SIMONE DEL ROSARIO:
TWITTER’S TRYING TO FORCE ELON MUSK TO MAKE GOOD ON HIS $44 BILLION OFFER. BUT THERE’S A CHANCE HE’LL ONLY HAVE TO FORK OVER $1 BILLION FOR A BREAK UP FEE. AND WE’VE GOT SOME OF THE BIGGEST BREAK UP FEES EVER PAID IN THIS WEEK’S FIVE FOR FRIDAY.
AT NUMBER 5, THE $150 MILLION FEE PAID BY PHARMA GIANT PFIZER TO IRELAND-BASED ALLERGAN. BREAK-UP FEES ARE GENERALLY 1 TO 3 PERCENT OF THE DEAL, SO IT’S CLEAR PFIZER GOT A BARGAIN WHEN THE $160 BILLION DEAL FELL THROUGH. PFIZER PLANNED TO USE THE MERGER TO MOVE TO IRELAND FOR TAX RELIEF, BUT AFTER THE U-S TREASURY CHANGED TAX RULES, PFIZER WALKED AWAY AND PAID THE MAKER BEST KNOWN FOR BOTOX FOR THE HASSLE.
AT NUMBER 4. THE LOVE BETWEEN HILLSHIRE BRANDS AND PINNACLE FOODS LASTED JUST A FEW WEEKS BACK IN 2014. HILLSHIRE’S BOARD GOT COLD FEET IN THE $4.3 BILLION DEAL TO ACQUIRE PINNACLE, WHICH RECEIVED $163 MILLION FOR ITS TROUBLE. THE DECISION TO WALK AWAY CAME AFTER HILLSHIRE GOT A BETTER OFFER. INSTEAD OF HILLSHIRE BUYING PINNACLE, TYSON FOODS BOUGHT HILLSHIRE FOR $8.55 BILLION.
OUR NUMBER 3 GETS US INTO THE BILLIONS, WITH NVIDIA’S PAYMENT OF $1.25 BILLION TO SOFTBANK AFTER THE FAILED TAKEOVER OF SOFTBANK’S CHIPMAKER ARM HOLDINGS. THE $40 BILLION SALE NEVER STOOD A CHANCE, FACING ANTITRUST CONCERNS FROM REGULATORS IN THE U.S. AND E.U.. NOT ALL WAS LOST, THOUGH, NVIDIA GOT TO KEEP A 20-YEAR LICENSE FOR ARM’S INTELLECTUAL PROPERTY.
IT’S NOT SURPRISING BIG PHARMA’s BACK AGAIN AT NUMBER 2. ABBVIE’S $55 BILLION BID TO BUY ADDERALL-MAKER SHIRE. IN 2014 NETTED THE LATTER $1.64 BILLION. IT’S THE SAME SITUATION AS PFIZER AND ALLERGAN. ABBVIE’S BOARD WORRIED IT WOULDN’T GET THE TAX INCENTIVE IT WANTED BY INCORPORATING IN THE U.K. BUT IN A TWIST, IN 2020 ABBVIE BOUGHT ALLERGAN INSTEAD, AFTER PFIZER MISSED OUT. THAT DEAL ACTUALLY WENT THROUGH.
AND OUR NUMBER ONE IS NATURALLY THE MOST EXPENSIVE BREAK UP FEE EVER. INVESTIGATIONS INTO MONOPOLISTIC ACTIVITIES SUNK AT&T’S $39 BILLION ACQUISITION OF T-MOBILE IN 2011. REGULATORS SAID AT&T WOULD HAVE TO SELL OFF A LOT OF T-MOBILE’S BUSINESS TO GAIN APPROVAL, SO AT&T PARTED WITH $4 BILLION INSTEAD. BUT THAT STILL ACCOUNTED FOR MORE THAN 10% OF THE DEAL, AND THEY GOT NOTHING FOR IT.
IT’S STILL NOT THE WORST BREAK UP IN HISTORY. AMAZON FOUNDER JEFF BEZOS SHELLED OUT $38 BILLION IN HIS DIVORCE WITH EX MACKENZIE SCOTT. THAT’S FIVE FOR FRIDAY. I’M SIMONE DEL ROSARIO FOR JUST BUSINESS. SEE YOU NEXT WEEK.
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