DealZone

KKR’s latest listing missive

nysePrivate equity giant KKR’s latest document on its lengthy route to becoming a publicly-traded company makes the intriguing suggestion that it could list on either the Nasdaq or the NYSE.  

The idea all along has been for KKR, after listing on Euronext through buying its Amsterdam-listed fund KPE, to potentially list on the NYSE, so switching to Nasdaq would be quite a suprise.

Press releases up to now have pinpointed the NYSE as KKR’s possible future home. However, today’s document is a filing to unitholders rather than a statement to the press, so it is more formal and looks at all possible eventualities (such as a long section on risk factors).

[extract] Following the consummation of the Combination Transaction, KPE and KKR will have the right to require that the other use its reasonable best efforts to cause interests in the Combined Business to be listed and traded on the New York Stock Exchange or The NASDAQ Stock Market at a future date. If such listing occurs, KPE would make an in-kind distribution of such interests to KPE unitholders, subject to applicable laws, rules and regulations, KPE units would cease to trade on Euronext Amsterdam and KPE would subsequently be dissolved and delisted from Euronext Amsterdam.

The NYSE and Nasdaq have been arch rivals for years and compete tooth and nail for listings. We’re betting this one won’t really be up for grabs though, and that KKR will settle next to rival Blackstone on the Big Board.

from Summit Notebook:

How to gum up an exchange merger: salt water

It's a puzzle M&A bankers and corporate executives have been trying to solve for years: how far from your home market can an acquisition take place and ultimately stumble over cultural differences? It's a question that looms large as quintessentially Italian automaker Fiat prepares to swallow up Chrysler -- inventor of the K-car and the minivan -- and which reportedly haunts St Louis-based employees of Anheuser Busch in the aftermath of their company's takeover by the penny pinching Belgians and Brazilians at InBev.

Gary Katz, CEO of Deutsche Boerse unit International Securities Exchange, insisted during his appearance at the Reuters Exchanges and Trading Summit that all has been sweetness and light since the Germans assumed control of the upstart American options exchange and that there has been "nearly zero turnover" since the takeover.

But Thomas Kloet, Chief Executive of Canadian exchange powerhouse TMX, was one of several executives at the summit who insisted that cross border mergers can often be a recipe for disaster and that the ideal mergers are "domestic roll-ups" like CME Group's takeover of Nymex and the Chicago Board of Trade or indeed TSX Group's takeover of the Montreal Exchange, which created TMX.

from Summit Notebook:

Nasdaq president to finance companies: come hither

A fertile planting ground for tech, biotech and even some energy offerings, Nasdaq OMX has historically struggled to lure listings in some other areas, notably financial services.

Now, that could be about to change, Nasdaq OMX President Magnus Bocker said at the Reuters Exchanges and Trading Summit. As Nasdaq looks for ways to attract new listings and end a virtual drought in IPOs, it sees financial services firms as one of the most promising areas.

That Nasdaq would at least be hoping to narrow the gap in financial services listings with NYSE, the traditional ruler of the space, is not as out of left field as it might sound.

Rosetta Stone IPO shows it pays to leave ‘em wanting more

What a difference a day makes.

A day after college operator Bridgepoint Education Inc had to settle for a shrunken IPO, language instruction company Rosetta Stone actually priced its $112.5 million IPO above its estimate price on Wednesday, and has followed that up by rising 42 percent in its inaugural trading day Thursday. But that “pop” might be a deliberate marketing decision, rather than a major mispricing of the deal.

Much of Rosetta’s success may have had to with the small size of float– 6.25 million shares– which led analyst Ben Holmes of Morningnotes.com to say the IPO had “built it in demand.”

And any company hopes to price its deal to get a first day “pop” to reward investors for their risk-taking. IPO Boutique‘s Scott Sweet said that Rosetta Stone’s enormous first day pop — if it holds, it will be the largest since Intrepid Potash‘s 58 percent starting jump nearly a year ago — will ingratiate investors and make raising additional money through a follow on easier. (Rosetta Stone CEO Tom Adams told Reuters on Thursday the company had no plans now to raise more money.)

U.S. still a draw for foreign IPOs

nasdaq11Stock exchanges in emerging markets have grown more sophisticated in recent years, giving Nasdaq and the New York Stock Exchange a run for their money in attracting new overseas IPO listings.

Yet last week, Chinese video games maker Changyou.com, made a spectacular debut on the Nasdaq, and on Monday, Israeli tech company N-trig, which makes pen and touch devices for notebook computers, said it was planning a Nasdaq listing in 2010.

But why would Changyou.com, for example, with virtually no sales to speak of in the U.S., list there, rather than on a Chinese exchange?

NY AG Cujo

New York Attorney General Andrew Cuomo is barking loudly at execs of American International Group, threatening “significant legal ramifications” if they take bonuses for a job well done at the bailed-out insurance behemoth. Expect him to start bearing his legal teeth soon: fines, legal costs, penalties …
 
“Please inform my office as soon as possible what AIG plans to do with respect to executive bonuses and pay raises this year,” Cuomo wrote in a letter to the company’s chief executive, Edward Liddy. “As you know, I believe AIG’s decision has significant legal ramifications.”
 
So there’s the threat. Now what?
 
Remember Dick Grasso? The state of New York sued the former head of the NYSE over his nearly $200 million pay package. Grasso said he would give back $48 million in deferred pay if he got an apology. Four years later, it’s still not clear just how much he has been forced to give up.
 
In 2004, Grasso’s sin was a sign of the times. The supply of corporate largess far outstripped demand for outrage as the credit and housing booms made us giddy. Now, with taxpayers coughing up $700 billion in relief for the financial sector and around $150 billion being thrown into the black hole at AIG’s credit default swaps department, law enforcement can be expected to take on this compensation creature with a sharper set of teeth. Smelling their own blood, chiefs at Goldman Sachs and UBS have sworn off bonuses.
 
Deals of the Day:
 
* Struggling British sweets-to-CDs retailer Woolworths is in early-stage talks to sell its high-street business for what one industry source said was likely to be for a nominal sum.
 
* UniCredit’s Bank Austria is close to selling for 1.2 billion euros ($1.5 billion) profit-sharing rights in a vehicle that owns stakes in Austrian industrial firms, the Der Standard daily reported. 
 
* United Internet has dropped its bid for rival freenet’s DSL broadband business, the company said. 
 
* China’s Bank of Communications wants to invest $100 million in Taiwan’s Taishin Financial, as China and Taiwan work on a deal to boost investment between their financial sectors, media reported. 
* Western Mining said it plans to purchase a 39 percent stake in Xining Special Steel Group from its parent for 1.1 billion yuan ($161.2 million).

(PHOTO CREDIT: Brendand McDermid/Reuters)

Bye-bye cool tickers? DNA and BUD head for bin

budweiser-factory.jpg

Pity the guys who dreamt up two of Wall Street’s coolest tickers — DNA and BUD — both of which look set to be consigned to the dustbin of history.

Genentech grabbed the three letters synonymous with biotechnology by being in on the ground floor of the gene revolution. Anheuser-Busch was lucky enough to have a beer brand known everywhere by one syllable. Now both look doomed. dna-global-logo.gif

Genentech faces a $43.7 billion bid from Roche for the 44 percent of the Californian biotech group that it doesn’t already own. Genentech is expected to succomb, albeit after a possibly sweetened offer. Anheuser has already agreed to a $52 billion takeover by InBev.

Grasso’s curse

grasso.jpgThe antagonists of former New York Stock Exchange CEO Richard Grasso haven’t fared well in the five years since he was ousted, amid a public outcry over his $187.5 million compensation package.

As the legal battle over his payday heads to the New York Court of Appeals, former Attorney General Eliot Spitzer’s reputation is in tatters, and many of the NYSE board members who forced Grasso out are now out of work themselves.

Tuesday’s trial could be a showstopper for Wall Street, reliving an embarrassing drama for the NYSE. Potential witnesses include U.S. Treasury Secretary Henry Paulson and ex-Bear Stearns chairman James Cayne, who were both members of the NYSE’s compensation committee — as well as Spitzer himself.

The history of the NYSE, in dance

If writing about music is like dancing about architecture, to what can we compare the difficult task of dancing about a stock exchange?

The Buglisi Dance Theatre took on the challenge this week, performing “Under the Buttonwood Tree.com (A Frenzy on the Floor)” on a stage in front of the New York Stock Exchange’s American flag-covered facade.

It began with a gold-bedecked woman, who rang a gong (a la the opening bell) while flanked by a squad of men carrying green flags. The dance company then performed a 35 minute history of the NYSE, from the Buttonwood Agreement of 1792 to the end of World War II. That’s right: no mention of the Dick Grasso years, or haunting pas de deux to represent disappearing floor traders.