Witnesses urge Ticketmaster, Live Nation deal review; Dow may drop Rohm & Haas bid to $64 per share

By Cristal Cody

Tupelo, Miss., Feb. 24 - The combination of Ticketmaster Entertainment, Inc. and Live Nation, Inc. appears to be facing an uphill regulatory battle after testimony made Tuesday before the Senate Judiciary Committee's antitrust subcommittee.

In other deals, an analyst predicted Dow Chemical Co. will renegotiate a new takeover price of $64.00 a share, down from the current offer of $78.00 a share, for Rohm & Haas Co.

Meanwhile, the markets made a comeback on Tuesday after Federal Reserve chairman Ben Bernanke said the recession could end this year.

The Dow Jones Industrial Average added 236.16 points, or 3.32%, to close at 7,350.94.

The Standard & Poor's 500 index gained 29.81 points, or 4.01%, to close at 773.14, and the Nasdaq Composite index rose by 54.11 points, or 3.90%, to 1,441.83.

Investigations urged for Ticketmaster, Live Nation deal

The announcement from Ticketmaster and Live Nation of their planned merger was met with a thud earlier this month, and concerns of concentrated power sparked a promised investigation by the Department of Justice.

Beverly Hills, Calif.-based Live Nation is the largest producer of live concerts in the world, and West Hollywood, Calif.-based Ticketmaster is the leading entertainment ticketing and marketing company.

Sen. Herb Kohl of Wisconsin, chairman of the Subcommittee on Antitrust, Competition Policy and Consumer Rights, said in his statement during the hearing on Tuesday, "We have good reason to be skeptical as to whether music fans will truly realize these benefits. Those of us who are concerned with maintaining diversity and competition in the concert business should insist that these issues be closely examined before this deal is allowed to proceed."

In the all-stock merger, Ticketmaster shareholders will receive 1.384 shares of Live Nation stock for each share of Ticketmaster.

Michael Rapino, president and chief executive officer of Live Nation, played to foreign ownership fears by lawmakers in his statement to the subcommittee.

"We face the very real possibility that if we don't find a solution, we could ultimately be bought by a foreign-owned entertainment conglomerate like the majority of the major record labels," he said. "Unlike so many other businesses, we are not here today to seek a bailout or a tax credit or any other favor. Instead we've come with our own self-funded renewal plan."

Irving Azoff, CEO of Ticketmaster, testified that jobs "could be in jeopardy without this merger."

Ticketmaster employs about 6,700 people across the country.

David A. Balto, senior fellow for the Washington, D.C.-based Center for American Progress Action Fund, a former trial attorney for the Justice Department's antitrust division and former policy director for the Federal Trade Commission, urged a complete review of the deal.

"This merger of dominant firms raises serious competitive concerns and could potentially lead to significantly higher prices for the hundreds of thousands of consumers who purchase tickets every day," he said in his testimony. "The DOJ should go beyond this merger and investigate anticompetitive conduct in the ticketing market. Similarly, the FTC should investigate deceptive conduct by Ticketmaster."

Ticketmaster shares jumped 60 cents, or 13.48%, to close at $5.05 on Tuesday, while shares of Live Nation rose by 45 cents, or 14.02%, to $3.66.

Eyes on Dow court date

Analysts expect no moves from Dow until a decision is made in the Delaware lawsuit scheduled for trial on March 9 through March 13.

Midland, Mich.-based Dow, which makes and sells chemicals, plastics and other products, was expected to close the $15.4 billion acquisition of Rohm & Haas on Jan. 27.

Philadelphia, Pa.-based Rohm & Haas, which makes specialty materials for a variety of industries, filed the lawsuit to force Dow to close the deal.

An analyst said Tuesday that shares of Rohm & Haas will trade from $45.00 to $65.00 until a court decision is reached.

The analyst expects Dow to renegotiate the takeover price to $64.00 a share from the current deal's terms of $78.00 a share for Rohm & Haas.

"We estimate that the ROH share price could fall to or below $19 per share if the deal breaks," the analyst said in a research note.

Dow's shares added 53 cents, or 7.15%, to close at $7.94 on Tuesday.

Shares of Rohm & Haas rose by $1.10, or 2.06%, to $54.60.

Mentioned in this article:

Dow Chemical Co. NYSE: DOW

Live Nation, Inc. NYSE: LYV

Rohm & Haas Co. NYSE: ROH

Ticketmaster Entertainment, Inc. Nasdaq: TKTM

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