CEO, Manalo LLP

Roderick Manlo

Manalo LLP

We provide event driven research services to hedge fund managers and institutional investors that cover select definitive and pre-announced M&A deals, focusing on identifying and analysing the key upside and downside risks to a particular transaction. We primarily analyse $billion+ takeovers or mergers of publicly-traded European targets, but also look at deals globally to assess when there is a key European angle or aspect that can influence the deal outcome.

With over 16 years’ experience in risk arbitrage and investment banking, we specialise in providing research and advisory services on all facets of risk arbitrage, with particular expertise in:

- Cross-Border M&A
- Hostile Takeovers
- Local Takeover Codes
- Antitrust & Competition
- Financial Valuation
- Shareholder Vote Analysis
- Impacts of Precedent Transactions
- Risk Arbitrage Trading Strategies

Event-Driven

<p>Shareholder meetings for Amec and Wood Group will be held on 15-Jun-17, and these are both expected to secure the 75% and 50% requisite approvals, respectively. The Amec vote is anticipated to clear comfortably since the alternative to a merger involves Amec being perceived as a stock which not only recently suspended its dividend but also most likely needs to undertake a £500m rights issue. With continued support from its Board, Wood Group will almost certainly see its 50% Class 1 threshold attained without issues. Securing the Wood Group vote is an important step, especially as one of the current risks to the deal for risk arbitrage funds long the spread is a counterbid for Wood Group. Once the Class 1 shareholder vote has been secured, a counterbid for Wood Group and a subsequent change to the Board’s recommendation alone cannot lapse the deal. Amec and its bankers are running the merger process, as targets always do in UK schemes, and under the 13-Mar-17 Co-Operation agreement, Wood Group is obliged to use reasonable endeavours to satisfy all conditions as soon as possible. This should reduce the downside on a break due to a Wood Group bid, but doubts will remain over the companies’ Unaoil links as well as expected scrutiny from antitrust regulators.</p><p>We explore the latter in this note, the potential hurdle of global antitrust. Competition approvals are required from the UK, Australia, Canada, US, Turkey and Kazakhstan, but realistically, the key antitrust review body will be the UK regulator, the Competition and Markets Authority (CMA). The CMA has commenced its merger inquiry and the Phase I deadline is 7-Aug-17. While a combined Amec + Wood Group will dominate oil and gas services in the North Sea, the CMA’s jurisdiction, the companies confirmed in the scheme document that Wood Group has indeed proposed to divest the majority of Amec’s upstream oil and gas business located in the UK and serving UK customers.</p>

Shareholder meetings for Amec and Wood Group will be held on 15-Jun-17, and these are both expected to secure the 75% and 50% requisite approvals, respectively. The Amec vote is anticipated to clear comfortably since the alternative to a merger involves Amec being perceived as a stock which not only recently suspended its dividend but also most likely needs to undertake a £500m rights issue. With continued support from its Board, Wood Group will almost certainly see its 50% Class 1 threshold attained without issues. Securing the Wood Group vote is an important step, especially as one of the current risks to the deal for risk arbitrage funds long the spread is a counterbid for Wood Group. Once the Class 1 shareholder vote has been secured, a counterbid for Wood Group and a subsequent change to the Board’s recommendation alone cannot lapse the deal. Amec and its bankers are running the merger process, as targets always do in UK schemes, and under the 13-Mar-17 Co-Operation agreement, Wood Group is obliged to use reasonable endeavours to satisfy all conditions as soon as possible. This should reduce the downside on a break due to a Wood Group bid, but doubts will remain over the companies’ Unaoil links as well as expected scrutiny from antitrust regulators.We explore the latter in this note, the potential hurdle of global antitrust. Competition approvals are required from the UK, Australia, Canada, US, Turkey and Kazakhstan, but realistically, the key antitrust review body will be the UK regulator, the Competition and Markets Authority (CMA). The CMA has commenced its merger inquiry and the Phase I deadline is 7-Aug-17. While a combined Amec + Wood Group will dominate oil and gas services in the North Sea, the CMA’s jurisdiction, the companies confirmed in the scheme document that Wood Group has indeed proposed to divest the majority of Amec’s upstream oil and gas business located in the UK and serving UK customers.

Amec Foster Wheeler / Wood Group: Can the Takeover Fail Due to Antitrust?