Mining companies who want to be part of industry-wide consolidation but have been spurned by their targets can take heart — “no” sometimes means “maybe”.

Just ask mining giant Rio Tinto.

The company courted Alcan Inc. for about six months starting on Oct. 10, 2006 and was turned down more than once before it finally won the company over with a $38 billion deal, according to a regulatory filing.

Rio’s first proposal, presented at a Paris meeting in October, was rejected only a week later on Nov. 1, with Alcan saying it was more interested in finding other ways to work together. 

Rio and the Canadian aluminum company met and talked again over the next five months, and in March, Rio put forth a cash offer. That was followed by more calls and meetings, but on May 1, Alcan turned Rio down, saying it did not want to pursue discussions further.

Six days later, the story changed. Alcan’s U.S. rival Alcoa launched a hostile bid for Alcoa and Rio was back as a suitor. This time Alcan, which rejected Alcoa’s bid repeatedly, was a bit more receptive.

Alcan and Rio executives started another round of talks and meetings that went on for two months, even as other possible suitors for Alcan came forth. And on July 11, with a revised offer in hand, Alcan finally said “yes”.

(Photo: Tom Albanese, Rio Tinto CEO. Reuters file)

Dubai’s investment plans for markets outside the oil rich emirate are big – big enough to rival some of the mega-deals sought by U.S. private equity giants.  Dubai’s overseas investment focus underscores the wave of oil wealth headed for equities markets from New York to London.                  Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  Â Â Â Â Â Â Â Â Â Â Â 
    In a series of interviews with Dubai executives, Reuters reports that the country’s private equity arm is, among other things, targeting as much as $10 billion of investments in Europe and Japan.
    Middle Eastern investors picked up the pace of their foreign investment last year, a trend that has only gained in size and speed. Among the factors drawing Mid-East oil money to the U.S. and Europe was a correction in the overheated stock markets in Dubai and Saudi Arabia. The Abu Dhabi Investment Authority plunked down $600 million for a 40 percent stake in Apollo Management’s European fund, which listed last year.
    Top executives at both Dubai International Capital and Istithmar, an investment fund that also invests on behalf of Dubai, reveal in the Reuters interviews not only their global investment strategy but also their plans for individual deals such as Barneys and deals focused on media and airlines.
    Dubai International Capital even chimed in on its thoughts about HSBC’s valuation, and how it, as a major shareholder in the bank, thinks that subprime worries are overdone. The fund sees an EADS turnaround as well.
   The interviews come amid a larger, global push by foreign governments growing increasingly aggressive as equity investors abroad, a topic outlined on the front page of the Wall Street Journal on Tuesday.
     

(Photo: Dubai International Capital’s Chief Executive Officer Ansari talks during an interview with Reuters in Dubai)

Brad Greenspan’s offer to take a big stake in Dow Jones might present an attractive counterproposal to the $5 billion offer for the company by Rupert Murdoch, but some number crunchers are finding that the numbers make them a little green. (Summary: lend the Bancrofts some money to buy out their relatives, load up on debt, start a third business news channel, go video video video online and a few other things.)

Few people watching the process are giving him much of a chance, but as the Bancrofts meet in Boston on Tuesday to consider Murdoch’s offer, it is proving hard to ignore the other guy out there.

Benchmark Co. analyst Ed Atorino shared his thoughts after some more thorough parsing of Greenspan’s offer:

- The proposed purchase by Dow Jones of 50 percent of the shares outstanding at $60 would cost approximately $2.5 billion (42 million shares at $60 per share). The debt would carry an estimated interest cost of $187 million to $200 million ($2.5 billion at 7.5-8 percent), wiping out most of Dow Jones’s earning and jeopardizing the dividend.

- The Bancrofts would be saddled with $200 million-$300 million in debt (after Dow Jones share purchase) and heavy interest costs unless Greenspan provides them with an interest-free loan. The Bancrofts would also lose much of their voting control of the company in the process.

- Dow Jones’s stock price would undoubtedly plummet, leaving the surviving Bancrofts with a much lower-priced stock in a company with heavy debt and little earnings.

- WSJ.com would lose a substantial amount of revenue if it switched to a free service resulting in lower future profits for Dow Jones.

- There is no provision for financing the launch of a financial news channel. (Another part of Greenspan’s proposal)

If you think Atorino was taking a critical tone, check out Ken Doctor, an analyst at Outsell Inc. Here’s the complete blog entry at the end of this link, but here’s an excerpt below:

- The kind of free-to-public, video-forward site he’s pitching is one that’s already out there — it’s called MarketWatch and it’s owned by Dow Jones.

- Greenspan says his plan will move the share price to $100. I don’t think so. The second page of Brad’s open letter, “Assuming stable performance from the existing businesses….” Unfortunately, that can’t be done. Print’s not stable; it’s in decline.

- The public likes web video, but how much will it watch — how much does the subject matter itself lend itself to video, when you consider the value of written analysis and data? So is his projection of 10 billion annual video page views by 2009 a tad high?

The credit market jitters may be bad for private equity firms, but it’s probably good news for many corporate–or in M&A terms, “strategic”–buyers.  Count Halliburton as one company that hopes to capitalize on the private equity pull back. Leveraged buyout firms, which have routinely snatched companies away from strategic suitors, are finally facing borrowing limits, a development that could allow corporate buyers to win back some of its M&A market share.

     Indeed, Halliburton Co. , the world’s second-largest oil services firm, said it sees opportunity in the private equity slowdown.
    “The fact that the private equity market maybe is cooling a bit and it may be a little bit more difficult to get financing, will hopefully work to our advantage,” Halliburton’s Chief Financial Officer Christopher Gaut, told analysts on the company’s second-quarter earnings conference call on Monday. 

      In other words, reduced competition means easier M&A for corporates. Gaut said the Houston company, which also has a headquarters in Dubai, will continue to look for products or technologies that fit with its existing business. Halliburton is also on the prowl for local operations it can build up with its own technology, according to Gaut.   

       (Reporting by Anna Driver in Houston)   
   

(Photo. Reuters file)

Former BATS Trading CEO Dave Cummings may have delighted the trading community with his tongue-in-cheek e-mails that often took aim at arch rival Nasdaq, but dont expect his successor Joe Ratterman to do the same.

Rattermans first e-mail newsletter after he recently took over as CEO retains Cummings chatty style, but leaves out the digs. There will be some Dave e-mails, Ratterman said, but the tone and content of future e-mails will change to reflect the new management and personality of BATS.

Cummings, who founded the Better Alternative Trading System in 2005, initially sent out his e-mails to inform the market of his new electronic trading platform. Cummings mailing list swelled from 20 people to about 1,800 as BATS took market share from bigger exchanges like Nasdaq. His e-mails, which went out as often as twice a week, became known for landing verbal punches on Nasdaq and its CEO Bob Greifeld.

One e-mail from Cummings blasted the Nasdaq propaganda machine for sending out information that was blatantly false. Another e-mail took aim at Nasdaqs failed bid for the London Stock Exchange, saying the U.S. stock exchange should cut deals with willing partners. If someone does not want to talk to you, maybe its not them, its you, he wrote. Cummings got a lot of media attention after he criticized Greifeld’s “reckless, bullying leadership style” in one of his e-mails.

Ratterman will limit his e-mails to one a month, and the focus wont be on any particular people or market centers, according to BATS Trading spokesman Randy Williams.

Does that mean upstart BATS — which is applying for exchange status with the U.S. Securities and Exchange Commission and has plans to enter the London market  – is finally growing up?

A week of dinosaurs, ugly brides, apologies, oddball plans and family struggles…

    “I think equity bridges are a terrible idea.” — Jamie Dimon, CEO of JPMorgan Chase & Co. “I think they’re bad — I think they’re a bad financial policy. I don’t think they’re good for the banks. “I don’t think they’re good for the private equity guys, so I hope they go the way of the dinosaur because they’re basically a one-sided put on our balance sheet.” (July 18)
    
    “I sincerely apologize to all Whole Foods Market stakeholders for my error in judgment in anonymously participating on online financial message boards,” — John Mackey, CEO of Whole Foods Market Inc. “I am very sorry and I ask our stakeholders to please forgive me.” (July 17)
    
    “For ten years we have known what some call the golden age and that period cannot last forever.” — Carlyle Group  co-founder David Rubenstein, in an interview with the French daily La Tribune. “The profitability of our business will probably decline in the coming years but not to the point where investors will shun private equity.” (July 20)
    
    “It’s an oddball proposal,” — Ken Doctor, a media analyst at Outsell Inc., in reference to a plan by Internet entrepreneur Brad Greenspan that would keep Dow Jones & Co. Inc. out of Rupert Murdoch’s hands. (July 20)
    
    “While my daughter talks of good governance, she apparently ignores the cardinal rule of good governance that the boards of the two public companies, Viacom and CBS, should select my successor…. It must be remembered that I gave to my children their stock; and it is I, with little or no contribution on their part, who built these great media companies with the help of the boards of both companies.”  — Viacom and CBS Executive Chairman Sumner Redstone in a letter to a Forbes reporter as he takes a private squabble with daughter Shari Redstone public. (July 20)
    
    “Sometimes he’s a very straightforward guy who says what he feels and thinks. But he’s very rich and a tycoon’s son so in some sense, he doesn’t need to make money through devious means.” — Chim Pui-chung, a Hong Kong legislator, commenting on Bank of East Asia CEO and Dow Jones director David Li, who may face civil charges as part of a U.S. investigation into insider trading involving Dow Jones shares. (July 19)
    
    “I hope the board now will stick to running the business and not engage in this kind of thing.” — Rick Pzena, founder and co-chief investment officer of Pzena Investment Management, after he and other shareholders in auto parts company Lear Corp. voted down a buyout offer from billionaire investor Carl Icahn which had been recommended by the board. (July 16)
    
    “Alitalia is not exactly a beautiful wife that can find a wonderful prince.” — Oliviero Baccelli at Bocconi University’s transport economics research centre as plans to sell the unprofitable airline ran into further trouble. (July 17)
    
    “Our risk appetite is not the issue. The issue that’s been at the heart of the frustration at UBS has been our risk processes, that they are unduly bureaucratic and too slow.” — UBS Investment Bank CEO Huw Jenkins on its weakness in certain areas, particularly in lending for leveraged buyouts. (July 16)
    
    “You might as well try to get out before it gets worse, but who’s going to buy all these subprime businesses?” — Scott Brassey, a portfolio manager at Burroughs Hutchinson Investment Managers, on CIT Group’s decision to exit the mortgage business. (July 18)
    
    “The market’s punishment of unsound financial arrangements has been swift, harsh and without prejudice.” — St. Louis Federal Reserve Bank President William Poole. (July 20)

    “How united are the Sulzbergers, and what holds them together? Who is the next generation, and how committed are they to the family’s long practice of investing heavily in quality journalism, even in rocky financial times?” — Clark Hoyt, the public editor of the New York Times, urging the newspaper to write an article about the Sulzberger family and whether it is committed to retaining control of the New York Times Co. (July 22)

Satellite Radio providers XM and Sirius picked up one heavenly endorsement on Friday:   one of God’s top guys.

Ok, maybe that’s going a bit too far. But His Eminence Edward Cardinal Egan, the Archbishop of New York for the Catholic Church, for sure is a heavyweight holy man in the United States, and he thinks the proposed merger — whose opponents range from radio industry bigwigs to members of Congress — is a good idea. So much so that he devoted an entire op-ed to the topic on Friday in the New York Post.

“From my perspective (the merger) offers a unique opportunity to extend the reach and breadth of religious programming. It is also an unmatched opportunity to strengthen this new medium and position satellite radio to compete with the ever-growing list of audio entertainment providers.”

The endorsement by Cardinal Egan — a contributor to “The Catholic Channel” on Sirius — comes one day after another influential voice, from the (ahem) church of Wall Street, jumped off of the Satellite Radio merger bandwagon. On Thursday, Bernstein Research media analyst Craig Moffett pulled the plug on his coverage of both XM and Sirius, with a note that seemed to suggest that he had something else to focus on.

In a note to clients, Moffett said he rated XM at “Outperform” and Sirius at “Market-perform” but that Bernstein was “terminating coverage of XM Satellite Radio and Sirius Satellite Radio as our team shifts its focus to other incremental coverage.”

(Photo: Reuters File)

Jim Ottaway returned to the public stage Friday with an opinion piece in the Financial Times newspaper urging — as you might have guessed — the Bancroft family not to agree to sell Dow Jones to Rupert Murdoch’s News Corp.

There are good reasons not to sell the publisher of The Wall Street Journal, despite the $5 billion, $60 per share offer, Ottaway wrote. Namely: “Dow Jones is not a sick company that needs to be cured by Doctor Rupert Murdoch.”

The FT’s Web site does not offer free access to the commentary by the former Dow Jones board member and executive, but he sent us a longer version that you can read here.

Among his other points:

- “Dow Jones is leading newspaper-dominated publishing companies with its successful transition to Internet age electronic businesses, which represent about 40% of its operating income and are growing fast as newspaper advertising revenue declines.”

- “News Corp. is not a good long-term home for Dow Jones, a $3 billion rational market value company which would disappear into a $72 billion asset company, with 85% of its revenues coming from entertainment, not serious news companies.”

He also noted that fears of the stock falling to the $30 range from the $55-$60 range it is at now are fanned by advisers trying to scare them into selling. Here’s what he said on that:

- “I hope a majority of the Bancroft Family will vote to refuse Murdoch’s generous offer, without fear, but with confidence in a strong Dow Jones that is making a remarkably successful transition to the electronic information age. Why give a very bright future as an independent company to Rupert Murdoch?”

Dana Corp. keeps cars and trucks on the road supplying vital engine and chassis organs. But the auto parts supplier’s path out of bankruptcy isn’t proving such an easy ride.  Dana agreed to a deal earlier this month with Centerbridge Capital Partners under which it would receive $750 million of investment. Dana’s largest shareholder, Appaloosa, however, isn’t impressed. In a filing on Thursday, Appaloosa described the deal struck with Centerbridge as “absurd and one sided”.  Appaloosa accused Dana of resisting efforts it had made to gain access to company data and sets out a rival proposal which it describes as “materially superior”. But that doesn’t seem to have reassured the market much with Dana’s shares still trading around a dollar.  “I’m surprised how poorly the equity is trading,” said a bondholder of a rival bankrupt supplier — Delphi. “If there was a strong feeling there was going to be more of a competitive process I think the equity would be trading better than a buck,” said the person, who declined to be named.

(Picture from Dana’s Web site)

A bad day for junk bonds is helping push Blackstone to new post-IPO lows – but another issue is starting to surface: how are analysts going to value the private equity giant.

Sell-side analysts gearing up to launch coverage on Blackstone, which went public last month, will face a host of challenges including limited access and few publicly-traded comparable companies.

To make private equity — and arguably hedge funds — work, youve got to keep it confidential, said Brad Hintz, a Sanford Bernstein analyst who follows brokers and investment banks. And if you keep it confidential, the analyst has a very difficult time valuing it.”

“Unfortunately that often leads to one of two extremes: massive over-valuation with the assumption that you own the goose that lays the golden egg. Or massive under-valuation because its a big black box and you have no faith in your ability to forecast anything.

With dust settling after its IPO, Blackstone may be finding investors less sanguine about holding the rich but cryptically valued units. Perhaps anticipating difficulty communicating with analysts, last month the embattled private equity firm hired Joan Solotar as senior managing director overseeing public markets.

Solotar who will manage relationships with analysts formerly directed equity research at BofA and was herself a top-ranked analyst.