M & A wrap: Swift takeover for Olympus unlikely
Olympus Corp should be the easiest of takeover targets: a profitable business with its share price in tatters, its management in utter disgrace and its balance sheet in need of fresh capital. But not in Japan. Reuters reporter Isabel Reynolds explains why.
Bonuses are sinking at Morgan Stanley, with cash payouts capped at $125,000, The Wall Street Journal reports.
Want to know how Wall Street firms determine bonuses to their employees? The New York Times talks to “the invisible hand behind bonuses on Wall Street”.
AIA Group, Asia’s No.3 insurer and about one-third owned by American International Group Inc, may bid for the $6 billion Asian insurance operations of ING, sources said, with the prospective sale expected to draw heavy interest from rivals.
Japan’s Sumitomo Mitsui Financial Group (SMFG) and Sumitomo Corp are buying the aircraft-leasing business of Royal Bank of Scotland in a deal worth $7.3 billion, in the most aggressive acquisition by a Japanese lender since European banks began offloading non-core assets.
Private equity executive Paul Levy defends his business in an interview with DealBook, saying “I think it’s a pretty honorable industry.”
M & A wrap: Weak deal-making hurts JPMorgan earnings
JPMorgan Chase & Co’s fourth-quarter earnings fell 23 percent, in line with Wall Street expectations, as the European debt crisis depressed trading and corporate deal-making. Its figures show Wall Street firms such as Goldman Sachs and Morgan Stanley are in for a tough quarter as investment banking results suffer.
Private equity firm TPG Capital is willing to invest about $1 billion in Japan’s Olympus Corp in a joint deal with Sony Corp or another suitor circling the scandal-hit firm, a source told Reuters.
Meanwhile, TPG, US Airways Group and Delta Airlines are among several parties interested in potential bids for AMR Corp, the bankrupt parent of American Airlines.
Kodak is in advanced talks with Citigroup to provide bankruptcy financing, Bloomberg reports.
Deal Journal explains why it’s tough for the New York Times Co to sell the Boston Globe.
M & A wrap: RBS’s fresh jobs cull
Royal Bank of Scotland abandoned ambitions to be a top global investment bank and said it would cut another 4,450 jobs as it bows to pressure from the UK government to shut down risky operations and prepare for tougher international regulations.
General Motors could shift more vehicle production to its European factories in a cost-cutting deal with its German union that could avert a damaging standoff and keep Opel out of bankruptcy, people familiar with the discussions told Reuters.
South Korea’s Samsung Electronics is open to forging an alliance with Japan’s troubled Olympus Corp, potentially joining other electronics firms in circling one of the world’s biggest names in medical equipment.
Reuters reporters Svea Herbst and Katya Wachtel take an insightful look at the great hedge fund humbling of 2011.
The Wall Street Journal says Mitt Romney’s role at buyout firm Bain Capital is opening divisions in the Republican Party. On that note, is private equity a hero or villain, asks Randall Forsyth at the Barron’s.
M & A wrap: Hostess files for bankruptcy
Twinkies and Wonder Bread maker Hostess Brands Inc filed for bankruptcy protection for the second time in less than three years, after failing to reach an agreement with workers on pension and health benefits. The company, which has about $860 million in debt, said it does not expect disruptions in the manufacturing and delivery of its products during the bankruptcy process.
Deutsche Boerse’s last-ditch lobbying efforts in support of its proposed takeover of NYSE Euronext look set to fail, leaving the deal heading for the rocks with European antitrust regulators expected to block the deal.
Alibaba Group has reduced the size of its debut loan to $3 billion, the funds which the Chinese e-commerce giant plans to use to buy back part of the 40 percent stake held by Yahoo. As Mitt Romney has established himself as the front-runner for the Republican nomination, private equity becomes part of the debate, according to The New York Times.
Bloomberg writes about hedge funds sitting out of stocks rally. “Hedge funds have made massive mistakes,” George Feiger, chief executive officer of Contango Capital Advisors Inc, the San Francisco-based wealth management arm of Zions Bancorporation, told Bloomberg in a telephone interview.
M & A wrap: Olympus seen vulnerable to takeover
Japan’s disgraced Olympus Corp is suing its president and 18 other executives, past and present, for up to $47 million in compensation, as it struggles to recover from one of the nation’s worst accounting scandals.
“Essentially, everyone feels they are on death row. It does seem extremely strange to have the death row cell inside the company,” said Nicholas Smith, head of Japanese equity strategy at CLSA in Tokyo. “Having nobody at the helm makes it easier for a takeover.”
WebMD Health Corp ends talks with with potential acquirers and and warns that 2012 profit would be significantly lower.
Meanwhile, Eastman Kodak announces a new management structure as the once-iconic photography company tries to refocus as a digital company to help fend off financial difficulties.
DealBook writes about a boom in starter capital for hedge funds, despite the industry’s disappointing returns.
Hostess Brands, the maker of Twinkies and Wonder Bread, is preparing to file for Chapter 11 bankruptcy protection as soon as this week, The Wall Street Journal reports, citing people familiar with the matter.
M & A wrap: Wall Street prepares to take big pay cut
As banks prepare to report fourth-quarter results and make final bonus decisions for 2011, total compensation is likely to be the lowest since 2008, when the financial crisis destroyed some firms and left many survivors on government life support, the WSJ reports.
The Deal Journal takes a look at earnings estimates for banks — How long can they go?
Energy executives expect dealmaking in the U.S. oil and gas sector to rise in 2012 or at least match last year’s brisk pace, a survey shows.
Three South Korean shipbuilders are considering a joint 1 billion euros ($1.3 billion) bid for a French engineering company to prevent a Chinese rival from challenging their domination of the global LNG carrier market, sources with direct knowledge of the matter said.
Instead of running auctions for artillery shells, harpoons and zen gardening kits, a faster way for EBay to enrich its owners would be to split off PayPal, Bloomberg says. “While EBay is worth $40 billion, separating PayPal, its online payments unit that is increasing sales twice as fast, would boost the combined value of the entities by as much as 30 percent,” according to data compiled by Huntington Asset Advisors and Bloomberg.
M & A wrap: Chinese buyers circling more European assets
Fresh signs of a mooted wave of Chinese money looking to buy European assets on the cheap emerged, with a major bank said to be in the running for parts of Britain’s RBS and an Italian yacht maker seen in the sights of Shangdong Heavy Industry.
Federal authorities investigating the collapse of MF Global have expanded their inquiry to include the actions of the CME Group, the operator of the main exchange where the commodities brokerage firm conducted business, the DealBook reports, citing people briefed on the matter.
The Daily Beast says Yahoo is now on a deathwatch. “Less than 16 years ago, Yahoo was an Internet sensation that vanquished rivals like Lycos and Excite. Now, even with a new CEO and a vast audience, it is on the verge of eclipse—as is Kodak, another firm once on the cutting edge,” author Zachary Karabell writes.
Michael Woodford, the ousted British CEO of disgraced Olympus Corp who blew the whistle on a $1.7 billion accounting fraud, dropped his bid to return to lead the medical device maker, blaming cozy ties between its management and big Japanese shareholders.
Millennial Media Inc., the second- largest mobile-advertising company in the U.S., filed for a $75 million initial public offering, Bloomberg reports.
M & A wrap: JAL eyes sharp turnaround
Japan Airlines plans to raise more than $6.5 billion ahead of re-listing its shares as early as September, a source with knowledge of the matter said, marking a sharp turnaround for the carrier following its bankruptcy in 2010. The public offering is expected to rank as Japan’s largest since Dai-Ichi Life Insurance raised 1 trillion yen in 2010, and will likely be carried out against a backdrop of tough industry competition and sluggish economic growth.
Eastman Kodak is preparing a Chapter 11 bankruptcy protection filing in the coming weeks in case it is unable to sell its digital patents to raise capital, The Wall Street Journal reports.
Blackstone Group will conclude fundraising for its latest buyout fund in January, raising just over $16 billion in a 4-year process challenged by the global financial crisis.
Investors are eagerly anticipating an offering from Facebook, which is expected to go public in the second quarter at a market value of $100 billion. But other companies — including Toys “R” Us, Yelp and the Carlyle Group — may not get such a warm reception, according to the DealBook.
Italy’s Fiat has raised its stake in Chrysler by 5 percent to 58.5 percent, meeting a final target set by the U.S. government as the two groups move closer to creating one of the world’s leading auto makers.
Barnes & Noble is considering splitting off its Nook electronic reader business, which has been the main growth engine for the company.
M & A wrap: Meet Yahoo’s new CEO
Yahoo Inc appointed Scott Thompson as its chief executive, replacing interim CEO Tim Morse who will resume his role as chief financial officer.
Who is Scott Thompson? The Wall Street Journal has a brief introduction of the former PayPal boss.
2011 may go down as the dark ages for hedge funds, the DealBook writes.
MF Global unloaded hundreds of millions of dollars’ worth of securities to Goldman Sachs in the days leading up to its collapse, according to two former MF Global employees with direct knowledge of the transactions.
Exxon Mobil is in talks to sell most of its 50 percent stake in TonenGeneral Sekiyu KK back to its Japanese refining partner and unload other assets in Japan in a deal that could be worth as much as $5 billion, four sources with knowledge of the matter said.
Groupon’s shares, which have fallen below the company’s initial public offering price, show that both merchants and investors are having second thoughts about the nascent daily-deal industry, Bloomberg reports.
M&A wrap: Whole Foods the next Starbucks?
Whole Foods is about to become the next Starbucks, writes Leigh Drogen. It is about to move from being an organic grocery store to a cultural icon.
Total, France’s largest oil company, bought a $2.32 billion stake in Ohio’s Utica shale region from Chesapeake Energy and EnerVest, Bloomberg reports.
Meet Ted Weschler, a Warren Buffett disciple who has become one of a few candidates to replace the Oracle of Omaha as chief investment officer at Berkshire Hathaway, Deal Journal reports.
Deal makers are growing confident that 2012 will be better for business than 2011, DealBook reports. Not only do they point to cheap financing and the large amounts of cash on corporate balance sheets, but they say that companies that have already cut costs may decide that they need to make acquisitions to drive growth in the face of a tepid economy.
From what I have observed as an educated consumer and regular customer, Whole Foods Market has been doing a fantastic job at simultaneously appealing to customer needs and managing costs.
What I have seen over the past 2-4 years, after the stock lost so much value, was a SMART set of tactics to reign in costs. Some examples at the store level include: Eliminating bakery samples, increasing conventional produce, offering a greater variety of competitively priced grocery items, educating consumers that the “Whole Paycheck” expression is inaccurate, increasing prepared food options and seating, and of course opening stores in highly trafficked and high spend areas such as multiple locations in Manhattan.
When I go to Whole Foods Market in Washington State, the Parking Lots are always, always busy. This was not always the case. Congratulations to WFM for continuing their mission and not deviating on their values. Unlike regular grocery stores, I feel good every time I enter Whole Foods Market. Traditional grocery stores certainly provides an important purpose, but Whole Foods Market provides an experience on top of the same purpose. Cheers to Whole Foods Market for providing a consistent and valued experience every time I walk through the doors.
