MPS shares jump on bid; Sun database sale expected; concessions likely for Ticketmaster merger

By Cristal Cody

Tupelo, Miss., Oct. 20 - Shares of MPS Group, Inc. jumped 21.27% after the Jacksonville, Fla.-based staffing service said Tuesday it will be acquired for $1.3 billion by Swiss human resources solutions firm Adecco SA.

Also on Tuesday, investors are slightly concerned about the call for Oracle Corp. to divest Sun Microsystems, Inc.'s open-source database MySQL to complete its $7.4 billion acquisition, an analyst told Prospect News.

Meanwhile, an analyst said Tuesday that Live Nation, Inc.'s $400 million stock acquisition of Ticketmaster Entertainment, Inc. is likely to be challenged by the U.S. Department of Justice but should ultimately close.

On Wall Street, disappointing housing starts reports and a stronger dollar kept stocks down throughout the day.

The Dow Jones Industrial Average fell 50.71 points, or 0.50%, to close at 10,041.48.

The Standard & Poor's 500 index slipped 6.85 points, or 0.62%, to 1,091.06, while the Nasdaq Composite index closed down 12.85 points, or 0.59%, at 2,163.47.

MPS waits for buyout approval

Zurich-based Adecco will pay $13.80 a share in cash to acquire MPS Group. The price represents a premium of 24% over Monday's closing stock price of $11.14.

The boards of both companies have approved the deal.

The transaction is expected to close in the first quarter of 2010 and is subject to MPS Group shareholder approval and regulatory clearances.

MPS Group spokesman Tyra Tutor told Prospect News that the deal requires approval by U.S. and European Commission regulators and potentially other governments.

"The other countries aren't as large," she said.

The transaction will be financed with Adecco's current cash resources and existing financing. Adecco said it will launch a mandatory convertible bond of 900 million Swiss francs to help finance the acquisition.

"Together, MPS Group and Adecco will be well positioned to deliver a broad range of high-value professional staffing solutions to our clients," Timothy Payne, MPS Group's chief executive officer, said in a statement.

MPS shares gained $2.37, or 21.27%, to close Tuesday at $13.51.

Adecco shares lost 5.31% to end at 51.70 Swiss francs.

Demand grows for Oracle divestiture

On Monday, Michael Widenius, who created the MySQL database to operate web sites, said in a statement that Oracle should commit to the divestiture to resolve European Commission antitrust concerns.

The Justice Department already has approved the transaction, but the European Commission said in September it would investigate the acquisition. The commission's decision is not due until Jan. 19.

The deal, first announced in April, had been expected to close in August.

Santa Clara, Calif.-based software maker Oracle has offered $9.50 a share in cash for Redwood Shores, Calif.-based Sun.

Oracle and Sun representatives did not return calls for comment on Tuesday.

Brent Williams, an analyst with the Benchmark Co., told Prospect News on Tuesday that there are some concerns about the potential divestiture of MySQL, but not enough to impact Oracle or Sun shares.

"MySQL is running around $100 million in revenue," he said. "It wasn't a primary rational for Oracle to do the deal. MySQL is a low-end product that's pretty capable for hosting applications that don't need the heavy metal feature of high-end Oracle products."

Sun shares dropped 10 cents, or 1.10%, to close at $9.01.

Oracle's stock shed 23 cents, or 1.03%, to $22.19.

Scrutiny stays on Ticketmaster buyout

Beverly Hills, Calif.-based concert promoter Live Nation and West Hollywood, Calif.-based Ticketmaster could close their merger by the end of the year, but not without concessions, Krisztian Szentessy, an analyst with Pali Capital Inc., said in a research note on Tuesday.

The companies are "likely to be willing to commit to remedies related to primary and/or secondary ticketing to get the deal done," Szentessy said.

Earlier this month, the Competition Commission in London provisionally ruled against Live Nation's acquisition of Ticketmaster on antitrust concerns. The commission's final report on the merger is expected by Nov. 24.

The deal also is under scrutiny by U.S. antitrust regulators and has drawn criticism from lawmakers and musicians.

"We still believe that the deal is more likely to be approved by the DOJ than not, albeit with conditions, despite populist calls by fans, bloggers and high-profile musicians," Szentessy said.

Ticketmaster shares closed down 15 cents, or 1.36%, at $10.88 on Tuesday.

Live Nation shares slipped 16 cents, or 2.05%, to $7.66.

Mentioned in this article:

Adecco SA Swiss: ADEN

Live Nation, Inc. NYSE: LYV

MPS Group, Inc. NYSE: MPS

Oracle Corp. Nasdaq: ORCL

Sun Microsystems, Inc. Nasdaq: JAVA

Ticketmaster Entertainment, Inc. Nasdaq: TKTM

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