All aboard the Orient Express

June 20, 2008

barclays1.jpgJapan’s Sumitomo Mitsui Financial Group may invest about $926 million in British bank Barclays, people familiar with the matter told Reuters, the latest in a string of subprime-hit Western lenders increasingly turning to Asia for funding. Japan’s third-largest bank is also considering a business alliance in Asia with Barclays, which is expected to raise about $8 billion from sovereign wealth funds and other investors and then offer shareholders the right to buy on the same terms. If Sumitomo Mitsui opts to invest it would give the Japanese bank a stake of just over 2 percent. Up to five outside investors are also expected to participate, and backers may include existing Singapore-based sovereign wealth fund Temasek and China Development Bank, plus the Qatar Investment Authority.

Steve Ballmer insisted Microsoft will not seek to make a spate of other Internet acquisitions (Facebook, we’re looking at you) in the wake of its failed bid for Yahoo, according to the Financial Times. “People don’t understand what they’re talking about,” Ballmer said. “At the end of the day, this is about the ad platform. This is not about just any one of the applications.” Meanwhile, over at Yahoo, a spate of executives are reported running for the hills, just as the company is trying to justify its decision to go it alone and to repel Carl Icahn’s proxy fight. Among the departed: Flickr co-creator Stuart Butterfield, whose bizarrely hilarious resignation letter could best be summed up as: “There Will Be Tin.”

The fate of the world’s largest leveraged buyout hangs in the balance ahead of Friday afternoon’s decision by the Supreme Court of Canada on whether BCE treated its bondholders unfairly in agreeing to a $34.8 billion ($34.5 billion) takeover. Ontario Teachers’ Pension Plan, with U.S.-based private equity firms Providence Equity Partners, Madison Dearborn Partners and Merrill Lynch Global Private Equity, are offering C$42.75 a share to take BCE, parent of Bell Canada, private.

More Deals of the Day:

** France Telecom declined to comment on a report in French paper Les Echos that it might be ready to make new concessions to improve its $41 billion cash-and-share offer for rival TeliaSonera.

** Malaysia’s second-largest lender, CIMB Bank, has agreed to buy a 42 percent stake in Thailand’s BankThai for about 5.9 billion baht ($177 million), the Bank of Thailand said on Friday.

** France’s leading sugar producer Tereos abandoned plans on Friday to bid for the sugar business of Danish food group Danisco, saying it would instead look for alternative acquisitions.

** Private equity firm Bain Capital will launch a $445 million bid to buy out Japan’s D&M Holdings Inc, the maker of Denon audio equipment, from U.S. buyout firm Ripplewood and the other shareholders.

** Australian-listed miner Indophil Resources NL said it had received a A$488 million ($465 million) bid that trumped a hostile offer from Xstrata Plc, and recommended shareholders take it.

** South Korean food group Dongwon said it was in talks to buy the StarKist seafood business from Del Monte Foods Co, sending shares of its key units higher.

** AviChina Industry & Technology Co Ltd said its controlling shareholder, China Aviation Industry Corporation II, was proposed to merge with China Aviation Industry Corporation I.

** Hynix Semiconductor Inc, the world’s No. 2 memory chip maker, said it would buy a 2 percent stake in Taiwan-based chip design house Phison Electronics Corp.

** Investment firm Guiness Peat Group Ltd said it had reached its target 35 percent stake in New Zealand insurance and fund management company Tower Ltd.

** Ithaca Energy Inc said it has received an unsolicited non-binding offer from Endeavour International Corp. The offer consists cash and shares at an indicative price of $3.25 per Ithaca share, it said.

** Norwegian offshore driller Prosafe Production sold its 30.1 percent stake in peer Teekay Petrojarl to U.S.-listed shipping group Teekay Corp for $258 million.

** Vienna’s bourse submitted the highest bid for a majority stake in Slovenia’s stock exchange, outbidding Greek bourse operator Hellenic Exchanges, the Greek bourse said on Friday. In a bourse filing, Hellenic Exchanges said its binding offer for Slovenia’s stock exchange was not the highest.

** The European Commission restarted on Friday its review of plans by Itema to buy specialised equipment used in textile production from Barco of Belgium.

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