China’s ICBC Overtakes Bank of America in Market Cap Citigroup Seeks China Securities Arm to Drive Growth Barclays hires Citigroup to rule rival out of ABN Amro counterbid ABN Amro urges voters to reject break-up demands Mergers and Acquisitions No Longer Shock Japanese How Street Hit Lender More headlines below
ResCap to ‘Sharply’ Reduce Subprime Lending Fischer to Leave Credit Suisse GM backs away from Chrysler bid Cerberus to acquire Tower Automotive Sainsbury, Boots try to fend off predators Diller calls executive pay ‘no big deal’ In the ABCs of the NYSE, Macy’s Snags the ‘M’ Riviera rejects merger proposal from Riv Acquisition
China’s ICBC Overtakes Bank of America in Market Cap – Bloomberg
Industrial & Commercial Bank of China Ltd., the nation’s biggest, overtook Bank of America Corp. as the world’s second-largest bank by market value as China’s stocks headed for a record.
Shares of Industrial & Commercial Bank, known as ICBC, surged 7.7 percent to 5.71 yuan at the 11:30 a.m. break in Shanghai, valuing the Beijing-based company at $231.8 billion. That surpassed Bank of America’s $227.1 billion and trails only Citigroup Inc.’s $249.8 billion.
The rally came as Citigroup Chief Executive Officer Charles Prince is in Beijing, outlining plans to expand his branch network and build an investment bank in the world’s fastest-growing major economy. Prince is vying with ICBC and Bank of China Ltd. for a bigger slice of the nation’s $2 trillion of household saving…..
Citigroup Seeks China Securities Arm to Drive Growth – Bloomberg
Citigroup Inc., the biggest U.S. bank, aims to develop a Chinese securities business to enter a market where trading in stocks more than tripled last year.
“China stands out as a country of unparalleled promise,” Charles Prince, Citigroup’s chief executive officer, said at a press briefing in Beijing today. One of the priorities is “to continue building our investment-banking business in China.”
Citigroup won about $6 billion in overseas underwriting assignments from Chinese companies this year after its worst showing in four years in 2006. The New York-based firm needs to tie up with a domestic securities company to begin proprietary trading and brokerage services in the country, and narrow the gap with Goldman Sachs Group Inc. and UBS AG….
Barclays hires Citigroup to rule rival out of ABN Amro counterbid – The Times of London
Citigroup effectively ruled itself out of pursuing a counterbid for ABN Amro after the US bank was hired by Barclays to provide additional corporate finance advice on its proposed £80 billion merger with the troubled Dutch bank.
The appointment takes to five the number of investment banks retained by Barclays. Last week, the British bank brought in Deutsche Bank and Lazard, in addition to its existing advisers Credit Suisse and JPMorgan Cazenove.
Barclays is thought to have drafted in Citigroup because of the perceived strength of its financial institutions group, led by New York-based Hamid Biglari, its global head….
ABN Amro urges voters to reject break-up demands – Financial Times
ABN Amro on Wednesday met all the demands of activist investors by including a break-up vote on the agenda of its April annual meeting.
However, the Dutch bank which is being courted by Barclays of the UK, urged shareholders to reject the far-reaching demands as discussions about its future continue.
The decision to include the controversial motion reflects the fact that ABN does not want to risk provoking investors during the Barclays talks, which are aimed at creating the world’s fifth largest bank with a market value of more than $175bn.
It also underscores a view within ABN that many shareholders believe the takeover negotiations have superseded the demands levelled a month ago by minority investor The Children’s Investment Fund (TCI)…..
Mergers and Acquisitions No Longer Shock Japanese – New York Times
One of the hottest new shows on Japanese television is called “Vulture,” though it is hardly a nature program. It is about a fictional New York investment fund that buys ailing Japanese companies and imposes harsh American-style management changes.
That may strike Americans as dry finance instead of family entertainment. But the program’s popularity in Japan underscores a new openness in this country’s business culture. After being virtually taboo for decades, corporate mergers have risen sharply in the last three years and are becoming something of a preoccupation even among ordinary people.
While Japan is a long way from the dog-eat-dog world of corporate America and Europe, takeovers and buyouts are becoming a common, if not always welcome, feature of the business landscape. The number of mergers involving Japanese companies as buyers or sellers more than quadrupled in a decade, to 2,775 deals last year from 621 in 1996, according to Recof, a Tokyo-based market research company….
How Street Hit Lender – Wall Street Journal
On a March 6 conference call, New Century Financial Corp. Chief Executive Brad Morrice seemed hopeful.
Increased defaults were hammering loans the company had made to less-creditworthy home buyers, and its lenders were preparing to declare it in default. But Mr. Morrice told bankers from Citigroup Inc., Goldman Sachs Group Inc. and its nine other Wall Street lenders that he had a plan to secure new financing so he could keep his mortgage business going. He just needed a little time.
Hours later, the bankers began formally terminating lending agreements that had provided $8 billion to New Century — pushing the nation’s second-largest mortgage lender to risky "subprime" borrowers (behind HSBC Holdings PLC’s HSBC Finance Corp.) to the brink of bankruptcy.
By extending generous credit to subprime lenders, Wall Street firms financed the borrowing binge that helped fuel the housing boom. Those firms now are turning off the money spigot. They see more borrowers having trouble paying off those mortgages in a slowing economy, which has made investors less willing to pour money into the sector….
ResCap to ‘Sharply’ Reduce Subprime Lending – Wall Street Journal
General Motors Acceptance Corp. said Wednesday that it intends to "sharply" cut the volume of subprime mortgages originated by its Residential Capital LLC unit for 2007, amid continued pressure from housing prices and the nonprime mortgage market.
GMAC, which used to be wholly owned by General Motors Corp., said in a presentation for investors that pressures on ResCap will constrain GMAC results in the near term.
The financing company reiterated that its highest priority is to implement changes at ResCap, including maximizing earnings from other ResCap businesses, according to the presentation, which was filed with the Securities and Exchange Commission…..
Fischer to Leave Credit Suisse - Wall Street Journal
Leonhard Fischer, a top Credit Suisse Group executive, is decamping to a holding company controlled by private-equity firm Ripplewood Holdings LLC, becoming the latest in a line of bankers moving into the private-money sphere.
London-based Mr. Fischer is Credit Suisse’s chief executive officer for Europe, the Middle East and Africa, and sits on the bank’s executive board. He oversees 12,000 employees for the Zurich-based banking powerhouse.
Mr. Fischer, 44 years old, will be changing to much smaller confines as part of th
e Ripplewood move. He will be co-CEO of Belgium-based RHJ International, a publicly traded vehicle for investments made by Ripplewood, of New York. RHJ employs about 40 people who help oversee a portfolio of investments, primarily in the auto-parts industry….
GM backs away from Chrysler bid – Financial Times
General Motors will not be submitting a first-round bid for Chrysler this week but may enter the sale process later, people close to DaimlerChrysler’s sale of its lossmaking US unit say.
Bids worth $4bn to $6bn are expected to be submitted by Friday to JPMorgan Chase, which is advising DaimlerChrysler on the sale, from at least three private equity groups and Magna International, the Canadian automotive parts and vehicle assembly concern.
GM is not likely to be involved in the first round, but could enter the process as soon as next month after expected bids from Cerberus Capital Management and the Blackstone Group in a consortium with Centerbridge Partners. Ripplewood Holdings may also bid….
Cerberus to acquire Tower Automotive – Financial Times
Cerberus Capital Management, the private-equity group, is set to expand its growing automotive interests by buying Michigan-based Tower Automotive, one of the biggest makers of vehicle frames and chassis modules.
Cerberus has agreed to invest about $1bn in Tower, which has been in Chapter 11 bankruptcy protection for the past two years. The funds would be used to recapitalise the company, including repaying Tower’s debtor-in-possession financing and other obligations.
If other investors submit bids, an auction will be held on June 21, with a view to Tower emerging from court protection at the end of July…..
Sainsbury, Boots try to fend off predators – Financial Times
Alliance Boots and J Sainsbury on Wednesday sought to strengthen their hands against the private equity predators stalking themwith the publication of trading updates.
While the two FTSE 100 retailers were using the opportunity to paint their performances in the best possible light, Kohlberg Kravis Roberts and Stefano Pessina, executive deputy chairman of Alliance Boots, were fine-tuning an improvement to their £9.7bn offer, which was rejected by the pharmacy group’s board earlier this month.
Meanwhile, the CVC-led consortium circling Sainsbury was wrestling with the supermarket group’s large pension deficit, which remains a potent obstacle to a firm offer….
Diller calls executive pay ‘no big deal’ – Financial Times
Barry Diller, chief executive of internet group IAC, has lashed out at corporate governance reforms for undermining the competitiveness of US business and dismissed executive compensation as “no big deal” for shareholders.
In an interview with the Financial Times, Mr Diller, one of the best-known and best-paid media executives, said the greater scrutiny of corporate America had made management overly cautious and was pushing many companies, including his own, to consider going private.
“We [Americans] have found ways to take our competitive edge actually mechanically away from us,” Mr Diller said. “You have boards now that are skittish in every area. They’ve made chief executives very skittish.”….
In the ABCs of the NYSE, Macy’s Snags the ‘M’ - Wall Street Journal
After years of sitting on the shelf, one of the stock market’s vanity plates finally has an owner. But it isn’t who you might think.
The New York Stock Exchange said one of its coveted one-letter stock symbols, "M," would be assigned to Federated Department Stores Inc., which plans to change its name to Macy’s Inc. While a symbol change isn’t normally big news, this one is noteworthy because the M letter was long thought to be reserved by Big Board officials for Microsoft Corp., should the software titan ever decide to leave Nasdaq Stock Market Inc.
Federated, a department-store company with corporate offices in Cincinnati and New York, said it will go for the shortened name, rather than the Macy’s Group Inc. it announced earlier, because the one-letter symbol was available….
Riviera rejects merger proposal from Riv Acquisition – Reuters
Casino operator Riviera Holdings Corp. said on Wednesday that its board has rejected a $27 per share cash merger proposal it received on March 26 from Riv Acquisition Holdings Inc.
The proposal values the company at about $329 million, based on 12.17 million shares outstanding, as of December 31, 2006.
The Las Vegas-based company said Riv Acquisition has entered into a lockup and option agreement for 9.2 percent of its outstanding shares held by Triple Five Investco and Dominion Financial without prior approval from Riviera’s board.
Riv Acquisition’s action have triggered the defensive provisions of its articles of incorporation applicable to substantial stockholders, Riviera Holdings said in a statement….
