Back to the well?

June 3, 2008

lehman.jpgLehman Brothers stock took an early hit on a report in the Wall Street Journal that it may raise up to $4 billion in fresh capital. It’s not clear who might want to buy into the storied brokerage, particularly given the number of top banking heads that have recently rolled down Wall Street. Lehman may issue common stock, diluting current shareholdings, and will probably reveal its capital plans when it reports quarterly results the week of June 16, the report said. Two months ago, the bank sold $4 billion of preferred shares, and in early May, it sold $2 billion of 30-year bonds.

Staples raised its bid for Dutch office supply distributor Corporate Express by about 14 percent to 9.15 euros a share, or $2.65 billion, but in order to secure the deal Corporate Express would have to nix its plan to buy French peer Lyreco. Staples says it has the backing of about 23.3 percent of Corporate Express shareholders. The initial bid was met with a cool response. This time, Corporate Express is blushing a bit more warmly, saying it will carefully review the new offer and make a further announcement in due course. “The 9.15 euros is somewhat higher than we expected. We believe this offer is attractive,” said Rabo Securities analyst Philip Scholte.

China Merchants Bank has agreed to buy control of Wing Lung Bank for $4.66 billion in a deal that will provide China’s sixth-largest lender with greater access to the Hong Kong market. After initially dropping out of the auction, China Merchants Bank returned late in the process to beat front runners Australia and New Zealand Banking Corp and Industrial Bank of China, the world’s largest bank by market value. China Merchants said late on Monday it would pay HK$156.50 a share for a 53 percent stake in Wing Lung, confirming what people with direct knowledge of the matter told Reuters on Friday.

Shares in Italian broadband operator Tiscali jumped more than 10 percent after a report that Britain’s Vodafone will bid for the company. Italian daily MF reported that bid will come in the next 24 hours, citing sources close to Vodafone. Although the price was being kept secret, a reasonable bid would be about 2.8 euros a share, the newspaper said. The market is largely buying the article, as shares rose more than 8 percent to 2.5975 euros. Tiscali said in a statement it had not yet set a price for itself and was still in talks with a number of companies.

Other deals of the day:

* Swiss private bank EFG International made its first move into the French market by acquiring French wealth manager Sycomore Gestion Privee for an undisclosed sum, it said.

* Swedish engineering group Alfa Laval said it had bought U.S. heat exchangers maker Standard Refrigeration.

* Indian telecom services provider Spice Communications has been approached by UAE-based Etisalat and others for a stake in the Indian company, chairman B.K. Modi told reporters.

* France’s Groupama denied a newspaper report it had made an offer for Banco de Sabadell’s insurance unit.

* Britain’s Taylor Nelson Sofres and Germany’s GfK have agreed a merger of equals to create the world’s second-biggest market research company with a market value of about $4 billion.

* Metcash, Australia’s largest grocery wholesaler, posted a stronger-than-expected 18 percent jump in full-year profit on strong growth in fresh food sales, and confirmed it has bid for a unit of Primary Health Care.

* Indonesian miner PT Aneka Tambang and its partner, China’s Shenzhen Zhongjin Lingnan Nonfemet, have raised their offer for Australian-listed Herald Resources, valuing the company at as much as $523 million ($499 million).

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