Tags: M&A
Archive for July, 2008
UBS is taking on poachers; Philip Morris bids $2 billion for Canadian cigarette maker Rothmans; Tullett Prebon talking merger with GFI
On July - 31 - 2008
Nice timing: Merrill’s John Thain is already up over $2 million on the stock he bought on Tuesday
On July - 31 - 2008
Merrill Lynch’s John Thain bought 500K shares of stock in Tuesday’s offering at $22.50 a share. With the stock closing at $26.65, he’s up over $2 million on paper. Other insiders who have so far profited handsomely are Merrill president Greg Fleming and brokerage head Robert McCann. Each of them bought 100K shares.
Thain Bought $11.3 Million of Merrill Stock in Sale – Bloomberg
Tags: Credit Crunch, John Thain, Merrill Lynch
Another one bites the dust: Carlyle shutting down its Blue Wave hedge fund
On July - 31 - 2008
Another Carlyle Group fund has run aground and is liquidating. It’s multi-strategy Blue Wave fund, which has seen assets drop from $900 million when the fund opened its doors in 1997 to around $600 is going the orderly liquidation route:
Tags: Carlyle, Credit Crunch, Hedge funds, Liquidations / implosions
Carl Icahn will be a no show at the Yahoo annual meeting; he has hopes for “the beginning of a beautiful friendship” with Jerry Yang and Roy Bostock
On July - 31 - 2008
If you’re looking forward to a show from Carl Icahn at Yahoo’s annual meeting on Friday you’re going to be disappointed. That’s because he won’t be there. With the proxy fight over, he doesn’t want to turn the event into a media circus (or maybe more of a media circus than it’s still bound to be), according to a post in his blog.
He also talked about why he threw in the towel in his fight with Yahoo as well as about meeting with Yahooligans Jerry Yang and Roy Bostock a few days ago. Of the meeting he said:
…I believe both gentlemen genuinely
wish that we will be able to work together to enhance value. While we
still disagree on many points, I have great hope "this will be the
beginning of a beautiful friendship." Minorities on boards can accomplish a
great deal (see following articles on Blockbuster). I look forward to
working harmoniously with the new board of Yahoo!Concerning the Annual Yahoo! Meeting – The Icahn Report
Tags: Activist Investing, Carl Icahn
So where will Alan Schwartz land now that he’s leaving JP Morgan? KKR?
On July - 31 - 2008
Former Bear Stearns CEO Alan Schwartz and JP Morgan are officially parting ways. JP Morgan issued an internal memo to employees which was read to TheStreet.com:
"With
most of the work on the merger integration behind us, Alan will be moving on
from the firm at the end of August to pursue other interests," said the
memo, signed by CEO Jamie Dimon and the co-heads of the investment banking unit,
Steve Black and Bill Winters."Despite the extremely difficult circumstances that brought our firms
together, Alan has been a terrific and constructive partner throughout the
process," the memo stated.
So will he land at KKR as has been the rumor for some time?
Tags: Alan Schwartz, Bear Stearns, JPM Chase, KKR, Revolving Door
Page Six: Henry Kravis spotted looking at hookers
On July - 31 - 2008
At least the ones in paintings. Page Six "Sightings" notes that the KKR boss was seen "intently studying" one of the paintings of a hooker at the Museum of Modern Art’s "Kirchner and the Berlin Street" show of rare 1914 paintings from artist Ernst Ludwig Kirchner. The painter focused on the street life in Berlin, and he liked to show ladies of the evening, who you could pick out of the crowd from their big plumed hats. A far cry from what today’s hookers look like.
Tags: Art, Henry Kravis, Hookers, KKR
- House Votes to Regulate Tobacco as a Drug
- Deutsche Bank Profit Declines 64% on Debt Writedowns
- Broker Goes Missing As Securities Charges Near
- UBS pays Massachusetts $1 mln to end probe
- Google to Extend Reach With Venture-Capital Arm
- China’s Debt Rating Raised to A+ by Standard & Poor’s
- United sues pilots’ union over flight cancellations
- Starbucks Reports Third-Quarter Loss on Closure Costs
- Artificial turf makers tout safety report; House member skeptical
- GM May Cut Salaried Workforce in U.S., Canada by 15%
- Disney posts a 7% profit gain in its third quarter
- Nintendo Shares Decline After Forecast Left Unchanged
- Las Vegas Sands Posts Loss on Casino, Interest Costs
Are cell phone termination fees illegal? They might be, in California
On July - 30 - 2008
In a blow to cell phone service providers that could have broad national implications, a California court has ruled that early termination fees violate state law. That’s the first decision in the country that deems the nasty fees illegal. According to Mercury News:
In a preliminary ruling Monday,
Alameda County Superior Court Judge Bonnie Sabraw said Sprint Nextel must pay
California mobile-phone consumers $18.2 million as part of a class-action
lawsuit challenging early termination fees….Whether Sabraw’s ruling will stand isn’t clear. Experts say an appeal is likely,
and the Federal Communications Commission is considering imposing a rule -
backed by the wireless industry – which might decree that only federal
authorities can regulate early termination fees.
Sprint early termination fees are illegal, judge rules – Mercury News
Tags: Cell Phones
Uncategorized
The SEC isn’t totally sleeping: They’re on Twitter!
On July - 30 - 2008
If you don’t know what Twitter is, it’s a way to keep in touch with people with short 140 character notes fired into cyberspace. And even though the SEC has seemed to be sleeping until recently when its nearly invisible leader Chris Cox weighed in on the nekkid short selling issue, someone over there seems to be alive and sending out messages on Twitter, according to Barry Ritholtz who got a personal email from them. You can see the SEC in action under the Twitter id SEC_Investor_Ed
Page Six: Jeffrey Epstein’s doing fine in prison
On July - 30 - 2008
Maybe we’re just way behind the times, but we didn’t think that prison inmates got email access. Guess they do, at least at some of the cushier barred digs. Page Six tells us that jailed financier / sex offenderJeffrey Epstein seems to be doing just fine in prison. He has his own cell and is said to spend a lot of time in the library "e-mailing various models he befriended in New York, sending them boxes of chocolates and promising them career help".
Tags: Hookers, Jeffrey Epstein, Legal
- SEC Extends Naked Short-Sale Order on Fannie, Freddie
- World Trade May Expand Even as WTO Talks Sputter
- Temasek ploy pays off at bank’s cost
- Citigroup Markdowns May Rise $8 Billion, Analyst Says
- Former Enron Executive Pai Agrees to Insider-Trading Settlement
- Sony Shares Fall After Full-Year Profit Estimate Cut
- Wyeth, Elan Alzheimer’s Drug Has Side Effects, Limits
- Starbucks Cuts 1,000 Jobs, Makes Executive Changes
- Remy Falls as Sales Fall, Distiller Forecasts Stagnant Profit
- Delta Air doubles fee for second checked bag to $50
- EADS Second-Quarter Profit Rises on Airbus Sales
- ArcelorMittal Rises After Net Doubles on Steel Demand
- Nintendo Profit Rises 34% as Wii Outsells PlayStation
Boone Pickens dumps his Yahoo shares and calls their management “pathetic”
On July - 29 - 2008
Oil man Boone Pickens spoke to the San Francisco Chronicle commenting that "I think that Yahoo management was pathetic" for their inability to make some kind of deal with Microsoft to sell all or part of the company. He disclosed on Monday that he’s dumped all of his shares at a loss. Pickens admitted to CNBC around the time that he ventured into his 10 million share Yahoo investment that he was playing follow the leader with Carl Icahn — and that he really didn’t know much about the then looming proxy contest. Next.
Pickens rips Yahoo management, says he dumped shares at a loss – San Francisco Chronicle
Tags: Activist Investing, Carl Icahn, Microsoft
A walk down memory lane: Merrill Lynch’s John Thain statements on their need for capital
On July - 29 - 2008
With Merrill Lynch’s huge announcement yesterday of their bullet biting asset and equity sales, Reuters takes a walk down memory lane and presents a list of John Thain quotes about the company’s capital raising needs starting on December 24, 2007, with the most recent feel good statement, on the company’s July 17 earnings conference call:
"Right now we believe that we
are in a very comfortable spot in terms of our capital."
Here are our favorites, made on March 8 to French publication, Le Figaro:
"…Today I can say that we will
not need additional funds. These problems are behind us. We will not return to
the market."
and to Spain’s El Pais newspaper on March 16:
"We have more capital than we
need, so we can say to the market that we don’t need more injections. We can
confirm that we have tackled the problem."
FACTBOX: Quotes from Merrill’s Thain on capital needs – Reuters
Tags: Credit Crunch, John Thain, Merrill Lynch
- Merrill Aims to Raise Billions More
- Nomura Has Unexpected Loss on Provisions, Trading
- Treasury and banks kick-start home financing tool
- SCA avoids insolvency after $1.8bn injection
- Amgen Raises Forecast on Improved Sales and Successful Trial
- Alcatel-Lucent’s Russo, Tchuruk Quit; Quarterly Loss Widens
- Oracle Expands Theft Claims in Complaint Against SAP
- Yahoo CEO Yang sees one direction: Forward
- SAP Raises Full-Year Revenue and Margin Forecasts
- Mervyn’s Is Close To Bankruptcy Filing
- U.S. drivers log 9.6B fewer miles in May
- Starbucks Shuts Stores, Backing Away From Australia
Fork tongue?: John Thain’s credibility in question as Merrill Lynch raises a boat load of new equity
On July - 28 - 2008
Merrill Lynch traded like crap all day and now we know why. John "we-don’t-need-to-raise-no-stinking-capital" Thain’s latest plan includes a humongous and dilutive equity capital raise, as well as a sell off of much of the kaka paper on the firm’s balance sheet.
They’re selling $30.6 billion gross notional amount of U.S super senior ABS CDO’s, currently carried on their books at $11.1 billion, for the monumental sum of $6.7 billion to Lone Star Funds. And they’re financing 75% of the purchase price. So Merrill is selling the paper at 21.6% of face, and 60.4% of the latest book value. And that’s producing a fresh Q3 writedown of $4.4 billion. Nice!
The company is also issuing approximately $8.5 billion of common stock in a public offering launched today. Temasek Holdings, Merrill’s largest shareholder, will buy $3.4 billion of the stock. In addition, Merrill Lynch’s executive management team "intends to purchase approximately 750 thousand shares of common stock in the offering". And let’s not forget that Temasek’s investment agreement contained a reset provision: Merrill will pay them $2.5 billion, which Temasek will invest back in the publc offering without a future reset provision.
In addition, $5.4 billion of the $6.6 billion of outstanding mandatory
convertible preferred holders have agreed to exchange their outstanding
preferred stock for approximately 195 million shares of common stock, plus
accrued dividends payable in cash or stock at the option of the holder. A holder
of $1.2 billion of outstanding mandatory convertible preferred has agreed to
exchange their securities for new mandatory convertible preferred securities
with a reference price of $33.00. The reset feature for all securities exchanged
has been eliminated.
Here’s the full press release:
Tags: Credit Crunch, John Thain, Merrill Lynch
- Lehman Hardest Hit by Biggest Rise in Borrowing Cost Since 2000
- Einhorn awaits new distressed debt price falls
- Marshall Wace set to pursue financials
- European hedge fund launches fall to six-year low
- U.S. lawyers busy as hedge funds face scrutiny
Tags: Greenlight Capital, Hedge funds, Law firms, Legal, Lehman Brothers, Marshall Wace
Apple CEO’s health questions: NY Times “slime bucket” reporter “who gets most of his facts wrong” gets a call and a scoop from Steve Jobs
On July - 28 - 2008
Steve Jobs finally said something about his health. In a bizarre off the record conversation to a journalist he doesn’t seem to respect a whole lot — Joe Nocera, at the NY Times — Jobs apparently copped to an illness "a good deal more than a "common bug" in the Times’ words, but not life threatening, nor a recurrence of cancer. Will Steve Jobs’ odd call Nocera put to rest the questions over the Apple CEO’s health for now, or will people now question his mental health for giving a huge scoop to someone he disdains? The whole thing is weird. We wonder why he just didn’t come clean on the record. The stock is down nearly $5 on the day….
Yahoo: Even though proxy fight is history, some holders may withhold votes for directors as a show of displeasure
On July - 28 - 2008
The proxy fight may have been ended between Carl Icahn and Yahoo’s board but that hasn’t tempered the ill feelings of many Yahoo shareholders. The NY Post says that Gordon Crawford, at Capital Research, may be one of those. The company is Yahoo’s 2nd largest holder, with around 6.5% of the shares, and is said to be considering the now largely symbolic move of withholding votes for Chairman Roy Bostock and CEO Jerry Yang at Friday’s annual meeting.
‘Capital’ Unrest Casts Gloom Over Yahoo! – NY Post
Tags: Activist Investing, Carl Icahn, Microsoft
So far, July is proving to be dismal for many hedge funds
On July - 28 - 2008
That includes Harbinger, which the Financial Times notes lost 12% in the first 2 1/2 weeks of July, and Clarium, down 4.3% for the month to July 18. Both funds are said to still be up strongly for the year though. Hedge funds that have gotten hit the most were the many who piled into the long commodities / short financials bets. And one of the worst performers is said to be RAB Capital’s hedge funds. Their Energy fund was down 16.1% by mid July and down 25.2% year to date; the company’s $2 billion Special Situations fund got smacked to the tune of 11.4% and it’s down 31.8% year to date…
Tags: Harbinger, Hedge funds, RAB Capital
- SEC Intensifies Efforts To Rein In Short Selling
- Citigroup Is Accused In Its Hedge Fund’s Flop
- KKR to go public through fund merger
- Gasoline price drop continues, to $3.970 Sunday, AAA says
- Deutsche Bank May Report Lower Quarterly Profit on Writedowns
- Goldman Cuts Asia Growth Forecast on Weak Exports, Tight Credit
- Banks Are Still On The Short List
- Cleveland-Cliffs Investor Making Voice Heard
- Motorola Moves to Open Up Sale Options
- Toyota Cuts Sales Goal on Falling U.S. Truck Demand
- Airbus Delivers First A380 to Emirates, Its Biggest Customer
- ‘Dark Knight’ continues to dominate
Former manager of spectacularly imploded Sowood Capital is looking to raise new funds
On July - 25 - 2008
Former Sowood Capital leader Jeffrey Larson is trying to make like a phoenix and raise cash for a new fund. If you recall, Sowood was one of the spectacularly imploded funds from last year, losing around $1.5 billion, or half of the fund’s value. They apologized profusely in a letter to investors (when most other firms experiencing big losses didn’t show quite as much remorse.) Last April the Boston Globe reported that Larson would try to raise a new fund. Now Larson is said to be beating the bushes for cash. He’s said to be offering some concessions in his terms as an inducement for a second chance. He’s described by Reuters as so far having only mixed results.
Microsoft is “done” pursuing Yahoo
On July - 25 - 2008
Come on, don’t tease us. Are they really done? At least for now, it would appear, but we’ve all heard that before. Microsoft’s CEO Steve Ballmer is saying that they’re ready to move on. Per Reuters
"There’s nothing under discussion
between the two of us," Ballmer told investors of how six months of various
talks had reached an impasse earlier in July…"We had a set of principles,
we talked about them, it didn’t work out," he said. "Fine, we’re done.
We can move on."
Tags: Microsoft
- SEC looks at short-selling rules
- What Financials Rally?
- Fed Discount Loans to Commercial Banks Rise to Record
- WAMU Whacked
- Auction-Rate Crackdown Widens
- Credit Suisse cautious despite return to profit
- GMAC, Cerberus Accord With FDIC Provides $3 Billion
- Fannie, Freddie Short Interest Rises as Paulson Plans a Rescue
- Dan Dorfman: This Bear Market May Have More Bite
- Ex-Livedoor Head Horie Loses Fraud-Conviction Appeal
- Juniper Net Gains 40% as Demand Rises, Shares Surge
- Infineon to Cut 10% of Workforce After Loss Widens
- Samsung Profit Misses Analyst Estimates on Chips, TVs
- Ford posts $8.7 billion second-quarter loss on truck slump
- Clear Channel Investors Approve Buyout by Private Equity Firms
- Agreement reached for FCC to clear XM-Sirius deal
Putting up his Dukes: Andrew Giuliani sues the university after he’s kicked off the Duke golf team
On July - 24 - 2008
Andrew Giuliani, son of Former mayor / former presidential candidate Rudy
Giuliani, was kicked off the Duke University golf team last February for reasons
that aren’t really clear, and he’s suing the school and the coach.
Giuliani, a senior and an aspiring pro golfer, was illegally kicked off the team
in February without warning according to the law suit. The
report was reported in the Duke newspaper, The Chronicle. According to
the suit, Giuliani could be reinstated to the team only with written letters of
support from each team member, and the coach was said to be threatening to cut
anyone who provided that support. The younger Giuliani hasn’t asked his
dad for support. He told Newsday: "I love my father very much," …"I just decided not to ask him to get involved in the situation."
According to the NY Post’s account:
Tags: Golf, Legal, Rudy Giuliani
