BSkyB are planning to buy-back £750 million of their own shares to help protect themselves from a hostile takeover bid. The move will also make it clear to shareholders that they do not plan to be taken over any time soon.

BSkyB has reported good financial results this year with an increase in revenues of 16% to a total of £6.6 billion. Their cash flow has also increased considerably with £869 million sitting in the bank. So a share buy back is the most sensible course of action in the current circumstances.

Some investors actually wanted to see BSkyB claw back more of their shares though, but SSkyB’s CEO said that they wanted to keep a healthy cash flow for any future investments.

At the moment the big news at Sky is the partnership with the BBC to share some of the F1 Grand Prix coverage. The partnership is running from 2012 to 2018 and it will see half of all the grand prix’s aired on the BBC. Sky will be showing them all on its own Sports channels.

HD (high definition) is boosting Sky’s coffers, with many people paying out an additional £10 each month for the right to view HD TV. With 10.3 million customers this alone has the potential to add £1.2 billion to its annual revenue. Currently there are around 3.87 million Sky+HD customers who are paying a premium fo the right to record Sky and watch in HD. However, overall there has actually been a small drop in average revenues per customer of around £5.

With the growing interest in FreeSat, which offers free HD television and free recording, pausing of live TV and series linking (i.e. everything which Sky offers) plus access to BBC iPlayer via the set top boxes, it is a surprise that Sky continues to grow its customer base.

Also on the horizon is the long awaited Google TV which will revolutionise the way we watch television. At the moment the battle is between  satellite and cable services, but soon superfast broadband will be streaming films first to screens in high definition. If you are planning to invest in Sky in the long term then it is important to consider the new technologies and services which are growing rapidly.

Good news for shareholders this year though as the board agreed to raise the dividend by 20% to 23.2 pence.

Big news today, PNC Financial Services Group Inc are making a bid for RBC (Royal Bank of Canada).

PNC is the 6th largest bank in America and has made an offer to pay a total of $3.62 billion in cash and stock for the Royal Bank of Canada’s retail business.

PNC wishes to acquire RBC to help grow its retail banking business. Currently its main presence is centered in Florida and the neighbouring states whereas RBC has over 420 branches in 15 states in northern US states.

Many other Canadian banks are currently looking to expand into America so this move by RBC to invite a takeover by an American bank is an interesting decision to say the least. RBC has had some financial issues in the last few years and has suffered from too much real estate exposure during the sub-prime crisis.

PNC will be taken on a lot of debts from RBC. RBC Bank has made losses for each of the last 11 quarters.

PNC Takeover Terms

PNC takeover offer terms will be announced soon. The takeover is expected to be completed in the first quarter of 2012.

In case you had not already heard, Rolls-Royce and Daimler are taking over Tognum. On 6th June 58.35% of Tognum shareholders had accepted the offer from Daimler and Rolls-Royce.

Daimler and Rolls-Royce now control a total of 59.87% of Tognum through their joint venture called Engine Holding GmbH.

The final acceptance of shares is due to close on Monday 20th June and it is expected that sufficicent shares will be tendered to finalise the deal.

Terms of the Offer

Daimler and Rolls-Royce offered Tognum shareholders EUR26 per share tendered. Very soon after this offer the Supervisory and Management Boards of Tognum AG accepted the offer.

Tognum AG

Tognum is a Mechanical engineering company which controls several divisions of DaimlerChrysler and was originally set up by a private equity fund called EQT IV. Tognum has been trading on the Frankfurt exchange since 2007, however, EQT sold out its 22.3% stake to Daimler in 2008. Daimler had increased their shareholding in Tognum to 28% prior to the takeover bid.

Tognum’s CEO was very optimistic of the takeover, stating:

“Together with the two companies, we further strengthen our technological leadership in propulsion systems and distributed energy systems and develop our company into a platform for growth”

Engine Holding GmbH

Engine Holding is a joint venture by Daimler and Rolls-Royce. The acquisition of Tognum will allow Rolls-Royce to develop its marine and diesel power activities while Daimler is likely to focus on developing its relationship with its major clients who currently order modified Daimler diesel engines from Tognum for a variety of specialist roles.

No, not the American heavy metal band, but the Australian resource and commodities company Metallica Minerals Ltd.

Metallica has announced plans for a rights issue to raise $4.9 million to develop is Tri-metal Project.

Metallica’s Tri-Metal Project operates in the Townsville area. Also it is running a Weipan zircon / rutile mineral sands project on the Cape York Peninsula in the Far North Queensland region.

This news has led to a rally in share price with a rise of 5.8% today to 36.5 cents.

Terms of the Metallica Rights Issue

For every 10 shares currently held shareholders may elect to take up 1 new share in Metallica Minerals and 2 shares in Planet Metals Ltd. at a cost of 42 cents. This represents a discount as Metallica was trading at close at 34.5 cents and Planet Metals is trading at 9.5 cents, so the combined cost to buy the 3 shares in the open market is 53.5 cents.

Who Are Metallica Minerals?

Minerals and commodities are in high demand at the moment which is why Metallica is keen to develop its projects. Metallica current specialise in extraction of these minerals:

• Nickel-Cobalt
• Coal Energy
• Bauxite
• Tungsten
• Copper
• Gold
• Limestone

On the 3rd June 2011 it announced that it had positive tests from its recent surveys in the Tri-metal project zone.

Find out more about their operations on their website: www.metallicaminerals.com.au

The insurance company, Resolution plc, is planning to return up to £500 million to shareholders by way of a share buyback (also called a share repurchase offer).

Companies perform share buybacks when they are cash rich and wish to reduce their cash balance. Buying back shares is a way to reward investors by offering a price exempt from trading fees (or much reduced fees) and also reducing the number of shares in the open market.

Resolution has over £1 billion on its books which comes from its Friends Provident and Axa UK Life assurance businesses. Resolution acquired with Friends Provident in 2007 which also gave it the Axa UK life assurance business.

£3 Billion Rights Issue

Resolution raised a huge amount of cash through a rights issue however early in 2011 it announced that it was going to cease its hunt for new businesses to acquire and focus on developing its current brand and services.

A share buy back is proof that Resolution are serious about consolidating their current stocks and working on developing their products now. They have grown quickly in recent years and now is a good time for them to invest internally and at the same time reduce the number of shares on the market which will reduce risk of hostile takeovers.

Fixed Price or Dutch Auction

There are several ways a company can buy back its own shares. Sometimes it will just fix a price and invite shareholders to tender.

If it wishes to restrict the number of shares / the amount of cash it has to pay it will most likely issues a Dutch Auction and invite shareholders to bid to tender their shares at a price within a fixed range. The company will then start tallying up the number of shares tendered from the lowest price upwards until it reaches the target cash figure.

The Bank of Ireland has announced plans to carry out a rights issue to raise an estimated EUR4.35 capital. The rights issues is likely to be underwritten by the Irish government and represent a reasonable discount to market price.

Full details of the rights issue will not be announced until after an agreement has been made with the underwriters, who are the Minister for Finance and the NPRFC (National Pensions Reserve Fund Commission).

Bank of Ireland is also redeeming bonds by offering a cash or stock option. The more shareholders that elect for stock the lower the capital raising will need to be. So the rights issue is tied in with the “bondholder burden sharing” scheme and the Liability Management Exercise (“LME”) that they are also running.

Full details of the Capital Raising scheme can be found on their website:

http://www.bankofireland.com/about-boi-group/investor-relations/capital-raising-2011/

The first big tech stock corporate takeover in a while. News in that Lenovo who are the 4th largest computer manufacturer in the world, have made a takeover bid for Medion.

Medion is a German stock and Lenova is Chinese. Lenovo are looking to purchase 36.66% of Medion AG shares at EUR13 each from the founder Gerd Brachmann, who owns 55% of the stock. So shareholders will not be electing to tender their shares in this offer.

Lenovo build personal computers as well as commercial systems, workstations, servers and storage drives. They currently control around 10% of the world market in computer hardware. The Chinese state own about 27% of Lenovo through state shares in Legend Holdings Limited.

Medion produce a budget priced range of computers and electronics and markets most of its products through the Aldi supermarkets.

Takover of IBM’s PC Company Division

In 2005 Lenovo bought the IBM PC Company Division for $1.75 billion. This was its first and largest takeover to date. Earlier this year Lenovo made a partnership with Japan’s NEC to create a new company called Lenovo NEC Holdings B.V.

This is the first takeover offer on a German stock by a Chinese corporation and it will be interesting to see what shareholders make of it.

Lenovo’s CEO Yang Yuanqing has stated that he is looking for more takover opportunities to help grow his business further.

Esthetics International Group Bhd (EIG) has announced plans to raise RM26.4 million through a rights issue sale.

EIG are hoping to release 52.8 million rights (nil paid rights shares) along with 52.8 million warrants which will be detachable (so can be trade separately).

Terms of the EIG Rights Issue

For every 5 shares held you are entitled to 2 rights and 2 warrants.

Call price is likely to be 50 sen (subject to confirmation).

Forth Ports Plc has been acquired (a recommended cash offer) by Otter Ports Limited and is subject to a scheme of arrangement on the 2nd June 2011.

Forth Ports (UK sedol 0347310) will be de-indexed from the FTSE250 following its sale to Otter Ports, a subsidiary of Arcus European Infrastructure Fund. The takeover saw Forth Ports being sold for £745 million.

The takover agreement valued Forth Ports shares at £16.30, which reflects a premium of 8.3% based on the closing price on 4th March 2011. The final dividend of 20p per share will still be paid out to entitled shareholders (record date 15th April 2011).

Forth Ports Company Registrar

For more information on this event contact Forth Port’s company registrar:

• Equiniti Limited Aspect House,
• Spencer Road,
• Lancing,
• West Sussex,
• BN99 6DA.
• Shareholder helpline: 0871 384 2149

The final trading price on the London Stock Exchange was £16.27.

Mahindra & Mahindra Ltd. is considering a Scheme of Arrangement between Mahindra & Mahindra Ltd. and Mahindra Automobile Distributor Private Limited which is a wholly owned subsidiary of Mahindra & Mahindra Ltd.

The terms of the scheme are not announced yet but it may involve a demerger of Mahindra Automobile Distributor Private Limited to allow it to trade separately on the Indian stock exchange.

In addition to the possible demerger of the automotive business there are also reports of an additional demerger of its Agri Inputs Business.

Mahindra & Mahindra Limited is an Indian multinational conglomerate with headquarters in Mumbai. It was originally a steel trading business during the post-war period then moved into the autmotive industry and produced Willys Jeeps, the military jeeps that would common during the second world war. It went on to produce a range of popular 4 wheel drive vehicles.

Since 2008 Mahindra has been developing is automotive industry further with new models such as the Scorpio and the Bolero. It has been working in partnership with Ford and has expanded its operations to Egpyt and Brazil.

Mahindra & Mahindra Operations

As well as the automotive industry, Mahindra & Mahindra also cover:

• Farm Equipment
• Banking & Finance with the Kotak Mahindra Bank
• Information Technology - Tech Mahindra, Mahindra Satyam, Bristlecone
• Club Mahindra Holidays
• Mahindra Defence
• Mahindra Aerospace
• Infrastructure & Real Estate – development of Special Economic Zones (SEZ)
• Agriculture Farm Component
• Healthcare

Mahindra & Mahindra was the 19th largest company in India in 2010 with a turnover of Rs 319.57 billion.