Unstructured Finance

Mahindra Satyam dives after results


Shares in Mahindra Satyam ended 8.7 percent lower at 90.25 rupees on Thursday after the company reported a net loss for 2009 and 2010 after market hours the previous day.

For the year ended March 2010, Satyam posted a net loss of 1.25 billion rupees on revenue of 54.8 billion rupees. For fiscal 2009, it had a loss of 81.77 billion, wiping out most of the revenue of 88.13 billion rupees.

In another report, JPMorgan downgraded Mahindra Satyam to neutral from overweight as restated financials restored normalcy. Shares in Tech Mahindra ended 5.2 percent lower at 752 rupees.

Do you think it is the right time to invest in Mahindra Satyam?

Deals wrap: Avis ups the ante in bidding war

Car rental company Avis has agreed to pay a $20-million break-up fee in its offer for Dollar Thrifty if rival Hertz walks away from its own takeover bid. Dollar Thrifty shareholders were due to vote on the Hertz offer on Thursday in Chicago, but announced they have delayed that vote, citing additional voting activity. *View article*

Hertz and Avis have been going back-and-forth in their bid to wrest control of Dollar Thrifty since Hertz initially announced its takeover bid last April. Hertz and Dollar Thrifty agreed to a sweetened deal earlier this month, currently worth about $50.95 a share or roughly $1.5 billion. The Wall Street Journal said the Avis deal isn’t likely to help Dollar Thrifty shareholders that much, as Avis’s additional $20 million break-up fee was just “45 percent of the $44.6 million break-up fee that would be due to Hertz immediately upon signing an Avis deal.” *View WSJ blog*

China’s Sinochem is working feverishly to put together a rival bid for Potash Corp to counter BHP Billiton’s $39-billion hostile takeover offer, sources told Reuters. Although BHP’s bid deadline isn’t until November 18, “sources close to the firm” told Reuters a decision could come soon. *View article*

Smith attacks hedge funds’ 2 and 20

Here’s the link to Terry Smith’s blog attacking the “unsupportable” practice of hedge funds charging their clients fees of 2 and 20 (2 percent annual and 20 percent performance).

Smith compares the maths that show a $1,000 investment in Berkshire Hathaway in 1965 (when Buffett began) would last year be worth $4.3 million, with a hedge fund charging 2 and 20.

Apparently, of the $4.3 million, $4 mln would belong to the manager and only $300,000 to you…

Mahindra Satyam posts FY09, FY10 results

Mahindra Satyam on Wednesday reported net losses for FY2009 & FY2010, giving the first view of its financial state almost 2 years after it was hit by India’s biggest corporate fraud.

Shares in Satyam ended just 0.1 percent higher at 98.9 rupees ahead of results announcement.

Tech Mahindra will start the process to merge outsourcer Mahindra Satyam with itself by mid-November, a top official said on Wednesday.

Check Out Line: Is that enough buyback, Nelson?

USA/Check out Family Dollar’s plans for a surge in store openings and $750 million stock buyback plan.

The retailer, which prices most of its goods under $10, said on Wednesday that it plans to open 300 new stores in fiscal 2011, 50 percent more than it opened in fiscal 2010, which ended in August. It also authorized a new share repurchase plan that it said would lower its cost of capital.

Back in July, activist investor Nelson Peltz’s Trian Fund management announced a 6.6 percent stake in Family Dollar and said it suggested several ways for the company to boost shareholder value. Taking on debt for a buyback was one thing Peltz’s group said it suggested. Family Dollar said it could take out debt for the buyback plan it announced, but that it would also use cash on hand and cash from operations.

Deals wrap: Pricing Genzyme

A sign points the way to the headquarters of Genzyme in Cambridge, Massachusetts August 3, 2010. REUTERS/Brian Snyder    Sanofi-Aventis is considering whether to raise its $18.5-billion bid for drugmaker Genzyme as soon as next week, Bloomberg said, citing sources. Sanofi has not ruled out a hostile bid but would prefer friendly negotiations, the report said. *View article *View factbox

India’s showpiece IT services companies are scouting for acquisitions in overseas markets as they focus on expanding geographical presence as well as client base to boost growth, Reuters reported from the India Investment Summit in Bangalore. *View article *Full coverage

Companies are flush with cash, financing is cheap and dealmaking has staged a comeback, according to Bloomberg’s third-quarter review of M&A activity. *View Bloomberg article

BSE Power Index gains

The sun sets behind electric pylons in Allahabad February 22, 2006. REUTERS/Jitendra PrakashPower stocks posted decent gains on Tuesday, sending the power index up 1.15 percent to the top of the sectoral gainers list.

ABB shares topped the index, closing 4.6 percent higher, followed by Siemens which gained 3.7 percent.

JSW Energy, GVK Power and Adani Power were among the stocks on the losing side.

Do you think it’s a good time to invest in power stocks?

Check Out Line: Showdown at the Barnes & Noble corral

barnes1Check out Barnes & Noble’s victory at its annual meeting.

Shareholders of the U.S. bookseller had to choose between dissident investor Ron Burkle and Chairman Len Riggio as a bitter proxy battle between the chain’s top two stakeholders came to a head.

And the winner of the “gunfight” was Barnes & Noble, whose slate of directors won election.

Burkle, whose Yucaipa Cos owns 18.8 percent of Barnes & Noble shares, had been on a slate of three nominees seeking seats on the board, including the one held by Riggio, the man who built the chain into the largest U.S. specialty bookseller and the company’s largest shareholder with a 28.2 percent stake. Three of the nine board seats were up for a vote.

Deals wrap: Befriending the market

Facebook CEO Mark Zuckerberg speaks while unveiling the company's new location services feature called "Places" during a news conference at Facebook headquarters in Palo Alto, California August 18, 2010.  REUTERS/Robert Galbraith Facebook is likely to go public sometime after late 2012, a board member said. A stock market debut by a company valued in the tens of billions of dollars would be one of the most highly anticipated initial public offerings of the decade. *View article

Andrew Ross Sorkin from The New York Times takes a look at the secondary market’s implied market value for Facebook. Will Facebook ultimately be worth $33 billion or $3 billion? *View NYT article

Southwest Airlines’ $1.4 billion AirTran Holdings deal pays for itself, writes columnist Robert Cyran. *View article *Further reading