Unstructured Finance

M&A wrap: Banks vie for Facebook IPO role

 

With the prized Facebook IPO on the horizon for 2012, the lead investment-banking role is still up for grabs and long-time rivals Goldman Sachs and Morgan Stanley are considered front runners, the Wall Street Journal reports.

In this Deal Pipeline video, Paul Hastings corporate department partner Barry Brooks predicts that mergers and acquisitions in financial services will jump in 2012.

Banco Bradesco, Brazil’s second-biggest private sector bank, pulled out of talks to buy HSBC Holdings‘ consumer finance unit Losango on concern about potential charges related to labor disputes, a local newspaper reported on Friday.

The settlement between the Trust Company of the West and Jeffrey E. Gundlach caps a bitter and protracted dispute that turned the normally anodyne mutual fund world into a heated legal battleground, reports DealBook.

Swiss Petroplus struggles to keep its refineries across Europe running after aggressive acquisitions by former chairman Thomas O’Malley up to 2007 have given way to the current credit crunch, economic slowdown and financial crisis.

M & A wrap: SEC explores Groupon memo

Among the series of distractions ahead of Groupon’s IPO last month was the Mason Memo, WSJ’s Deal Journal reported late Wednesday. Newly disclosed documents shed light on how Groupon was forced to explain the memo to the SEC.

Alibaba Group has hired a Washington lobbying firm in a sign that the Chinese e-commerce company would be willing to make a bid for all of Yahoo in the event that talks to unwind their Asian partnership fail.

The value of global takeovers dropped to the lowest level in more than a year this quarter, Bloomberg.com reports. A recovery in 2012 looks to be muted because cash-rich companies are weighing Europe’s economic crisis before making big purchases.

M & A wrap: Plan B for ING

Dutch financial services group ING Group has scrapped plans for a separate trade sale of its Belgian insurance business, worth 500 to 750 million euros, a person familiar with the deal said on Wednesday.

Sears “has been a mismanaged asset,” Gregory Melich, an analyst at International Strategy & Investment, said in a Bloomberg Television interview yesterday. “A lot of traditional department stores have reinvigorated themselves through merchandising, through changing their locations; you think of Macy’s. You haven’t seen that from Sears.” Yesterday the largest U.S. department store chain reported that it would close as many as 120 locations after same-store sales fell 5.2 percent in the eight weeks ended Dec. 25.

Whirlpool investors–already burned by a sagging stock in 2011–aren’t spending time trying to figure out what the impact of Sears’ planned store closings will be. They’re just bailing out, reports the Wall Street Journal. As Whirlpool has seen weak demand of its own this year, investors are seemingly done for now in waiting for turnaround signs. Shares are off 7 percent today to $47.57, pushing Whirlpool’s stock price down more than 46 percent for 2011.

LIPPER: Equine vs equity investing

Is betting on horses very different from picking stocks? Can understanding a gambler’s approach and mentality give a better understanding of fund managers?

In searching for answers to these questions, I spoke to Paul Moulton, a professional gambler who originally worked in the fund management industry. He then set up a fund research company (Fitzrovia International, which he eventually sold to Reuters), although his working life began with an attempt to become a professional chess player.

Most of the fraternity of professional gamblers who make a living from horse racing are what Moulton describes as ‘traders’ or ‘chisellers’.

SAC Capital: a look back in time

By Matthew Goldstein

The full year numbers aren’t in, but it appears Steve Cohen’s SAC Capital had a pretty good year–especially compared to most other long/short equity hedge funds which lost money. But how does this year’s 8% gain stack-up against other strong years posted by the Stamford, Conn. hedge fund?

As we reported previously on UF, a good chunk of SAC Capital’s trading prowess in 2011 is being credited by sources to a single team led by Gabe Plotkin. His $1.2 billion book is one of the largest at SAC Capital and has generated between $150 million and $200 million in profits.

Indeed, only Cohen’s own 2 billion book–called the “big book,” the “Cohen account,” or simply “COHE”–is believed to manage more money at the $14 billion fund.

Another black eye for Bruce Berkowitz

By Katya Wachtel

This year has been cruel to many money managers, and one stock-picker giving John Paulson a run for his money as the worst performing manager of 2011, is Fairholme Capital Management’s Bruce Berkowitz.

Berkowitz’s flagship Fairholme Fund has suffered huge losses on AIG, The St. Joe Company, Bank of America and Regions Financial. His bet on Sears can now be added to that laundry list of losers.

Today the struggling retailer announced plans to close up to 120 stores, the share-price tanked, and as one of Sears’ largest shareholders, Berkowitz is likely nursing some ugly wounds.

M&A wrap: Total merges solar units

U.S. solar panel maker SunPower, a unit of French oil major Total, said it had agreed to buy Total-owned Tenesol for $165.4 million in cash in an expected deal that will regroup the French group’s solar business under one umbrella. Total announced the $1.3 billion takeover of SunPower in June.

Concurrently with the closing of the acquisition, Total has agreed to purchase 18.6 million shares of SunPower common stock in a private placement at $8.80 per share, a 50 percent premium to SunPower’s Dec 22 closing price. After the sale of Tenesol, Total will own about 66 percent of SunPower shares.

Deutsche Boerse won U.S. antitrust approval to buy NYSE Euronext in a $9 billion deal to create the world’s No. 1 exchange operator, but the transaction still faces serious regulatory headwinds in Europe. In Europe, there have been weeks of negotiations with antitrust regulators, in which staff made clear their reservations about approving a combination of Deutsche Boerse’s Eurex and NYSE Euronext’s Liffe on concerns that the merged entity would have a monopoly over European listed derivatives trading. A formal decision by the European Commission is not expected until January or early February.

The guy who is killing it at SAC Capital

By Matthew Goldstein

Move over Steve Cohen. The trader who is killing it at Cohen’s $14 billion SAC Capital Advisors this year is Gabriel Plotkin.

The portfolio manager, who specializes in consumer products and the gaming and lodging industry, is one of the top producers this year at Cohen’s hedge fund, say several people familiar with the Stamford, Conn. hedge fund. Plotkin, who joined SAC Capital in late 2006 from North Sound Capital, is emerging as on Cohen’s most reliable money men.

At SAC Capital, where most portfolio managers run books that range from as little as $250 million to $500 million, Plotkin manages one of the largest. His team of half-dozen traders and analysts manages about $1.2 billion of the firm’s money, say sources.

John Thaler’s JAT thaws some more in December

By Katya Wachtel

John Thaler’s hedge fund, JAT Capital, had a meteoric rise through much of 2011, generating a 38 percent return at its peak in early September.  Since then, Shumway Capital alum has ebbed, though he’s still beating a ton of his competitors.

Through December 16, JAT fell 1.2 percent, according to an investor.

The fund remains up 14 percent year-to-date though, and given the average hedge fund was down about 4.4 percent through November, JAT investors have something to smile about. Though they have less to smile about than they did a few months ago.

Others are grimacing, since many of the industry’s heavy-hitters have taken a beating this year. It’s no secret that stars like John Paulson,  Mark Kingdon and Lee Ainsle are sustaining double-digit losses. Through December 16,  Paulson’s Advantage Plus fund is down 52 percent year-to-date; Kingdon’s Offshore fund is down about 19 percent; and Ainslie’s Maverick Fund is off about 15 percent.

M&A wrap: EU crisis hits bank advisory fees

Europe’s debt woes dragged worldwide investment banking income down this year, data showed, with fees on the continent slumping to the lowest quarterly level ever recorded and company listings and acquisitions grinding to a near halt. In Europe, fees raised since October from bonds, flotations and mergers and acquisitions stand at the lowest quarterly level ever recorded by the data providers. A stronger start to the year in areas such as mergers and acquisitions fizzled out, leaving investment banks’ overall haul of fees at $72.6 billion — down 8 percent on 2010.

Yahoo is considering a plan to unload most of its prized Asian assets in a complex deal valued at roughly $17 billion, sources familiar with the matter said on Wednesday, winning nods of approval from Wall Street and driving its shares higher. The offer – the latest among proposals put forth in recent months to resuscitate the once high-flying Internet company – is expected to be considered by Yahoo’s board on Thursday, sources said. The board was uninterested in entertaining offers for the entire company at this point, said one of the sources, who spoke on condition of anonymity.

Oshkosh Corp has sent a proxy card to shareholders recommending they ignore an effort by billionaire investor Carl Icahn to install his own board members as he pushes for a merger with one of the company’s key rivals. Icahn recently nominated six associates to be on the board of the Wisconsin maker of trucks, construction lifts and defense vehicles. In a letter to the company’s shareholders last week asking for support for his nominations, he also voiced strong support of a merger between Oshkosh and Navistar International Corp. Icahn owns nearly 10 percent stakes in both companies.

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