DealZone

Deals wrap: Nasdaq getting hostile with NYSE

Chief Executive Officer of The Nasdaq Stock Market Inc. Robert Greifeld speaks at a news conference at the Nasdaq headquarters in New York, April 22, 2005.

Nasdaq OMX Group Inc, not wanting to be left out in the cold of the global mergers frenzy among exchanges, is closer to making a counter-bid for NYSE Euronext, a source familiar with the situation said. Nasdaq would finance the transaction with up to $5 billion in debt and would most likely have to sell Euronext’s Liffe derivatives business to IntercontinentalExchange Inc to raise the needed capital.

If successful, such a counter-offer would redraw the global exchange map and thwart yet another merger plan by Germany’s Deutsche Boerse.

Even though the Nasdaq group has several options to go forward with a bid for NYSE,  Michael J. De La Merced of The New York Times thinks Nasdaq will find itself hard pressed to stay alone as its competitors bulk up through a series of mergers.

Private equity firm Apollo Management is expected to set terms today for its long-expected initial public offering that could be up to $500 million in size, four sources familiar with the situation said.

A listing would see Apollo join Kohlberg Kravis Roberts & Co and Blackstone Group in becoming one of the few publicly-traded private equity firms.

Goldman builds exposure to China insurance market

Having taken a nibble at the Chinese insurance market in December, helping number three life insurer China Pacific Insurance list a $3.1 billion IPO in Hong Kong in December, Goldman Sachs is taking a bigger bite at that most promising and enticing of global investments, China’s financial products industry.

Sources tell us that an investing arm of Goldman is in the final stages of an agreement to buy AXA’s $1.05 billion stake in Taikang Life, China’s No.4 life insurer. The deal would allow France’s AXA to shed a non-core asset, while granting Goldman a piece of China’s growing insurance industry, report George Chen and Michael Flaherty.

Several private equity firms, including Kohlberg Kravis Roberts & Co and Blackstone Group, competed in the Taikang auction, as did Singapore’s Temasek Holdings, sources have told them.

DealZone Daily

Tuesday’s top stories:

* Ireland’s government is poised to take control of a much bigger chunk of the financial sector than initially planned.

* South Africa’s Investec (INVP.L) announces a recommended offer to buy the remaining shares in British firm Rensburg Sheppards (RBG.L) for 412 million pounds ($619.4 million) to boost its wealth and asset management activities.

* Private equity firms Kohlberg Kravis Roberts & Co (KKR.AS) and CVC have teamed up to bid for Interactive Data Corp (IDC.N), yet another private equity team formed in recent weeks as an auction for the financial market data provider progresses, two sources familiar with the matter say.

Where’s the bull? Blackstone’s IPO plans

Time to reap some green shoots? Private equity firm Blackstone plans to list up to eight of its portfolio companies, aiming to make more hay from improved stock markets. Rival Kohlberg Kravis Roberts & Co’s Dollar General filed for an initial public offering of up to $750 million in August, and KKR is considering others, sources previously told Reuters.

Blackstone is positioning one company — hospital staffing firm Team Health — for an IPO and evaluating the potential for seven others, a source tells us, citing a letter sent from Blackstone to investors. The letter also says Blackstone is in the process of selling five companies outright, which it sees generating aggregate proceeds of $2.8 billion.

One of the exits is Kosmos Energy’s Ghanaian oil interests, the source who has the letter said. Sources previously told Reuters that Exxon Mobil had agreed to buy Kosmos Energy’s stake in the Jubilee field. Kosmos is backed by Blackstone and Warburg Pincus.

KKR’s imagination

Nobody can question Eastman Kodak‘s intention in raising some $700 million. Getting a commitment from private equity firm Kohlberg Kravis Roberts to buy up to $400 million of its debt is also a perfectly logical step for the old-economy stalwart as it lumbers into the digital age. What KKR is thinking is another matter.

KKR says the investment reflects its belief in Kodak’s strategy. They’re also getting warrants in Kodak to purchase up to 53 million shares of its common stock. The Wall Street Journal says KKR could end up owning close to 20 percent of the company.

The 24/7 Wall St blog notes that the fall in Kodak’s share price following the news shows the market isn’t blindly convinced of KKR’s intelligence. But Kodak’s bonds got a boost, if for no other reason than there’s a buyer out there.

Chairgate: the Economist recants

The Economist has published a correction to its earlier report that Henry Kravis, KKR’s archetypal “Barbarian at the Gate”, may have stumped up 22 million euros for a chair once owned by Yves Saint Laurent:

“Our report suggested that Henry and Marie-Josée Kravis may have been the purchasers of an early 20th-century chair designed by Eileen Gray. Mr Kravis assures us that neither he nor anyone in his family bought the chair in question. Our apologies to all concerned,” the free-trade-loving weekly says.

Our post yesterday on the Economist’s original story prompted some acerbic follow-ups elsewhere in the blogosphere and a firm denial from Kohlberg Kravis Roberts HQ.

UPDATED: KKR denies an auction victory

(This updates an earlier post with KKR’s denial).

Maybe the days of private equity paying eye-watering prices at auction really are over.

Kohlberg Kravis Roberts has firmly denied a report in the Economist’s books and arts section saying that, despite the deep economic funk, buyout doyen Henry Kravis was behind the “startling” $28 million purchase of a vintage chair at the recent Yves Saint Laurent sale in Paris:

“Who, in the current climate, were the buyers?” the Economist asked. ”Few prices were more startling than the €22m commanded by an early 20th-century chair designed by Eileen Gray. Cheska Vallois, an Art Deco dealer, won the work in the room; it is thought that she did so on behalf of Henry and Marie-José Kravis, who had already acquired examples of Gray’s work from Ms. Vallois at the Biennale des Antiquaires in Paris.”

IPO by U.K. buyout firm an ocean apart

It’s enough to make Leon Black, Henry Kravis and Stephen Schwarzman jealous.

UK-based buyout firm Resolution, founded by entrepreneur Clive Cowdery, has not only launched a rare IPO – it raised £600 billion ($889 million) last week- but the deal enjoyed a 15 percent “pop” in its trading debut on the London Stock Exchange Wednesday.

The buyout fund will target U.K. insurance and asset management companies in deals in the range of £3 to 5 billion. And that may be part of why the IPO did well: The U.K. insurance sector has underperformed the market with companies contending with lower valuations.