Latest / Bloomberg Intelligence / Bloomberg's Sherman on Mondelez-Hershey, and Lions Gate(Audio)

Transcript

Bloomberg's Sherman on Mondelez-Hershey, and Lions Gate(Audio) · Bloomberg Intelligence

• 0:01
  Speaker 1: He's taking stock with Kathleen Hayes and Pim Fox on
• 0:04
  Speaker 1: Bloomberg Radio. Well, it's a deal that could have or
• 0:07
  Speaker 1: still could. I suppose if the people talking about a
• 0:10
  Speaker 1: deal get back together, it could have created the largest
• 0:14
  Speaker 1: candy company in the world. But after her she has
• 0:16
  Speaker 1: rejected an offer from Mandels and Global candy and snack
• 0:21
  Speaker 1: food maker. You kind of wonder what's going to happen. Next.
• 0:24
  Speaker 1: Joining me now is Alex Sherman. He is technology media
• 0:28
  Speaker 1: and telecom m and a reporter. But bottom line, this
• 0:30
  Speaker 1: is our deals guy. He follows all these deals day
• 0:33
  Speaker 1: in and day out for Bloomberg and he's joining me
• 0:36
  Speaker 1: now in our New York studio. Alex, Welcome, Thanks Kathleen,
• 0:39
  Speaker 1: and we are going to talk about stars and lines.
• 0:41
  Speaker 1: Gape at first, because this is the breaking news. You've
• 0:44
  Speaker 1: been watching deals for a long time. So Mandeleys tells
• 0:47
  Speaker 1: her she we want to We're gonna pay what a
• 0:48
  Speaker 1: dollar seven a share? And her she says, no, thank you.
• 0:53
  Speaker 1: What do you think's going on? So just saying no
• 0:56
  Speaker 1: thank you doesn't necessarily mean no thank you, because sometimes
• 0:59
  Speaker 1: it gets out of a company's hand. So in other words,
• 1:03
  Speaker 1: you know, a typical deal is done in what's called
• 1:05
  Speaker 1: sort of a friendly manner, which is that the two
• 1:07
  Speaker 1: companies have negotiations, they discuss and then you know, maybe
• 1:11
  Speaker 1: we break a story or maybe not, and a press
• 1:14
  Speaker 1: releases announced that one company is buying another. If it
• 1:16
  Speaker 1: isn't friendly, then what often happens is a a one
• 1:19
  Speaker 1: company will send another company a so called a bear
• 1:22
  Speaker 1: hug letter. And that's what we saw here, where a
• 1:25
  Speaker 1: company says, look, we would like to buy you for
• 1:27
  Speaker 1: this amount of money. Uh. It then oftentimes turns into
• 1:31
  Speaker 1: a hostile situation, which is what this is more or less,
• 1:34
  Speaker 1: where Hershey is coming out and saying, we rejected the
• 1:38
  Speaker 1: offer and and we have uh, we don't see any
• 1:40
  Speaker 1: reason to keep negotiations going with the buyer, Mandela. In
• 1:43
  Speaker 1: this case, the question is does Mandelay then up its
• 1:46
  Speaker 1: bid by significantly more money, thus putting pressure on Hershey
• 1:50
  Speaker 1: to negotiate because it has shareholders to answer to. Well, uh,
• 1:55
  Speaker 1: you know, uh mondalai oreos Hershey chocolate seems be a
• 2:00
  Speaker 1: good fit O. People don't eat sugar quite as much.
• 2:06
  Speaker 1: But as you point out, there is a shareholder history.
• 2:08
  Speaker 1: What should be what should we be watching for next?
• 2:10
  Speaker 1: Is next big headline here. So the next big headline
• 2:13
  Speaker 1: is if Montalais opposites bid. Uh. There's some talk that
• 2:16
  Speaker 1: maybe this is a tactic on Mondalai's part to actually
• 2:19
  Speaker 1: get acquired itself. In other words, threatened to buy another
• 2:22
  Speaker 1: company and therefore put pressure on on a even larger company.
• 2:27
  Speaker 1: You know, they've been talking earlier that Pepsi might want
• 2:29
  Speaker 1: to buy Montalais. Whether it's Pepsi or somebody else, this
• 2:31
  Speaker 1: would force the action on that move. So that's something
• 2:34
  Speaker 1: else to look out for. Okay, here's a deal that
• 2:36
  Speaker 1: we can talk about, and this is right up your alley,
• 2:38
  Speaker 1: lions Gate Entertainment buying billionaire John Malone's Stars, a cash
• 2:43
  Speaker 1: and stock deal valued at four point four billion dollars. Yeah,
• 2:46
  Speaker 1: we broke this story last night and it was announced
• 2:48
  Speaker 1: this morning. Uh, not really a surprise for those following
• 2:51
  Speaker 1: this industry closely. In fact, I believe I first broke
• 2:54
  Speaker 1: the story that Stars was for sale in ten that's
• 2:57
  Speaker 1: how long this company has been for sale. Finally breaking
• 3:01
  Speaker 1: a deal today broker in one with lion Skate. The
• 3:03
  Speaker 1: idea here is to put two uh subscale content companies
• 3:07
  Speaker 1: together to give them more leverage Uh, to negotiate with
• 3:11
  Speaker 1: some of the pay TV providers that we've seen come
• 3:14
  Speaker 1: together in recent years. So I'm thinking about a T
• 3:17
  Speaker 1: and T buying Direct TV, or All T spuying Sudden
• 3:19
  Speaker 1: Lincoln Cable Vision, or Charter buying Time Warner Cable. Those
• 3:22
  Speaker 1: deals gave the operators more leverage in the in the
• 3:25
  Speaker 1: content negotiations between companies. Uh. So it is an after
• 3:29
  Speaker 1: effect that the content companies now would come together. This
• 3:32
  Speaker 1: was a John Malone and Mark Ritchesky deal. John Malone
• 3:36
  Speaker 1: controls Stars and actually got on the board of lion Skate,
• 3:40
  Speaker 1: so he was on both sides of this deal. Mark
• 3:42
  Speaker 1: Rocheski the largest shareholder in lion Skate and will be
• 3:45
  Speaker 1: the largest shareholder of the pro forma company if the
• 3:48
  Speaker 1: deal in fact closes. What are Ana was saying about
• 3:51
  Speaker 1: this is this, you know, the positive as goodbuy. It
• 3:53
  Speaker 1: depends who you ask. There's definitely a a current and
• 3:57
  Speaker 1: undercurrent of thought that this is sort of a desperate
• 4:00
  Speaker 1: ration deal that both of these companies have struggled. Uh.
• 4:02
  Speaker 1: And surely you can say that just take a look
• 4:04
  Speaker 1: at their stock prices. Lionsgate had a terrible quarter last quarter.
• 4:08
  Speaker 1: Stars has really struggled for a while. They had Disney
• 4:11
  Speaker 1: Movies and they lost that contract to Netflix. Uh. So
• 4:14
  Speaker 1: I think the idea was that these two companies need
• 4:16
  Speaker 1: to do something. Uh And now the jury is still
• 4:19
  Speaker 1: out if this something is enough. Alright. Alex Sherman, thank
• 4:22
  Speaker 1: you so very much for joining us. He's a technology
• 4:26
  Speaker 1: media and telecom m and a reporter for Bloomberg. Will
• 4:30
  Speaker 1: be seeing how the maybe maybe maybe we'll be back
• 4:32
  Speaker 1: on on the next deal. We'll see out of it. Well,
• 4:36
  Speaker 1: you know, it's always sweet to have you here. Okay,