Monthly M&A Insider - Mergermarket

UK
Tata Motors finds it difficult to maintain Jaguar
and Land Rover
• In June 2008, Tata Motors, the listed India based
automotive company, completed the acquisition of Jaguar
and Land Rover, the UK based automobile manufacturers,
from Ford Motor, in a megadeal valued at $2.3bn. Almost
a year after, Tata is facing problems in raising funds to
repay the $2bn bridge loan that it took in order to fund the
acquisition, the payment is due on 2 June 2009.
• On 16 March 2009, Standard & Poor’s stated that Tata
Motors’ BB- long-term credit rating could drop by one notch
or more on account of the deterioration in the company’s
financial profile, and its ability to meet the short-term debt
taken for the acquisition of Jaguar and Land Rover.
• In mid-March, Tata requested an additional £500m in state
aid in order to secure jobs for the UK car manufacturers. A
sale of its two luxury brands is also a possibility since the
demand for cars slowed down since last year. Tata Motors
is worried that it will not be able to sustain its business,
although the company is hoping that its orders for Nano will
provide some relief for its loan.
JJB Sports’ fitness club business sold to
its founder
• On 26 March 2009, David Whelan, the chairman and
founder of JJB Sports Plc acquired the Fitness Clubs
business of JJB Sports for a total cash consideration of
£83.4m.
• JJB Sports Plc was granted a waiver by the UK Listing
Authority, in regards to the requirement to issue a circular
and obtain shareholder approval for the disposal. The waiver
is granted for companies in severe financial difficulty.
• On 10 December 2008, the company initiated an auction
process in relation to the Fitness Clubs business. Besides
the disposal, JJB Sports Plc also proposed a company
voluntary arrangement (CVA) to compromise claims of
landlords of approximately 140 closed retail stores and
temporarily vary the terms of the leases of the open
retail stores. JJB Sports Plc also proposed a company
voluntary arrangement to compromise claims of landlords
of approximately 140 closed retail stores and temporarily
vary the terms of the leases of the open retail stores. David
Whelan will pay £40m immediately but the remaining
£33.9m will be released to the JJB Sports from an escrow
account only when the landlord’s consent is obtained to the
assignment of the relevant leasehold properties.
Consolidation in the mining sector
• After the acquisition of Aricom by Peter Hambro in
February, two more deals took place this month further
consolidating the mining sector. Premier Oil Plc, the listed
UK based oil and exploration company acquired Oilexco
North Sea Limited, the UK based company engaged in oil
and exploration services in North Sea region for a total cash
consideration of $505m. Oilexco Inc filed for bankruptcy
and won creditor protection from a Canadian court on
5 February 2009. Aquarius Platinum, a listed Australian
platinum group metals producer has launched an offer to
acquire Ridge Mining, the UK based company engaged in
platinum group metals for £68.91m.
Monthly M&A report – 100