DealZone

DealZone Daily

Auto maker General Motors is grappling with the future of its European units Saab and Opel after one sale collapsed and the other was pulled, targeting the bulk of its 9,000 job cuts at Opel’s German factories.

Bookseller Borders UK called in the administrators yesterday, adding its name to a growing list of failed British high street retailers. Administrator MCR is hoping to sell the business, bought by Valco (the private equity arm of turnaround specialist Hilco) in July this year, as a going concern.

Lachlan Murdoch, son of News Corp chief executive Rupert Murdoch, sold some $27.6 million of his shares in his father’s company as he bought 50 percent of Daily Mail & General Trust’s radio operations in Australia.

For the latest deals news from Reuters, click here.

And here’s the top stories from elsewhere (some external links may require subscription):

Concerns over Dubai World’s debt dominated the news as stocks around the world tumbled and markets struggled to get to grips with the extent of the problem in the absence of solid information, says the Financial Times.

Reliance aims big with $12 bln bid for LyondellBasell

Ranked by Forbes as India’s richest man with a net worth of $32 billion, Mukesh Ambani Mukesh Ambani, chairman of Reliance Industries, is no stranger to taking risks.

The move by conglomerate Reliance Industries, controlled by Ambani, to bid for bankrupt LyondellBasell is a calculated one. Markets seem to think this is a bargain and investors pushed up Reliance’s stock nearly 4 percent on Monday.

If the deal, which sources say may be worth $12 billion,  goes through, it would catapult Reliance into the ranks of top petrochemical makers such as Saudi Arabia’s SABIC, Germany’s BASF and Dow Chemical Co.

Cocos – credit market classics?

 ”Cocos” has become the user-friendly name for a new type of hybrid bond created to help UK bank Lloyds raise money from investors to break away from a government insurance scheme for bad loans.

This nickname seems to have caught on in financial circles as it is much snappier than the bonds’ official title: Enhanced Capital Notes.

The name Cocos seems to have derived from “contingent convertible,” which describes one characteristic of these bonds – they convert to equity in certain circumstances.

Lenders quiet on Yell support

For Yell, the publisher of Britain’s Yellow Pages directories, there is a world of difference between 90 and 95 percent.

The lower figure is the amount of lenders backing its debt financing plan, the higher figure is the amount it needs. If it falls short of its target this evening, the company may need to go to the court to push through a deal.

(News story here.)

The proposals are vital to the heavily indebted company’s short-term future, allowing it to rejig its capital structure and tap equity investors for up to 500 million pounds.

Die Hard (with a vengeance)

Actor Bruce WillisAmerican actor Bruce Willis is probably best known as the all-action hero in the Die Hard films, fighting evil-doers against all the odds.

But in France, Willis looks to be a new shareholder in French vodka maker Belvedere, maker of Poland’s Sobieski vodka. Earlier this year Willis signed a multi-year deal to promote Sobieski.

Like Willis, Belvedere is no stranger to battles, having been through a two-year-long court fight with its bondholders. The bondholders — many of whom are hedge funds — want to be repaid and would accept a forced sale of the company to get their cash back. Belvedere disagrees and has proposed a debt restructuring plan that would see them paid back over years.

PE deals indicate lending thaw

NORWAY/Two very different deals announced Wednesday show that financing markets are starting to support larger private equity transactions again.

Still, large numbers of banks were involved in each deal and both involved a significant amount of the private equity firms’ own equity.

“It suggests there’s a little bit of thawing,” said Steven Kaplan, a professor of finance at the University of Chicago. “It suggests there will be a normal world at some point and they are both the kind of deals you’d expect to see in this environment — you don’t expect public-to-publics in this market.”

Keeping score: U.S. bonds, European convertibles, Chinese IPOs

From this week’s Thomson Reuters Investment Banking Scorecard:

· US CORPORATE DEBT TOPS $20 BILLION, BREAKS RECORD

For the second consecutive week, the volume of corporate investment grade debt in the US market topped the $20 billion mark, bolstered by benchmark names in the energy & power and financial sectors.   Shell International Finance raised $5 billion via Morgan Stanley, Bank of America Merrill Lynch and Deutsche Bank, while Canada’s Cenovus Energy raised $3.5 billion this week.

Investment grade debt activity from non-financial issuers totals $372.3 billion for year-to-date 2009, already besting the previous all-time record for annual non-financial activity set in 2001 when $360.5 billion in new corporate issues were brought to market.

· EUROPEAN CONVERTIBLE BONDS UP 50%
While global convertible bond activity is down 46% over 2008, the market for convertible bonds in Europe has picked up dramatically, with $24.1 billion in new convertible offerings – a 50% year-over-year increase.  Issuers in the materials, financial and industrial sectors account for nearly 60% of this year’s volume in Europe.  Deals from Anglo American, Arcelor Mittal and Alcatel Lucent top the list of convertible offerings this year.

Road to fortune or highway to hell?

GM-OPEL/That will ultimately be the question asked about what kind of a future the German carmaker Opel faces.

Parent General Motors said on Thursday that it indeed wanted
to sell a majority stake in the unit to Canadian auto parts
group Magna and Russia’s Sberbank, a decision long favoured by the German government under Chancellor Angela Merkel.

With about two weeks to go until a general election in
Europe’s biggest economy, this would clearly be a political
victory — but the question remains whether it will also be an
economic one.

Keeping score: IPO filings, U.S. debt, Porsche

Highlights from this week’s Thomson Reuters Investment Banking Scorecard:

·Nine Consecutive Weeks of IPO Filings in the US
Since late June, 32 Companies have filed to go public on US stock exchanges, marking nine consecutive weeks of IPO filings and the longest streak in over a year.  Notable names include Hyatt Hotels, Dole Foods, Dollar General and Ancestry.com.

·US Debt Capital Markets Activity Breaks Even
The volume of new debt offerings from US issuers totals $1.5 trillion for year-to-date 2009, exactly even with volume last year at this time.  US High Yield activity is up 139% over 2008 levels, totaling $72.4 billion from 166 offerings.

·Porsche-Volkswagen Tie-up Boosts M&A Rankings
As Porsche and Volkswagen prepare to merge operations, eight investment banks secured advisory roles in the transaction, boosting worldwide M&A rankings.  Most notably, Citi moved up one spot to third, while UBS moved to seventh from ninth.

Nycomed crafts a buyout, 2009-style

Nycomed, the Swiss drug company, already has 4 billion euros or so of net debt and some pretty junky single-B credit ratings. But that’s not deterring the private-equity owned outfit from plotting a bid for the drugs business of Belgium’s Solvay, even in these leverage-phobic times. As I wrote earlier:

“Switzerland’s Nycomed plans to draw on buoyant junk bond markets and new cash from its private-equity owners to fund a buyout of Solvay’s drugs unit, people familiar with the matter said.

“Such a structure would allow Nycomed — which already has billions of euros of syndicated loans — to bypass the moribund leveraged loan market and would create a group with some 6 billion euros ($8.6 billion) in yearly sales.”