| Private equity loses its glamour
Bain Capital's successful conclusion to its bid to take over Edcon has revised the record books. At R25bn, this is the biggest private equity deal in SA history by a wide margin. It is a large injection of foreign direct investment, and the conclusion of a flattering bidding war. Yet somehow the deal had lost its glitter. That may be as true of the sale as it is of the private equity industry as a whole. The technicalities of the Edcon approval are part of the reason. Only 80% of shareholders who voted at the special general meeting backed the proposed scheme of arrangement, not much more than the 75% needed. Apparently only 71% of shareholders voted, so that implies 14% of Edcon's shareholders were against the deal - including the Public Investment Corp, which voted the 3% it manages directly against the deal, but left a further 7% stake managed by third-party fund managers to their discretion.
Wesfarmers faces Coles bidding war
COLES last night moved to warn shareholders to retain their shares in anticipation of a higher offer. The move came ahead of it opening its books to suitors tomorrow. The nation's second largest retailer said that Wesfarmers' cash offer, worth $16.47 a share, was not an offer that the Coles board would be prepared to recommend to its shareholders. "Until such time as Coles' ownership review has been completed and the Coles board has made a recommendation to shareholders, Coles shareholders are advised not to sell, or grant economic or voting interests over, their shares," the company said in a statement. Meanwhile, Wesfarmers' first-mover advantage has failed to pay off, with all bidders who have signed confidentiality agreements able to enter the room as soon as tomorrow.
City firms go happy capping
Our revelation that Clifford Chance has capped liability across the board on corporate due diligence will get City M&A partners scrambling to review their policies. Up until now only Eversheds has admitted capping its liability. But as The Lawyer's research reveals, liability caps on due diligence in M&A is seriously starting to take hold at the big City firms. It all started on the sell-side with vendor due diligence in auctions. Because the vendor's lawyers are facilitating a transaction for someone who is not their client, a cap on liability is relatively uncontroversial. But caps on the sell-side have started to erode client resistance on the buy-side. Accountants have been doing this for years, which has always made corporate lawyers pretty grumpy.
Bob Perani part of group bidding for Generals
Perani told The Journal on Saturday night that he is part of a group that has reached an agreement to purchase the United Hockey League club from owner Khaled M. Shukairy. How much of the club they control has yet to be decided. "There is a deal," Perani said between the second and third periods of the Generals' playoff Game 6 with the Kalamazoo Wings. "I've guaranteed certain things. We've got some things to work out. I'm excited. I think we'll sell a lot of tickets through businesses. "We have to have people feel they can come down here and get their money's worth and be entertained." Perani said the five other individuals who could be part of the ownership group include Chuck Glasscock, one of his vice presidents at Perani's Hockey World, which is the largest independent distributor of hockey equipment in the world.
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