Deals du Jour

ING sells its 51 percent stake in a wealth management joint venture to partner Australia and New Zealand Banking Group for $1.6 billion as the Dutch group slims down through asset sales.

ING is offloading assets to raise 6-8 billion euros, and is also selling its Asian and Swiss private banking assets. HSBC is the front-runner to buy the Asian private bank assets, sources tell Reuters.

In other M&A news:

Britain’s biggest pubs group, Punch Taverns, puts more than 300 of its worst performing pubs up for sale as it strives to cut its debt pile.

French state-controlled power group EDF could raise its stake in waste, water and transport firm Veolia to 13-14 percent as Veolia’s boss is set to go to EDF, French daily Les Echos said.

For deals reported by other media click here.

Ask Sid if he likes UK banks

If you see Sid, tell him. Tell him his help will be needed to swallow more UK equity than at any time since the flood of privatisations in the 1980s.

That’s the clear message from UK Financial Investments, the body that holds stakes in Royal Bank of Scotland, Lloyds Banking Group and nationalised banks. Those stakes are likely to be worth about 80 billion pounds.

“We will need to innovate, be imaginative in our approach and use the full range of sales methods available to us,” John Crompton, head of market investments at UKFI, says in a speech at Reuters offices in London.

High-frequency trading: useless and manipulative?

Floor tradersThe explosion of interest in high-frequency trading has started to drag new faces to sometimes staid industry conferences. Traders who for years worked on algorithms and computer codes behind the scenes are stepping into the spotlight. They’re appearing on more and more panel discussions, feeling the need to defend their practice against the slings and arrows of politicians and regulators.

So far, they’ve managed to mix exasperation with good humor. The head of one high-frequency trading shop, speaking on a panel this week, said that if you believe everything you read in newspapers you might think the practice is “an unfair, highly profitable and socially useless trading strategy implemented by highly secretive and unregulated traders using superfast computers to compete with retail investors, manipulate markets and front run flash orders causing volatility in the financial markets and creating systemic risk.”

He argued that a more accurate definition of high-frequency trading would be, “a wide variety of highly competitive, low margin trading strategies implemented by professional market intermediaries who have invested heavily in technology that have the effect of making the markets more efficient by enhancing liquidity and transparent price discovery to the benefit of investors.”

Deals du Jour

The world’s second largest confectionery group Cadbury has rejected a $16.7 billion bid approach by Kraft Food. But North America’s top food group still hopes it can clinch a deal to create a global powerhouse in snacks and quick meals.

For more from Reuters on the latest deals, click here.

Below is a round-up of all the market chatter from the press on Monday:

* South Korea’s No. 4 lender Hana Bank will buy a 18.44 percent stake in the Bank of Jilin in northern China for $316 million, said Yonhap news, citing an unnamed Hana Bank official.

* Russian billionaire Oleg Deripaska’s carmaker, GAZ, the Russian industrial partner in a Magna-led bid for Germany’s Opel, is not interested in an equity stake in Opel, Deripaska told Vedomosti newspaper.

from Commentaries:

Cash M&A still lifeless

Bond sales are at a record, equity markets are at year-highs, private equity firms are sitting on huge cash piles -- Blackstone alone has $29 billion -- and banks are lending to each other again.

The ingredients should all be there for a resurgence of cash-driven mergers and acquisitions. But instead, the market is in hibernation.

So far the value of all M&A deals completed this year totals $990 billion. You have to go back to 2003 -- when the total for the year was $1.23 trillion -- to find a figure this low, according to Thomson Reuters data.

Lloyds: who needs asset insurance?

Lloyds Banking Group is weighing up if it needs to take part in the UK government’s asset protection scheme (APS). The plan, described as “catastrophe insurance” to protect Lloyds and RBS from losses above a certain amount, may no longer be in Lloyds’ best interests and it is considering options, according to reports.

On pure financials, a rights issue could be better for shareholders. Credit Suisse analysts estimate the APS must payout 9 billion pounds for the scheme to breakeven for Lloyds, equivalent to further asset losses of about 9 percent. “On this basis we think there are grounds for Lloyds to reconsider its accession to APS,” the analysts say.

But that doesn’t mean shareholders would be better off without APS. Lloyds would probably have to raise at least 15 billion pounds to provide a capital cushion to satisfy regulators, which could be difficult.

Deals du Jour

Wall Street banks and lawyers could collect nearly $1 billion in fees from the Federal Reserve Bank of New York and American International Group to help manage and break apart the insurer, the Wall Street Journal said, citing its own analysis.

The following M&A related stories were reported by Reuters and other media on Thursday:

Jewelry retailer Finlay Enterprises filed for Chapter 11 protection and said it would sell its assets in an auction supervised by the bankruptcy court. The company listed assets and debt in the range of $500 million to $1 billion in its filing, Reuters reported.

Phew! Due diligence done at last

Lloyds’ deal to buy HBOS was sealed in the time it takes to sup a few cocktails with Gordon Brown. But poring through the gung-ho mortgage lender’s books took nine whole months and many thousands of man hours.

Lloyds Banking Group on Wednesday admitted it had finally completed due diligence on HBOS, after agreeing to buy it in a shotgun marriage last September.

“Nine months after agreeing to purchase HBOS, it has finally completed its review of the assets at HBOS. This means … it has completed its due diligence of HBOS,” said Hank Celenti, analyst at Royal Bank of Canada.

Santander joins Brazil’s IPO party

Spain’s Santander confirms plans to spin-off 15 percent of its Brazilian business in a flotation potentially worth over $3 billion.

Reuters reported on July 21 that the bank was mulling an initial public offering in the second half of the year, and advisers have been appointed, people familiar with the matter say.

Santander will lead and underwrite the share sale alongside Credit Suisse and Bank of America/Merrill Lynch. Banco Pactual, the Brazilian bank sold by UBS in April, will be a bookrunner on the deal, the sources say.

Deals du Jour

Japanese banks Aozora and Shinsei, both loss-making lenders backed by U.S. investors, are in talks to merge to create Japan’s sixth-largest bank.

A deal would give Aozora access to Shinsei’s retail deposits to ease its funding needs and could provide Shinsei with a much-needed boost to capital.

It could also signal that banks around the world will seek deals as they emerge from the financial crisis.