DealZone

from Breakingviews:

JJB eyes Sports Direct with cash call

Why put cash into JJB Sports? Investors are apparently so keen to do so that the sports retailer expects to raise 100 million pounds -- more than its market capitalisation of just over 80 million.

At first glance, it is hard to see why. Britain is in the grip of a deep recession and only a few months ago, JJB was flirting with administration. Its shares have fallen 90 percent in two years. If that wasn't enough, the company is embroiled in price fixing probes by the OFT and the Serious Fraud Office.

Clearly, JJB has benefited from the effect of a buoyant stock market into which investors still seem keen to put cash. As a stock that has fallen a long way, JJB is more likely to rebound once doubts about its future are lifted.

But there's more to it than that. Many investors are trying to pick those that will emerge strongest in their sectors. They are backing JJB because they see it as a potential winner.

Under executive chairman David Jones the group is positioning itself to sell high quality sports clothing and equipment -- in contrast to Mike Ashley's Sports Direct discount chain, the UK's largest sports retailer.

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.

Signs of sovereign life

ubs.jpgSovereign wealth funds were thought to be nearly extinct sources of capital for the crumbling western banks. But life finds a way. The Government of Singapore Investment Corp, one of the world’s biggest sovereign wealth funds, said it would subscribe to UBS‘s rights issue. A GIC spokeswoman declined to provide the value for the transaction but said it currently owns 0.4 percent in UBS common stock. It controls 9.54 percent of the voting rights in UBS. The fund invested 11 billion Swiss francs ($11 billion) in mandatory convertible notes in UBS last December, after the bank’s U.S. housing crisis losses. In January, GIC invested $6.88 billion in Citigroup. Its sister fund Temasek Holdings pumped $5 billion into Merrill Lynch. GIC says on its website that it manages well above $100 billion but some analysts estimate the figure is closer to $300 billion.

The U.S. Federal Reserve Board approved Bank of America Corp‘s acquisition of Countrywide Financial Corp, the nation’s largest mortgage lender. Bank of America agreed in January to pay $4 billion for Countrywide, a California-based firm that helped fuel a multi-year housing boom that went bust when risky loans to shaky borrowers began to fail. In a statement, the federal regulator said it considered many comments for and against the bank buyout and “has considered carefully the financial factors of the proposal.” The Fed also said that it vetted about 770 individual comments on the proposed takeover and the views of many other stakeholders.

Applied Materials has approached beleaguered Dutch semiconductor equipment maker ASM International to buy a significant part of its business for $400 million to $500 million. Shares in ASMI jumped as much as 23 percent to an eight-month high after the company said its U.S. rival had expressed interest in two of its businesses that make machines to deposit thin films of materials on silicon wafers. ASMI, which is locked in a dispute with activist investors who are trying to sack its chief executive, said a divestment would have major implications for its strategy.