NEW YORK (TheStreet) –In a year when many investment banks saw top lines beefed up, thanks to a steady slew of transactions, 2014 ended with dealmakers wanting more. In 2015, they will likely get it. Activists are hounding corporate titans to make divestitures, leveraged buyout shops are eager to put capital back to work and CEOs are fighting to define their tenures, often with a big buy. TheStreet breaks down some potential big deals for 2015, and the stocks and banks likely to be impacted.
1. Yahoo!-AOL Merger
It is by no means a sure thing, but if activist Starboard Value gets its way, Yahoo! CEO Marissa Mayer's ambition of building Yahoo! (YHOO) back into a web titan will be derailed. Instead, the struggling Internet pioneer will be sold off and combined with another Internet 1.0 mainstay: AOL (AOL) . This would likely entail AOL CEO Tim Armstrong taking the lead role in the merged company, given his reputation as an operations whiz. Although dealmakers have speculated a Yahoo!-AOL merger could be in the works -- there is little to report so far. But should a deal take place, it's likely to be a multi-billion-dollar deal and provide a windfall in advisory fees to the participating banks.
2. eBay's Breakup
Activist shareholder Carl Icahn finally won his war against venture capitalist and former eBay (EBAY) board member Marc Andreessen -- now that PayPal will be spun off of the online marketplace in 2015. With four quarters of rising revenue trailing at more than $7 billion, Goldman Sachs (GS) is set for a big payday as eBay's advisor. Already, eBay's market capitalization has swelled past the $70 billion mark, and a PayPal IPO is expected to be one of the biggest -- if not the biggest -- initial public offering in the first half of 2015. eBay's announcement that it would spin off PayPal proved immediately accretive for its stock, but don't expect a huge pop in its share price until the PayPal spin off date draws near.
3. Darden Restaurants
A breakup may be brewing for Darden Restaurants (DRI) , which is facing pressure from hedge fund Barington Capital Group. Darden, which tried to appease investors and Barington by selling its restaurant chain Red Lobster, encountered backlash when these parties complained the $2.1 billion sales price was too meager. As 2015 kicks off, Darden -- named for Red Lobster's founder -- is being pushed to make improvements at its Olive Garden chain, despite its shares pushing new 52-week highs. Should an Olive Garden makeover fail to pan out, a breakup of Darden would be likely.
4. Hewlett-Packard's Split
Not every big breakup is spurred by an aggressive outside investor. Hewlett Packard (HPQ) decided to break itself up, before any outside hedge fund could lay siege to the 75-year-old tech titan. The company is cleaving off its consumer businesses, such as printers and laptops, from its corporate services division. The corporate services division will be operate under the Hewlett-Packard Enterprise group. Even as this multi-billion dollar breakup continues into the new year, more M&A could be on the way once its split has been completed: Hewlett-Packard Enterprise has been suggested as a possible acquirer of Massachusetts IT storage giant EMC (EMC) . HP's anticipated split comes as it abandons a five-year turnaround plan -- suggesting it would not succeed in its long-term goals -- and against a backdrop of gains nearing 45% in the public markets.
5. Time Warner Cable-Comcast
Time Warner Cable's (TWC) planned acquisition by Comcast (CMCSA) could be nixed in Washington, some market watchers say, and undoing a $45 billion deal would be costly to all parties but one -- Comcast. It turns out that Comcast is not on the hook for a breakup fee. However, banks stand to lose hundreds of millions of dollars if in 2015 one of this year's biggest announced deals is scotched short of completion. In a year when regulators appeared to look kindly on legacy industry mergers -- from airways to big tobacco -- the rejection by the FCC of Comcast's mega-deal may have repercussions throughout the cable industry in 2015.
6. Caesars Entertainment
While much of forward-looking deal projections center on heady multiples and big price tags, there is one big transaction that can't be overlooked in 2015 -- Caesars Entertainment (CZR) . This transaction, however, is not about lofty multiples, but rather about using a buyout of its subsidiary Caesars Acquisition (CACQ) as part of an expected bankruptcy filing and restructuring in 2015. Caesars Entertainment is heading toward a restructuring that will reorder its capital structure, costing private equity firms, including TPG Capital, billions of dollars as it tries to reduce $18 billion in liabilities. Already, Caesars has cleaved off premium assets, but it will take until January 9 to see if its restructuring plan has sufficient support among creditors -- otherwise, the casino will have rolled a seven at a crucial time.
7. Time Warner
Just as Comcast sought to take out Time Warner's cable assets, Rupert Murdoch and his 21st Century Fox (FOXA) attempted to buy out Jeff Bewkes' Time Warner (TWX) in early 2014, only to be rebuffed. It seems as if Bewkes made the right call, spurning the $75 billion bid. Time Warner's stock has already shot past Murdoch's offer price. Meanwhile, a few bidders could stand in the way of a potential 21st Century Fox-Time Warner merger -- although, as with the Time Warner Cable sale, it could turn out to be the regulators that spoil the party. This potential deal -- like the rumored Yahoo-AOL merger -- could generate hundreds of millions of dollars in deal fees for bankers.
8. Halliburton-Baker Hughes Buyout
Not every deal is spurred by an activist investor. Sometimes, it takes bigger market forces -- such as free-falling oil commodity prices -- to spark a big deal. Such was the case with Halliburton's (HAL) plans to acquire Baker Hughes (BHI) in a $35 billion deal. But the discounted price of oil isn't saving Halliburton much on the more than 50% premium it will pay to make the buy. Like Comcast's Time Warner Cable play, Halliburton's deal is a big gamble. Regulators could ultimately shoot it down, leaving the company to pay $3.5 billion in breakup fees. But if the deal goes through, it will be a big win for Goldman, which successfully took the exclusive advisory role for Baker Hughes and is set to net a big payday.
9. Family Dollar And Two Suitors
Yet another big corporate move that was predated by activist Carl Icahn's agitation, Family Dollar (FDO) is still in play as we head into 2015, with two big strategic competitors vying to buy the discount retailer. Family Dollar said it will reconvene its shareholders on Jan. 22 to consider dueling proposals from its two rivals: Dollar Tree (DLTR) and Dollar General (DG) . Initially, Family Dollar's board was swayed to Dollar Tree's proposal -- albeit at a lower price than Dollar General's bid. But as Dollar General's efforts gain momentum, along with a regulatory review that could clear its purchase, Family Dollar's board of directors seems to be having second thoughts about selling to Dollar Tree. In the end, Family Dollar may ultimately side with selling to the highest bidder in 2015.
Virtualization software company VMware (VMW) is coming under pressure from activist investor Elliott Management, which is pushing storage giant EMC (EMC) to sell its holdings in VMware. EMC, which owns an 80% stake inVMware, will likely look to offload its holdings in VMware in the new year. Some market watchers have speculated that VMware could be acquired, if EMC is willing to sell its stake. With enterprise service providers looking to upload an increasing number of clients' data and information into the cloud, VMware, which under performed the markets in 2014, could find itself coveted among strategic bidders. If that happens, look for its price tag to cross the $40 billion mark.