General Growth battle intensifies
The battle for control of General Growth, owner of shopping centers across America, continues, as it weighs two rival offers.
General Growth, which is trying to exit bankruptcy, will consider at a board meeting Thursday whether to postpone a key court hearing set for Friday as it continues talks with suitors Simon Property and Brookfied Asset Management.
It has asked Simon to increase its $5.8 billion bid. General Growth may also come back with a new counter0ffer on antitrust issues that could arise from a merger of the two largest U.S. mall owners.
Despite being in bankruptcy since last April after grappling with falling rents and rising vacancies, bidders are keen to take control of the Chicago-based company, which owns a number of malls which generate high cash in posh destinations.
If shoppers, which fuel America’s economy, return to stores in force, it could turn into a good investment.
from Summit Notebook:
Tax evaders on the run
By Neil Chatterjee The U.S. has promised it will hunt down tax evaders. And it seems tax evaders are on the run. DBS bank, based in the growing offshore financial centre of Singapore, told Reuters it had been approached by U.S. citizens asking for its private banking services. But when told they would have to sign U.S. tax declaration forms, the potential clients disappeared. Swiss banks also approached DBS on the hope they could offload troublesome U.S. clients to a location that so far has not been reached by the strong arms of Washington or Brussels. DBS said no thanks. In fact many private banks and boutique advisors now seem to be avoiding U.S. clients. Will this spread to other nationalities, as governments invest in tax spies and tax havens invest in white paint? Is this the end of offshore private private banking?
Bank of America’s Chalice: Poison or Red Bull?
For months, as he endured hearings on Capitol Hill and fought off a series of lawsuits, Bank of America CEO Ken Lewis trudged through a post-apocalyptic financial landscape against a steady drumbeat of questions about his future. The deal he had called “the strategic opportunity of a lifetime” — his purchase/salvage of Merrill Lynch — had swung from an act of patriotism, keeping the American way of banking from utter ruin, to a scandal over Merrill losses and bonuses.
Perhaps he should have seen the writing on the walls of the vacant houses financed by Countrywide, the mortgage lender Lewis purchased/salvaged just six months before the Merrill deal. The two transactions may have been strategic gems, but they were laced with political poison as the economy floundered toward its dramatic deleveraging and taxpayers pumped $20 billion into Bank of America to fund the Merrill deal.
“It was only a matter of time,” Campbell Harvey, a professor at Duke University’s business school, told Jon Stempel. “There is too much collateral damage.” As Stempel reports, Lewis spent north of $130 billion on acquisitions, including FleetBoston Financial Corp, the credit card issuer MBNA Corp, LaSalle Bank Corp, Countrywide, Charles Schwab Corp’s U.S. Trust private banking unit, and Merrill. In buying Merrill, he added a giant investment bank to what was already the largest U.S. retail bank, credit card issuer and mortgage provider. (Wells Fargo & Co has since become No. 1 in mortgages.)
Lewis plans to be gone by the end of the year and leaves no immediate successor, so Bank of America has only a few months to figure out who to anoint. Though his demise is a cautionary tale, odds are good that the bank’s worst days are behind it. An incoming chief can blame Lewis for any ill-conceived agreements surrounding Merrill. More importantly, with economic recovery apparently at hand, Lewis’ deals of a lifetime have a better chance than ever of paying off.
If BofA can harvest 45 billion of operating profit per year post 2011 as Mr. Lewis suggests- these aquisitions of distressed brands could make Mr. Lewis one of the shrewdest dealmakers ever.
Truth in tender offers? An eyewitness account.
U.S. Securities regulators on Thursday sued a well-connected Kuwaiti financier, saying he reaped millions in suspicious profits after false takeover reports briefly sent shares of Harman International Industries soaring this week.
Reuters reporter Ransdell Pierson was in the office working the Sunday shift when he received a fax with the purported takeover offer. Unable to verify the authenticity of the fax, Reuters did not publish the story. Here is Ransdell’s first person account of what happened, and a copy of the fax. Would you have questioned its veracity?
Ransdell Pierson:
I was scouring newspapers on a Sunday shift in the Reuters New York bureau and waiting for news about distressed lender CIT Group, when the phone finally rang and broke my reverie. “Newsroom,” I said, and the caller replied, “Your Jeddah bureau is closed today. Can I send you a fax?” The male caller, who I imagined to be a middle-aged office aide frustrated by the thankless chore of delivering his fax, said it was a press release about a deal. Something about one company buying another for about $3 billion. “If it’s such a big transaction, shouldn’t this news be coming over the PRNewswire or BusinessWire?” I asked him. He explained that it was the weekend, so faxing a press release was the best route. I gave him a fax number and he called back, irritated the document hadn’t gone through. I gave him another fax number and he soon called back again, more irritated than before. So I gave him the number of a third Reuters fax machine, but told him that it needed to include contact information for all the parties. “Otherwise, we can’t authenticate it.” “OK, you’ll have it,” he replied.
But when the single-sheet document arrived seconds later, it was bereft of any contact info. Topped by a legitimate-looking APG logo [standing for Arabian Peninsula Group] , it described an offer by the group to buy U.S. stereo equipment maker Harman International Industries. It was plausibly well written, so I did not dismiss it out of hand. But I was skeptical.
Finding no references to the Arabian group in the Reuters databases or Google, and unable to reach any Harman officials for verification, I was glad I hadn’t sent any headlines out about the “deal” on the Reuters wire.
I followed up by calling my editor at home and telling him about the calls, and the fax. He said the 100 percent premium for Harman, in this economy, seemed outlandish. “I’m sure it’s a hoax.” Even so, the last thing I did that night, after going home, was to do one last Google search — to see if any other news organizations had carried the “news.” The headline from the press release did appear on one or two websites, but not on any major news organizations. I slept well.
from Photographers Blog:
Tim Geithner : What’s In Your Wallet?
What's in U.S. Treasury Secretary Timothy Geithner's wallet? Not much.
While testifying in front of a House Appropriations Subcommittee on Capitol Hill Thursday Geithner was shown a $50 Billion Zimbabwean bank note (rendered worthless by Zimbabwe's hyperinflation) by U.S. Representative John Culberson (R- TX) and asked if he had ever seen one himself. Geithner immediately pulled a piece of Zimbabwean currency out of his own pocket and showed it off to the committee. At the next break in the hearing I approached Geithner and asked how he happened to have a piece of foreign currency in his pocket. His response was "I often have some foreign currency in my wallet. Want to see?" He pulled a very thin and mostly empty wallet from his pocket.
Amongst many empty slots in the thin weathered leather wallet there could be seen three credit or debit cards with Visa and Mastercard logos (all inserted into the wallet upside down so that the card issuers could not be seen) and an old and yellowed looking identification card of indeterminate origin.
From inside the wallet Geithner extracted a small pile of receipts and paper including a New York City MTA farecard, pointing out that there were European Euros tucked amongst the paper.
Notably not seen in the U.S. Treasury Secretary's wallet? Any U.S. dollars.
from MacroScope:
Canada dresses up for bears
For all the designer drinks and gourmet foods - from raw oysters to sushi, and the sea of men in expensive suits and bejeweled women in elegant gowns, the setting seemed fit only for celebration.
But dressed as they were to the nines, investors attending "A Night with the Bears" at Toronto's upscale Elgin Theatre, were eager to hear the worst, on the edges of plush seats amid predictions of market doom from some of the continent's savviest financial minds.
"I only wish we'd sold tickets," said a smiling Eric Sprott, arguably Canada's best known hedge fund manager and chairman at Sprott Asset Management Inc, as he looked out at the 1,500 or so crowd.
In a media room below stage, journalists were held equally rapt by the star speakers after being treated to a hand-operated elevator ride.
Once there, rows of chairs slowly filled as smartly-dressed servers roamed the dimly-lit space offering drinks to journalists briefed quickly.
The message?
When an economic recovery takes place -- and it won't take place any time soon -- it's going to be a weak and shallow recovery.
Distressed investors say TGIF
Roman Catholics have fish Fridays. Boxing fans have Friday Night Fights. For distressed investors, like Jon Winick, president of Clark Street Capital, there’s Friday night Failure. “You can count on Friday failures for the next six to twelve months,” Winick said at a distressed investing conference in New York this week. He forecasts bank failures to rise to 200 through next year. There have been 14 bank failures so far this year, according to the Federal Deposit Insurance Corp, with filings every Friday since Jan. 16 after the year end and New Year’s Day holidays. The FDIC seized 25 banks last year. In just the first seven weeks of 2009, the 14 bank failures mean the FDIC is on pace to close more than 100 banks in 2009. Distressed investors say they are expecting a record wave of bankruptcies this year, marking unprecedented opportunity for investors and a feeding frenzy on Fridays. The filings on Fridays are procedural, as the FDIC posts the failures at the end of the week. That allows the declaring bank to give regulators the weekend to sort things out, and it prevents a big run on the bank because branches are closed. Brad Hunter, national director of consulting at Metrostudy, a housing industry research firm, thinks things are just getting started. He said bank takeovers ultimately could exceed 1,000. “Option ARM loans are coming due, and that will trigger another wave of foreclosure,” he said.
from India Insight:
Satyam — truth be damned?
If a stock dives 55 percent, is it time to go bargain hunting?
Absolutely not! At least that was the case with India's Satyam Computer Services after it shocked investors on Wednesday by disclosing most of its profits were cooked up.
The disclosure came after the company's botched attempt last month to buy two construction firms partly owned by its founders, which sent its shares diving 55 percent in one session by angry investors.
Chairman Ramalinga Raju said: "It was like riding a tiger, not knowing how to get off without being eaten."
The shares tumbled nearly 80 percent, roiling investor confidence in India and bringing an undignified end to the illustrious career of one of the country’s top businessmen.
The accounting fraud which analysts instantly dubbed as "India's Enron", battered confidence in Indian companies and cast a shadow on the once-booming outsourcing industry.
The biggest Indian corporate scandal in memory threatens future foreign investment flows into Asia's third-largest economy, already facing slowdown pangs.
Satyam was,is and will remain one of the TOP company no matter what happens .The SPIRIT OF SATYAM is very high, all the EMPLOYEES AND LEADERS are united and stand by Satyam and will do their BEST to come out of it.
ALL THE BEST FOR SATYAM 
Yahoo’s deal with Google: Band-Aid
So Yahoo and Google scaled back the terms of their search advertising deal in what looks like a last-ditch, attempt — at least for Yahoo — to get it past U.S. regulators.
Some analysts called it the Band-Aid deal, while others said it smacks of desperation.
Frost & Sullivan’s digital media global director Mukul Krishna said the revised terms were “more of a Band-Aid than the extensive surgery” Yahoo needs.
Barclays Capital’s Douglas Anmuth had a similar take: “We have long viewed the search outsourcing deal as a Band-Aid-not-a-panacea for Yahoo, but compromised terms or an outright rejection of the deal would likely force Yahoo to consider other strategic measures.”
Those “other” measures are a merger of Yahoo and Time Warner’s AOL unit, or Yahoo shareholders’ ultimate dream: Microsoft coming back to woo Yahoo.
Eric Jackson, the dissident Yahoo shareholder who sold his fund’s 3 million Yahoo shares in September after being convinced regulators would nix the Google deal, said: “You just gotta hope that the love bug bites Microsoft again and they want to come back.”
Sanford Bernstein analyst Jeffrey Lindsay said he expects Yahoo’s deal with Google to falter and for Microsoft to come back next year with a bid of around $20 per share. That may not sound too bad considering Yahoo is trading at $13, but remember that the last Microsoft offer had been for $33 a share.
A Killer Economy
This economy is a killer. Just ask New Yorkers on Craigslist.
You may not have heard of the Killers, a music group from Las Vegas that’s been variously called the next U2 and the best Mormon rock band of all time. They are playing tonight at the Hammerstein Ballroom in New York City.
Tickets, at $45, sold out in a few minutes when they went on sale in late September, and have been reselling for 10 times that amount on the secondary market. That’s where Craigslist, and a former hedge fund associate, come in.
A Reuters reporter was not willing to pay the $350 asking price per ticket to see the show, and emailed the seller, pointing out a recession is under way. The former hedge fund associate emailed back: “I’m not a scalper. I’m a ticket arbitrageur.” So we called him up.
“I really like this band. I can play some of their songs,” he said. “New York is an expensive place and I don’t have a paycheck coming in today.” He did not want to be identified since he is looking for work.
The Ivy League-educated 25-year-old, a Killers fan, bought tickets to Friday’s show a few days before his Park Avenue hedge fund laid him off, along with several others. The fund paid out unused sick days and vacation time, but no severance. He’s received inquiries about tickets from across New York’s financial industry, but mostly from its higher strata.
“Only VPs are still able to still afford luxury,” he said. ”The belt’s already been tightened. It used to be the associates and the analysts were the most visible, making money in this economy, because we walked around with new Hermes ties and bought all the hot clothes. Now that’s clearly over.”
