Chris Kaufman

With media titans GE and Vivendi still negotiating a deal to bring cable operator Comcast into a mega-media joint venture, a management move at DirecTV is giving dealwatchers a fresh programming alternative.

Yinka Adegoke and Sinead Carew report the appointment of PepsiCo veteran Michael White (pictured below), who has no experience in pay TV, as DirecTV CEO is being read as a sign the company's parent, Liberty Media, just wants a baby-sitter until its sells the operation in the next couple of years.

Telecom leaders Verizon and AT&T approached Liberty earlier this year, they report. Both have cross-marketing deals with DirecTV and would leapfrog the rest of the market with the addition of DirecTV's subscriber base. But fears of insurmountable regulatory resistance put those talks on ice.

Liberty Media shareholders are set to vote this morning on a plan to split DirecTV from Liberty Entertainment -- a move that Wall Street believes could pave the way for a telephone company to put in a bid for DirecTV, leading to a similar bid for smaller rival Dish Network.

If Comcast gets its content pipeline connected to NBC Universal, the pressure on the telcos to boost subscribers could get them to test the regulatory waters again.

So far, Cadbury's hope that Italy's Ferrero and U.S.-based Hershey will make a counter-bid for the chocolate company look like a pipedream. Cadbury's stock has ticked up but is still pretty much where it has been since Kraft's hostile $16.8 offer hit the market. Nobody appears to be buying the idea that a white-chocolate knight will come up with a bid to seriously rival Kraft's.

The chance of a joint Ferrero-Hershey bid may be slim. Questions about funding commitments and investment restrictions set on Hershey by its charitable trust ownership structure make any deal involving the maker of chocolate kisses a tough sell.

And market sources say that if they were successful, a Ferrero-Hershey tie-up would likely lead to a breakup of Cadbury along geographic lines.

The mid-size investment bank has named Kenneth Jacobs as CEO and chairman, reinforcing an institutional commitment to dealmaking since the death of legendary Wall Street wizard Bruce Wasserstein. Jacobs has been with the firm for more than two decades and touts an in-the-trenches approach to running the firm. He joined Lazard in 1988, was named a partner in 1991 and became deputy chairman in 2002.

Steven Golub, interim chief executive since Wasserstein's death, will continue as Lazard vice chairman and chairman of its financial advisory group. Ashish Bhutani and Gary Parr will become directors and vice chairmen. Bhutani will continue as CEO of Lazard Asset Management. Parr is a deputy chairman. Steven Heyer, a director since Lazard's initial public offering in 2005, will become lead director, a new board position.

While Jacobs' ascension was widely anticipated, it will be interesting to see if other senior execs stay with the bank, given that the new boss is only 51 and will presumably be in the top spot for some time.

Announcing a third-quarter operating loss, the government-owned automaker said it would begin paying down its $6.7 billion debt to the U.S. government ahead of schedule. Most financial experts would agree that paying off debt is a good thing.

The government extended almost $50 billion in financing to GM but agreed to convert most of that into a 61 percent equity stake in the automaker. A congressional oversight panel said the government was unlikely to recover all of the financing it provided GM.

Banks that paid off their government bailouts early were able to shrug the pay czar off their backs and return to the time-honored practice of paying their executives whatever they pleased. It's unclear whether GM will be able to do the same once it pays off the government. After all, taxpayers will still be majority shareholders after all debts are paid. Ken Feinberg may well wind up with a desk at GM's HR office.

So why pay this money back before it is due? It's not as if the prepayment is being funded from genuine earnings. In effect, GM is using money borrowed from taxpayers to pay them back. With expectations so low, and markets gradually accepting that the worst may be behind it, is this trip really necessary?

Hewlett-Packard's move into the network equipment market with a $3.1 billion deal for 3Com could be marred by allegations of insider trading. At first glance, the hallmarks of suspicious trading are there, according to option traders said. 3Com shares jumped 5.18 percent to $5.69 during the day -- before the deal was announced -- rising from the opening bell and closing a penny off the session high.

After the bell, when the deal was disclosed, 3Com shares shot up 35 percent to $7.65. Option market sources told our reporter Doris Frankel it wasn't just the stock behaving oddly ahead of the late-afternoon news. Volume in 3Com call options -- which convey the right to buy the company's shares at a fixed price within a specified time period -- soared.

A total of 8,085 calls traded, against only six puts. That amounted to 17 times the recent average daily call volume, according to option analytics firm Trade Alert.

"The rise in 3Com shares and a surge in call volume before the takeover announcement tell us that somebody's timing was extremely good," said Jon Najarian, co-founder of optionMonster, a Web information site. "Since I do not believe in coincidences on Wall Street, I would bet that these unusual call option trades will spark an investigation."

The Securities and Exchange Commission, which looks into unusual options and share trading activity, was closed on Wednesday for the U.S. Veterans Day holiday. Expect it to be busy today.

The Wall Street Journal reports AIG Chief Executive Robert Benmosche threatened to walk last week. Chafing after the recent compensation review by pay czar Ken Feinberg, Benmosche reportedly told AIG directors he was "done," but the board talked him down and he agreed to think it over.

Benmosche took over as the insurer's chief executive in August, becoming the fourth person to hold the post in about a year. On his watch, the recipient of up to $180 billion of federal aid, including more than $80 billion in loans, posted its second straight quarterly profit last week.

A recovery in the value of AIG's investments has helped improve the bottom line at the 80 percent state-owned insurer, and it may be that the next CEO, if Benmosche catches the revolving door on the fly, will be able to justify better pay on improving performance. AIG said at the end of October it was no longer looking to sell two Japanese units, AIG Edison Life Insurance and AIG Star Life insurance, because it now believes they will help improve its corporate value.

There is still the matter of all that money owed to the U.S. government. Consider it a long-term objective for any AIG CEO.

The defining deals of the week, Kraft’s now officially hostile bid for Cadbury and a deal to sell a majority stake in NBC Universal to Comcast, hinge on decisions of Europe Inc, so they could well drag on many more weeks.

This morning, Kraft formally bid for Cadbury with the same offer mooted two months ago, before today’s put-up-or-shut-up deadline. Cadbury has already said no to these terms, and can be expected to do so again. But the sinking expectations that Kraft might pay more, and the lack of any other buyers coming forward, don’t help to make the case for a successful hold out by Cadbury executives.

Over the weekend we learned that GE and Comcast agreed on a valuation of around $30 billion for a joint venture between NBC Universal and Comcast, ironing out what has been a key obstacle in talks so far. But French media conglomerate Vivendi, which owns 20 percent of NBC Universal, has not yet agreed to a deal, a source said.

So far as NBC is concerned, Vivendi is so far tres mum. Every year between mid-November and mid-December, Vivendi has to decide whether to exercise its option to sell its NBC Universal stake. Vivendi is believed to be eager to dispose of it, but nobody knows what they want for it.

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If a deal can't get done with the backing of Canada's pension fund and capitalism's mightiest bank, then the leveraged buyout market would truly be dead.

So it is with limited fanfare that DealZone welcomes the buyout of IMS Health by Canada's public pension plan and Goldman Sachs as a sign of the market's return to health. Green shoots in the LBO patch are hardly growing all jack-and-the-beanstalk, but putting together $4 billion for the prescription drug sales data provider is not just ice on the moon either.

Excluding debt, the $22-a-share cash deal is the biggest leveraged buyout since Bristol-Myers Squibb sold its ConvaTec unit to Avista Capital and Nordic Capital just over a year ago for $4.1 billion, according to data from Thomson Reuters.

Financing markets and general optimism have improved from the nadir of the crisis, and debt, if you can find it, is hardly expensive, with core rates at zero. But $4 billion pales in comparison with strategic deals in the health space this year, such as Wyeth's $68 billion union with Pfizer.

It is safe to say, though, that had the IMS deal foundered, it would have been a far worse signal for LBOs than its success means for the relative health of the business.

Following in the greatest of capitalist traditions, the Oracle of Omaha announced plans to buy up the shares he doesn't already own in one of the country's biggest railroads, Burlington Northern Santa Fe. And in an egalitarian, if unexpected, move, he said he would split his Class B stock to the tune of 50-to-1, making it possible for just about anyone to own Berkshire Hathaway's traditionally lofty shares.

The railroad purchase is a bet on the future of America, Buffett said, and it's his biggest acquisition ever. It values the railroad at $34 billion, and the price of $100 a share is a premium of nearly 32 percent. The premium vaults the railroad into the top spot by market cap, surpassing Union Pacific.

Buffett also owns stakes in other railroads, so it will be interesting to see if his move stirs any antitrust comments from Washington. Idiomatically, there is something profoundly rural in the Americana of Buffett's latest bet; much more so than Berkshire Hathaway's mainstay insurance business.

The three-way fertilizer fight between CF Industries, Terra and Agrium may be approaching its end game. Over the weekend, CF raised the cash portion of its hostile offer for smaller rival Terra. It said it was able to add more cash because of strength in stock and debt markets.

CF is itself fending off a hostile takeover bid from Agrium. Last month, possibly throwing a monkey wrench into CF's bid for Terra, Agrium said it would sell part of a nitrogen fertilizer facility to Terra to overcome regulatory issues related to its hostile takeover bid for CF.

In its latest move, CF is offering $32 in cash -- including a $7.50 special dividend that Terra plans to pay -- and 0.1034 of a share of CF common stock for each Terra share. That would amount to $40.61 per share based on CF's Friday closing price and represents a 28 percent premium to Terra's Friday closing price, the company said in a statement. It is about 5 percent higher than CF's previous stock bid of 0.465 CF shares for every Terra share.

But perhaps more importantly, the new bid would not require approval from CF shareholders as it is now mostly cash. Terra had said CF would not be able to get its all-stock offer approved by CF shareholders. Cutting them out of the process is always a good way to help move a deal along.