DealZone

Deals wrap: Adjusting to Basel rules

Photos of yuan (top) and U.S. dollar banknotes are displayed at a money exchange in Hong Kong September 13, 2010.  REUTERS/Bobby YipNew capital rules set by global regulators brought relief to the world’s banks on Monday, giving weaker lenders time to raise funds and freeing the strong to lift dividends or hit the acquisition trail. *View article *View Basel III factbox *View analysis on the impact

Marking HP’s second major deal since the departure of Mark Hurd as chief executive, the company said it will buy security software firm ArcSight Inc for $1.5 billion in cash. *View article *View reaction from Seeking Alpha

Frozen out of deals for two years by a lack of credit and a stormy economic outlook, buyout firms are now back fighting over assets, keen to spend hundreds of billions of dollars before time runs out and they have to give money back to investors. *View article

It’s an open question whether General Motors Co’s IPO will be the largest U.S. offering ever, but it is already one of the most contentious. *View article

Deal wrap: Talking defense

Israeli Air Force F-15 fighter jets fly in formation with a Boeing 707–320 aerial refueling tanker during a ceremony for newly graduated pilots at the Hatzerim Air Base, June 28, 2010.  REUTERS/Baz Ratner Boeing defense chief Dennis Muilenburg startled many this week when he told the Reuters Aerospace and Defense Summit he would not rule out the possibility of a large-scale merger. Is he sending up a trial balloon to gauge the Pentagon’s reaction? *View article *Read more at the Aerospace and Defense Summit

Two of the world’s biggest private equity firms, KKR and TPG, are potentially interested in Foster’s wine business, but they are not currently working on rival bids, sources told Reuters.  Earlier this week Foster’s rejected a $2.5 billion offer for its wine business as too cheap. *View article

The SEC is investigating investment advisory firms that channel investors’ money into hedge funds, the Wall Street Journal reported. *View WSJ article

Deals wrap: Betting on 3PAR

Chips and cards are shown on a poker table at the Rio hotel-casino in Las Vegas,   REUTERS/Las Vegas Sun/Steve Marcus 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

Deals wrap: Who’s interested in AIA?

The logo of the AIA tower is seen at its entrance in Hong Kong July 13, 2010.REUTERS/Tyrone Siu AIG has started talks with potential investors to sell stakes in its Asian life insurance business AIA ahead of AIA’s planned IPO, sources say. *View article* In a related matter, Prudential says its failed bid for AIA, which collapsed in May, will cost less than first expected. *View article

General Motors posts its biggest quarterly profit in six years a day ahead of an expected IPO filing. *View article *View article

Private equity firms that benefited from Dubai’s boom years are now looking to the emirate for reforms needed to revive the sector, writes Nicolas Parasie and Dinesh Nair. *View analysis

Deals wrap: Buying into GM

General Motors auto dealership employees drive brand new Chevrolet cars at a parking lot in Shenyang, Liaoning province, November 7, 2009.  REUTERS/Sheng LiIs a company that lost $88 billion from 2005 through the first quarter of 2009 and wiped out equity investors when it declared bankruptcy last spring worthy of another bet? The General Motors IPO is going to be a tough sell. *View article

Take a big picture look at the markets through the eyes of six European private equity executives. *View Financial News article

Internet telephony firm Skype filed with U.S. regulators to raise up to $100 million in an initial public offering of American depositary shares.  *View article

Deals wrap: Who’s tuning into RadioShack?

A Radio Shack store is seen in Cambridge, Massachusetts April 28, 2008.  REUTERS/Brian Snyder    Blackstone Group and TPG Capital are unlikely to continue to pursue a possible bid for RadioShack, two sources familiar with the situation said.  The electronics company had a handful of private equity firms circling but interest appears to be waning.    *  View article

Private equity firms have incentives both to buy and sell right now. Pressure is on to invest billions of dollars raised in 2006-2008 as the end of those funds’ investment periods approach, while funds are also keen to sell or take public existing investments to reward under-pressure investors.  *  View article

Hedge funds have cut back their bets over a volatile summer for financial markets, worried that big swings in investor sentiment are playing havoc with their carefully-researched trades.  * View article

The morning deal: Selling Abraxis

A sign for the NASDAQ Market site is seen in New York's Times Square, February 8, 2010. REUTERS/Shannon StapletonBiotechnology company Celgene has agreed to acquire Abraxis BioScience for $2.9 billion in cash and stock. Abraxis shared are up 20 percent on the news and that’s got to make Abraxis Chairman Patrick Soon-Shiong happy, he owns over 80 percent of the company’s outstanding shares.

Activity in the red-hot potash sector: the Belorussian government hopes to raise up to $7 billion from the sale of a minority stake in potash producer Belaruskali to help replenish state coffers.

Shares in BP jumped 8 percent today, helped by bid talk and optimism that the worst may be over for the stock as the company comes closer to halting the massive oil leak from its Gulf of Mexico well. Read about the fantasy M&A story here.

Facebook is more than just a pretty face

The social networking website of Mark Zuckerberg (pictured) is now worth $23 billion, close to the value of online shopping website Ebay, based on the price of a recent stock purchase by private equity firm Elevation Partners. Elevation purchased $120 million in Facebook stock from private shareholders, valuing the company at $23 billion, a person familiar with the matter told Reuters on Monday.

A valuation of that amount makes Facebook larger than Yahoo, which has a market capitalisation of $20 billion, and edging closer to the size of Ebay, at $27 billion. Still, it is a fraction the size of Google ($150 billion). Facebook’s backers include Digital Sky Technologies, Microsoft Corp Corp, Hong Kong tycoon Li Ka-shing and venture capital firms Accel Partners, Greylock Partners and Meritech Capital Partners.

Citi’s risky businesses

Assume for a moment that Citi is successful in raising $3 billion for private equity and hedge funds, and assume for another moment that the U.S. government takes away these businesses away from Citi, as legislators are threatening. What happens next? Why is Citi building a business it may soon have to sell? And why would any investor give money to a hedge fund manager that may have to sell its business?

Investors will not likely care about whether the bank will sell its alternative asset management business. Customers care most about who is investing their money day to day, not which corporate logo is on the stationery. And if Citi has to sell the business, it will get a slightly higher price for a business that has an extra $3 billion under management.

Citi is still walking into a mine field by building a business that lawmakers are explicitly trying to keep banks out of. One thing for sure–if Citigroup is building alternative asset management businesses, nobody can accuse it of being under the thumb of the government, which still owns billions of the bank’s shares.

Kroll’s former boss finds his quarry

You couldn’t accuse former Marsh & McLennan CEO Michael Cherkasky of wandering too far from his knowledge base. Though he may not have been able to shine at Marsh, he seems to have not only found kindred spirits in private equity firm Providence Equity Partners, but he may have gotten them a steal for his old firm, financial intelligence company Kroll.

Six years ago, Marsh bought Kroll for $1.9 billion. Today Altergrity, headed by Cherkasky and backed by Providence Equity Partners, said it would pay only $1.3 billion – cash, mind you – to take the investigative franchise private. Marsh wrote off more than $850 million in goodwill, so analysts note that the insurer could register a profit from the sale. It’s not as if Cherkasky had to come in with some sweep-them-off-their-feet offer. Marsh has had Kroll on the block for at least a month.

Over the years, Kroll has hired plenty of investigators, former police and intelligence officers, and has taken on its fair share of journalists as well. It operates in that colorful space between suits and sleuths. While not an unnatural business for an insurer to own, analysts seem happy with Marsh’s steps to streamline and strip away the non-core asset, so they say it’s a good deal for Marsh to get Kroll off its books.  For Kroll, private equity leadership – particularly as familiar as it feels with Cherkasky at the helm – could be just the kind of management needed to build operations in the shadows.