Weibo, Apache, Molson Coors, AMD and BioMarin



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It’s time to make a shopping list — and not just for Santa.

The fourth quarter is also a good time for both corporate America and investors to prepare for even more buyouts in the new year.

Some companies are finishing up an impressive 2017, with plenty of cash to deploy on a shiny new toy and the wind at their backs after a roughly 18% rise for the S&P 500 index Others are closing the books on a lackluster year, and looking for a way to grow via acquisition to prevent similar troubles in the months ahead.

And occasionally you find a spendthrift CEO who can’t say no to the shopping bug. Just look at the $69 billion proposal for CVS Health Corp to purchase Aetna a deal that has many investors skeptical.

Whatever the motivation, buyouts are sure to come hot and heavy in 2018. The Federal Reserve is looking to continue its tightening of monetary policy, which will increase borrowing costs to finance big-ticket deals, and that means there’s an incentive to ink transactions sooner rather than later. Furthermore, many companies that have seen big appreciation over the last 12 months have more bargaining power for stock-based deals.

And of course, there’s the never-ending quest to be bigger and better — and after a rosy 2017, some CEOs may realize they are under the gun to deliver again in the new year.

Some acquisitions plans come out of left field, but here are a few potential transactions I’m watching that could take place in the next 12 months. And if they happen, they could result in a nice pop for the company that is being bought out.

Weibo

Weibo Corp. is one of China’s most popular social-networking sites, and has captivated investors with roughly 450% gains since December 2015. Part of the reason is the big growth potential, with Weibo tracking 22% revenue growth and 83% EPS growth this year. Its user base eclipsed rival Twitter Inc. this year, and Weibo is still growing audience as Twitter flatlines.

But an equally big reason for the run-up in the stock price is rumors of an acquisition, most likely by Chinese e-commerce giant Alibaba Holdings A deeper look at Weibo, a $22.3 billion company, reveals that only roughly 12% of its stock is publicly traded; Alibaba owns about 30% and just over half of the company is in the hands of parent Sina Corp.

Alibaba, with a market cap of more than $430 billion, is an ambitious Asian tech company that has both the will and the capital to make big-ticket deals like this, and its close relationship with Beijing means it won’t suffer bureaucratic hangups like a Western company would.
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