Daily Briefing: StanChart to buy AmEx Bank
** Standard Chartered is moving to beef up its private and correspondent banking services with a deal to buy American Express Bank for around $860 million in cash. The Asia-focused retail bank said it would pay Amex Bank’s net asset value at the time of completion, plus $300 million. At the end of June, that value stood at $860 million. American Express said separately it valued the transaction at $1.1 billion. Standard Chartered said it would finance the deal with internal resources and an ongoing debt funding program, is expected to create pretax cost savings of more than $100 million per year from 2009 onwards. The bank expects the deal to be accretive to earnings per shares in 2009, the first full year of ownership.
** More than a dozen parties, including some private equity firms, have expressed interest in Wendy’s International, according to the Wall Street Journal. Citing a person familiar with the the situation, the Journal said Wendy’s board was still considering a recapitalization or other change in strategy in addition to an outright sale of the fast-food company. Arby’s parent Triarc Companies, controlled by billionaire investor Nelson Peltz, is the only company that has publicly expressed interest in making a bid for Wendy’s. But any private equity interest is severly limited by the credit crunch.
** With the Fed expected to cut interest rates later today, the Deal Journal takes a look at what effects various moves would have on the deal-making market. It says rumors of November layoffs in the industry are growing louder.
** Australian healthcare firms Symbion Health and Healthscope, searching for alternatives to a failed A$2.9 billion ($2.4 billion) takeover deal, plan to extend tie-up talks, according to a source close to the deal. Rival Primary Health Care last week voted its 20 percent stake in Symbion against the deal, scuppering Healthscope’s takeover proposal and prolonging the battle for valuable medical testing assets in Australia’s consolidating healthcare industry. Following the vote Healthscope and Symbion started fresh talks and had five days to come up with a new bid. The source said they will extend that period.
** Private equity titans are finding little sympathy from pension funds in their efforts to stave off higher taxes, and a recent study buyout firms can earn even more money from fees than from selling on restructured assets, has not helped their case. Pending legislation would raise taxes on “carried interest” — profits on the sale of assets — at private investment funds to 35 percent from 15 percent.