At AIG; an offer they can’t refuse
The Wall Street Journal appears to have gotten hold of a rather disturbing AIG memo implying an unseemly threat that angry Americans will undoubtedly feel fits the crime. Unless those who had the audacity to accept bonuses start returning the money, names of bonus recipients will be handed out to the angry mob by New York’s attorney general. On the other hand, if enough people join the giveback, the names won’t be released.
In Washington, the Senate is looking increasingly less likely to vote any time soon on a measure to tax the offending bonuses out of existence. Public ire over the bonuses helped send a similar measure zipping through the House quicker than Treasury Secretary Timothy Geithner can say “too big to fail.”
The AIG memo could be seen as more evidence that the case against the bonuses is flimsy at best. Not that authorities have no right to make this kind of threat – but isn’t it kind of seedy that they think they have to?
As DealZone has argued before, all this political gangsta rap is just tapdancing around the issue that AIG and its attendant contracts could have been legally restructured in a bankruptcy and that, having bailed out AIG, Americans must come to grips with the fact that the company was saved so it could stay in business and honor its contracts, no matter how odious. Either that, or kiss the $180 billion rescue goodbye and put bankruptcy back on the table.
Christopher Kaufman; DealZone Editor
Deals of the Day:
* Swiss drug maker Novartis said it had made an open offer to acquire up to an additional 39 percent in its unit Novartis India at 351 rupees per share.
* U.S. restaurant operator Yum! Brands said that had it agreed to buy about 20 percent of China hot-pot chain operator Little Sheep for $63 million from U.K. private equity firm 3i Group and other sellers.
* The New York Times, which is trying to lighten its debt load as advertising revenue falls, plans to sell the Times Daily newspaper of Florence, Alabama to a regional publisher.
* German retailer Metro AG has taken a controlling stake in Britain’s 24-7 Entertainment, which supplies technology used in music downloads, Metro said.
* When the world’s biggest concert promoter and largest ticket seller announced they would merge last month, it seemed unlikely that antitrust enforcers would approve the creation of such an entertainment giant.
* State-run Indian Oil Corp said the government had approved a proposal to absorb its subsidiary Bongaigaon Refinery & Petrochemicals (BRPL). Indian Oil will issue four shares for every 37 shares in BRPL, it said in a statement.
(PHOTO: Pastor Mary Huguley tries to deliver a letter to a security guard in front of the home belonging to Douglas Poling, one of numerous executives who were recipients of a bonus from American International Group Inc. (AIG) in Fairfield, Connecticut March 21, 2009. REUTERS/Eric Thayer)