The M&A Flurry That Started in 2021 Isn’t Even Close to Done, According to Analysts

The M&A Flurry That Started in 2021 Isn’t Even Close to Done, According to Analysts

USA News Group – Last year in 2021, over 63,000 M&A deals set the all-time record with whopping $5.9 trillion, with deals in the US alone up by 82%. Analysts including those at Morgan Stanley are already projecting 2022 to be another strong year after last year’s boom. In fact, KPMG projects that 2022 could be even bigger than last year’s record. Already there’s been a blockbuster in tech, through the recent mega-acquisition of Activision Blizzard (NASDAQ:ATVI) by Microsoft, Inc. (NASDAQ:MSFT). Now the market is paying attention to some of the next important deals on deck, including potential deals for Peloton Interactive, Inc. (NASDAQ:PTON), Kohls Corporation (NYSE:KSS), and Petroteq Energy, Inc. (OTC:PQEFF).

In the case of clean technology company Petroteq Energy, Inc. (OTC:PQEFF), an offer is already on the table from Viston United Swiss AG, that has been given a deadline extension of April 14, 2022. Petroteq specializes in oil production, having developed proprietary technologies that enable the company to produce oil without water, waste tailings ponds and emissions. In addition to sustainable oil production, their technology cleans oil sands of all hydrocarbons, creating a purified sand as part of an overall ESG strategy.

Already earlier this year, Petroteq’s Board Members shared their unanimous intention to tender their shares through the offer.

“After thorough consideration of all aspects of the Viston Offer, the advice provided by Haywood and consulting with its other advisors, the Board has unanimously determined to recommend that Shareholders accept the Viston Offer and tender their Common Shares,” said the Board in their official statement.

The offer itself is valued at a considerable premium over the market price, with a 100% all-cash consideration of ‎C$0.74 ‎per common share. This price point represents a premium of ‎approximately 279% over the closing price of the Common Shares on the TSX Venture Exchange on August 6, 2021—being the last trading day that the Common Shares were traded on the T‎SXV before being halted on that exchange.

So far, the company has also announced its willingness to assist Viston with its CFIUS filings.

"We are particularly pleased with the recognition this shows of our technology which we have taken from inception to commercial viability as a one of its kind in oil sands eco-friendly, green extraction,” said former Petroteq Chairman and CEO, Dr. Gerald Bailey, who retired in January. “We had always forecast a great future. However, we respect the value of this offer to shareholders and if it can be achieved it will reward our many dedicated supporters."

Shares in Peloton Interactive, Inc. (NASDAQ:PTON) reportedly soared early on as reports started to trickle out that it was a prime takeover target. However, as weeks rolled on, Peloton’s stock dropped, all while reports surfaced of its founder selling $50 million in stock to MSD Partners.

As the leading interactive fitness platform in the world, Peloton announced a comprehensive program to reduce costs and drive growth, profitability, and free cash flow. As per the program’s outline, Peloton expects to deliver at least $800 million in annual run-rate cost savings, while reducing its planned 2022 CapEx spending by approximately $150 million.

"Our focus is on building on the already amazing Peloton Member experience, while optimizing our organization to deliver profitable growth," said John Foley, Co-Founder of Peloton and newly appointed Executive Chair. "This restructuring program is the result of diligent planning to address key areas of the business and realign our operations so that we can execute against our growth opportunity with efficiency and discipline."

According to a recent piece from Barron’s, retail giant Kohls Corporation (NYSE:KSS) is also a takeover target. Reports that private-equity firm Sycamore Partners and Canadian department store Hudson’s Bay were preparing takeover offers that could value the company at more than $9 billion—which is slightly higher than the company’s March 18, 2022 closing price market cap of nearly $8.7 billion.

At a recent virtual investment day, Kohl’s updated the market on the company’s strategy to drive growth and become the retailer of choice for the active and casual lifestyle.

"We have fundamentally restructured our business to drive sustainable and profitable growth, while providing a strong return to shareholders," said Michelle Gass, CEO of Kohl’s. "We have laid the foundation for our winning strategy and have started to implement key initiatives that will scale and accelerate our growth in the years ahead."

One of the biggest takeovers so far in 2022 was that of Activision Blizzard (NASDAQ:ATVI) by Microsoft, Inc. (NASDAQ:MSFT), which sparked even more chatter within the gaming industry of additional big deals to come.

The US$68.7 billion deal netted in several popular game franchises into Microsoft’s portfolio, including World of Warcraft, Call of Duty and Candy Crush.

“Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms,” said Satya Nadella, chairman and CEO, Microsoft. “We’re investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all.”

Microsoft acquired shares at a price of $95 per share for Activision Blizzard. At the time the deal was announced, shares of Activision skyrocketed from $65.39 on the previous trading day to $82.31 for a one day gain of nearly 26%—while the official purchase price was more than a 45% premium on top.

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