DealZone

Adelson splashes the pot in Asia

Sands China’s weak debut in Hong Kong - a first-day drop of 10 percent – was the fourth-worst launch on that market this year, but came as little shock to analysts who were betting against the Asian gambling play. Rival Wynn Macau is down 5 percent since listing in October.

Sands China’s $2.5 billion IPO wasn’t helped by the default tremors kicked off by Dubai, which has helped to expose a whole new area of risky bets in emerging markets.

“The fever for casino stocks is seen to be over now,” said Patrick Yiu, a director at CASH Asset Management. “Investors are worrying about the industry outlook, especially keen competition, when more casinos are ready for business.”

“We’re not in this for a day’s trading, we’re in it for the long term,” Las Vegas Sands CEO Sheldon Adelson said.

So is this a time to hold ‘em, fold ‘em, walk away or run? Adelson clearly is not counting his money while sitting at the table, and there will be many who argue that betting against the Chinese appetite for gambling never made anyone rich. More likely, fund managers will look for more attractive price points to place their bets, while Sands plays with house money.

General Motors staff has IPO dreams

CHINA-AUTOS/Ever wonder how General Motors is holding onto its top talent? 

After a traumatic bankruptcy and series of federal bailouts, the company still owes billions of dollars to the U.S. and Canadian governments. It lost $1.2 billion in its latest quarter, and only sees a slight uptick in auto sales next year.    

The days of banner-year profits and bonuses must seem far off for GM’s executives and finance staff.  GM’s Chairman has already said pay caps imposed on companies by the U.S. government’s pay czar make it tough to hire executives.

While other job opportunities are obviously limited in Detroit, and they may have nowhere better to go in the industry,  the company’s plans for a 2010 IPO has emerged as a key staff retention tool, one of its top executives said on Tuesday.

Keeping score: Asian IPOs, Oz M&A, tech debt

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

ASIA PACIFIC IPOs UP 65%
Malaysian telecommunications provider, Maxis Bhd, raised $3.3 billion in an initial public offering this week, the biggest IPO from a Malaysian issuer on record.  Asia Pacific offerings account for 59% of global IPO activity this year and total $49.2 billion for year-to-date 2009, a 65% increase over last year at this time.
In Asia, China International Capital Co, CITIC and UBS account for nearly 35% of overall IPO activity, by proceeds, this year while Morgan Stanley has lead managed the most offerings in the region, with 14.

AUSTRALIAN M&A TOTALS $130.9 BILLION
Australian target M&A activity totals $130.9 billion for year-to-date 2009, a 58% increase over the year ago period.  Deal activity in the materials, financial and industrial sectors accounts for nearly 80% of overall activity.
A bid for Melbourne-based Transurban Group, an operator and developer of electronic tolling systems by an investor group comprised of Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan for $8.9 billion topped the list of biggest deals this week.

HIGH TECH CORPORATE DEBT UP 34%
This week’s $4.9 billion bond offering from Cisco Systems brings year-to-date corporate debt volume in the high tech sector to $56.9 billion, a 34% increase over last year.  Ranking as the largest US high tech bond for year-to-date 2009, it also marks Cisco’s second debt offering this year.
As the global credit markets have rebounded this year, a number of high technology names have stepped into the bond market with multi-billion offerings including Hewlett-Packard, Oracle, Microsoft and IBM.

DealZone Daily

Poland’s top utility PGE jumped 13 percent at its market debut on the Warsaw bourse today. The IPO, at $2.1 billion, is Europe’s biggest this year.

And IPO flows from Asia continue — South Korea’s No. 2 insurer Korea Life Insurance may raise around $2 billion in the country’s biggest IPO since Lotte Shopping’s $3.8 billion listing in 2006.

For more on deal-related stories from Reuters, click here.

And here’s some picks from the papers:

* Intel, the world’s biggest chip maker, is planning to participate in bids invited by Indian state-owned telecom equipment maker ITI Ltd. to set up joint ventures, the Business Standard reports.

DealZone Daily

Talk continues to swirl around Kraft’s potential bid for Cadbury. On Thursday Reuters reported a top shareholder in the British confectioner would accept 820 pence a share — well above Kraft’s first cash and shares offer but only a little higher than where the stock has been trading in recent days.

Activist investor Nelson Peltz, who has stakes in both Cadbury and Kraft, may now become a factor, a report says. A contractual obligation not to criticise Kraft’s management comes to an end on Friday. Will fireworks ensue when the gag is removed?

Other deal-related news in Friday’s papers include:

* BP Plc (BP.L) has had talks with Ghana’s national oil company about a possible joint bid for Kosmos Energy’s stake in the huge Jubilee oilfield off the coast of the country, Bloomberg said, citing two people familiar with the matter.

DealZone Daily

Cisco Systems plans to buy advanced wireless equipment maker Starent Networks Corp for $2.9 billion to boost its product offerings as phone carriers build out next generation networks, Reuters reports.

In other stories on Wednesday:

Royal Bank of Scotland Group is considering a government-backed plan to give up all 312 of its RBS-branded branches in England and Wales in a move to satisfy European authorities, the Financial Times says.

Las Vegas Sands, which is seeking to raise up to $2.5 billion by listing its Macau assets on the Hong Kong stock exchange, could launch the initial public offering by late November, the South China Morning Post reports.

Wynn’s sure thing in China

Nobody ever got poor betting on Chinese demand for gambling, though the big players in Macau have seen a few busted flushes along the way. With more than a billion fatalists eager to hit the tables, and only one place to do it (Macau is China’s only legal gambling venue), it’s not hard to see the case that Wynn Macau and Las Vegas Sands are making for Hong Kong investors. It’s the same story Hong Kong and Macau magnate Stanley Ho has made for decades.

Wynn Macau’s $1.63 billion Hong Kong IPO, the sixth-largest in the world this year, was considered rich, despite the hype and that “sure thing” ring. After all, the colony is covered with half-finished projects and other remnants of the last time this too-good-to-be-true investment turned out to be what it was.

Wynn Macau shares ended 6 percent higher on Friday, valuing the casino giant at $6.9 billion. The solid debut bodes well for rival Las Vegas Sands, which plans to raise up to $2 billion in a Hong Kong offering for its Asia assets, most notably in Macau.

DealZone Daily

On a quiet day for deals, worth noting that Royal Bank of Canada joins the growing queue of prospective buyers of a wealth management business. Read the exclusive Reuters story here. On a larger scale, Wynn Macau‘s strong debut in Hong Kong ups the ante for Europe, where bookbuilding for the IPO of Poland’s PGE starts next week. For more deal-related news from Reuters, click here.

Elsewhere:

* The U.S. Federal Deposit Insurance Corp is questioning the positive conclusions given to Citigroup Inc’s management team in a government-mandated review in the aftermath of the financial crisis, the Wall Street Journal says.

* A management buyout of Malaysia’s national carmaker Proton Holdings could be possible, the firm’s chairman was quoted as saying in the Star newspaper.

DealZone Daily

HSBC (0005.HK) (HSBA.L) has resumed talks with Royal Bank of Scotland (RBS.L) over the purchase of the remaining retail and commercial units that bailed-out RBS owns in Asia, according to sources. RBS is selling its remaining retail and commercial banking units in China, India and Malaysia, worth ” a few hundred million” dollars. The talks are in early stages as Standard Chartered’s exclusive negotiations with RBS only ended within the past week or so.

For these stories and more deals-related news from Reuters, click here.

Here’s what we found in Thursday’s newspapers:

* Part-nationalised British lender Lloyds Banking Group (LLOY.L) is sounding out investors about a 15 billion pound ($23.81 billion) rights issue to help it avoid a government scheme to insure it against credit losses, The Financial Times reports.

* Chinese metals conglomerate Chinalco may be interested in acquiring a stake in UC RUSAL when the indebted Russian aluminium giant lists shares in Hong Kong, the Vedomosti business daily cites two banking sources as saying.

Deals du Jour

At long last, Europe may see its first sizeable IPO: Aviva says it expects to complete the flotation of its Dutch unit, Delta Lloyd, in November. And shares in Telenor jump 15 percent after it settles a long-standing row with Russia’s Alfa Group. The agreement will involve a pooling of assets between the two companies. For these and other stories on deals, click here.

And here’s what we found of interest in other media today and over the weekend.

Shoprite Holdings Ltd chairman Christo Wiese is looking to swap some or all of his stake in Africa’s biggest grocer for stock in furniture maker Steinhoff, a South African newspaper reports.