DealZone

General Growth battle intensifies

The battle for control of General Growth, owner of shopping centers across America, continues, as it  weighs two rival offers.

General Growth, which is trying to exit bankruptcy, will consider at a board meeting Thursday whether to postpone a key court hearing set for Friday as it continues talks with suitors Simon Property and Brookfied Asset Management.

It has asked Simon to increase its $5.8 billion bid. General Growth may also come back with a new counter0ffer on antitrust issues that could arise from a merger of the two largest U.S. mall owners.

Despite being in bankruptcy since last April after grappling with falling rents and rising vacancies, bidders are keen to take control of the Chicago-based company, which owns a number of malls which generate high cash in posh destinations. 

If shoppers, which fuel America’s economy, return to stores in force, it could turn into a good investment.

After listing, General Growth attracts more interest

Fairholme Capital Management and Pershing Square, two key investors in General Growth Properties, have offered to invest another $3.93 billion in the mall operator to help it emerge from bankruptcy. Shareholders, who only had access to the stock again on the NYSE as of last Friday, bid the stock more than 4 percent higher in early Tuesday trade.

While the new offer does not knock out the one from GGP rival Simon Property Group, it could get more support among unsecured creditors who would have had to settle for cash and stock under GGP’s original proposal.

The latest deal builds on one from Brookfield Asset Management but now allows General Growth to remain an independent company instead of selling itself to Simon, its largest competitor.

DealZone Daily

For the latest deals news from Reuters, click here. And here’s the top stories from the newspapers (some external links may require subscription):

John Tiner, former head of the Financial Services Authority, and now chief executive of Resolution – the investment vehicle established by Clive Cowdery — said his company is targeting pure asset management businesses in its quest to create an enlarged British life assurance and fund management group, the FT said.

LLoyds Banking Group is in talks with stockbroker Execution about creating a joint venture as it plans to build a sizeable presence in the UK equity broking market, the Times said. 

In asset management, it’s shedding season

For asset managers, the shedding season seems to have no end in sight.

More asset management units of financial institutions are likely to find their way into the market in the months ahead, as they look to separate distribution from product creation, Jefferies & Co’s financial institution group predicts. 

More than two-thirds of global asset management deal activity came from such divestitures in the third quarter, a record level in a three-month period, Jefferies said.

These included deals such as Bank of America’s agreement to sell the long-term asset management business of Columbia Management to Ameriprise, Bank of New York Mellon’s acquisition of Insight Investment from Lloyds, and the purchase by Sumitomo Trust & Banking of Citigroup’s 64 percent interest in Nikko Asset Management. 

from Summit Notebook:

Tax evaders on the run

  By Neil Chatterjee
    The U.S. has promised it will hunt down tax evaders.
    And it seems tax evaders are on the run.
    DBS bank, based in the growing offshore financial centre of
Singapore, told Reuters it had been approached by U.S. citizens
asking for its private banking services. But when told they would
have to sign U.S. tax declaration forms, the potential clients
disappeared.  
    Swiss banks also approached DBS on the hope they could
offload troublesome U.S. clients to a location that so far has
not been reached by the strong arms of Washington or Brussels.
    DBS said no thanks. In fact many private banks and boutique
advisors now seem to be avoiding U.S. clients.
    Will this spread to other nationalities, as governments
invest in tax spies and tax havens invest in white paint?
    Is this the end of offshore private private banking?

KBW analysts see asset manager deals

Asset managers are in for some deal-making as the sector tries to deal with the chinks exposed by the financial crisis, KBW analysts predict.”Stressed capital markets have depressed profitability at most asset managers and brought to the fore many of the challenges that have been confronting the industry but were obscured by the bull market,” the analysts write in a report.Some of the deal activity has already been playing out as divestitures by financial services companies, with negotiations ongoing for such units as AIG’s business and Bank of America’s Columbia.KBW’s analysts predict most acquisitions are likely to be smaller transactions.Possible buyers? Invesco, BlackRock, Bank of New York Mellon, Franklin Resources, Legg Mason, Affiliated Managers Group, Federated Investors, Blackstone, Fortress, GLG Partners and others have expressed a continued interest in acquisitions, they said.Those hungry for larger deals could include Franklin and Bank of New York Mellon, the analysts said, adding that they see little likelihood of deals between publicly traded asset managers.

Deals du Jour

Citigroup plans to sell 20 businesses in consumer finance, many of them located in Europe, its chief executive Vikram Pandit said in an interview with Singapore’s Business Times

He said the move was due to the shift in the consumer finance market where “there is less funding availability and they are probably less robust as businesses.”

Pandit also said that the group’s capital position following the completion of the exchange of preferred shares for common equity in July, reflected an “incredible financial strength.”

Deals du Jour

Spain’s Banco Santander (SAN.MC) has appointed advisers to spin off its Brazilian business in a $3 billion initial public offering (IPO) to create one of Brazil’s biggest bank, the FT reports. But it’s not new — Reuters carried the story last week, which said Bank of America-Merrill Lynch, Credit Suisse and UBS would underwrite any deal. Click here for that story. More details could come from Santander today alongside its Q2 results.

In other M&A related stories reported by Reuters and other media on Wednesday:

Private equity firm Kohlberg Kravis Roberts & Co is in the advanced planning stage for an initial public offering of stock in Dollar General Corp, a discount retailer. Goldman Sachs, Citigroup and KKR are likely to underwrite the deal, the Wall Street Journal cited people familiar with the matter as saying.

Sumitomo Trust and Banking has agreed to buy Nikko Asset Management, Citigroup’s Japanese asset manager, for about 100 billion yen ($1.1 billion), the Nikkei newspaper reported.

Goldman’s Viniar: Why pay twice?

HEALTHFOOD-ASIA/Turns out Goldman Sachs is a staunch advocate of going organic — when it comes to the money management business.

As Barclays auctioned off its Barclays Global Investors unit this year, Goldman was widely seen as a likely acquirer. That is until Blackrock In under Larry Fink emerged as the buyer with a $13.5 billion deal.

Lots of other money managers are expected to be sold, as the industry consolidates and cash-strapped banks look for valuables to pawn. But Viniar told analysts Goldman’s preference is to grow the business without deals, and appeared to question the very idea of money manager deals.