Procter & Gamble seeks Sara Lee unit; News Corp. eyes Travel Channel; Adobe completes tender

By Stephanie N. Rotondo

Portland, Ore., Oct. 23 - Friday's merger-and-acquisition activity stayed strong as news reports indicated that Sara Lee Corp. and Cox Communications Inc. had received some interest on potential asset sales.

First off, Procter & Gamble Co. is reportedly interested in Sara Lee's air-care unit, a division of its household products unit. Reports indicate the transaction could be valued at around $700 million.

Meanwhile, News Corp. is throwing its hat in the ring for Cox's Travel Channel network. The cable network has been up for sale since July, and the price keeps going higher.

It was also a day for completed tender offers, as Adobe Systems Inc. wrapped its tender for Omniture Inc. shares, and Apollo Global Management Inc.'s offer for Parallel Petroleum Corp. was also completed. Apollo said it would immediately begin a subsequent offer for all remaining outstanding shares.

The equity markets ended the week with a weaker tone, and the Dow Jones Industrial Average once gain fell below 10,000. The index fell 109.13 points, or 1.08%, to 9,972.18, while the Nasdaq Composite dropped 10.82 points, or 0.50%, to 2,154.47. The Standard & Poor's 500 index declined 13.31 points, or 1.22%, to 1,079.60.

Sara Lee unit sought

Procter & Gamble is said to be interested in Sara Lee's air-freshener business, according to news reports.

Sara Lee said last month that the division was for sale and that it had received "significant interest." But the company is reportedly wanting to sell off the unit in its entirety instead of piece by piece.

"The business is for sale," said Tim Ramey, an analyst with D.A. Davidson. "It's likely that business is worth more to a large consumer products company than it is to Sara Lee."

Still, Ramey declined to say whether or not the deal - and its reported value - would be a good option for Sara Lee, as "I don't know the EBITDA generated by that business."

However, "if it is anything like the amount they got for the body wash business from Unilever, it certainly could be attractive," he opined.

Last month, Sara Lee sold its skin-care and deodorant business to Unilever for $1.9 billion. The Chicago-based maker of brand-name products is divesting itself of non-core businesses to focus on its food and beverage units.

Cincinnati-based Procter & Gamble could also benefit from the deal, as it could help the company establish a foothold in markets outside of the United States, at least in regards to its air-care business.

Sara Lee's equity fell 23 cents, or 1.97%, to $11.47. Procter & Gamble's shares dipped 69 cents, or 1.19%, to $57.44.

News Corp. enters ring for Travel Channel

News Corp. has entered the competition for Cox Communications' Travel Channel.

Cox put up a 65% stake in the cable network for sale in July. At that time, Scripps Network Interactive was considered to be the frontrunner in the auction first valued at around $700 million.

But now News Corp. is being touted as the favorite, with bids reaching $800 million - or possibly more.

A consortium group led by Providence Equity Partners is also eyeing the acquisition.

News Corp.'s stock declined 50 cents, or 3.36%, to $14.39. Cox Communications is privately held.

News Corp. is a New York-based vertically integrated media company.

Adobe, Omniture deal nears completion

Adobe Systems announced it had officially completed its tender offer for Omniture.

Adobe's subsidiary, Snowbird Acquisition Corp., purchased approximately 68.12 million of Omniture's outstanding shares at $21.50 per share, representing 86.68% of the company's total outstanding stock. Another 3.03 million shares have also been committed.

Adobe will exercise its "top-up" option, purchasing additional shares directly from the company at $21.50 per share.

The tender offer expired at midnight ET on Thursday.

The merger was expected to be completed Friday. Omniture, an Orem, Utah-based developer of online business optimization software, will then become a wholly owned subsidiary of the San Jose, Calif.-based software company.

Adobe's shares slipped 48 cents, or 1.36%, to $34.69, while Omniture's gained $0.04, or 0.19%, to close at $21.52.

Apollo tender for Parallel completed

Among other completed tenders, Apollo Global Management's offer for Parallel Petroleum's outstanding shares expired Thursday, and Apollo will begin a subsequent offer for the remaining shares.

Approximately 35.24 million shares were validly tendered in the initial $3.15-per-share offer, representing 84.62% of all outstanding shares. Apollo said the second offer will commence immediately and will expire at 5 p.m. ET on Thursday.

Parallel's shares rose by a penny, or 0.32%, to $3.14.

Parallel Petroleum is a Midland, Texas-based independent energy company.

Mentioned in this article:

Adobe Systems Inc. Nasdaq: ADBE

Omniture Inc. Nasdaq: OMTR

News Corp. NYSE: NWS

Parallel Petroleum Corp. Nasdaq: PLLL

Procter & Gamble Co. NYSE: PG

Sara Lee Corp. NYSE: SLE

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