– BG Group plc (BG/ LN): Further commotion coming out of Brazil’s huge corruption case involving Petrobras (BG’s operator of its oil fields in Brazil) – Andre Esteves, CEO of BTG Pactual, the sixth largest Brazilian bank, was arrested as part of the wide corruption probe on suspicion he and the leader of the government coalition in the Senate, Delcidio Amaral, allegedly tried to interfere in testimony related to a pay-to-play scheme at the state-run oil giant, Petrobras, according to a court document. Although Brazil and Petrobras will continue to attract further political and corruption headlines, this should not affect BG or the BG/ Shell deal given all fraud and allegations stem from Petrobras’ relationships with its (sub)contractors (and not related to the international ownership partners) with main focus on its downstream operations (BG’s role in Brazil is upstream).
– Rexam plc / Ball Corp (BLL US): After our sources had indicated to us that Ball had been looking to give up a relatively high number of plants to EC, Reuters reported last night Ball Corp is ready to sell 11 European plants (9 can and 2 ends manufacturing facilities: most likely a mix of plants of Rexam and Ball with 4 plants in Germany, 3 in UK, and one each in Spain, France, Netherlands, and Spain): based on our rough estimates of about $100m revenue per plant, this divestiture package for EU alone already could imply divested sales of about $1.1bn vs deal’s self-imposed divestiture captive $1.58bn. Based on these concessions Ball is considering, it looks Ball is willing to go all the way to get this deal approved.
– Ten Cate NV (KTC NA): Swiss event driven/merger arbitrage fund PSquared Asset Management (with 2.8% stake) is being quoted in Dutch local press that the offer by Dutch private equity Gilde Buy Out Partners for Ten Cate should be higher than the EUR 24.5 cash offered. This noise by PSquared follows earlier rumours/reports that other, local shareholders (like Kempen Capital with 5.5% stake) are equally unimpressed with the price offered. Although bump by Gilde in next 1-3 weeks might be outside scenario (given that they can waive required shareholder acceptance from 95% to 66.67%), there is very limited downside buying Ten Cate around the EUR 24.5 offer price (deal has already gotten all regulatory approvals, and offer is expected to close by 16 December).