Unstructured Finance

Deals wrap: What now for Berkshire?

David Sokol, Chairman, MidAmerican Energy Holdings, and Chairman, President, and CEO of NetJets, speaks during the Fortune Brainstorm Green conference in Dana Point, California April 13, 2010. Reuters/Mario AnzuoniWarren Buffett’s reputation as someone who prides himself on his transparency and handpicks managers who can run businesses in a similar manner, took a blow when David Sokol, widely seen as Buffet’s successor at Berkshire Hathaway, resigned after buying shares in chemical company Lubrizol Corp before pushing Buffett to acquire it. Sokol said he did nothing wrong. Analysts said any impact on Berkshire Hathway will be short-term but acknowledged that Buffet’s brand was damaged.

Other Berkshire execs seen as possible successors to Buffett include Ajit Jain, Berkshire Hathaway Reinsurance Group chief, repeatedly praised by Buffett for his running of the insurance business;  Gregory Abel, MidAmerican Energy Holdings CEO, who Buffet called a “terrific manager” and part of a “dream team” at the Berkshire-owned utility; and Matthew Rose, Burlington Northern CEO, who joined Berkshire after selling the No. 2 U.S. railroad company to Buffett last year for $26.4 billion.

Warren Buffett’s hunt for a large acquisition could lead to targets like Eaton, Illinois Tool Works or Cliffs Natural Resources, all of which seem to fit his recent preference for growth in industries outside of his core insurance unit, writes Michael Erman and Ben Berkowitz.

Vodafone will buy out Indian partner Essar in a $5 billion deal that ratchets up its exposure to a mobile market that has proved challenging despite its rapid growth.

The NY Mets are seeking $200 million for a minority portion of the team — a badly needed cash infusion that the team’s owners would pour directly into the club’s operations and use to pay off some of their debt, writes the New York Times.

Jimmy John’s franchise fires union workers after sick-day campaign

The owners of 10 Minnesota Jimmy John’s sandwich shops — where a rare unionization vote was narrowly rejected last year – have fired six union organizers.

sickdayposter[1]The terminated workers are members of the Industrial Workers of the World, a formerly high-profile union better known as the Wobblies, and said they were fired after they put up 3,000 posters (shown here) around Minneapolis as part of a campaign to win paid sick days.

Michael Mulligan, president of MikLin Enterprises Inc, which operates the affected Jimmy John’s restaurants, told Reuters that the terminated union workers “crossed well over the line of protected activity” with their latest appeal.

Deals wrap: Swiss wealth managers targeted

A man uses his cellphone as he walks past a logo at the entrance of Swiss bank Julius Baer Group headquarters in Zurich October 6, 2008. REUTERS/Christian Hartmann The latest clampdown by German and U.S. authorities on tax-evading clients at banks such as Credit Suisse could make Swiss wealth management firms alluring takeover targets, bankers say. Swiss private banks have been intensifying their cleanup of untaxed assets in an effort to limit the attention of foreign authorities, reducing risk for potential acquirer, writes Martin de Sa’Pinto and Edward Taylor. Union Bancaire Privee, EFG and Julius Baer are seen as targets.

Valeant Pharmaceuticals said it was not interested in a bidding war for drugmaker Cephalon and was willing to walk away. But Chief Executive Michael Pearson also said Valeant may consider raising its offer if Cephalon opens up its books and the deal looks right. Shares of Cephalon surged more than 29 percent on Wednesday, above the $5.7 billion unsolicited offer from Valeant, in a sign investors are expecting a higher bid.

Conditions are better for a wave of U.S. bank mergers, with large deals that carry a price tag of $5 billion or more possible by the end of the year, a UBS AG investment banker said on Tuesday.

Deals wrap: GE to slow M&A warpath

General Electric Co Chairman & CEO Jeff Immelt talks to the media before speaking at the Detroit Economic Club in Birmingham, Michigan June 26, 2009. REUTERS/Rebecca CookGeneral Electric continued on its M&A warpath with a $3.2 billion agreement to acquire France’s Coverteam, a maker of automation systems used in the oil and gas sector, marking the latest in a series of deals in the energy industry. But, after some $11 billion in acquisitions in the energy sector over the past six months, GE plans to slow its pace of dealmaking, a top executive said.

Rio Tinto said it would go ahead with its A$3.9 billion ($4 billion) takeover offer for Riversdale Mining even if it ended up with a minority stake in the Mozambique-focused coal miner.

Canada’s federal election could add a fresh element of uncertainty to the London Stock Exchange‘s proposed C$3 billion ($3.1 billion) takeover of TMX Group, a deal which was already seen as far from a sure thing, writes Cameron French.

Do do do…

A new song has emerged in the European funds industry, born in the midst of the financial crisis. It is called “let’s all do a Carmignac”. It may not be quite as catchy as the Conga, and maybe not quite as much fun, but it has certainly gained a number of followers.

The fund performance and distribution strategy at Paris-based Carmignac warrant more column inches than are available here. But more broadly, it is well worth looking at some of the numbers that have led others to dance to its historically-unfashionable tune of mixed asset, balanced investing, as well as examining wider industry activity to see what insights can be gleaned.

The largest mutual fund in Europe – Carmignac Patrimoine – has generated net sales of around 10 billion euros ($14.05 billion) in each of the past two years. In both of these years this one fund attracted more than 50 percent of all sales activity across Europe (including those funds suffering redemptions) in its Mixed Assets sector. And even if only those funds generating inflows are compared, the fund drew in around 30 percent of sales in the sector.

Gerard Fitzpatrick: Positive on global growth

Guest blogger Gerard Fitzpatrick is portfolio manager at Russell Investments, where he runs a $5 billion global bond fund.

The views expressed here are entirely the author’s own and do not constitute Reuters point of view.

The global economic outlook is positive overall, currently powered by China and America’s twin engines of growth. Questions have been asked about the level to which the Japanese disaster may slow down the world’s economic recovery, but in reality, it’s expected to have only a small negative effect on global growth this year.

Morning Line-Up: Turning the tide or washed out by tsunami


News and views on the asset management industry from Reuters and elsewhere:

Computer driven funds hit in Japan fallout – Financial Times

Aberdeen inflows turn positive in 2011 - Reuters

Dreyfus launches emerging market fund - Wall Street Journal



L&T shares rise more than 2 pct

Shares in Larsen & Toubro gained 2.5 percent on Monday, helping Sensex post its 5th consecutive day of gains.

The stock ended at 1639.20 rupees and was the among top gainers of the 30-share Sensex.

“…we believe these near-term concerns are now priced in and the valuations are attractive,” UBS said in a note while reiterating its “buy” rating on the stock.

Deals wrap: eBay’s $2.4 billion GSI buy

Visitors chat next to the Ebay logo at the CeBIT computer fair in Hanover March 2, 2011. REUTERS/Tobias Schwarz EBay said it plans to buy e-commerce company GSI Commerce, which owns Web businesses such as the flash site Rue La La and ShopRunner, for $2.4 billion. Ebay said it will offer shareholders of GSI $29.25 per share, a 51 percent premium over its closing price on Friday.

Tabula announced $108 million in funding, one of the largest venture rounds in a decade for a chip company, writes VentureBeat’s Matt Marshall. The company says it can create programmable logic devices for $200, compared to a cost of more than $1,000 offered by competitors.

Despite soaring valuations of tech companies and warnings that the bust a decade ago may be repeated, there are notable differences between the dot-com boom and now, write Evelyn M. Rusli and Verne G. Kopytoff of the New York Times. Today, the stock market is not glutted with offerings and attractive tech start-ups like Groupon have real businesses — not just “eyeballs and clicks”. But, as cash continues to pile up, the fear is that all the money cannot be put to work responsibly, they add.