Top GFI staff seek exit clause if rival BGC bid succeeds

More than 100 senior employees at GFI Group, the US interdealer broker, are seeking changes to their contracts that would allow them to leave the company if a hostile takeover bid by rival BGC Partners is successful.

Dozens of the GFI’s top desk heads and producers have expressed their concern to management in recent months about a BGC purchase, said two people familiar with the situation.

Howard Lutnick, BGC chief executive

Many are worried about working within BGC’s corporate culture, which incentivises employees via a partnership structure unique in the industry and could lead to bonus cuts.

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Caesars Entertainment’s New Corporate Structure and Governance

Restructuring

Caesars Entertainment’s (CZR) operating unit, Caesars Entertainment Operating Company (or CEOC), will restructure as a separate operating company (or OpCo) and property company (or PropCo), with a real estate investment trust (or REIT) directly or indirectly owning and controlling PropCo.

PropCo will own all of CEOC’s real property. A separate subsidiary of PropCo will own all the assets of Caesars Palace Las Vegas (or CPLV).

CEOC’s board composition

OpCo will have three board members, with CZR appointing either two or three such members, depending on whether it owns 90% or more of the equity. If CZR appoints all three members, then one member will be independent.

The REIT will have seven board members, with the holders of the first lien notes appointing either six or seven of the members, depending on whether the first lien note holders own 90% or more of the equity.

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Benzinga’s Weekend M&A Chatter

The following are the M&A deals, rumors and chatter circulating on Wall Street for Friday January 2 through Sunday January 4, 2014

Perfect World Reports Chairman’s Preliminary Non-Binding ‘Go-Private’ Offer of $20/ADS

The Offer:
Perfect World Co., Ltd. (NASDAQ: PWRD) announced Friday, that its board of directors has received a preliminary non-binding proposal from its founder and chairman, Mr. Michael Yufeng Chi, to acquire all of the outstanding shares of Perfect World he does not currently own, in a going private transaction for $20.00 per ADS ($4.00 per ordinary share) in cash.

Perfect World’s Board has formed a special committee of independent directors to consider the proposal.

Perfect World shares closed Friday at $19.25, up 22%.

Kindred Acquires Centerre Healthcare for $195M

The Deal:
Kindred Healthcare, Inc. (NYSE: KND) announced Friday, that it has completed the previously announced acquisition of Centerre Healthcare Corporation for approximately $195 million in cash.

Kindred Healthcare shares closed Friday at $17.77, down more than 2%.

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China’s M&A mission to reach for the stars

According to Yahoo Finance, in 2010, Metro-Goldwyn-Mayer, the storied Hollywood studio behind classics from The Wizard of Oz and James Bond to The Hobbit, filed for Chapter 11 bankruptcy protection. It was the classic victim of a leveraged buyout from a group including Providence Equity Partners and TPG Capital, alongside Sony and Comcast.

The Hobbit

Now it is rumoured to be the target of another group of investors with a lot of capital in their pockets — this time the Chinese. Mainland companies such as Dalian Wanda and Fosun, a conglomerate, are both flush with cash. Dalian Wanda just went public in Hong Kong raising almost $4bn in the process and Fosun has access to the coffers of its Portuguese insurer among other sources of money.

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KKR sells remaining stake in Alliance Boots

According to Yahoo Finance, KKR today announced the sale of its remaining stake in Alliance Boots to Walgreens Boots Alliance, Inc., the new holding company of Walgreen & Co., following the exercise by Walgreens of the call option to acquire the remaining 55% of Alliance Boots as the second step of the overall transaction. In August 2012, Walgreens acquired 45% of Alliance Boots in the first step of the overall transaction.

Dominic Murphy, Member, Head of KKR operations in the United Kingdom commented: “The investment in Alliance Boots adds to our track record of partnering with European entrepreneurs to build global companies and industry leaders. Since Alliance Boots was taken private in 2007, a strong investment program has led to a transformation of the company, both at the retail and distribution side, and to a strong international expansion across Europe, the Middle East and Asia. In 2012, we created, together with Walgreens, the world’s largest pharmacy-led health and wellbeing enterprise. Since then, Alliance Boots and Walgreens have made strong progress in executing on all synergies and plans, allowing the announcement today of the full combination.””

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VSE Corporation Signs Agreement to Acquire Companies Held by Killick Aerospace

VSE Corporation (VSEC) announced today that it has signed a definitive agreement to acquire four business units from Killick Aerospace Group, consisting of Prime Turbines (including both U.S. and Germany-based operations), CT Aerospace, Kansas Aviation and Air Parts & Supply Co. The companies to be acquired specialize in maintenance, repair and overhaul (MRO) services and parts supply for corporate and regional jet aircraft engines and engine accessories. The initial purchase price payable upon the closing is approximately $184 million in cash. The purchase agreement also includes potential post-closing payments of up to $40 million if CT Aerospace, Kansas Aviation and Air Parts & Supply Co. surpass certain thresholds of earnings before interest, taxes, depreciation and amortization (“EBITDA”) during the first two years after the closing and one additional post closing payment of $5 million if such companies surpass a certain EBITDA threshold during any 12-consecutive month period in 2014 and 2015. Other purchase price adjustments also may be required based on certain post-closing determinations, including in respect of the closing net working capital and certain inventory and equipment.

The four business units combined sales and income before taxes are estimated to be approximately $111 million and $22 million, respectively, for the year ending December 31, 2014. Such estimated results are not necessarily indicative of future financial performance and the actual results of the four business units for 2014 may differ from the estimated results. The four business units have approximately 185 employees.

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Walgreens and Alliance Boots Complete Step 2 of Merger to Form First Global Pharmacy-Led, Health and Wellbeing Enterprise

Walgreen Co. and Alliance Boots GmbH today completed Step 2 of their strategic partnership to form Walgreens Boots Alliance, Inc. (Nasdaq:WBA), finalizing the two-step merger launched in 2012 to create the world’s first global pharmacy-led, health and wellbeing enterprise.

Under a reorganization merger agreement approved earlier this week by Walgreens shareholders, Walgreens is now a wholly owned subsidiary of Walgreens Boots Alliance, Inc. Existing shares of Walgreens common stock were converted automatically into shares of Walgreens Boots Alliance common stock on a one-for-one basis. Walgreens Boots Alliance common stock will trade on the Nasdaq stock exchange under the symbol WBA.

The new global enterprise combines Walgreens, the largest drugstore chain in the USA; Boots, the market leader in European retail pharmacy; and Alliance Healthcare, the leading international wholesaler and distributor. Together, Walgreens Boots Alliance spans more than 25* countries, with over 12,800* stores, over 370,000* employees and more than 340* pharmaceutical distribution centers serving more than 180,000† pharmacies and other points of care. The merger also brings together a unique brand portfolio of outstanding retail, wholesale, service and product brands, alongside the world’s largest pharmaceutical wholesale and distribution network. Walgreens Boots Alliance will be domiciled in the United States and headquartered in Deerfield, Ill.

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