will be necessary.
The timing for the MHR decision is very tenuous at this time and depends almost entirely on the companies' ability to submit the structuring information quickly. The general impression from MHR officials is that this case will continue into next month.
Countrywide Financial (CFC) - Bank of America (BAC)
June 13, 2008 (9:55a) - ISS Recommendation
This entry will simply acknowledge the receipt of Institutional Shareholder Service's recommendation that CFC shareholders vote in favor of this proposed merger at the June 25, 2008 shareholder meeting.
This is a major no-brainer for CFC shareholders, so the ISS recommendation is truly a non-event. However, in light of CFC's continuing corporate problems, any development perceived as positive must be highlighted.
It will also be pointed out that BAC has continued to express full commitment to this transaction over the last few days. While BAC would certainly be justified in terminating this deal or severely altering the current terms, it does no appear inclined to do so based on public statements and its behavior throughout this transaction.
BAC is fully expected to complete this transaction on or about June 25, 2008.
Anheuser-Busch Cos. (BUD) - InBev
June 13, 2008 (8:45a) - Initial Analysis
This has become a very difficult situation to assess with any degree of confidence. First and foremost it will be stated that it is extremely difficult to conceive of a situation where the iconic BUD would agree to non-U.S. ownership for a variety of obvious reasons. Although just about every company has a sale price, this concept is not likely to apply in this scenario, regardless of shareholder sentiment.
Second, the prospect of BUD's market value dropping dramatically from a failed InBev takeover attempt (a la YHOO in the MSFT situation) may indeed be a compelling factor at the moment, but this should certainly be outweighed by the long-term implications. Unlike many industries, such as the Internet, BUD's products will continue to thrive and be a major part of the U.S. social fabric (for better or worse) well into the foreseeable future. In other words, there is absolutely no rationale whatsoever for this transaction to take place from the perspective of BUD or its shareholders.
Finally, if InBev has any intentions of going hostile in this situation, the public and political repercussions would on a scale that would ultimately harm InBev's image and business in the U.S. It must be assumed that InBev is fully aware of this concept and will move forward with extreme caution.
Not surprisingly, reports are now surfacing that BUD has engaged in discussions with Modelo (Mexico) with respect to a potential combination as a means of dissuading InBev. This is obviously a rational move by BUD, although one that is not entirely necessary at this stage.
Currently, this publication can foresee no scenario in which InBev will actually succeed in its unsolicited offer, even if it increases its offer to an unusually high level.
BCE, Inc. (BCE) - Teachers Private Capital
June 12, 2008 (9:35a) - Financing Status
This entry will note that reports are now surfacing (originating with the Globe and Mail) regarding a possible attempt by the lending banks to leverage the ongoing legal battle into further re-structuring of the deal's financing.
Such a development would not be at all surprising given the tumultuous nature of this deal over the last few months. However, it should be pointed out that similar behavior by the lending banks in CCU-Bain transaction drew some very harsh criticism, as well as threats, from various clients of the banks, which very likely had an impact on quickly resolving the situation in that case. With this in mind, the banks involved in this deal must be cautious not to cross the line of impropriety where their clients, also involved in the deal, are concerned.
Again, this transaction has seen more than its share of bizarre developments so a financing adjustment would come as not shock. This potential development is certainly not considered deal-threatening at this point, especially with the Supreme Court litigation and outcome pending.
Penn National Gaming(PENN) - Fortress (FIG)
June 12, 2008 (9:00a) - Status Report (LA, CO, IL, IN)
This entry will serve as a reminder that the Louisiana GCB Meeting is scheduled for June 17, 2008 (agenda available here on June 15) and the GCB will likely issue its approval decision at that time, although this has not yet been confirmed by GCB officials.
The Colorado Gaming Commission has scheduled its monthly meeting on June 19, 2008. The meeting agenda will be posted here either today or tomorrow and this case is expected to be added to the June 19 docket.
The Illinois Gaming Board will hold a closed session on Monday, June 23 and an open/closed session on Tuesday, June 24, 2008. Unfortunately, the IGB does not publish its meetings agenda, so efforts are currently in progress to determine if this case will be considered at this months sessions.
The Indiana Gaming Commission has not yet scheduled its June 2008 meeting. The IGC usually sets the meeting date during the final week of each month and posts the agenda to this site a few days in advance of the meeting.
ChoicePoint Inc. (CPS) - Reed Elsevier
June 12, 2008 (8:20a) - Additional Analysis
Unfortunately, neither company is willing to discuss the HSR or Exon-Florio reviews at this time, which is not terribly surprising under the circumstances. This is a case where both antitrust and national security issues must be considered major delaying factors, if not outright threats to completion of the transaction. The reluctance of the companies to provide even superficial information on the two key review tends to confirm at least the former suggestion that the delays here will be significant.
One of the problems in assessing this deal is that the services provided by the companies in the area of personal identification/data are extremely elusive in terms of gathering market-related information. This is especially true for market data in the government-related services which is, quite naturally, not available for public consumption. In other words, determining the extent of the competition issues on a quantitative basis here is essentially an act of futility.
This May 24 article published by the Kansas City Star offers a fairly decent overview of the impact this transaction will likely have. Some excerpts included the following:
"The British firm Reed Elsevier has plans to buy the data services company ChoicePoint and meld it with its own LexisNexis operation.
