Spring Fever and the Sexuality of Corporate America

And that’s why birds do it, bees do it
Even educated fleas do it
Let’s do it, let’s fall in love

from “Let’s Do It” by Cole Poter

I saw two squirrels going at it in my backyard a few days ago through the screen door.  At least I think that’s what they were doing.  Or maybe it was more innocent, maybe one squirrel had a piece of an acorn stuck in her throat and the other squirrel was performing the Heimlich maneuver.

Look, I know what I saw.  I threw a tennis ball at the tree to shoo them away, “I got little kids here, Alvin!”

All of God’s creatures get a little frisky in the spring.  I used to switch girlfriends this time of year myself back before I became a thirty-something, diaper-changing automaton in the service of my Jewish American Princess Overlord.

Sorry, I lost my thread for a second.  Oh yeah, while we were fretting over whether or not to Sell in April or Sell in May the most unexpected thing began happening – US Corporations began to rut in the forest’s clearing, right out in the open for all to see.  The pace of deals and rumored deals and pondered deals is quickening.  The combinations are getting downright freaky!  As I wrote yesterday, each deal announcement feels like a bomb being dropped around us, it’s exhilarating.

US corporations, flush with cash, bedeviled with low PEs and unsatisfied with the weak organic growth opportunities of the current environment, are feeling the urge to merge – and that urge is beginning to surge.  They’re slapping on the Aqua Velva and cuing up the Marvin Gaye.

To wit, in just the past 24 hours:

Hologic buys Gen-Pro – a merger of equals consummated in the backseat of the medical diagnostic space.

And just this morning : DID PF Chang’s China Bistro just catch a bid from Centerbridge Partners? Private equity? Whoa, it’s like 2005 again, where’s my Kelly Clarkson CD?

Energy Transfer Partners (an MLP) takes over Sunoco at a 20% premium!

Coca-Cola in talks with Monster Energy Drink!  But wait – the dirty talk got too hot and heavy, the share price ran up too much and Coke got spooked.  Monster goes and takes a cold shower…for now.

Microsoft’s doing something with Barnes & Noble? For $300 million? Leave the money on the dresser!

Delta Airlines buys…an oil refinery from ConocoPhillips?  WTF? That’s borderline bestiality!

The deals are coming fast and furious now. Love is in the air and lust in the M&A meetings – when the growth is slow and cash is abundant, the pitchbooks begin to read like Dear Penthouse Forum.  The breakup fees are the closest they get to “using protection.

And this is a good thing, keeps the shorts on their toes and keeps mom & pop distracted from the Fiscal Cliff and the now-10% plus pullback in their beloved Apple.

But hey, whatever floats your boat, go get ’em, kids!