The Illinois Business Law Journal

Blockbuster's $1 Billion Bid on Circuit City

I. Introduction

     On April 14, 2008 Blockbuster Inc. announced publicly its offer to purchase electronic retailer Circuit City Inc. Blockbuster has been in talks with Circuit City for months regarding an acquisition. [1] On February 17, 2008 Blockbuster sent a letter to Circuit City Chairman Philip Schoonover offering over $1 billion for the transaction. [2] This is equivalent to $6 to $8 a share in cash for the company. [3]Blockbuster also stated that they were willing to pursue alternative deal structures to enable Circuit City shareholders to receive stock. [4] Circuit City is hesitant about the deal and has yet to reveal to Blockbuster its long-term corporate plans and performance data. [5] This paper will evaluate the benefits and negatives of the acquisition as well as discuss whether this merger should occur.

M&A Trend In 2008

In the first financial quarter of 2008, a steady trend in M&A activity is patent. The weak dollar, the economic slowdown, banks’ lack of liquidity, or the motivation to add shareholder value are all viable reasons for the trend in M&A activity.

Some corporations, in 2007, projected M&A to remain strong until, “private-equity buyers pushed up target prices too high and economic growth slow[ed].” [1] A New York investment bank for media and information industries tracked buyouts in the media world for the first quarter of 2008 and reported 202 transactions that had a total value of $13.4 billion. [2] This figure is in no way a cap on the total dollar value of all M&A activity in the first quarter since the $13.4 billion represents only M&A activity in the media and information industries.

Will the XM-Sirius Merger Pass FCC Regulations?

I. Introduction

     On February 19, 2007 satellite radio rivals Sirius Satellite Radio and XM Satellite Radio announced their intention to merge. [1] Both companies have experienced billions of dollars in losses. [2] Their net debt is approximately $1.6 billion. [3] According to Wall Street equity analysts, this merger will help the financial future of both companies by cutting their costs and resulting in a savings of over $3 billion . [4] However, the two companies have major hurdles to overcome. One hurdle was antitrust concerns about the merger by the Department of Justice. [5] On March 24, 2008 the United States Department of Justice closed its investigation and approved the XM-Sirius merger, finding that the merger would not harm consumers or competition. [6] Still, the XM-Sirius merger has one more obstacle in its path - the approval of the Federal Communications Commission (FCC). [7] In order for XM and Sirius to receive approval of their merger from the FCC, under the License Ownership Restrictions the FCC must find that the merger is in the "public interest." [8] In determining whether or not the merger is in the public's interest, this paper will analyze the merger's effect on consumers and competition as well as evaluate if the FCC will or will not approve the XM-Sirius merger.

Breach of Fiduciary Duty Suits Arising Out of Yahoo’s Rejection of Microsoft’s Offer

Last month, Yahoo!, the California-based Internet service provider, rejected a “generous” offer by U.S. software giant, Microsoft. [1] Microsoft’s 62 percent premium above Yahoo!’s share was aimed at maximizing synergies that existed between both companies. Microsoft hoped to gain a greater market advantage in the internet search industry while enjoying a majority share of the projected $80 billion market by year 2010. [2] Following Yahoo!’s rejection, some disgruntled Yahoo shareholders have sought legal remedies to voice their dissatisfaction with Yahoo’s decision. [3] In light of three previously decided cases, Emerging, Van Gorkom, and Disney, this article will attempt to provide a legal analysis on the breach of fiduciary duty suits against Yahoo!.

Creating Stability in the Airline Industry through Merger

I. Introduction

In the mid-1980s the airline industry experienced merger mania. Delta bought up Western. [1] Pan Am merged with National [2]. Texas International and New York Air merged with Continental and People Express. [3] Now this trend has reemerged through the possible merger of Delta, the third-largest U.S. airline in terms of passenger traffic, with Northwest, the fifth-largest carrier, to create the largest passenger airline in the world. [4] Executives of both airlines have agreed on most of the basics of a merger, but talks have stalled over the issue of integrating workers. [5] As talks have stalled, the question remains whether Delta and Northwest should merge. This article will discuss the implications of the Delta-Northwest merger. First, it will discuss the antitrust considerations. Second, it will examine the likely impact of the merger on employers, shareholders, and customers. Finally, this article will conclude on whether or not the Delta-Northwest merger will be beneficial for the two companies and the airline industry.

A New Height For Internet Search?: The Micro-Hoo Deal

Microsoft’s Offer

A $44 billion bid by Microsoft (“MSFT”) to acquire Yahoo (“YHOO”) may be an indicator of just how desperate Microsoft is to dominate the internet search market. [1] This bid may be reflective of Google’s threat to the world’s largest software maker. [2] With the offer on the table, analysts can only speculate about Yahoo’s response to the $44 billion possible merger.

Megafirm Merger Mania

I. Introduction

    A prominent trend in today’s corporate law firms is that of merging large firms together for an even larger powerhouse.  This year indicates a large jump from last year’s already high number for law firm mergers.  [1]  While the amount of mergers continue to climb, statistics indicate that the average size of the smaller American law firm have decreased, reflecting an overall lean in the industry towards the megafirm. [2]  Proponents of mergers point out that mergers help create opportunities by increasing the pool of client contacts and projects. [3]  Firms combine their resources and expand their practices with the ultimate goal of serving their clients better. [4]  However, there are downsides that this article discusses that are not often publicized in the splashy press releases that herald each law firm merger.

Post-Merger: What’s in a Name?

Amongst the due diligence, negotiations, and deal making in crafting a merger between two companies, one issue that arises is what to name the new company.  A newly merged company’s choice of name may have much to do with how shareholders, customers, and other corporate constituents perceive the newly merged company.

Miller and Coors Set to Combine U.S. Operations

I.    Introduction

SABMiller and Molson Coors announced October 9th, 2007 that they signed a letter of intent to combine all U.S. and Puerto Rico operations of their subsidiaries Miller and Coors. [1]  This joint venture will result in a combined 69 million U.S. barrels of beer sales and net revenues of approximately $6.6 billion. [2]  The announcement sets the stage for a showdown with the current market leader Anheuser-Busch.  MillerCoors is set to have 30% of the U.S. beer market, while Anheuser-Busch dominates with 50%. [3]

Get Ready for Mobile Ads

Nokia Corp. announced on September 17, 2007 that it has reached a definitive agreement to acquire Enpocket, Inc. [1] The move is set to boost Nokia’s products and services in the area of mobile advertising. [2]