DealZone

Deals wrap: Shell games

A new Reuters investigative report takes a deeper look at a niche industry of advisers who specialize in so-called “reverse merger” deals that use shell companies to give clients easy entry into U.S. capital markets. As correspondents Nanette Byrnes and Lynnley Browning report, more than 400 Chinese companies have been listed in the U.S. over the course of the last decade by way of this back-door method. But, as their investigation shows, a recent “spate of spectacular collapses of Chinese stocks listed on American exchanges has cost U.S. investors billions of dollars” and sparked multiple investigations into the practice.

Job cuts are on the way at HSBC. Europe’s biggest bank announced plans to axe 30,000 positions between now and the end of 2013 as it retreats from countries around the globe where it is struggling to compete. The first 5,000 cuts came as part of the company’s restructuring efforts across Latin America, the U.S., Britain, France and the Middle East. The bank, which posted a surprise rise in first-half profit on Monday, is reversing a strategy that had been criticized for “planting flags” around the world. CEO Stuart Gulliver’s far-reaching plan unveiled three months ago aims to slash costs and he intends to sell, shut or slim down retail banking in 39 countries. HSBC said on Sunday it would sell 195 U.S. branches to First Niagara Financial for about $1 billion in cash, and close another 13 of the 470 sites it had.

Peabody Energy and ArcelorMittal launched a hostile $5.2 billion bid for Macarthur Coal after the Australian target’s board said the approach undervalued the company and it was working on attracting a rival offer. Peabody, the largest U.S. coal company, and ArcelorMittal, the world’s top steelmaker, have been courting Macarthur to secure its resources of pulverized coal, a key steelmaking ingredient, but talks to get the backing of Macarthur’s board collapsed over the weekend.

Lansdowne Partners, one of Europe’s biggest hedge fund firms, has sold its $850 million stake in Goldman Sachs as part of a move out of investment banks burdened by regulation and into retail banks, a source close to the situation told Reuters.

A report emerged late last week on tech blog Boy Genius Report that cited an unproven source saying Apple is in talks to buy U.S. bookseller Barnes & Noble. Technologizer’s Harry McCracken takes a look back at the long list of past Apple acquisition rumors to make a point about how often they turn out to be untrue.

Deals wrap: Copycats sure to follow LinkedIn

A day after LinkedIn’s shares more than doubled in their public trading debut, analysts are scrambling to explain why the stock exploded and figure out what happens next.

The professional networking site’s IPO was being closely watched by Facebook, Groupon, Twitter and Zynga to gauge investors’ appetite for Internet companies.

Facebook COO Sheryl Sandberg described a public offering of Facebook shares as “inevitable,” while Evelyn M. Rusli over on DealBook predicts a surge in Internet IPO’s but doesn’t think the market is setting itself up for another tech bubble burst.

Deals wrap: Blockbuster year for M&A?

A man and child look out over destroyed homes after a tsunami and earthquake in Sendai, northeastern Japan March 12, 2011. REUTERS/KyodoDespite upheaval in the Middle East and Japan, worldwide M&A have risen 58 percent to $717 billion so far this year, according to preliminary data from Thomson Reuters, marking the best start to a year since 2007 and building on last year’s tentative recovery. Analysts expect to see continued strong activity in mining and energy, but some warned it’s still too early to see the full implications of the recent crises.

Deal-making in Asia got off to a strong start in 2011, with cashed-up companies tapping investment opportunities in sectors from energy to industrials, and bankers say the transaction pipeline for the rest of the year looks healthy.

Executives at boutique investment banks see an increasing number of clients wanting their advice after a Delaware ruling last month accused large investment bank Barclays Capital of conflicts of interest.

Deals wrap: Icahn turns inward

Investor Carl Icahn speaks at the Wall Street Journal Deals & Deal Makers conference, held at the New York Stock Exchange, June 27, 2007.  REUTERS/Chip East Seems billionaire investor Carl Icahn has had enough of managing money for outsiders. The 75-year-old stock picker dropped a bit of surprising news on Tuesday when he said he plans on returning all of his clients’ money, making him the latest in a string of investors to do so.

Barnes & Noble’s bid to reinvent itself as a formidable competitor in the burgeoning e-books sector is off to a solid start. Its Nook is the second best-selling e-reader on the market behind Amazon’s Kindle, and the book chain’s chief says it has 25 percent of the e-books market.  So why can’t the bookseller find any buyers? Reuters correspondents Phil Wahba and Jessica Hall take a closer look in a new piece.

Jury selection in the trial against Galleon Group hedge fund founder Raj Rajaratnam kicks off the action today in a case at the heart of the biggest insider trading investigation in a generation.

Deals wrap: Aussie coal is hot

A coal excavator loading coal at one of Macarthur Coal's mines  in Queensland is seen in this undated photograph obtained April 9, 2010. REUTERS/Macarthur Coal/HandoutAround $7 billion of Australia’s coal assets are in the crosshairs of predators from Seoul to Shanghai, as Asia jostles for supplies to feed its burgeoning needs, pushing up bid valuations for Australian coal miners. *View article *View factbox

Barnes & Noble’s predicament is sounding like Blockbuster’s — meaning, unfortunately, the fading video rental chain not a successful movie. The U.S. bookseller’s cash flow is sinking and technological shifts look set to worsen that. What exactly the bookseller can do is unclear. *View column

Bernard Madoff had the big numbers attached to his crime but Kenneth Starr’s alleged Ponzi scheme has celebrities. Vanity Fair takes a look into Starr’s world. *View Vanity Fair article

Turning the page on Borders

Barnes & NobleBarnes & Noble Inc reportedly has read the market and decided to turn the page on an acquisition of rival Borders Group Inc. The largest U.S. specialty bookseller, which had been looking into a bid for Borders, is likely to take a pass because of tight lending markets that would make it difficult to arrange bank financing, the Wall Street Journal said, citing people familiar with the situation. Borders, which put itself up for sale in March, has struggled with liquidity issues and has been closing underperforming stores and taking other steps to turn around its business.

Reuters’ DealTalk columnists report that overseas metal and mining companies may have U.S. coal assets in their sights. Indian and Russian firms in particular are looking to snap up assets in order to gain a foothold in the U.S. metallurgical coal market, DealTalk says. Metallurgical coal, also called met or coking coal, is used to make coke, the material used to fuel blast furnaces at steel mills. Two assets that could be on the market are privately owned U.S. coal producers United Coal and Bluestone, one source familiar with the matter said.

Shares in Impala Platinum (Implats), the world’s No. 2 producer of the precious metal, raced 9 percent higher on Thursday partly boosted by market talk that BHP Billiton could make a $26 billion bid for the South African company. South African website www.Miningmx.com said BHP may soon have no choice but to make an offer of at least 200 billion rand ($25.65 billion) for Implats. The article said BHP, the world’s largest producer of metals and minerals, had the world’s best and most diversified portfolio of assets in the resources sector — with the exception of platinum, to which it has no exposure. “At the moment it is pure speculation, but yes, for sure the speculation is affecting the (share) price,” Roy Lamb, a trader at Investec Securities in Johannesburg said. BHP declined to comment.