The Afternoon Deal: Follow the money

currencyFollow the shifting money patterns into Asia and the secondary market at the Reuters Private Equity and Hedge Funds Summit. Later this week look for exclusive interviews from top management at Blackstone, 3i and THL.

Private Equity and Hedge Funds Summit:
-Asia set to grab a 5th of hedge fund flows
-PE secondary deals seen picking up
-Hedge funds, private equity face profit squeeze

Deals from the Web:

‘Golden Era’ May Elude Private-Equity Investors as Prices Rise (Bloomberg)
“Private-equity firms tell investors that the years following recessions offer the best opportunity to make money. This time may be different.” – Bloomberg

Four Thoughts About the Return of Merger Monday (WSJ)
“So, what does today’s flood of deals say about the economy, the state of M&A and future deal making?” – WSJ

MSCI Is Still on the Hunt for an Index Deal (NYT)
“When asked if MSCI, known for its international and commodity indexes, had the capacity (and desire) to make more deals after absorbing RiskMetrics, Mr. Fernandez was unequivocal in his response.” – NYT

The afternoon deal: Trend spotting

DROIDSpotting a trend is an essential skill for M&A reporters. Is the sector consolidating? Collapsing? Where will the next deal be? Following is a list of M&A stories and the trends they may foretell.

More takeovers likely for hard-hit satnav firms
“Following several takeovers, remaining players in the satellite navigation sector are rethinking strategies and some are set to sell out under pressure to survive, industry sources and analysts say.”

New doubts surface over AIG’s $2.2 billion Nan Shan deal (Reuters)
“The bid raised concern among Taiwanese politicians about the mainland’s intentions toward Taiwan, which Beijing views as a renegade province.”

Duane Reade and Its Road to Health
“But Duane Reade is as much a story about selling milk and toothpaste at 2 a.m. as it is about Wall Street, financial engineering and shifts in the private equity industry.” – NYT

Tengzhong may buy Hummer via offshore vehicle (Reuters)
“Support from Beijing has been critical for Chinese firms that have embarked on a series of deals to pick up distressed assets from a global auto industry reeling from overcapacity and sharply depressed demand during the worldwide recession.”

Wal-Mart Adds Its Clout to Movie Streaming
“The acquisition adds a forceful player to what is already a crowded field of companies aiming to deliver streamed entertainment to the living room.” – NYT

The afternoon deal: Deciphering Schlumberger’s deal

OIL/Schlumberger’s stock is down, while shares of Smith are up 8 percent. Is Schlumberger’s $11.34 billion all-stock deal for Smith International a bet on gas, a sign of more consolidation to come, overpriced, or a shrewd move?

Here’s what is being said on the Web:

Schlumberger sees gas drill growth in Smith deal (Reuters)
“No doubt, in the long-term, shale gas is going to be one of the big new energy sources in the U.S. and overseas,” Schlumberger Chief Executive Officer Andrew Gould said, “and the capacity to serve that market in North America is of great interest to me.”

Behind Schlumberger’s Smith Deal: A Big Gas Bet (NYT)
“Schlumberger’s $11 billion takeover of smaller rival Smith Industries seems to be a big bet on unconventional natural gas production in the United States,” reports The New York Times.

The afternoon deal: When to go to market

GERMANYRunning the gamut from “bloodied” private equity firms to an oversubscribed Man Infra initial public offering, stories from today show the IPO market is on shaky ground and, as always, finding the right valuation is vitally important.

IPO stories from the Web:

Bloodied buyout firms sit tight for IPO return (Reuters)
“Private equity firms are putting flotation candidates back in the box after receiving knock backs from angry fund managers, and will try again in a couple of years when they hope the market will be more receptive,” reports Reuters.

Mega IPO of AIG’s AIA unit faces headwinds (Reuters)
“For handlers of AIG’s massive IPO of its Asian life insurance unit, getting investors to recognize the name and the size of the business is the easy part,” reports Reuters

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.

The afternoon deal: IPO gloom


Few like to hear words like “softening” or “plateauing” but they’ve been thrown around today after Travelport axed its planned $1.8 billion IPO. A cautious eye is now being cast upon planned sales of travel firm Amadeus and retailer New Look.

Of the 62 IPOs launched globally since December 1, 2009, 32 were shelved — 15 in the U.S., 7 in Europe and 10 in Asia.

“The market remains open for good companies with good prospects that have a sensible raison d’etre for listing, but as a dumping ground for private equity? No, thank you,” says a UK fund manager.

The afternoon deal: PE in Berlin

GERMANY/Optimism, and the accompanying cash flow, seems to be improving report Megan Davis and Simon Meads from the private equity Super Return International conference in Berlin.

“A lot of balance sheets in corporate America got clean and lean and I think you’ll see a good deal of M&A activity over the next couple of years,” said Apollo Management’s founder Leon Black.

Here are some other takes from Berlin:

Apollo predicts ‘bonanza’ in commercial property (FT)

Super Return: Black Sees Better Days Ahead (NYT)

For Private Equity, a Time for Wary Optimism (NYT)

Investors demand that buyout firms disclose more (Reuters)

Other topics:

‘Blind Pools’ Falter as Ziman, Callahan Plan Comeback (Bloomberg)

China builds stakes in Canadian mining companies (The Globe and Mail)

What Those CIC Stakeholding Disclosures Say About Its Strategy (WSJ)

The afternoon deal: Taxing PE

USA/OBAMAAs a political move, raising the taxes on private equity firms seem a no-brainer but as Megan Davies and Kim Dixon report, gaining tax dollars from the easy target may not be a simple process.

The tax is likely to be a hot issue at one of the private equity industry’s biggest conferences, Super Return International, which starts on Tuesday in Berlin and is attracting heavy hitters from major American buyout firms such as Carlyle and Apollo.

More PE news: