DealZone

Deals wrap: Are hedge funds losing their sex appeal?

GM/IPOA small but growing number of hedge fund investors believe the once-free spirited portfolios, viewed as the cutting edge of finance for most of the past decade, have become too conservative and boring.

Goldman Sachs, responding to pressure from shareholders, regulators and clients, said it will disclose more information about how it makes money.

The U.S. power sector could be among the hottest industries for deals in 2011, but shareholders may not see the benefits for some time.

Simon Property walked away from a $4.5 billion bid to take over Britain’s Capital Shopping Centres.

“Monday Monday” lived up to its name yesterday and the deal bonanza heralds optimism for 2011 M&A.

General Growth battle intensifies

The battle for control of General Growth, owner of shopping centers across America, continues, as it  weighs two rival offers.

General Growth, which is trying to exit bankruptcy, will consider at a board meeting Thursday whether to postpone a key court hearing set for Friday as it continues talks with suitors Simon Property and Brookfied Asset Management.

It has asked Simon to increase its $5.8 billion bid. General Growth may also come back with a new counter0ffer on antitrust issues that could arise from a merger of the two largest U.S. mall owners.

Busy week ahead at the mall

General GrowthGeneral Growth has a busy week ahead.

The No. 2 U.S. mall owner is weighing a $5.8 billion takeover bid from its larger rival, Simon Property.

It postponed a hearing in bankruptcy court to Friday to have a ‘stalking horse’ bid approved, which would set the floor for future offers for the company.

General Growth has so far favored a bid led by Brookfield Asset Management to help it exit bankruptcy, choosing it over another offer by Simon to come in as a passive investor and buy a minority stake in the company.

DealZone Daily

The world’s largest credit and debit card processor Visa is to pay some $2 billion for CyberSource, a company that helps retailers take online payments, including from mobile phones. Analysts estimate Visa already has 45 percent of the online market and the deal will only serve to boost the company’s position further.

The U.S.’s largest mall owner Simon Property Group has sent a revised recapitalization plan to rival General Growth Properties, which would see new investors, including Oak Hill Advisers, RREEF, ING Clarion Real Estate Securities and Taconic Capital, inject a further $1.1 billion into the business. Simon has already offered to invest $2.5 billion for about a quarter of its rival, while  Paulson & Co — the U.S. hedge fund that bet against Goldman Sachs Abacus mortgage product — injecting a further $1 billion.

Film moguls Bob and Harvey Weinstein and backer Ron Burkle could reach a deal for Walt Disney’s Miramax Films within days, despite a rift between the Weinsteins and one of their minority shareholders Mark Cuban.

Simon takes fresh tack in bidding battle for bankrupt GGP

Simon Property says it is teaming up with hedge fund Paulson to try to unseat Brookfield Asset Management as the key investor in General Growth Properties as the mall operator angles toward an exit from its bankruptcy.

Simon said it and Paulson would invest $2.5 billion to help General Growth exit bankruptcy, and more importantly, make the investment without taking any warrants to buy shares like Brookfield and other investors have under its current plan, Paritosh Bansal reports.

Paulson, the $32 billion hedge fund run by billionaire investor John Paulson, has made a commitment to co-invest $1 billion with Simon. Sources told us earlier this week that Simon was looking at ways to revise its offer for GGP, which was seen getting hung up on anti-trust concerns.

Simon says … higher bid

BoxingHere’s the latest twist in the General Growth saga: Simon Property says it is weighing a higher bid for its smaller, bankrupt rival and could come up with something within a week.  That’s not surprising.

When General Growth investors Bill Ackman and Fairholme Capital Management stepped up with $3.3 billion of fresh capital to shore up a Brookfield Asset Management-backed plan, Simon lost the edge it had with unsecured creditors. The unsecured creditors stand to get cash under both plans now. And experts said it was too early for Simon to walk away from the game.

For now, Simon is trying to take away General Growth’s excuses for rebuffing its bid.

After listing, General Growth attracts more interest

Fairholme Capital Management and Pershing Square, two key investors in General Growth Properties, have offered to invest another $3.93 billion in the mall operator to help it emerge from bankruptcy. Shareholders, who only had access to the stock again on the NYSE as of last Friday, bid the stock more than 4 percent higher in early Tuesday trade.

While the new offer does not knock out the one from GGP rival Simon Property Group, it could get more support among unsecured creditors who would have had to settle for cash and stock under GGP’s original proposal.

The latest deal builds on one from Brookfield Asset Management but now allows General Growth to remain an independent company instead of selling itself to Simon, its largest competitor.

DealZone Daily

U.S. mall owner General Growth Properties is looking to raise up to $2 billion from public markets to buy its way out of bankruptcy and fend off an unwanted takeover approach. The U.S. no. 2 is facing pressure to enter talks with market leader Simon Property Group, itself in discussions with Blackstone about the private equity firm co-investing in its bid.

National Australia Bank said it is actively pursuing AXA Asia Pacific, despite concerns the takeover fight for the regional arm of the French Insurer was distracting it and hurting earnings growth. The competition regulator last week raised concerns over an NAB-AXA alliance, bolstering the position of rival AMP.

Meanwhile, AXA Private Equity has entered exclusive talks to buy the private equity assets of investment bank Nataxis, which hopes to sell them for 507 million euros, plus a premium to valuation based on performance.

Simon says: General Growth, negotiate!

You’d think a company in bankruptcy has few weapons with which to defend itself against a predatory buyer. But in the case of bankrupt mall operator General Growth, the tone that would-be salvager Simon Property has taken makes it sound as if the court-protected business has some leverage. That’s because it does.

Late on Wednesday, Simon threatened to walk away from its $10 billion bid if General Growth did not begin talks soon. Chief Executive David Simon accused General Growth of “inappropriately speculating with creditors’ money”. Simon wasted no time getting nasty. It only made its offer to General Growth public the day before.

The offer also came a week before General Growth would have had to apply for a six-month extension period giving it the exclusive right to come up with a plan to emerge from bankruptcy. So where does General Growth’s management get the chutzpah to hold off buyers when creditors have already arrived to claim the company’s assets?

The afternoon deal: Simon says …

GENERALGROWTHSimon Property’s $10 billion offer for General Growth is seen as a pre-emptive strike coming just a week before a bankruptcy court hearing where General Growth was expected to ask for more time to offer its own plan for emerging from bankruptcy, writes Reuters’ Ilaina Jonas and Helen Chernikoff.

Here are some different takes on the deal:

*  “Due to synergies between Simon Property and General Growth, we feel it is unlikely a competitor would be able to bid more than SPG, so we expect that other meaningful bids are unlikely,” Rich Moore, managing director at RBC Capital Markets in Solon, Ohio, in a note to investors. – Bloomberg

*  “Ever since General Growth entered bankruptcy-court protection last year, potential buyers have been circling the mall owner’s premium retail assets,” Michael Corkery writes in the WSJ’s Deal Journal. The blog lists Brookfield Asset Management and Vornado Realty Trust as potential bidders.