DealZone

Deals wrap: A successor for Buffett?

A fairly unheralded 44-year-old Chinese-American hedge fund manager, with a strong background as a human rights activist, has become a leading candidate to replace Warren Buffett, should he retire as founder and CEO of the $100-billion Berkshire Hathaway fund, according to the Wall Street Journal.

Li Lu, who was a student leader during the 1989 Tiananmen Square protests in Beijing, is the first person to be identified to potentially replace the soon to be 80-year-old Buffett, in what the WSJ story said is “among the most high-profile succession stories in modern corporate history.”

Buffett told the WSJ his retirement plans are not imminent and his job would likely be split after he leaves the company into separate CEO and investing functions. The WSJ story revealed David Sokol, the current chairman of Berkshire unit MidAmerican Energy Holdings, is considered the top contender for Buffett’s CEO role, while Li would potentially serve as one of Berkshire’s top fund managers.

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Recently Facebook founder and CEO Mark Zuckerberg told ABC News’s Diane Sawyer he would only consider an IPO “when it makes sense,” but now Bloomberg, “citing three people familiar with the matter,” reports that may not be until 2012.

The postponement would give Zuckerberg more time to increase users – Facebook just surpassed the 500 million mark – and boost sales which could double to at least $1.4 billion in 2010, according to the sources quoted by Bloomberg.

Deals wrap: VW revving up for shopping spree?

German automaker Volkswagen has revealed it has amassed a $20-billion war chest it intends to use to finance its ambitious Strategy 2018, VW finance chief Hans Dieter Poetsch told Reuters.

Analysts expect the majority of VW’s cash reserve to be used to bid for the 70 percent of German truckmaker MAN it does not already own and to possibly buy the Porsche AG sports car business and Austria’s Porsche Holding. Even with those three purchases, VW would still have money left over.

Bernstein analyst Max Warburton told Reuters the $22.9 billion cash pile Poetsch claimed the company has accrued is “a ridiculous level of liquidity” unless VW aimed to top up its underfunded pensions or pursue M&A plans.

Deals wrap: AgBank’s IPO causes frenzy

It’s hard to find fault with the second-largest IPO in history, but analysts were only lukewarm about this week’s $19.3 billion IPO debut by Agricultural Bank of China.

Despite the tepid debut, AgBank’s IPO is only overshadowed by Industrial and Commercial Bank of China’s (ICBC) world record $21.9 billion public float in 2006. More interesting than the monetary value attached to its IPO was the fact that AgBank was even able to pull it off in the first place, given the global downturn and a very short three-month completion process. In a Reuters special report, one banker involved in the deal said: “It’s the last of its kind.”

Apparently cats aren’t the only species with nine lives – hedge-fund advisers do too. Bloomberg reported that Neuberger Berman Group LLC, which was part of Lehman Brothers Holdings Inc., has “reassembled a team of executives to invest as much as $1 billion in firms that run hedge funds.”

Tulane M&A Conference: Live coverage

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DealZone Daily

Tuesday’s highlights:

The proposed merger of two live music powerhouses, Live Nation Inc and Ticketmaster Inc , is given a huge boost as a British regulatory body drops its objections and approves the deal.

Sweden says a last-ditch bid by Spyker Cars for Saab offers a thread of hope the iconic brand would survive, as talks between the Dutch luxury carmaker and General Motors trigger an extended deadline.

Dubai World disappoints creditors by making little progress on securing standstill on $22 billion of debt, as a key creditor meeting proves a tame affair with less than half the expected attendees showing up.

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“Saab story ends” we wrote on these pages last week. Now it has begun again, after Dutch luxury carmaker Spyker raised a last-minute bid over the weekend. It looks as if there are other options, with General Motors saying it will look into several new expressions of interest for its Swedish unit. That’s only two days after it said it would start an orderly wind-down.

The London Stock Exchange (LSE.L) is buying 60 percent in Turquoise, its rival launched by a group of investment banks with a lot of fanfare two years ago. The centuries-old bourse will merge Turquoise with Baikal, its dark pool platform.

Kraft’s (KFT.N) hostile bid does not reflect Cadbury’s (CBRY.L) value, a significant number of big Cadbury shareholders thinks — that’s what Cadbury Chief Executive Todd Stitzer told my U.S. colleagues on Friday. ”It appears that the stand-alone value of the company has risen in the eyes of shareholders,” he said. Meanwhile, the New York Times writes that Britain is going “into an emotional tailspin” over the prospect of losing Cadbury. If that’s the case, they’re hiding it well — must be the stiff upper lip.

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British chocolate maker Cadbury (CBRY.L) ramps up its targets for sales and operating margins to show it’s worth more than Kraft’s (KFT.N) hostile $16.5 billion offer. It says it has seen interest from other bidders, but doesn’t mention them . Stock markets are unimpressed — Cadbury shares are up only 0.7 percent.

In the wrangling over Saab, Beijing Automotive Industry Holding Corp (0r BAIC) has said it has acquired some of the assets of the General Motors unit.

French insurer AXA (AXAF.PA) and Australia’s AMP Ltd (AMP.AX)  have raised their takeover offer for AXA Asia Pacific Holdings to $11.7 billion — a 16 percent rise. The two are keen to get their hands on different parts of the business. The French insurer is already the biggest shareholder in AXA Asia Pacific Holdings, and also its parent company.

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Thursday’s top stories:

Dubai’s Emaar Properties (EMAR.DU) says it will not merge with Dubai Holding’s property units, a move analysts said protected the developer from Dubai Holdings’ vulnerable debt position.

Sempra Energy (SRE.N) may join Royal Bank of Scotland Group Plc (RBS.L) in selling off their entire joint commodities business, offering quick entry into a lucrative market with a diverse, global trading book.

When AOL Inc Chief Executive Tim Armstrong rings the opening bell of the New York Stock Exchange on Thursday, he hopes to put behind one of the most disastrous mergers in corporate history. The question is, Yinka Adegoke writes, whether investors will take to the newly independent Internet company, especially since the spin-off was structured so the first holders of the stock are Time Warner Inc (TWX.N) shareholders.

DealZone Daily

Wednesday’s top stories:

Japan’s Suzuki Motor will sell a 19.9 percent stake to Volkswagen for $2.5 billion and use half the proceeds to buy shares in the German automaker, as the two firms form a formidable force in the auto industry.

Dutch mail group TNT (TNT.AS) needs to be a part of consolidation in the fragmented European courier market, a new shareholder says, fuelling investor pressure for TNT to sell its express business.

Canadian miner First Quantum Minerals (FM.TO) agrees to buy BHP Billiton’s (BHP.AX) (BLT.L) closed Ravensthorpe nickel mine for $340 million, paving the way to revive 5 percent of world nickel capacity.

Kraft’s anti-climax?

North American food giant Kraft is due to post its offer documents to Cadbury shareholders by Dec. 7, but this latest milestone in the 10 billion pound takeover saga may turn out to be more damp squib than giant Toblerone.

Kraft could indeed post the documents ahead of time as the Times reported this week. With no significant changes to the structure or value of the offer anticipated, the event is unlikely to captivate or move the markets, however.

Keeping the terms exactly the same would be typical behaviour for Kraft, as we said last month here. The company formalised its indicative offer in the hope that no rival bidders would emerge to pressure it to up its bid. Despite Wispas — sorry, whispers — about Hershey, Nestle, and Ferrero, no rival has come forward yet.