M & A wrap: Lifting the Vale
Brazil’s Vale said on Wednesday it has created a new logistics company for cargo transport, but it denied media reports it is planning to sell stock in the unit in a spin-off. Logistics services generated $1.5 billion in revenue in 2010, an increase of 33 percent from the year before.
Cerberus Capital Management LP’s deal to buy 64 hotels from bankrupt Innkeepers USA Trust could still go forward, but at a lower price, two sources familiar with the situation told Reuters.
NYT’s DealBook contributor Steven M. Davidoff writes that Capital One’s proposed $9.2 billion acquisition of ING Direct requires clearance from the Federal Reserve, as it poses a potential systemic risk. “Whether or not the Fed approves the Capital One/ING Direct transaction, it is time for the Fed to run public hearings on what exactly Dodd-Frank means for our banks and what we as a country want from them,” writes Davidoff.
Why IPO when the markets stink? Venture capitalist Jeff Richards’s answer: “You go public in a choppy market because your business has strong fundamentals that investors will buy into regardless, you raise important growth capital, and begin establishing a track record as a public company.”
If private equity firms drafted their NFL dream team, who would make the roster? Fortune.com’s Dan Primack goes deep.
Deals wrap: China’s shortcut to Wall Street
A examination of a cross-section of 122 Chinese reverse mergers on U.S. markets found that between each stock’s peak trading price and July 10, 2011, those companies saw a total of $18 billion of their market capitalization vanish. Reuters is exploring the extent and impact of corporate secrecy in the United States in a series of articles.
Expect more hostile deals in resources as cashed-up miners turn desperate to snare targets, deal advisers say, following Peabody Energy and ArcelorMittal’s change of tack this week on their $5.3 billion bid for Macarthur Coal.
Private equity and venture capital-backed initial public offerings in Asia have surged 77 percent in the year to date to the highest level ever, according to the latest Thomson Reuters data, as funds look to show returns to investors ahead of new fundraisings.
Bids for EMI suggest that the British music company could fetch more than $4 billion, the Financial Times reports.
The chairman of the House of Representatives Judiciary Committee, urged the federal government to resist one-sided calls to block AT&T Inc’s $39 billion plan to buy wireless rival T-Mobile USA.
Dunkin Brands, whose shares gained 47 percent on the company’s market debut last month, expects to raise prices to counter high commodity costs.
Deals wrap: Splitting up ConocoPhillips
Integrated energy company ConocoPhillips said it would split its businesses into two stand-alone, publicly traded corporations by spinning off its refining and marketing business.
Borders Group’s buyout deal with private equity firm Najafi Companies collapsed, raising the possibility that the bankrupt bookseller could be forced to liquidate its remaining stores and go out of business.
L-3 Communications, which faces breakup pressure from an activist investor, is expected to divest some low-end services assets but does not plan a broader portfolio restructuring such as a breakup, people familiar with the situation said.
“A group led by Joshua Harris, a co-founder of the private equity firm Apollo Global Management, announced late on Wednesday that it had reached an agreement to buy the Philadelphia 76ers basketball team from the sports company Comcast-Spectacor,” reports DealBook.
Deals wrap: Doubts grow over BSkyB bid
The British government said it would take the closure of the Rupert Murdoch tabloid, News of the World, into consideration when deciding on the mogul’s bid to buy BSkyB.
Shares in Rupert Murdoch’s bid-target BSkyB slumped as the phone hacking scandal engulfing the media mogul’s empire pushed the controversial deal into uncharted waters .
Private equity firm, Carlyle Group, is in talks to buy Energy Capital Partners, a buyout company focused on power generation, electric transmission, midstream gas and other energy markets, the New York Times said.
A Visteon Corp hedge fund shareholder that will get two board seats soon has been pushing to break up the U.S. auto parts supplier, betting the company has more value in pieces than as a whole, people close to the situation said.
A booming IPO market and the lure of high returns kept China’s private equity sector humming in the first half , stoking fear of asset bubbles amid rising concerns over the quality of listed Chinese companies.
Deals wrap: Zynga files for IPO
Zynga Inc filed paperwork for an initial public offering on Friday, the latest in a series of hot social media companies to seek capital in the U.S. public markets. The company, which is behind a series of popular games on Facebook, said it hoped to raise up to $1 billion. It did not specify the number of shares it plans to sell or give an expected price range.
A group including Apple, Research In Motion and Microsoft will pay $4.5 billion to snatch Nortel Networks’ patents from under the noses of Google and Intel, stealing a march on their rivals in a litigious market. Bankrupt Nortel had put up for sale 6,000 patents and patent applications in the largest public sale of its kind, a potential treasure trove for latecomers to the market such as Apple, Google and Intel.
Belgium’s KBC Group is expecting around eight to 10 first-round offers for its private banking arm KBL, people familiar with the matter said, after attempts to sell the business for $1.9 billion failed in March. Bidders are expected to include corporate suitors and private equity firms from across the globe, the person said, and a shortlist for the next round will be drawn up in about a week.
Investors are asking for more of their money back from hedge funds in June than in any other month in 2011 as fund returns hit by May’s commodity rout shake client confidence, according to data by hedge fund services firm GlobeOp.
Can a sports franchise be run like a hedge fund? That’s what Tom Gores, head of Los Angeles-based private equity fund Platinum Equity, is attempting to do with the Detroit Pistons after firing the NBA team’s chief executive and filling the job with a pair of Platinum Equity partners. According to NYT’s DealBook these moves “are straight out of the private equity playbook.”
Deals wrap: Streamlining HP
If private equity firms had their way, Hewlett-Packard would look less like a monolithic tanker and more like a small fleet of streamlined schooners, reports Nadia Damouni and Poornima Gupta.
Borse Dubai owns nearly 21 percent of LSE stock and the Qataris hold 15.1 percent, Thomson Reuters data shows, making the investors easily the largest shareholders in the London exchange and key decision-makers in its future.
BYD, the Chinese automaker backed by U.S. billionaire Warren Buffett surged more than 40 percent on its Shenzhen debut, as investors bet on a strong outlook for the company’s fledgling electric cars business.
News Corp secured British government backing for its buyout of BSkyB on Thursday after the minister responsible rejected complaints the move would give Rupert Murdoch too much power and influence.
Online daily deal site LivingSocial is meeting with banks to discuss an initial public offering of about $1 billion, according to a source familiar the situation.
Preparing for investment Armageddon? The NYT’s DealBook delves into the world of “black swan funds.”
Deals wrap: Investing in Kraft
Billionaire investor Nelson Peltz bought 12.2 million shares in Kraft Foods during the first quarter, his investment firm reported this week.
“Morgan Stanley, Bank of America Merrill Lynch, J.P. Morgan and UBS were among bankers leading LinkedIn’s massively hyped — perhaps overhyped — IPO last month. And today — surprise!!! — all four banks told investors to buy, buy buy LinkedIn stock,” reports the NYT’s DealBook.
Bernard L. Madoff, the convicted fraudster, doesn’t think he deserved a 150-year sentence, the NYT reports.
Blackstone Group (BX.N) was recently asked by the SEC to provide extra information about how it remunerates its executives, according to regulatory filings.
Interested in Pandora? Seeking Alpha contributor Spencer Osborne lists some metrics to watch for this Internet radio company.
from Felix Salmon:
Upgrading Skype and Silver Lake to Evil
Last week, Bloomberg's Joseph Galante published a story claiming that Skype investors in general, and Silver Lake in particular, were firing senior executives just before the company is sold to Microsoft, so that they don't get their full share of the proceeds from the sale. This seemed pretty evil to me, but it wasn't long before anonymous Skype investors started showing up on various blogs (SAI, TechCrunch, GigaOm) pouring cold water on the allegations, saying that the firings were all the doing of Skype's CEO, Tony Bates, and had nothing to do with Silver Lake at all.
The stories were very consistent with each other, and all of them seemed to be based on anonymous sources (except for GigaOm's, which was based on the word of an unnamed "company spokesman"). Because of this, it's impossible to tell whether there are multiple investors all credibly saying the same thing, or just one investor doing the rounds of the blogs and trying to push back against Galante's story.
But now Galante is back, with the story of Yee Lee, who left Skype after a significant chunk of his options had already vested -- and still didn't get any money from them.
After a month of back-and-forth with Skype's human resources department, Lee learned that even his "vested" options were worthless. It turns out the investor group, led by private equity firm Silver Lake Partners that bought Skype from EBay (EBAY) in 2009, had secured a so-called repurchase right that gave them authority to buy back the shares at the grant price. "I've never heard of a company taking away vested options," says compensation expert and Bloomberg News consultant Graef Crystal. "It invalidates the meaning of the word 'vested.' "
There are many more details in this blog post from Lee, which includes the letter he was sent by Ricardo Velez, Skype's associate general counsel. I'm reasonably good at hacking my way through legalese, but this is downright incomprehensible -- and clearly designed to be so.
Lee provides a copy of his 11-page stock option grant agreement, which is equally opaque. Here's the relevant bit, buried halfway down page 3, at the end of a long clause which seems mainly interested in what happens when there's an IPO.
BTW, if he didn’t have access to the partnership agreement, then he would have a much better case. It would be helpful to have facts
Deals wrap: VCs think IPO activity low
More than 80 percent of venture capitalists believe the initial public offering market is at very weak levels and it is curbing profits, according to a new survey.
Online video site Hulu has been approached by a potential buyer and is weighing whether to sell itself, according to a person familiar with the matter. GigaOM lists the possible candidates and the merits of a deal for each company.
Taiwan regulators rejected Kohlberg Kravis Roberts & Co’s $1.6 billion joint management buyout of electronics component maker Yageo Corp, a decision that may cast a shadow over other private equity involvement in the island.
Hedge fund managers are sifting through the rubble of the deepening Greek debt crisis to find money-making opportunities, though political uncertainty makes it a risky business.
Bridgewater Associates, the world’s biggest hedge fund, is close to launching a $10 billion fund, the Wall Street Journal reports.
The best trader in the world worked for Bernie Madoff, writes The Altucher Confidential.
Deals wrap: Capital One to buy ING’s U.S. online bank
Capital One plans to buy ING’s U.S. online bank for $9 billion in cash and stock, freeing the Dutch bank to repay bailout funds and sever its state ties.
Italian fashion house Prada floated at the low end of its target price range on Friday, raising $2.1 billion as investors baulked at its rich valuation while global markets are weak.
Private equity firm Leonard Green & Partners said it has teamed up with CVC Capital Partners to submit a proposal to buy BJ’s Wholesale Club, the third-largest U.S. wholesale club retailer.
The New York Times looks at what is behind the spate of energy deals. Business Insider provides the “16 meaningless market phrases that will make you sound smart on CNBC.”
