Deals wrap: Doubts grow over BSkyB bid
The British government said it would take the closure of the Rupert Murdoch tabloid, News of the World, into consideration when deciding on the mogul’s bid to buy BSkyB.
Shares in Rupert Murdoch’s bid-target BSkyB slumped as the phone hacking scandal engulfing the media mogul’s empire pushed the controversial deal into uncharted waters .
Private equity firm, Carlyle Group, is in talks to buy Energy Capital Partners, a buyout company focused on power generation, electric transmission, midstream gas and other energy markets, the New York Times said.
A Visteon Corp hedge fund shareholder that will get two board seats soon has been pushing to break up the U.S. auto parts supplier, betting the company has more value in pieces than as a whole, people close to the situation said.
A booming IPO market and the lure of high returns kept China’s private equity sector humming in the first half , stoking fear of asset bubbles amid rising concerns over the quality of listed Chinese companies.
Deals wrap: A rock & roll deal
Warner Music Group is looking for potential buyers and Goldman Sachs is advising on the process, a source familiar with the matter said.
Rumbles of shareholder dissent show drugmaker Sanofi-Aventis is walking a tightrope as it enters the endgame in its drawn-out bid for biotech Genzyme.
A group of companies led by Brazilian beef processor JBS has arranged a financing package to bid for all or parts of Sara Lee, a source with direct knowledge of the situation told Reuters.
Success is bringing new headaches for small hedge funds, reports the NYT.
Deals wrap: Are hedge funds losing their sex appeal?
A small but growing number of hedge fund investors believe the once-free spirited portfolios, viewed as the cutting edge of finance for most of the past decade, have become too conservative and boring.
Goldman Sachs, responding to pressure from shareholders, regulators and clients, said it will disclose more information about how it makes money.
The U.S. power sector could be among the hottest industries for deals in 2011, but shareholders may not see the benefits for some time.
Simon Property walked away from a $4.5 billion bid to take over Britain’s Capital Shopping Centres.
“Monday Monday” lived up to its name yesterday and the deal bonanza heralds optimism for 2011 M&A.
Betting against takeover rumors pays 14 percent, reports Bloomberg.
Deals wrap: Betting on 3PAR
Trumping HP’s bid by 30 cents a share, Dell offered, and 3PAR accepted, $1.6 billion for the data storage company. *View article *View analysis on valuations taking a back seat to egos
Fast money is building in Potash Corp after BHP Billiton’s hostile bid, but the sheer size of the potential deal could limit the sway arbitrageurs and hedge funds have on the outcome, writes Michael Erman. *View article *Full coverage *View WSJ’s blog on how to say “Potash”
Take a look at what could be Phil Falcone’s riskiest trade ever in a special report on the hedge fund manager’s wireless broadband technology bet. *View article
The private equity sector is responding to the new world order: less capital, less profit and more accountability. *View Bloomberg article
In man vs machine, GLG has Manly appeal
Hedge fund firm Man Group apparently pricey deal to buy GLG Partners gives Man – the world’s biggest listed hedge fund — better access to the large and lucrative U.S. market. It also counts as a small win for the human race in its apocryphal war for investors’ funds with cheaper, faster and — many would argue — far more dangerous algorithmic trading machines known as black boxes.
The $1.6 billion cash-and-shares deal represents a heady 55 percent premium to GLG’s closing price on Friday. Clearly some investors are worried it’s a little too rich. It has so far driven the shares of Man – which had already lost about a fifth of their value since mid-April — down by a little more than 8 percent.
London-based Man has long been seen as needing more inroads into the U.S. market to take on industry leader JP Morgan. As Joel Dimmock and Laurence Fletcher report, the purchase would also dilute Man’s reliance on its flagship black box fund AHL which badly lagged rivals last year. What do you do when the black box fails? Start investing in people again.
It is easy to see how the deal would have to be rich, since it pays up for talent that it needs to keep interested. A $500 million payout in shares, locked up for three years, ensures GLG principals Noam Gottesman, Pierre Lagrange and Emmanuel Roman don’t take the money and run. The message needs to be just as clear for the rest of GLG’s talent, which has numbers for super-rich clients and sovereign wealth funds.
from Funds Hub:
Icahn’t: Carl says no time for blogging, too little interest
Could Carl's silence be golden?
Our favorite billionaire blogger and corporate raider Carl Icahn is safely avoiding writer's cramp. His Icahn Report, launched to much fanfare as a hub for corporate governance and reform, has not been updated since April 16.
Reuters caught up with Icahn this week to discuss his intervention in CIT's attempted rescue. The legendary investor threw a bomb into the lender's efforts to strike a debt swap deal with its creditors, and to stay in business through a reorganization plan, by offering a $6 billion loan. Asked about the lack of production on his blog, Icahn explained he's been fully engaged this year:
"I've been sort of busy. And right now, with the market up, there's not as much interest in corporate governance like the were was a couple of months ago. I've been so busy, with all these positions we've got. There's a lot going on."
So we checked with Damien Park, who runs activist research group Hedge Fund Solutions LLC and has his own blog tracking activist activity. He observed that Icahn has been seeking board seats at Enzon Pharmaceuticals, Biogen, Amylin and Lions Gate. He was actively pestering Yahoo late last year and has remained a vocal shareholder.
"He's been livelier than most of the larger activist investors this year. That's for sure," Park said.
More interesting, perhaps, is Icahn's point that corporate governance fades as an issue when markets rebound. He announced the blog in 2007 and finally posted his first item on June 2008, as the credit crisis worsened. Perhaps his logging off is a good signal.
from Joseph Giannone:
Alpha Male: Goldman’s Carhart is back
More than a year after one of the hedge fund industry's best known managers departed Goldman Sachs, Mark Carhart re-emerged at a hedge fund conference and told Reuters the big news: he is coming back. You heard it here first.
Mark and his longtime partner, Raymond Iwanowski, retired last March and with research head Giorgio De Santis. More than 12 years of strong performance from Goldman's quant team had made Global Alpha the bank's flagship fund and one of the industry's largest at its early 2007 peak of $12 billion.
But a year before Wall Street imploded, computer driven funds had their own debacle. Global Alpha plunged in August 2007 as stock prices gyrated and interest rates jolted, prompting investors to pull out billions. That after the fund had lagged the average fund in 2006. And so Carhart "retired" at the age of 43.
Back in April this year, market wags speculated Carhart would land at buyout firm KKR to help build an asset management business. Instead, Carhart tells Reuters he intends to start his own firm and launch an "exotic beta" fund with an initial pool of $1 billion. Of course, fund-raising is tough these days, but Carhart, who is sporting longer hair and a easier smile, says he has been spending some rare time off touring the U.S.A. in his Airstream motor home with his family. If he can manage to keep two kids happy while logging thousands of miles, raising ten figures should be doable.
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?
from Funds Hub:
A kick up the…
It seems the UK Treasury Select Committee's very public chastisement of the hedge fund industry in January has had some effect.
At the time, MPs zeroed in on the Hedge Fund Standards Board (HFSB) in particular and the relatively small number of funds it had signed up -- 33 in December -- even though these funds accounted for half of the European industry.
"You've attracted 20 fresh members in a year. If I was a trade union officer on recruitment I'd be sacked," quipped Committee member George Mudie at the time.
However, things have moved on and firms have been -- if not rushing -- at least moving slightly more speedily to sign up.
With regulation at a European and international level looming, hedge funds are increasingly aware of the need to be seen to be imposing best practice standards.
Last week the HFSB said 13 more funds, including Odey, TCI and Jupiter, had signed up.
And yesterday HFSB chairman Antonio Borges told me the body is targetting 100 funds by the end of the year.
from Funds Hub:
Dog Days at Cerberus
Embattled Cerberus Capital Management, a private-equity firm named for the mythological three-headed dog that guards the gates of Hades, has been overwhelmed by clients seeking to withdraw money from its $2 billion hedge fund, Cerberus Partners.
Website FINAlternatives said that fund investors representing 17 percent of the assets wanted to withdraw their money in December, the most recent month for which statistics are available. Now, with Cerberus's investments in Chrysler and GMAC going bad and unemployed investors needing to tap more funds, that figure may be heading higher.
Now, according to this Bloomberg report, Cerberus sent a letter to clients warning them that it could take "years" to meet all the redemption requests, which have stacked up since the firm imposed gates in December.
“The fund’s withdrawal requests have increased substantially since the fund suspended withdrawals, partially because investors wanted to reserve their place in line and partially due to individual investors’ own liquidity needs,” according to the letter.
Like some other hedge fund firms juggling the desires of investors who want their money, with trying to avoid gutting their portfolio with forced selling, Cerberus is considering creating a special vehicle that would carve out a portion of the fund to be liquidated and distributed to investors who want out. But it also says this would not be a quick fix. Company founder Stephen Feinberg told investors the fund “Would be managed by the general partner until it is fully liquidated, a process which might take several years.”
So should Cerberus investors lump the hedge fund in with its auto wrecks? The Cerberus Partners fund lost 16 percent in the year ended last November and fell 3 percent to $1.99 billion in the first two months of February, but at least one private equity investor tells us they are not any worse at this business than their competition. Still, investors may want to tread warily around the three-headed dog when Feinberg says the current mess has created some great new distressed debt opportunities for his firm.
Cerberus spokesman Peter Duda declined to comment for this post.
