iVLG News Roundup Week 40: Mergers & Acquisitions, Securities Regulation, and Housing
Mergers and Acquisitions
Exxon Mobil Buys Canadian Oil and Gas Company
Oil giant Exxon Mobil agreed to terms on Wednesday to purchase Canadian oil and gas company Celtic Exploration. Exxon is paying roughly $3.1 billion in cash and stock. Exxon has been actively seeking to expand its presence in the energy-rich shale that is in western Canada.
The deal includes Exxon paying about $24.5 Canadian dollars ($24.92 USD) per share, which is roughly 35 percent above the Canadian company’s closing price. Celtic investors will also receive .5 of a share in a new company that will be led by Celtic’s current management team.
Microsoft Makes Two Deals in Two Days
Microsoft announced Wednesday that it has closed a deal to acquire MarketingPilot Software, LLC, a marketing software company based out of Evanston, Illinois. MarketingPilot makes automated marketing software that assists its customers manage marketing campaigns, through online and social media, radio, television, and print advertising.
This acquisition comes just one day after Microsoft announced its deal to purchase StorSimple, a cloud storage company.The terms of both deals have not yet been released.
SEC Advances its Plan for Tougher Regulation
The SEC has moved closer to overhauling the derivatives market by proposing tougher standards that will require the nation’s biggest banks to bolster their capital cushion and post additional collateral for derivative trades. Derivatives played a large part in the financial crisis, and this latest effort by the SEC is an attempt to rein in the unclear derivatives business. The proposed rules passed through the SEC by unanimous vote, and now enter a 60-day public comment period, which is required in order for the SEC to finalize the rules.
SEC chairwoman, Mary Schapiro, said, “these rules are intended to make the financial system safer, and the derivative markets fairer, more efficient, and more transparent.
SEC Files Complaint Against Hedge Fund
The SEC filed a complaint on Wednesday alleging that a hedge fund, which at one point managed as much as $1 billion in assets, lied to its investors about performance and asset values to earn higher management fees. As a result of the alleged misrepresentation, Yorkville Advisors persuaded investors to give $280 million to manage, which meant more than $10 million in excess fees. The SEC claims that the firm did not abide by its own policies for valuing assets, disregarded poor returns and withheld some of those returns from its auditor.
The firm defended itself, releasing a statement that this complaint was filed as part of the SEC’s “free money shakedown.”
Housing Starts Up to Highest Pace in More than Four Years
As our struggling economy continues its slow rebound, the latest news concerning the housing market is a breath of fresh air. Groundbreaking on new U.S. homes increased 15 percent last month. It is estimated that one of the major reasons our economy has failed to bounce back very quickly is that the housing market has been so stagnant. However, home building this year has been increasing for the first time since 2008. Economists estimate that for every new house built, at least three new jobs are created.