WEBVTT - Bloomberg's Sherman on Mondelez-Hershey, and Lions Gate(Audio)

0:00:01.160 --> 0:00:04.320
<v Speaker 1>He's taking stock with Kathleen Hayes and Pim Fox on

0:00:04.400 --> 0:00:07.760
<v Speaker 1>Bloomberg Radio. Well, it's a deal that could have or

0:00:07.920 --> 0:00:10.920
<v Speaker 1>still could. I suppose if the people talking about a

0:00:10.960 --> 0:00:14.000
<v Speaker 1>deal get back together, it could have created the largest

0:00:14.000 --> 0:00:16.920
<v Speaker 1>candy company in the world. But after her she has

0:00:16.960 --> 0:00:21.480
<v Speaker 1>rejected an offer from Mandels and Global candy and snack

0:00:21.560 --> 0:00:24.400
<v Speaker 1>food maker. You kind of wonder what's going to happen. Next.

0:00:24.680 --> 0:00:27.920
<v Speaker 1>Joining me now is Alex Sherman. He is technology media

0:00:28.000 --> 0:00:30.680
<v Speaker 1>and telecom m and a reporter. But bottom line, this

0:00:30.880 --> 0:00:33.559
<v Speaker 1>is our deals guy. He follows all these deals day

0:00:33.560 --> 0:00:35.960
<v Speaker 1>in and day out for Bloomberg and he's joining me

0:00:36.040 --> 0:00:39.239
<v Speaker 1>now in our New York studio. Alex, Welcome, Thanks Kathleen,

0:00:39.440 --> 0:00:41.800
<v Speaker 1>and we are going to talk about stars and lines.

0:00:41.840 --> 0:00:44.120
<v Speaker 1>Gape at first, because this is the breaking news. You've

0:00:44.159 --> 0:00:47.160
<v Speaker 1>been watching deals for a long time. So Mandeleys tells

0:00:47.159 --> 0:00:48.920
<v Speaker 1>her she we want to We're gonna pay what a

0:00:48.960 --> 0:00:53.800
<v Speaker 1>dollar seven a share? And her she says, no, thank you.

0:00:53.840 --> 0:00:56.080
<v Speaker 1>What do you think's going on? So just saying no

0:00:56.160 --> 0:00:59.800
<v Speaker 1>thank you doesn't necessarily mean no thank you, because sometimes

0:00:59.560 --> 0:01:02.760
<v Speaker 1>it gets out of a company's hand. So in other words,

0:01:03.320 --> 0:01:05.640
<v Speaker 1>you know, a typical deal is done in what's called

0:01:05.680 --> 0:01:07.640
<v Speaker 1>sort of a friendly manner, which is that the two

0:01:07.680 --> 0:01:11.880
<v Speaker 1>companies have negotiations, they discuss and then you know, maybe

0:01:11.920 --> 0:01:14.160
<v Speaker 1>we break a story or maybe not, and a press

0:01:14.240 --> 0:01:16.720
<v Speaker 1>releases announced that one company is buying another. If it

0:01:16.760 --> 0:01:19.560
<v Speaker 1>isn't friendly, then what often happens is a a one

0:01:19.600 --> 0:01:22.679
<v Speaker 1>company will send another company a so called a bear

0:01:22.800 --> 0:01:25.160
<v Speaker 1>hug letter. And that's what we saw here, where a

0:01:25.200 --> 0:01:27.160
<v Speaker 1>company says, look, we would like to buy you for

0:01:27.240 --> 0:01:31.119
<v Speaker 1>this amount of money. Uh. It then oftentimes turns into

0:01:31.200 --> 0:01:34.399
<v Speaker 1>a hostile situation, which is what this is more or less,

0:01:34.720 --> 0:01:37.959
<v Speaker 1>where Hershey is coming out and saying, we rejected the

0:01:38.000 --> 0:01:40.720
<v Speaker 1>offer and and we have uh, we don't see any

0:01:40.760 --> 0:01:43.800
<v Speaker 1>reason to keep negotiations going with the buyer, Mandela. In

0:01:43.800 --> 0:01:46.640
<v Speaker 1>this case, the question is does Mandelay then up its

0:01:46.680 --> 0:01:50.680
<v Speaker 1>bid by significantly more money, thus putting pressure on Hershey

0:01:50.760 --> 0:01:55.080
<v Speaker 1>to negotiate because it has shareholders to answer to. Well, uh,

0:01:55.400 --> 0:02:00.320
<v Speaker 1>you know, uh mondalai oreos Hershey chocolate seems be a

0:02:00.360 --> 0:02:05.960
<v Speaker 1>good fit O. People don't eat sugar quite as much.

0:02:06.000 --> 0:02:08.080
<v Speaker 1>But as you point out, there is a shareholder history.

0:02:08.120 --> 0:02:10.000
<v Speaker 1>What should be what should we be watching for next?

0:02:10.080 --> 0:02:13.280
<v Speaker 1>Is next big headline here. So the next big headline

0:02:13.320 --> 0:02:16.680
<v Speaker 1>is if Montalais opposites bid. Uh. There's some talk that

0:02:16.760 --> 0:02:19.480
<v Speaker 1>maybe this is a tactic on Mondalai's part to actually

0:02:19.520 --> 0:02:22.760
<v Speaker 1>get acquired itself. In other words, threatened to buy another

0:02:22.840 --> 0:02:26.600
<v Speaker 1>company and therefore put pressure on on a even larger company.

0:02:27.040 --> 0:02:29.000
<v Speaker 1>You know, they've been talking earlier that Pepsi might want

0:02:29.000 --> 0:02:31.600
<v Speaker 1>to buy Montalais. Whether it's Pepsi or somebody else, this

0:02:31.639 --> 0:02:34.399
<v Speaker 1>would force the action on that move. So that's something

0:02:34.400 --> 0:02:36.520
<v Speaker 1>else to look out for. Okay, here's a deal that

0:02:36.560 --> 0:02:38.840
<v Speaker 1>we can talk about, and this is right up your alley,

0:02:38.840 --> 0:02:43.160
<v Speaker 1>lions Gate Entertainment buying billionaire John Malone's Stars, a cash

0:02:43.200 --> 0:02:46.800
<v Speaker 1>and stock deal valued at four point four billion dollars. Yeah,

0:02:46.800 --> 0:02:48.640
<v Speaker 1>we broke this story last night and it was announced

0:02:48.680 --> 0:02:51.640
<v Speaker 1>this morning. Uh, not really a surprise for those following

0:02:51.680 --> 0:02:54.520
<v Speaker 1>this industry closely. In fact, I believe I first broke

0:02:54.800 --> 0:02:57.520
<v Speaker 1>the story that Stars was for sale in ten that's

0:02:57.560 --> 0:03:00.520
<v Speaker 1>how long this company has been for sale. Finally breaking

0:03:01.080 --> 0:03:03.560
<v Speaker 1>a deal today broker in one with lion Skate. The

0:03:03.600 --> 0:03:07.480
<v Speaker 1>idea here is to put two uh subscale content companies

0:03:07.480 --> 0:03:11.560
<v Speaker 1>together to give them more leverage Uh, to negotiate with

0:03:11.680 --> 0:03:14.640
<v Speaker 1>some of the pay TV providers that we've seen come

0:03:14.680 --> 0:03:16.919
<v Speaker 1>together in recent years. So I'm thinking about a T

0:03:17.040 --> 0:03:19.480
<v Speaker 1>and T buying Direct TV, or All T spuying Sudden

0:03:19.520 --> 0:03:22.760
<v Speaker 1>Lincoln Cable Vision, or Charter buying Time Warner Cable. Those

0:03:22.800 --> 0:03:25.600
<v Speaker 1>deals gave the operators more leverage in the in the

0:03:25.720 --> 0:03:29.400
<v Speaker 1>content negotiations between companies. Uh. So it is an after

0:03:29.480 --> 0:03:32.680
<v Speaker 1>effect that the content companies now would come together. This

0:03:32.800 --> 0:03:36.880
<v Speaker 1>was a John Malone and Mark Ritchesky deal. John Malone

0:03:36.960 --> 0:03:40.040
<v Speaker 1>controls Stars and actually got on the board of lion Skate,

0:03:40.080 --> 0:03:41.960
<v Speaker 1>so he was on both sides of this deal. Mark

0:03:42.040 --> 0:03:45.160
<v Speaker 1>Rocheski the largest shareholder in lion Skate and will be

0:03:45.200 --> 0:03:48.960
<v Speaker 1>the largest shareholder of the pro forma company if the

0:03:48.960 --> 0:03:51.120
<v Speaker 1>deal in fact closes. What are Ana was saying about

0:03:51.120 --> 0:03:53.320
<v Speaker 1>this is this, you know, the positive as goodbuy. It

0:03:53.440 --> 0:03:57.720
<v Speaker 1>depends who you ask. There's definitely a a current and

0:03:57.840 --> 0:04:00.000
<v Speaker 1>undercurrent of thought that this is sort of a desperate

0:04:00.120 --> 0:04:02.920
<v Speaker 1>ration deal that both of these companies have struggled. Uh.

0:04:02.920 --> 0:04:04.640
<v Speaker 1>And surely you can say that just take a look

0:04:04.640 --> 0:04:07.840
<v Speaker 1>at their stock prices. Lionsgate had a terrible quarter last quarter.

0:04:08.120 --> 0:04:11.160
<v Speaker 1>Stars has really struggled for a while. They had Disney

0:04:11.200 --> 0:04:14.720
<v Speaker 1>Movies and they lost that contract to Netflix. Uh. So

0:04:14.800 --> 0:04:16.760
<v Speaker 1>I think the idea was that these two companies need

0:04:16.839 --> 0:04:19.560
<v Speaker 1>to do something. Uh And now the jury is still

0:04:19.560 --> 0:04:22.600
<v Speaker 1>out if this something is enough. Alright. Alex Sherman, thank

0:04:22.640 --> 0:04:26.520
<v Speaker 1>you so very much for joining us. He's a technology

0:04:26.640 --> 0:04:30.040
<v Speaker 1>media and telecom m and a reporter for Bloomberg. Will

0:04:30.080 --> 0:04:32.880
<v Speaker 1>be seeing how the maybe maybe maybe we'll be back

0:04:32.880 --> 0:04:36.080
<v Speaker 1>on on the next deal. We'll see out of it. Well,

0:04:36.120 --> 0:04:38.240
<v Speaker 1>you know, it's always sweet to have you here. Okay,