A story in The Wall Street Journal about Yahoo’s “reorganization” plans even as executives are leaving had us wondering which came first, the reorganization or the departures. The cynical might envision two scenarios:

Scenario 1: Yahoo begins hemorrhaging executives the week after it chooses Google over Microsoft. Investors, already mad at CEO Jerry Yang and the board for not cutting a deal with Microsoft, are likely to see the loss of top talent as a fallout. So Yahoo decides to do some damage control by “reorganizing” its various products, such as mail and messaging, into something more centralized, and indicate that as the reason for some six departures this week.

Scenario 2: After failing to strike a deal with Microsoft, and with investors less than thrilled at the Google partnership, Yahoo needs to do something to show the world it’s worth more than $47.5 billion. It dips into a fast-depleting bag of tricks and pulls out, wait, a “reorganization” plan we’ve sort of heard before. Executives shake their heads, worry that may not save the company and that they’re better off as venture capitalists (or maybe they’re considering job offers at Microsoft), and begin deserting.

So which came first, the chicken or the egg? Send us your thoughts.

(Photo: Reuters)

Private equity buyouts of Clear Channel and BCE have already gone to court due to tightening credit markets, and now it looks like Apollo Management’s $6.5 billion buyout of U.S. chemical company Huntsman Corp may be next. Apollo’s Hexion Speciality Chemicals filed a lawsuit against Huntsman on Wednesday that would seek to limit its liability if the deal falls apart, saying financing for the buyout– one of the last still to close from the private equity boom of 2007 — was in jeopardy because of Huntsman’s weakened financial position. Huntsman called the move “a blatant attempt to deprive our shareholders,” and a countersuit seems to be all but inevitable.

Spanish retail bank Santander is looking at taking over insurer Allianz’s loss-making Dresdner Bank, according to sources familiar with the matter. Commerzbank, Germany’s second-biggest bank, is already in advanced talks about a deal with Dresdner. But foreign banks like Santander are keen not to miss a rare chance to get a foothold in Europe’s biggest economy, whose banking market is largely closed to outsiders because of the dominance of not-for-profit community savings banks.The Dresdner sale is only part of the merger mania in Germany’s banking sector: Top retail bank Deutsche Postbank is also up for sale and Citigroup is selling its retail business here.

Vodafone has dropped out of the auction for Tiscali, according to the the Financial Times, driving the Italian broadband company’s shares down more than 9 percent. Vodafone had been seen as the most likely buyer for Tiscali as it could acquire both the Italian and British divisions to combine them with existing assets. BSkyB and Carphone Warehouse, Italy’s Wind and Swisscom are still in the frame, and the FT said that Vodafone could even re-enter the process if an agreement with the remaining bidders could not be reached. At a time of tight credit markets, slowing consumer spending and flagging broadband growth, it seems that bidders can afford to play hardball.

More Deals of the Day:

** Google Inc and Yahoo Inc face intense U.S. Justice Department scrutiny of their deal to share some advertising revenue, and the heat will likely increase under a new administration, antitrust experts said.

** French drugmaker Sanofi-Aventis plans to make a 40.04 billion crown ($2.6 billion) offer for Czech drugmaker Zentiva trumping a bid from financial group PPF. ** Miner BHP Billiton Plc/Ltd is due to file with Chinese competition authorities this month for its planned $170 billion takeover of Rio Tinto Plc/Ltd, but lawyers said a new anti-monopoly law threw up uncertainties.

** Healthcare technology company MEDecision Inc said on Wednesday it agreed to be bought by insurer Health Care Service Corp for about $121 million, or $7 a share.

** Polish chemicals maker Ciech plans to buy a majority stake in smaller state-owned rival Tarnow, Ciech said in a statement on Wednesday.

** Spain’s FCC is considering buying two building companies in the United States, the construction and services company said on Wednesday.

** Private equity firm Apax Partners has not set a specific time to divest its 44 percent stake in German telecoms company Versatel AG, an Apax partner said on Wednesday.

** Shares of natural gas and oil producer GMX Resources jumped 8 percent to a lifetime high on Wednesday, a day after it bought additional property in the Haynesville/Bossier gas shale in Texas and Louisiana.

** Alstom on Wednesday called again for a merger with nuclear reactor maker Areva, a move that would help the heavy engineering group reap the benefits of a global nuclear industry boom.

Tomorrow a group of angry New York Mercantile Exchange seatholders will meet with the energy futures exchange’s brass to demand they get CME Group, which is vying to get its hand on NYMEX in a $9 billion deal,  to pay more for the seats they own. Or else, they say, they will scuttle the deal.

They claim the exchange has undersold itself,  for the execs’ own benefit (the execs are expected to fetch a golden parachute worth $79 million) and that their seats are worth far more than the $612,000 they are being offered.

Among the unhappy NYMEX seatholders are a group of members who also own American Stock Exchange seats and tried to extract more concessions from the New York Stock Exchange’s parent company on the same grounds back in January when the NYSE agreed to buy Amex.

But earlier this week, members of the American Stock Exchange overwhelmingly approved its purchase by NYSE Euronext in a deal that will merge the former arch rivals as early as August, if the SEC gives its blessing.

NYSE Euronext paid $260 million of its own stock and Amex members will receive extra shares based on whatever Amex’s Lower Manhattan headquarters can fetch on the cool commercial real estate market. Those terms are the same as what it had originally offered Amex members in January .

But in this case, analysts predict the CME won’t get off as easily as the NYSE did and will have to cough up more money for NYMEX. The main difference is that Amex is seen as a declining exchange while NYMEX trades in the lucrative oil futures exchange business and will fit nicely into CME’s business.

The New York Post can finally drop its Carl Icahn blog-watch timer. The long-delayed Icahn Report blog is going live on Thursday, the financier and corporate agitator told Reuters on Wednesday.

The billionaire investor first disclosed that he will join the blogosphere in February, offering up anecdotes and a running commentary on what he describes as the desultory state of corporate governance in America.

But since then, the blog, http://icahnreport.com, hasn’t contained any content, prompting the New York Post website to publish a daily “Carl ‘I Can’t’ Blog Counter,” with a live timer showing how many days, hours, minutes and seconds the blog has been quiet.

(On Wednesday at 4:42 PM EDT, that was 138 days, 23 hours, 10 minutes and 22 seconds).

Icahn, who has been embroiled in various high-profile proxy battles of late, including seeking a board change at Yahoo Inc , said previously his lawyers stopped him from writing anything. Now those concerns have been swept aside.

“We’re hoping for a grass-roots response to this down the road,” said Icahn in an interview. “We want to get shareholders to realize they should be doing something.”

“Corporate democracy is a myth in America and its a problem in this economy and one reason we don’t compete in many areas,” said Icahn. “With many exceptions, there really is no accountability.”

The launch of the Icahn Report has been delayed before. In April, the 72-year-old takeover veteran said his blog would go live “in a week or two.” Or three, or four….

Generic drugs are hot. Hard on the heels of Daiichi Sankyo's surprise $4.6 billion deal to take control of India's Ranbaxy Laboratories, a bidding war has broken out for Czech drugmaker Zentiva, a major supplier of off-patent medicines in central and eastern Europe.

Gerard Le Fur, CEO of France's Sanofi-Aventis, which already owns nearly a quarter of Zentiva, has been bounced into a planned $2.6 billion counterbid for the group by rival bidder PPF but is clearly eager to get the whole of the Czech business under his belt. Sanofi argues it makes strategic sense and most analysts agree. Here's why.

In the past, big pharmaceutical companies and many investors shunned the generics business, with the notable exception of Novartis and its large Sandoz operation. But with traditional branded drug sales flagging, more patents expiring and emerging markets a top priority, any sense of superiority seems to be evaporating.

Fitch Ratings sees an emerging trend towards more diversification into generics to cash in on the sector's strong growth, though it cautions that embracing generics could impact profit margins. In today's market environment, however, diversification is the name of the game, so it may not be long before other generic drugmakers in Asia or eastern Europe are put into play. 

When you need some fast cash, you can always count on oil money. Qatar’s sovereign wealth fund is reportedly considering backing a share issue by Barclays. You’ll recall that earlier this week Britain’s No. 3 bank said it would sell billions of pounds worth of shares to bolster its stretched balance sheet. The Financial Times quotes a person close to the Qatar Investment Authority as saying “We’re looking at it.” The QIA manages about $60 billion in assets and earlier this year bought under 2 percent of Credit Suisse. Qatar, which is the richest Arab country on a per capita basis thanks partly to high oil prices, is looking to spend between $10 billion and $15 billion over the next two years on bank stakes, Prime Minister Sheikh Hamad bin Jassim al-Thani told Reuters in February.

Of course, it’s not just the oil-rich out there poking around those struggling banks. Activist shareholder Olivant said on Wednesday it had raised its stake in Swiss bank UBS, which has been hit by massive losses on risky investments, to 2.5 percent. Olivant, headed by former UBS Chief Executive Luqman Arnold, said by taking a stake worth about $1.8 billion it was “demonstrating its belief in the potential restoration of shareholder value achievable through decisive action on the part of the UBS board”. Interpretation: We want change. How about splitting up the bank?

If banks aren’t your thing, there’s always Hollywood. Movie studio DreamWorks SKG is close to a deal with India’s Reliance ADA Group to form a new movie venture, the Wall Street Journal reported on Tuesday, citing people familiar with the talks. The Journal said a deal with Reliance would give movie director Steven Spielberg the cash to finance his DreamWorks team’s departure from Viacom Inc’s Paramount Pictures later this year.

And one from the Ho-Hum, Glad-its-Done Department: Office goods supplier Staples has won approval from the European Commission for its 1.7 billion euro ($2.64 billion) takeover bid for Dutch peer Corporate Express. Staples raised its all-cash offer to 9.25 euros per share from 9.15 euros last week, winning the backing of Corporate Express which also ditched its own deal to buy French privately owned competitor Lyreco.

More Deals of the Day:

** French drugmaker Sanofi-Aventis plans to make a 40.04 billion Czech crown ($2.57 billion) offer for Czech drugmaker Zentiva, trumping a bid from financial group PPF.

** German sports-car maker Porsche withdrew and then refiled its request to Brussels to acquire control of Volkswagen, the European Commission said

** Korea Express Co Ltd, the country’s top logistics company, said it had signed a deal to hand its 40 percent stake in a local joint venture to United Parcel Service Inc.

** Sinotrans, the Chinese conglomerate partnered with DHL, is considering merging with the country’s top river-shipping operator to create a national logistics giant, sending shares in its main listed arm up 6 percent on Wednesday.

** India’s Tata Communications Ltd said a unit had signed an equity joint venture with shareholders of China Enterprise Communications Ltd (CEC) to acquire a 50 percent stake in the Chinese firm for an undisclosed amount.

** A U.S. judge authorized bankrupt Canadian printer Quebecor World Inc to sell its European operations to Vadeho, an affiliate of Netherlands-based investment group Hombergh Holdings BV.

** Grey Wolf Inc said it has rejected a higher takeover offer from Precision Drilling Trust, saying the 30 cent increase to $9.30 a share wasn’t enough to convince it to abandon a planned merger.

** Microchip design software maker Cadence Design Systems Inc offered to buy smaller rival Mentor Graphics Corp for about $1.5 billion, but Mentor rejected the bid as too low.

** Grupo Hispania, which owns 3.5 percent of Spain’s Banco Popular, said it was negotiating with a Mexican group to sell its stake in the bank.

** German utility E.ON has gained full control of Endesa Italia after Italian utility A2A said it had agreed a deal for the demerger of the power generator where it would get assets for its 20 percent stake.

** Provident Energy Trust said it has sold its stake in some oil-producing partnerships in the United States to BreitBurn Energy Partners LP for $345 million, and that it will use the cash to cut debt.

** French bank Societe Generale said it had sold its entire 7.8 percent stake in Oman-based Bank Muscat to The Royal Court Affairs of Oman.

** Thailand’s Tisco Bank said it had withdrawn from negotiations to buy a 42 percent stake in rival BankThai after a newspaper report triggered a trading suspension in both stocks.

** Auto parts supplier Johnson Controls Inc moved a step closer to buying the interiors business of bankrupt Plastech Engineered Products Inc for $177 million after no competing bids emerged at an auction on Monday, lawyers said.

** Russian services conglomerate Sistema said it had increased its stake in India’s Shyam Telelink Limited to 73.71 percent from 72 percent.

** The American Stock Exchange said its members overwhelmingly approved the acquisition of the exchange by NYSE Euronext Inc, paving the way for the deal to close as early as August.

** L’Oreal, the world’s biggest beauty group, won European Commission clearance to buy the YSL Beaute cosmetics firm from French retailer PPR for an enterprise value of 1.15 billion euros ($1.78 billion).

** ArcelorMittal, the world’s largest steelmaker, said it would consider buying Turkish steelmaker Erdemir, lifting its shares.

** Power and telecom towers maker Sujana Towers Ltd said it had bought 51 percent in Mauritius-based Telesuprecon Ltd, which executes telecom infrastructure projects in east and central Africa.

** Microsoft Corp said it had purchased privately held digital television advertising technology company Navic Networks. Terms of the deal were not disclosed.

** Analysts expect CME Group Inc to do what it takes to nail down its planned acquisition of NYMEX Holdings Inc, even if that means bowing to pressure to sweeten the purchase price.

** A merger between Germany’s Commerzbank and Dresdner Bank may be attractive even if the latter’s troubled investment bank were thrown into the bargain, analysts said.

** SAP, the world’s leading maker of business software, has agreed to buy Visiprise, a small U.S. company that makes software to help manufacturers control operations, manage compliance and improve quality.

By Richard Cowan

Swallowing the popular American brew Budweiser in a $46.3 billion takeover is just business for Belgium’s InBev. But InBev CEO Carlos Brito found himself sipping a bottle of Bud Lite on Tuesday when he met with a Missouri senator who opposes the deal.

en. Claire McCaskill pointedly served Brito and his aides a selection of Budweiser, Bud Lite and Bud Select when they met in McCaskill’s office on Tuesday.

“I offered everyone a Budweiser. They all politely took a Bud Lite,” the first-term senator told reporters after a frosty, 45-minute meeting. “I think I’m the only one who almost finished mine.”

Also attending the meeting were Sabine Chalmers, an InBev lawyer, and lobbyist Sean Richardson, according to one of the senator’s aides. The InBev executives tried to woo McCaskill’s support for the deal to buy St. Louis-based Anheuser-Busch by promising to respect and maintain the longtime Budweiser brand.

That wasn’t enough to get McCaskill hopped up on the deal’s prospects.

“Anheuser-Busch is a company that we feel connected to … as Americans,” McCaskill said. “It’s an iconic company that symbolizes something about our country that’s important to us and that a premium profit for hedge fund investors is not something that I find terribly compelling at this point.”

On Wednesday, InBev executives may get another taste of Bud when they meet with Missouri’s other senator, Republican Christopher Bond, who also opposes the merger.

Jim Chanos has a knack for finding companies and industries that are poised to hit the skids, winning him equal measure of praise and vilification on Wall Street, the standard treatment for big short-sellers. (for further evidence, see also “David Einhorn”).

Most famously, Chanos’ now-$5 billion hedge fund Kynikos Associates shorted Enron before its collapse. But he also won big on other former Wall Street fallen angels like Sunbeam, Conseco, Tyco International and Boston Chicken.

Now Chanos is taking aim at another train wreck: the financial media. In a speech yesterday, Chanos trashed the broadcast and on-line media for breathlessly reporting rumor as legitimate news and called for more regulatory investigations into whose who feed the gullible or nefarious media rabble.

Chanos cited recent travails at a well-known New York investment bank that’s still around (yes, that one) that was the subject of repeated unsourced reports on a certain well-known business television channel (guess). The reports hammered the bank’s share price.

Chanos said he happened to be on his firm’s trading desk on that particular day, right in the thick of trader-land, where rumors are as rife as market positions.

“I run the world’s largest short-selling fund,” Chanos told the SIFMA conference. “We hear everything. That day we didn’t hear any rumors (about the bank).”

“Some of our financial journalists are MAKING the news,” said Chanos. “And blogs are saying things and reporters are reporting it as news.”

Chanos is calling for more government investigations into where journalists are getting phony tips that they foist on the market as news. “There are IM messages, email records, taped phone calls. This is not hard. Inspector Clouseau could do it.”

“A lot of this is just being manufactured to sell stories and get ratings.”

Time to short media stocks?

Goldman Sachs is close to completing a rescue of a $7 billion structured investment vehicle (SIV) formerly run by hedge fund Cheyne Capital, a source close to the matter told Reuters. It would be the first rescue of a failed SIV in such a manner, and could spur hopes that the market for asset-backed securities is finally reviving. Goldman will auction off the SIV’s assets to brokerages, hedge funds and other institutions.

The good news is the collateralized debt obligations (CDOs) and other instruments will finally be assigned a concrete value — markets need prices, after all — but the bad news is that price may be quite low due to a small number of bidders. Goldman will also restructure a number of other failed vehicles, some of which were formerly run by hedge funds and others by Standard Chartered Bank and Germany’s IKB, according to the Financial Times, which broke the story.

Societe Generale has purchased a 37 percent stake in U.S. wealth manager Rockefeller Financial Services for about $100 million as part of an alliance between the firms in private banking. SG Private Banking has assets of around $109 billion under management, and Rockefeller has $29 billion. Despite huge losses for banks due to problems stemming from U.S. subprime mortgages, private banking has continued to see signs of growth, especially in emerging markets.

Other deals of the day:

** The Indonesian and Chinese partners in a bidding war for Australia-listed miner Herald Resources Ltd matched a rival A$553 million offer on Tuesday.

** Boehringer Ingelheim will buy privately owned Actimis Pharmaceuticals for $515 million if the U.S. biotech company could successfully develop its asthma compound, the German drugmaker said on Tuesday.

** Hynix Semiconductor Inc, the world’s No. 2 memory chip maker, said it would buy about 9.5 percent of ProMOS Technologies for $168 million, boosting the Taiwanese chip maker’s shares.

** Real estate services firm Jones Lang LaSalle Inc has agreed to buy smaller rival Staubach Co for at least $613 million to bolster its tenant representation business and presence in key U.S. markets, the companies said.

** DLJ Merchant Banking Inc offered to buy out Italy’s Guala Closures SpA for 4.30 euros a share, or a maximum 290.8 million euros ($446.7 million).

** CME Group Inc, the world’s largest derivatives exchange, cleared a key hurdle in its planned purchase of NYMEX Holdings Inc when the deal got the blessing of the U.S. Department of Justice.

** DRS Technologies Inc received a higher offer from an unnamed foreign bidder and an expression of interest by a U.S. defense company before finalizing a deal to be bought by Italy’s Finmeccanica, DRS said in a document filed with U.S. authorities.

** Landry’s Restaurants agreed to be bought by Chief Executive Tilman Fertitta for about $1.3 billion, including debt, almost six months after he made his initial offer for the restaurant-chain operator, but left the door open for opposing bids from third parties.

** PFF Bancorp Inc, a financial services company hit hard by exposure to problem loans, said it agreed to be bought by FBOP Corp, the parent company of California National Bank, for about $30.5 million.

** Sirius Satellite Radio Inc’s planned acquisition of rival XM Satellite Radio Holdings Inc moved closer to consummation after a key U.S. regulator expressed support for the 16-month-old deal, driving up both companies’ shares.

** Polaris Acquisition Corp, a special purpose acquisition company, has agreed to buy Hughes Telematics, a maker of car electronics, in an all-stock deal, the two companies said in a statement.

** Private equity firms Carlyle, Candover and Doughty Hanson are likely to bid in the second round of the auction of Italian fashion house Roberto Cavalli, set for mid-July, people close to the matter said.
** Bold moves are what created brewing giant InBev and it needs one more as analysts say its bid for Budweiser maker Anheuser-Busch will likely have to rise by more than $3 billion to succeed.

** German solar module maker Solon bought a roughly 16 percent stake in newly formed U.S. solar cell maker SpectraWatt, broadening its supplier base and its presence in the U.S. market, the company said.

** Web-based marketing data company Greenfield Online Inc said media-focused U.S. buyout firm Quadrangle Group LLC would buy it for about $426 million, sending its shares up as much as 16 percent in morning trade.

** Ashok Leyland Ltd, India’s second biggest truck and bus maker, said on Tuesday it had made a strategic investment in German firm Albonair for development of vehicle emission treatment products.

** French software group Dassault Systemes said on Tuesday it planned to buy U.S. group Engineous Software for $40 million in a deal which Dassault said would boost its presence in simulation software.

** Czech financial group PPF launched its previously announced 950 crown per share bid for Czech drugs maker Zentiva on Tuesday and said it may improve terms of the offer.

** UK’s Wincanton Plc said on Tuesday it will not go ahead with its acquisition plans for after it made an offer at 281.25 pence per share.

** A New York administrative law judge recommended on Monday that state regulators disapprove Iberdrola SA’s $4.5 billion takeover of U.S. utility Energy East Corp, saying the deal is not in the public’s best interest.

** Swedish engineering group Alfa Laval said on Tuesday it had bought a 45 percent stake in Ageratec, a privately owned biodiesel company with estimated 2008 sales of 80 million crowns ($13.12 million).

** British supply chain group Wincanton has dropped plans for a 233 million pound ($455 million) bid for rival TDG, paving the way for private equity firm Laxey Partners to clinch a deal.

** South Korea’s POSCO, the world’s fourth-largest steel maker, is considering investing in Australian mining firm Macarthur Coal as part of its plan to boost mining assets, the company said on Tuesday.

** Samsung Heavy Industries Co Ltd, the world’s No.2 shipbuilder, said on Tuesday it had agreed to buy a 10 percent stake in Brazil’s Atlantico Sul Shipyard for some $22 million.

** Norwegian ship-builder Aker Yards said on Tuesday the sale of its Ukrainian shipyard to Russian group FLC West has not received approval from Ukrainian competition authorities as the company had expected.

Unfortunately for beaten down investment bank Lehman Brothers, the Ian Lowitt Era began with a whimper. 

Lowitt, Lehman’s  fourth new CFO since 2005,  made his debut on the world stage with a full minute of silence during the firm’s standing room only second-quarter conference call. Turns out a master of financials, former firm treasurer, Rhodes Scholar and the man-chosen-to-restore-confidence in Lehman forgot to switch on his microphone.

This awkward moment in the ongoing credit crunch followed CEO Dick Fuld’s forceful defense of the firm’s outlook and his assurances to the No. 4 investment bank has a handle on the problems that generated a $2.8 billion net loss. 

Funny thing is, Fuld had just assured his audience of analysts that Lehman will provide greater transparency, the legacy of accusations from critic David Einhorn that the firm was too secretive with vital information about exposures and asset valuations.

Lowitt also replaced Erin Callan, the well liked banker whose confrontation with Einhorn, and her spotty performance during the previous conference call, left investors with the unsettling view she was not cut out for the big job.  Below is the transcript of Ian’s failure to launch.

Dick Fuld, Lehman Brothers Holdings Inc. - Chairman, CEO 
Our goal — our goal is simple. That’s to create value for our shareholders and for our debt holders, for our clients, and for our employees. On many fronts, in this cycle, we did not achieve this goal. This is my responsibility. We’ve made a number of changes. It’s now my job to make sure that we execute. Ian? 

Ian Lowitt, Lehman Brothers Holdings Inc. - CFO 

(52 seconds of silence)
 
Operator   
Please continue to stand by. 
Lowitt
I’m sorry. I’m going to start over with my remarks. My microphone was off. Thanks, Dick. The microphone’s now on. Good morning and thank you for joining us today. 

(To see DealZone take on Fuld’s view on Lehman’s independence, click here. )