Amid Some Signs of Life for M&A, Moguls Head to Sun Valley

Media and technology bigwigs are packing their hiking boots and tennis racquets and heading to Sun Valley, Idaho Tuesday for the start of investment bank Allen & Co.’s annual conference.

It could be opportune timing. The deal value of U.S. tech and media M&A so far this year is up 58% from the same period in 2012, reaching $122 billion, according to Dealogic, a research firm. The number of deals, however, is down 19% to 1,329. The data suggest companies are willing to write bigger checks, even while remaining cautious.

Overall, U.S. M&A is up 27% from the same period last year. But it is down from the same period in 2011, and the number of deals has declined. The trends are similar globally, according to Dealogic.

Mergers and acquisitions have been sluggish for years, as acquirers have remained anxious about consumer and corporate spending and tax uncertainty.

There are some signs that’s changing, particularly in the technology sector. Salesforce.com, Yahoo and Google all announced acquisitions of a billion dollars or more this year, although multi-billion dollar deals have remained elusive.

In the near term, technology bankers say data-analytics technologies are likely targets along with mobile-payments companies. Some of those bankers predict that larger private companies, such as file-sharing service Dropbox and Square, a mobile payments company, could still be acquired, according to those people. Those companies, which have been valued by investors at more than $4 billion and $3 billion respectively, are widely considered to be on paths for initial public offerings. The companies did not return requests for comment.

In recent years, Sun Valley has been more a place for casually chatting about deals rather than finalizing them. In addition to deal talk, here are some other topics on our reporting agenda.

Hulu: The on-again-off again sale of this video site draws outsized attention because of the big personalities involved.  21st Century Fox CEO Rupert Murdoch and Walt Disney chief Bob Iger are selling. AT&T and the Chernin Group, a media company run by former News Corp. chief operating officer Peter Chernin, DirecTV, and Guggenheim Digital, an investment firm run by News Corp. veteran Ross Levinsohn, are among the suitors, according to people familiar with the matter. With final bids due last Friday, no big announcements are expected. But with many key players in attendance, we expect talks and maybe some curveballs. (For a blast from the past, here’s a Sun Valley walk-up I wrote in 2011 from when as many as ten bidders were circling Hulu. The owners decided not to sell.) 

Apple: The intense speculation that follows Apple around the globe follows its chief, Tim Cook, to Sun Valley. Last year, the freshman CEO mingled casually with Wendi Murdoch, former FCC Chairman Julius Genachowski and others. Each hushed conversation, including a few with Twitter CEO Dick Costolo, prompted intense speculation among reporters and even attendees. If he shows up, expect this year to be the same. In particular, we’re tuned into Apple’s talks with cable operators about running live and on-demand television programming on new Apple television hardware. (Tim is too smart to have those conversations in public.)  

Dell: Dell CEO Michael Dell’s saga to get shareholders to support a $24.4 billion buyout for the company doesn’t touch too many media moguls directly. But the megadeal, in which Dell and private-equity firm Silver Lake are proposing shareholders take the company private, is a cliffhanger likely to have attendees talking as investor Carl Icahn has launched a competing shareholder proposal.

Malone: Liberty Media Chairman John Malone often comes to Sun Valley with a colorful Hawaiian shirt and a deal idea or two. Two years ago, he was bidding for control of embattled bookseller Barnes & Noble. Last year, he was in pursuit of control of Sirius XM. Now, he has been hatching a plan to merge Charter Communications, a cable company in which Liberty owns a stake, with Time Warner Cable, say people familiar with the matter. The status of the talks is unclear. But Malone doesn’t give up easily. A Liberty spokeswoman says Malone will be attending.

Spokespeople for the other companies declined or did not return requests for comment. 

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