Blackstone has made it clear that among the reasons for going public is the ability to use the firm’s equity to make acquisitions. Most of the more than $7 billion it raised through the June IPO and the China state government deal will go to paying out employees and buying up partnership units. But Blackstone has stock as currency now, and a market cap of more than $30 billion. So who should Blackstone buy? Lazard, according to one banker who used to work there.
    
    The question of how Blackstone plans to grow its business has been batted around Wall Street for several months now. Will Blackstone become the next Goldman Sachs by buying Bear Stearns or Lehman Brothers? Or will they beef up their restructuring group? Maybe grow their small M&A advisory business?
    
    Blackstone declined to comment on its plans. Several bankers interviewed said that the firm is unlikely to do anything big, at least for now. But that hasn’t stopped the theories.
    
    William Cohan, the former Lazard banker who wrote a tell-all book about the bank called “The Last Tycoons,” spelled out why Blackstone should buy Lazard on Monday. Speaking to CNBC’s Erin Burnett (the subject of a New York Post interview over the weekend), Cohan gave his reasons:

    Cohan: You have to ask yourself, how are these two aging billionaire M&A warriors going to perfect their legacy…How is Steve Schwarzman on the one hand going to transform Blackstone in to Goldman Sachs, and how is (Lazard’s) Bruce Wasserstein on the other hand going to exit the scene gracefully, perfecting his reputation…? And I think if you look at the circumstances surrounding this, both from the social and a strategic point of view, the fit is excellent in both situations.
    
    Burnett: And, you are talking about here what Blackstone would get…Lazard is a famous name, number ten in worldwide M&A…and a bigger in terms of the number of senior bankers that are working there.
    
    Cohan: Exactly. And look at it. Blackstone is not ranked in the top 25 from (an M&A standpoint) and has 14 managing directors in their M&A group…Lazard has 149 managing directors in their M&A group…and about a billion dollars in revenue. And there is more to it than that…Not only is it M&A that you get… but the hidden jewel of Lazard is the asset management business–$125 billion of assets under management. How does it compliment Blackstone?…Blackstone, with $85 billion in assets under management, (has) most of that in private equity. They have about $30 billion, $35 billion of assets in alternative investments. 
     
    Burnett: …Is it not the right time to buy Lazard? 
   

    Cohan: Well, yes…The actual market cap of Lazard when you fully dilute the shares owned by partners is closer to $6.5 billion and has 22 price to earnings. Blackstone…probably trades at about a 25 p/e. So it would be accretive to Blackstone’s earnings. And let’s talk about it from a social perspective. Bruce Wasserstein and Steve Schwarzman are friends. They’ve known each other from Harvard Business School and Lazard doesn’t really have anybody who can run the firm in the future, I don’t think. If you look at what is going on now, Bruce is not running it day-to-day.

(Unofficial transcript provided by CNBC)

(Photo, Bruce Wasserstein. Reuters file)

On the face of it, Brazil’s 3-0 win over Argentina in the Copa America final, though not pretty, was fair and square.

They stung Argentina with an early goal, destroyed their normally slick passing game with tenacious marking in midfield, won most of the 50-50 balls with superior physical strength and hit their rivals with fulminating counter-attacks.

But there was another reason Argentina could not get into their rhythm. Nearly every time they got within 30 to 40 metres of the Brazilian goal, the move was halted with a foul — a tug of the shirt, a push or a sneaky trip, that sort of thing.

The offenders did not receive yellow cards because the fouls were not considered violent by the Paraguayan referee, Carlos Amarilla. Yet this tactic was clearly against the laws of the game, an illegitimate way of stopping Argentina playing football.

Like Amarilla, many other referees seem reluctant to clamp down on repetitive fouling. But, in doing so, they are encouraging the teams who put the emphasis on defending and destroying, as Brazil did on Sunday, and inhibiting those such as Argentina, who like to pass the ball around.

Should something be done to get rid of the tactical foul or is it part of modern football, where physical strength and power are becoming ever more predominant?

Brian Homewood was covering the Copa America in Venezuela

Pancake house IHOP Corp. ordered up a large feast on Monday when it announced its $1.9 billion acquisition of bar-and-grill chain Applebee’s International Inc.  –  a company nearly twice its size. 

IHOP, which has a market capitalization of about $980.6 million, will use securitized debt backed mostly by Applebee’s restaurant and real estate assets to fund the purchase of the much larger company, whose market value is $1.82 billion.

IHOP, which franchises 99 percent of its 1,319 restaurants, plans to revamp Applebee’s business model away from owning and operating its own restaurants to becoming predominantly a franchisor. Applebee’s has nearly 2,000 restaurants, of which 508 were company-owned. 

“The value is in the restaurants and the real estate. You’ve seen this play in Sears-Kmart, Toys R Us and elsewhere. The companies may have problems, but the land they are sitting on still has value and the brand names still have value that can be leveraged,” said one consumer investment banker who declined to be named.

Applebee’s, which has been under shareholder pressure to improve its stock price, said earlier this year it was reviewing its options. The company has struggled amid weak consumer spending, higher gas prices that siphon away consumers’ disposable income, as well as stiff competition from rivals and grocery stores that are selling more prepared meals.

“While the sale price (of Applebee’s) is somewhat less than we expected, it does illustrate value of franchised businesses with tools such as securitized lending, refranchising and G&A (general and administrative) reductions that are available,” said UBS Equity Research analyst David Palmer. 

“Importantly, the 9-tmes forward EBITDA (earnings before interest, taxes, depreciation and amortization) price highlights the value of a franchised business with owned real estateeven one with long-term issues like (Applebee’s),” Palmer said.

Other companies such as pizza-delivery chain Dominos Pizza Inc. have recapitalized on their own. Palmer suggested that Brinker International, which owns Chili’s Grill & Bar, could help its stock price by following IHOP’s plans for Applebee’s.
 
(Photo credit: IHOP website)  

Today, we have a video report on this guy in Australia who went on a 90-minute rampage in an armored vehicle. The police had no choice but to follow him as he continued on his smashing spree.

It was a bad thing to do, that’s for sure, but I like to think he did one good thing: he brought perspective to the road. This guy’s tank escapade made SUVs look like Mini Coopers by comparison, and I like to think a lot of guys driving those huge things suddenly feel pretty inadequate.

“Come on, Doris, let’s just go on home. I don’t feel like I’m King of the Road in my Hummer any longer…” Liz Kennedy reports:

More Oddly Enough Blog

Pali Capital media analyst Richard Greenfield, whose “Dear (name the media Chief Executive here)” research notes are both notorious for vitriol and renown for analysis, is now taking a page from billionaire investor Carl Icahn and urging the world’s largest media company to break itself up.

Greenfield upgraded his recommendation to “Buy” from “Neutral” on the belief that the sell-off or split-off of AOL, a split-off of Time Warner Cable, a sell-off of Time Inc. and a $14 billion stock buyback could send shares rising to at least $25 over the next 12 months. That’s a nice premium to its current level of about $21.

Greenfield says a Time Warner board meeting later this month will “hopefully set in motion some of the structural changes” and render a decision on a possible buyback. (Time Warner is virtually done with a $20 billion buyback that it announced following its resolution with Icahn last year.)

Some reporters on the beat will agree with at least one thing in Greenfield’s note: “Investors need a ‘PhD’ in TWX. Time Warner reported Q1 07 results by issuing a 17-page press release (detailing reported earnings, earnings before impairment charges, one-time gains/losses, merger/restructuring charges, legal reserves and other miscellaneous non-recurring items), 13 pages of trending schedules, three pages of business outlook, and a 20-page slideshow to accompany the earnings call; not to mention a book-like 10-Q.

“While one certainly has more than enough information to analyze TWX, its complexity has, without doubt, become a liability in the public market.”

Thanks Rich. Can we move on to Liberty Media now?

Once again, Reuters staff have died covering the war in Iraq.

When is a story worth a life?

The answer, of course, is never.

And yet, six Reuters deaths later, were still in Iraq, still covering the story.

Reuters Ukrainian cameraman Taras Protsyuk was killed in April 2003. Reuters Palestinian cameraman Mazen Dana was killed four months later. Reuters Iraqi freelance cameraman Dhia Najim was killed in November 2004. Reuters Iraqi soundman Waleed Khaled was killed in August 2005. And in July 2007, Reuters Iraqi photographer Namir Noor-Eldeen and Reuters driver Saeed Chmagh were killed.

All of the victims were visual journalists and the people who work with them. To get the story they must get close to the action.

To a journalist reporting the action is the entire reason we are in the profession. We tell the story. We tell what happened. We put it in context. We show; we describe; we explain.

Some do it in words, and that can be done from the office, which, in a place like Iraq, can be horrifically dangerous too. Some do it in pictures and video, and that must be done from the front. And that means taking a risk.

Imagine a world where no one took the risks.

Imagine a world where wars happened in secrecy.

Imagine a world where heroism, tragedy, death and life never got reported or were only filtered through official versions.

Imagine a world where you, as a citizen of whatever country you are reading this in, just didnt have the information you needed to make up your mind.

There arent many news organizations left in Iraq. The ones that are there take a terrible calculated risk. We at Reuters, like our colleagues at other major organization, struggle endlessly to make the dangerous safer, to understand the risks and to mitigate the risks. The cause of journalist safety is a vital one.

Foreign staff and Iraqi staff together put nationalities aside, put religion aside and put sectarianism aside to bring the story out day after day. They do it because they believe with every cell of their souls that telling the story truthfully and fully is a vital service and a sacred obligation.

They do it because they are journalists.

Our Reuters staff in Iraq exemplifies this creed. Read their stories. View their pictures. Watch their video. And know that they are there because they believe you need to know what is happening.

Taras, Mazen, Dhia, Waleed, Namir and Saeed. We at Reuters salute you. We salute your many colleagues from other news organizations who also have died. We salute your colleagues in the bureau today, who are striving to tell the story.

David Schlesinger is Reuters Editor-in-Chief

A tribute to Namir’s work has been compiled by his colleagues

    Banking that tens of millions of plus-size women in America will vent their frustration over finding a well-fitting pair of jeans, retailer Lane Bryant has launched a new formula for denim buying that mirrors Homeland Security’s terrorism threat advisory scale.
    Proclaiming that “jeans shopping has terrorized curvy women for years,” the president of Lane Bryant, LuAnn Via, promises that the company’s new Right Fit jeans will fit all customers.
    Lane Bryant, which is owned by Charming Shoppes Inc., scanned 14,000 women’s bodies with the help from body scanner company Intellifit, then turned results over to its design team, who created three new fits. Lane Bryant joins others such as MyShape.com and Zafu.com using technology to identify shape-appropriate apparel.
    The secret for Lane Bryant is in the color coding. Yellow means your body type is straight through the waist and hips, red is slightly curved, while blue is full at the hips.
    Voila! Choose your appropriate color and show those terrorists who’s boss!

(Photo: Lane Bryant)

     Mattel Chief Executive Officer Bob Eckert thinks retailer Toys ‘R Us is doing a great job improving their supply chain, in turn allowing Mattel’s toys to spend less time in the delivery truck and more time on the store shelf.
    Mattel just started shipping its Barbie Girls music player to stores, and Eckert was astounded when an analyst mentioned during Monday’s earnings conference call that she had seen the item last Friday on a Toys ‘R Us store shelf. 
    “I have not seen it anywhere at retail, including Toys ‘R Us yesterday in the particular store I was at … it certainly isn’t widely available at retail in any of the major customers yet,” Eckert said. 
    Mattel is hoping the doll-shaped digital music player is a strong holiday item and helps boost its lagging U.S. Barbie sales. The music player turns into a live character at Barbiegirls.com.
    “We just started shipping it, so maybe that’s insight into the improved supply chain at Toys ‘R Us that they received it and got it on the shelf so quickly,” Eckert said. 
    “The Toys ‘R Us stores look terrific to me right now … Toys ‘R Us I think is doing a terrific job, and I think we’re well aligned with them, but just shopping their stores and seeing how they’re presenting toys to me is a big improvement,” he continued.

Before plastic and computer models, scientists and students studying plants had few ways to look at delicate and unfamiliar species of blooms, short of travelling hundreds or thousands of miles to real plants in the field.
One answer to that problem was producing glass models of exotic species, which could be studied year-round. The world’s largest collection, with over 3,000 life-sized and enlarged examples of 847 plant species, resides today in Harvard University’s Museum of Natural History. Tucked into the same Cambridge, Massachusetts building that houses an aging and deteriorating collection of hundreds of preserved animals assembled by Louis Agassiz, a 19th-century scientist who attempted to disprove Charles Darwin’s theory of evolution, the delicate glass blooms appear to have maintained their original beauty.
The models were made in Hosterwitz, Germany, from 1887 through 1936 by father-and-son team Leopold and Rudolph Blaschka, part of family that had practiced the jewelry and glassmaking trade since the 15th Century. More than a century after they initially commissioned by the University, scholars continue to use them as a learning tool. A large selection of the models is also on display to the general public.

(By Scott Malone; Photo: Reuters/Scott Malone)

It’s one of those social dilemmas we all face these days, in in our busy, busy lives. Velma needs to put in a day at the conservative think tank where she works, but afterwards she wants to go straight to the beach, while there’s still some sun. What to do, what to do?

Well, this clever outfit, seen at a genuine fashion show, is a lifesaver.  The collar and tie satisfy even the most traditional office dress codes, but Velma can still hit the waves without skipping a beat, and who’s to notice that her business attire was really a thinly-disguised bikini? One question: what does the casual Friday version look like?

More Oddly Enough Blog

A model wears a swimwear outfit from the collection of Ashley Paige during the Mercedes-Benz Fashion Week show in Miami Beach July 13, 2007.   REUTERS/Hans Deryk