Deals wrap: Lowering expectations
BHP Billiton tried to dampen expectations it would substantially raise its hostile $39 billion bid for Potash Corp as bumper results showed it has plenty of firepower. *View article *View reaction from analysts and investors *View Potash Corp deal scenarios
Dubai World believes it can raise as much as $19.4 billion from selling key assets over eight years, if creditors back its restructuring, a document obtained by Reuters showed. *View article *View reaction from analysts and investors
Dell and Hewlett-Packard are expected to raise their bids for 3PAR, but technology investors and analysts warn of valuations taking a back seat to egos. *View article
Facebook may not be trading on the Nasdaq yet, but based on secondary market transactions the company is worth $33.7 billion. *View FT article *The case for a $50 billion Facebook
The M&A market is making headlines with blockbuster buys, but the WSJ takes a look at what the IPO market says about the state of deals. *View WSJ article
Dubai World in their hands
Interest is a murky business in Muslim finance, in which religious doctrine prohibits earning money from money loaned. And while bankers are largely upbeat about the deal being offered by Dubai to bail out Dubai World and its property unit Nakheel, relieved that they are getting anything at all, perhaps they will take some solace from the interest prohibition when they say a final goodbye to any interest they were due.
Dubai World is being recapitalized and Nakheel’s bonds are to be paid off – sans interest — with $9.5 billion of aid. The funds include about $4 billion from the government of Dubai and a previous loan of $5.7 billion from oil-rich neighbor Abu Dhabi. The plan is Dubai’s attempt to restructure some $26 billion in debt held by Dubai World, owner of the QE2 liner and Cirque du Soleil assets. Nakheel is the developer that conjured the emirate’s iconic global map made of islands.
Some investors were expecting Abu Dhabi to step in with more cash, but it is apparently done funding its neighbor’s excesses. Maybe next boom, they’ll be back.
In any way you take it or name it, all is Interest Tradings. Money earned through any means by the local Shaikhs, their friends and rich are mostly invested abroad. All know this but is this investment abroad on Islamic Principles? Do we have any Christian Way of Investment, if so kindly educate us all so that we may also follow. What if Hindus or some other believers also start propagating their followers to start investing in their own method of investment. I think to drag religion in all systems in life is not good even for them.
DealZone Daily
British Petroleum is bidding on a package of Devon Energy assets that the US energy company put up for sale late last year, sources familiar with the matter told Reuters. The company is looking at Devon’s position offshore Brazil, as well as Gulf of Mexico and Canadian assets, one source said. There could be around six other bidders as well as the British oil major. Read the story here.
And in news reported by other media on Thursday:
Dubai World will present its first concrete proposals to local banks on Thursday on restructuring $22 billion of debt, The National newspaper reported, citing unnamed sources. The state-owned conglomerate has requested meetings with Emirates NBD and Abu Dhabi Commercial Bank to present its proposals.
DealZone Daily
Australian wealth manager AMP Ltd will not seek to extend its exclusive agreement with France’s AXA SA on a joint $11.4 billion bid for AXA’s Australian unit, sources tell Reuters, opening the door for rival bidder National Australia Bank Ltd to start talks with AXA SA.
Shares in Thailand’s Thanachart Capital jump ahead of the announcement of the winning bid for a stake in Siam City Bank (SCIB), for which its Thanachart Bank is the frontrunner. Kaohoon newspaper reports that Thanachart Bank, also 49 percent owned by Canada’s Bank of Nova Scotia, has put in the highest bid of around $958 million for the 47 percent stake, beating HSBC.
In other M&A and corporate finance news reported by Reuters and other media on Wednesday:
Dubai World’s investment arm Istithmar has put port and shipping agent Inchcape Shipping Services up for sale for $600 million to $700 million and has attracted interest from private equity groups, the Financial Times says.
Britain’s consumer watchdog has asked for a say in the planned merger of the UK arms of France Telecom’s Orange and Deutsche Telekom’s T-Mobile, raising the threat of at least a delay to any deal.
An Australian court has rejected a demerger proposal from Australian sugar and building materials conglomerate CSR Ltd, domestic media reports. For the Reuters story click here.
Singapore’s ST Telemedia, a unit of investment company Temasek, is to buy Malaysian tycoon Vincent Tan’s 33 percent stake in Malaysian 3G company U Mobile, the Star newspaper reports.
from Matthew Goldstein:
Dubai World’s leaky submarine deal
NEW YORK, Nov 13 (Reuters) - One might think that after Madoff, Stanford and other Ponzi-like schemes, big banks would be more careful about the money managers they do business with -- especially people running highly speculative investment opportunities.
But it appears not everyone at the global banking giant HSBC <HSBA.L> got the message.
Consider the case of Dividium Capital, a now-defunct investment fund that was registered in the Isle of Man, an offshore banking haven located in the Irish Sea. Dividium, which operated out of Switzerland, promised investors high double-digit returns from the sale of gold certificates backed by an investment in a Russian gold mine project.
HSBC had been a primary depositary bank for the fund. Some of Dividium's investors say their money was wired to bank accounts that the fund maintained at an HSBC branch in the Isle of Man.
Dividium billed itself as an "international investment firm, which generates its returns on the basis of ethical principles with the objective of generating the best possible yield for the person and investor," according to some of its marketing literature.
But Dividium was anything but ethical, according to investors, lawyers and regulators.
Over the summer, Dividium was forced into bankruptcy by Swiss authorities after some of the firm's estimated 3,000 investors began complaining they weren't getting updated statements on their accounts and were unable to redeem their money.
