One intriguing remark that Blackstone COO Tony James let slip on today’s earnings call is that it could be gearing up to sell an energy asset. 
James explained that while opportunities to exit investments weren’t numerous, it had succeeded making a profit on the sale of pharmaceutical company Stiefel. 
“We have another company in our portfolio… in the energy sector, which had some very, very exciting results finding unbelievable amounts of hydrocarbons and… that might be something we’d look to exit,” James said on a call to the media. 
He didn’t identify the company so we’re doing the guessing ourselves — out of the current energy investments Blackstone lists on its website, we reckon Kosmos Energy, which has a significant oil field in Ghana, could fit the bill.

(Additional reporting by Mike Erman)

PepsiCo Inc’s offers to buy the remaining stakes in its two largest bottlers came as a surprise, but the biggest surprise may be the scant 17.1 percent premium in the overtures.
    
PepsiCo’s bid to buy the rest of the bottlers it does not already own constitutes a so-called “squeeze-out,” or a transaction in which the buyer already owned some portion of the target and was seeking to own the 100 percent.
    
Even given that squeeze-out premiums are typically lower than cases where a buyer did not own any part of the target and was seeking to acquire 100 percent, this one looks particularly low, according to FactSet Mergerstat.
    
The average 1-day premium for a squeeze-out deal was 35.77 percent versus the average 1-day premium of 44.10 percent for a full acquisition, FactSet Mergerstat said.
    
Put another way, the PepsiCo premium was half the normal premium for a typical squeeze-out. Both Pepsi Bottling Group and PepsiAmericas rose above PepsiCo’s offer, suggesting that shareholders expect the deal to get a little sweeter.

First Reserve is sitting on another $9 billion of spending money for energy deals after finishing raising its latest buyout fund, Fund XII. The private equity giant, which specialises in energy investments, said the fund is the largest ever raised in the energy sector and exceeds its previous fund, Fund XI, which raised $7.8 billion in 2006. 

The fund appears to be lower than target, however. London-based private equity intelligence firm Preqin said in a recent report that the fund had a $12 billion target.

“Energy remains a large, dynamic and complex industry where change creates new, attractive investment opportunities,” said William Macaulay, Chief Executive Officer of First Reserve in the press release (below).

Private equity firms have been struggling to raise new money for funds as the pension and endowment funds that invest in them have been hit by slides in the equity markets.

Some sectors and funds have been more successful than others. Secondary firms, which typically buy investors’ positions in buyout funds at a discount, have been particularly successful at raising capital.

Fund XII Final

As dealmakers everywhere struggle to get deals done, the healthcare industry seals yet another one.

Express Scripts has agreed to buy health insurer WellPoint’s prescription business for $4.68 billion in a significant expansion for the U.S. pharmacy beenfit manager. The deal will be a concoction of cash and up to $1.4 billion in common stock, and will generate more than $1 billion of incremental EBITDA.

This comes on the heels of Pfizer’s $68 billion acquisition of Wyeth, Merck’s $41.1 billion takeover of Schering Plough and Roche Holding’s $46.8 billion buyout of Genentech. Granted, this isn’t a pharma deal, but it still falls under the umbrella of the healthcare sector.

And in a market where deals aren’t getting done — mainly due to tight credit conditions and partly due to value gaps between buyers and sellers (due to the huge declines in stocks late last year) — you’ve gotta ask: what’s the magic pill?

Deals of the day:

* Indian mid-sized IT outsourcer Tech Mahindra won a bidding auction for a majority stake in fraud-hit Satyam Computer Services Ltd, edging out Larsen & Toubro, seen by some analysts as the favourite bidder. 
    
* India’s Larsen & Toubro, which has built up a 12 percent stake in Satyam Computer Services, plans to hold on to the stake, its chief financial officer said on television channel NDTV Profit. 
    
* Pakistan’s Habib Bank Ltd. (HBL) and MCB Bank are interested in buying the operations of Royal Bank of Scotland (RBS) in the South Asian nation, the two banks said in separate statements on Monday. 
    
* A bid by Japan’s Mitsubishi Rayon Co for unlisted British chemicals maker Lucite International has hit a hurdle in China where regulators have delayed the acquisition, two sources briefed on the matter said. 

* Orascom Telecom said on Monday it was proposing to extend the deadline to April 15 for implementing a court order for the Egyptian firm to sell its shares in mobile firm Mobinil to France Telecom.

Poor Dow Chemical.

Not only did the company end up having to buy Rohm and Haas at basically the same steep price it agreed to last year, but it has also become the favorite target of lawyers, bankers and maybe even judges at the Tulane Corporate Law Institute, an annual gathering of top dealmakers.

Timothy Ingrassia, head of Goldman Sachs mergers and acquisitions business in the Americas struck the first blow on Thursday morning.

 ”You’ve already had Dow Chemical’s unique interpretation of the merger agreement. There was never a transaction that made Apollo look better,” Ingrassia said, referring to private equity firm Apollo’s previous efforts to get out of an agreement to buy Huntsman Corp. 

“Dow did make a great point which is it was inconvienient to need to close that deal. I guess that was their legal argument,” he said.

Theodore Mirvis, a partner at the law firm that represented Rohm and Haas in the case, was later met with laughter when he presented a “hypothetical” case based on the Dow deal.

And Delaware Vice Chancellor Leo Strine may have been making a veiled reference to Dow, observing that litigating to get out of a deal puts a buyer in the not enviable position of arguing that your business is in bad shape.

“From the buyer’s side, the litigation is about how badly you suck,” he said.

    JPMorgan is cutting 30 percent of its research department, according to two former employees, but the bank is keeping mum about its plans and declined to give details of the cuts.
    David DeRose and Leighton Thomas, co-founders of a Bear Stearns alternative research unit that moved to JPMorgan when that bank acquired Bear a year ago, said on Wednesday they sold the unit to an investment firm largely because they could not hire more staff under JPMorgan’s management.
    “If you stay under a research division that’s being cut 30 percent, we can’t get any headcount,” said DeRose.
    JPMorgan intends to shed 1,000 to 2,000 jobs from its investment bank this year, co-investment bank chief Steve Black said at the bank’s investor day in February.
    It was unclear whether the cuts DeRose mentioned are included in these figures and a JPMorgan spokesman declined comment.
    Research staff may be an easy target for cuts, since it is hard to quantify their contribution to the bank’s bottom line.
    And banks’ research divisions across Wall Street have been shrinking since the Securities and Exchange Commission in 2002 banned firms from using banking fees to pay analysts.

By Elinor Comlay

Once nearly as routine and immutable as its dividend and its triple-A rating, General Electric CEO Jeffrey Immelt could be counted on to step up and calm the markets when things got rough. He who guides the biggest corporate bellwether of the U.S. — nay, global — economy was to the markets what baseball, apple pie and Chevrolet were to the United States.

Now that auditors at Chevrolet parent GM have called into question its ability to stay in business, and baseball’s biggest star has admitted once being a doper, apple pie seems to be all we have left of this particular cliché of Americana. And even dessert may not be safe from recession-spending cutbacks at the kitchen table.

So back to the question of GE: facing a possible downgrade after bowing to market realities and cutting its dividend, is Immelt’s job in jeopardy? CFO Keith Sherin sat down on the conglomerate’s business TV network, CNBC, to talk financials and assure markets the company would weather the storm just fine. GE’s finance unit has no short-term liquidity issues, and speculation about its ability to maintain sufficient capital is “overdone,” he said. Sherin also said it would take an “incredibly disastrous economic situation” for GE to seek money from the government’s Troubled Asset Relief Program. Many would describe the current economic outlook as precisely that.

One can gaze at the tea leaves and wonder whether the decision, presumably Immelt’s, to put CFO Keith Sherin on CNBC was a sign that the big chief is in trouble. Or perhaps trucking out other top executives is meant to bolster Immelt by spreading the exposure risk executives run when hitting the airwaves. Markets took Sherin’s comments positively, pushing GE shares higher in pre-market trade, so whatever plans behind plans there may have been, on the surface they seem to have worked.

Deals of the Day:

* WellPoint, the second-largest U.S. health insurer by revenue, has put its pharmacy benefits management (PBM) business up for auction, the Financial Times reported.

* British convenience-food maker Uniq Plc said it had agreed to sell its loss-making UK chilled fish business for an initial 1 million pounds to The Seafood Co Ltd to focus on profit-making businesses.

* Manila Electric Co may see a battle for control after an investor group led by the chairman of PLDT bought about 6 percent of Philippines’ biggest power retailer, media reports said.

* The Norwegian government said it had finished purchases of StatoilHydro shares after raising its stake to a planned 67 percent.

* The chairman of Citic Group, China’s top financial conglomerate, said Spain’s second-largest bank BBVA has a strong desire to raise its stake in CITIC Bank.

* China’s Shougang Iron & Steel is in talks to buy Shanxi-based Changzhi Iron & Steel, which has an annual capacity of 4 million tonnes, Shougang Group Chairman Zhu Jimin told reporters.

* The parent of Dalian Port Co will buy Jinzhou Port this year, the mayor of the northern city of Dalian said.

* Wall Street bank Goldman Sachs said it has no plan to sell its 5 percent stake in the National Stock Exchange of India, refuting a local media report.

(PHOTO: Jeffrey R. Immelt, chairman and CEO of General Electric, listens to a question during a news conference in Kuala Lumpur September 27, 2007.  REUTERS/Zainal Abd Halim)

Another day, another round of hand-wringing: Do I, or don’t I? That seems to be the mantra of top executives mulling buys in what continues to be a rocky market while those on the receiving end are left wondering will he, or won’t he?

So far, it ain’t looking good — for the sellers, or the buyers.

Late last night, Samsung Electronics Co Ltd, the world’s top memory chip maker, decided to dump its pursuit of flash memory card maker SanDisk Corp. That unsolicited deal would have been worth $6 billion, but Samsung apparently got cold feet after seeing SanDisk’s wider-than-expected quarterly loss.

“Your surprise announcements of a quarter billion dollar operating loss, a hurried renegotiation of your relationship with Toshiba and major job losses across your organization all point to a considerable increase in your risk profile and a material deterioration in value, both on a stand-alone basis as well as to Samsung,” Samsung CEO Lee Yoon-woo wrote to SanDisk management in a letter disclosed by Samsung on Wednesday.

As a result of these developments, we are no longer interested in acquiring SanDisk at $26/share.”

Ouch. At least Lee won’t be accused of beating around the bush.

The move, of course, wasn’t a big surprise. Many investors had been doubtful a deal would get down in the first place, given that the spread between Samsung’s offer price and SanDisk’s trading price was 80 percent, according to Reuters data.

But it’s also another sign that caution rules these days. As reporter Jessica Hall pointed out in her DealTalk column earlier this week, even marquee mergers have become more difficult and costly to close amid an ongoing credit freeze and financial crisis.

Look at GE and its appliance unit. That dance card has been open since May and suitors remain reluctant. Reporter George Chen, in another DealTalk column, points out that potential buyer Haier, China’s largest home appliance maker, plans not to bid for the unit until it sees clear signs of a U.S. market recovery. Chen was citing people with direct knowledge of the matter.

Meanwhile, General Motors is looking for a large investment from outside investors as a possible alternative to a deal with Chrysler, the Financial Times reported on Tuesday. GM and Chrysler have been in merger talks in an attempt to shore up cash and survive an industry slump, sources have said.

As the old saying goes, money makes the world go round. But the globe doesn’t appear to be spinning very fast these days.

More Deals of the Day:

** Japan’s largest beer maker Asahi Breweries Ltd is in a leading position in a bid for Groupe Danone’s Australian and New Zealand businesses, which could be worth up to A$1 billion ($678 million), a financial source said.

** Samsung Electronics Co Ltd, the world’s top memory chip maker, dropped a $5.9 billion unsolicited bid for flash memory card maker SanDisk Corp, citing the U.S. company’s deepening losses and uncertain outlook.

** Barnsley Building Society is to merge with larger UK rival Yorkshire Building Society after revealing a possible 10 million pound writedown from its exposure to two Icelandic banks, the companies said in a joint statement.

** Nissan Motor Co is proposing to buy about 20 percent of Chrysler and bring the troubled automaker into the Franco-Japanese alliance with Renault SA , the Detroit News reported, citing sources familiar with the situation.

** British Gas owner Centrica Plc said it bought Semplice Energy Ltd, a clean technology services provider, for up to 1.5 million pounds ($2.53 million) in cash to expand its range of energy efficiency and low-carbon capabilities.

** Legal and professional fee insurer Abbey Protection Plc said it would acquire three companies in the Accountax fold for an initial consideration of 4.4 million pounds ($7.4 million).

** Shares in global miner and takeover target Rio Tinto Ltd jumped 5 percent in a weak market, swept up by rumours ranging from a sweetened cash bid by BHP Billiton to a Chinese counter-bid.

** Wind turbine maker Clipper Windpower Plc said it has completed a joint venture agreement with an energy unit of oil major BP Plc for the development of a windfarm in U.S.

** Spain’s largest property company Martinsa Fadesa said its 50 percent owned Moroccan unit has sold assets for 165.7 million euros ($218.5 million), making a pretax gain of nearly 43 million.

** U.S.-based DTCC (Depository Trust & Clearing Corporation) and London-based LCH.Clearnet said they planned to merge to form the world’s leading clearing house. LCH.Clearnet shareholders would receive total consideration of up to 739 million euros ($974.7 million), the majority of which would be funded through LCH.Clearnet’s revenue, the companies said in a media release.

** Vienna stock market operator Wiener Boerse agreed to buy a majority stake in the Prague Stock Exchange to boost its position in the emerging markets of central and Eastern Europe.

** CITIC Pacific Ltd said it was in preliminary talks to sell its motor vechicle and food distribution unit, Dah Chong Hong Holdings Ltd.

[Editor's note: This blog post originally referenced a Reuters article reporting that United Parcel Service had dismissed talk of a $15 billion takeover bid for Dutch rival TNT. That article is wrong and has been withdrawn. Reuters accepts that the UPS executive was not commenting specifically on reports that TNT and UPS were in talks.]

Waste Management Inc, the largest U.S. trash hauler, said on Monday it has raised its rejected bid for rival Republic Services Inc by nearly 10 percent, to $6.73 billion. Under the revised offer, Waste Management would acquire all outstanding shares of Republic for $37.00 each, a 32.6 percent premium to Republic’s share price prior to Waste’s first takeover bid. That’s not likely to bring a smile to the face of Bill Gates, a major Republic shareholder through his investment arm, BGI, who last month asked Waste Management to walk away. BGI didn’t mince words in its letter to Waste Management’s CEO and board: “We can only assume your ill-timed and poorly conceived pursuit of Republic is designed to disrupt what you perceive as a competitive threat to your position in the market.”

GATX Corp is offering more than $3 billion for General Electric Co’s rail car leasing business, a source familiar with the discussions said. GATX is the leading bidder for the unit and negotiations are ongoing, the person said. A GE spokesman declined to comment. GATX was not immediately reachable for comment.

Other deals of the day:

* South Korea said it plans to sell a 49 percent stake in state-owned Incheon International Airport Corp, worth about $2 billion, to global airport operators as part of a drive to privatise and reform state-run companies.

* U.S. energy firm Marathon Oil Corp is selling a 20 percent stake in an Angolan oil field that could fetch almost $2 billion, attracting bids from China’s top three oil firms, India’s ONGC and Brazil’s Petrobras, sources close to the matter said.

* Media, entertainment and events group First Artist Corp said it agreed to acquire U.S.-based advertising agency Spot and Company of Manhattan Inc in a reverse takeover for up to $18.86 million in cash.

* Russia’s Gazprom Neft will offer Kazakhstan a stake in one of its own projects in exchange for a 49 percent stake in Kazakh oil firm MangistauMunaiGas (MMG), a senior Gazprom Neft official said.

* Kazakh miner Kazakhmys has increased its stake in domestic peer Eurasian Natural Resources Corp to 25 percent, but has no plans to launch a bid for now, it said.

* Dubai Mercantile Exchange, a joint venture between Oman, Dubai and the New York Mercantile Exchange, said it had sold a 20 percent stake to several financial institutions and energy traders.

* Debt-ridden French drinks group Belvedere is considering selling its Marie Brizard liqueur unit to refocus on its vodka business, business newspaper Les Echos reported, citing several sources.

* Australian farming cooperative Murray Goulburn has made a solo bid for dairy producer Dairy Farmers after its consortium with Italy’s Parmalat fell apart last week, a source familiar with the situation said.

General Electric has bulked up on its health binge, moving to buy medical device maker Vital Signs for $860 million. Vital Signs shareholders are to get $74.50 per share in cash, a 28.4 percent premium to Wednesday’s closing price, and above the shares’ 52-week high of $61.20, reached on May 9. GE said the deal, which it expects to close in the fourth quarter, values Vital Signs at $860 million, net of cash and investments. It said that shareholders with a 37 percent stake in Vital Signs have agreed to vote in favor of the deal.

Chinese pickup truck maker Hebei Zhongxing Automobile Co is in talks with General Motors and major Chinese automaker FAW Group to explore opportunities for cooperation, including possible equity ties, a source close to the situation said. “Consolidation is inevitable in the Chinese auto market, which now has more than 100 players, and a company of Zhongxing’s size makes a good takeover target or joint venture partner,” the source told Reuters. “Zhongxing is holding talks with several potential partners including FAW and GM to seek cooperative opportunities, including possible equity ties, but nothing has been decided at the moment,” a source said.

Tribune has narrowed the potential list of bidders for the storied Chicago Cubs baseball team to 3-5 groups bidding $1 billion or more, according to sources briefed on the matter. Of the 10 groups approved to bid for the Cubs by Major League Baseball, only those that bid $1 billion or more for the team, its home ballpark Wrigley Field and a stake in a regional sports TV network advanced to the next round, said two sources, who asked not to be identified because the process is ongoing. While Tribune and baseball officials declined to comment, three sources said Internet billionaire Mark Cuban, owner of the National Basketball Association Dallas Mavericks; and a publicly held group led by New York City taxi tycoon Andrew Murstein were among those advancing. Others advancing included Tom Ricketts, chief executive of Incapital LLC, a Chicago securities and investment banking firm, and son of the founder of TD Ameritrade; and a group headed by Michael Tokarz, chairman of MVC Capital, one of the sources said. The Tokarz group includes Fred Malek, who previously bid on the baseball team in Washington.

Other deals of the day:

* The head of state-run Korea Development Bank said it would resume the delayed sale of Daewoo Shipbuilding in August, possibly wrapping up the $4 billion deal by end-2008.

* South Korea’s Hana Financial Group, the country’s No.4 banking group, said its banking unit would invest 329.6 billion won ($327 million) to take a 19.7 percent stake in the Bank of Jilin in China.

* Malaysia’s Maybank is set to buy another 5 percent of Pakistan’s MCB Bank as early as next month, in a deal estimated at $218 million, sources familiar with the matter said on Thursday.

* Intel Capital, the venture capital arm of top chipmaker Intel Corp, said it would pump $17 million into three Indian companies, comprising two Internet portals and one advertising firm.

* Mapletree Investments, a property firm owned by Singapore state investor Temasek, said it will support a rights issue by Mapletree Logistics Trust by buying units not taken up by other investors.