Morning Take-Out

TOP STORIES

Private Equity Firms Depicted as Colluding  |  Bain Capital and other prominent private equity firms are depicted in court documents as unofficial partners in a bid-rigging conspiracy to hold down the prices of companies they were looking to buy, Eric Lichtblau and Peter Lattman report in The New York Times.

In Bain's $32.1 billion purchase of the hospital giant HCA in 2006, its biggest acquisition, competitors privately agreed to “stand down” and not bid as part of an understanding to divvy up companies targeted for buyouts, The Times reports, citing internal e-mails.

The documents, which lawyers for Bain Capital had sought to keep secret, are part of a lawsuit in Federal District Court in Boston brought against Bain and other firms by shareholders who claim that this scheme lowered the prices of more than two dozen companies and cost them b illions of dollars, according to The Times. In addition to Bain, the lawsuit names Goldman Sachs's private equity arm and the Blackstone Group, the firm run by Stephen A. Schwarzman. NEW YORK TIMES

 

Seeking Critical Mass of Gender Equality in the Boardroom  |  There is a remarkable lack of women in corporate boardrooms around the world, the Deal Professor writes. The European Union is considering a remedy that would require that 40 percent of a company's directors be women. This may be a milestone for gender equality, but the question is, will it make any difference in how companies are run?

The number of women directors remain s stubbornly low. According to Catalyst, a nonprofit organization devoted to furthering women in business, American companies have the fourth-highest average of women directors in the world. Women make up 16 percent of the average board of a Fortune 500 company in the United States. DealBook '

 

DEAL NOTES

Wall Street Sits Courtside for a Marathon Match  |  A number of bankers and financiers were at Arthur Ashe Stadium on Monday to witness tennis history as Andy Murray defeated Novak Djokovic in the men's singles final. But as the night wore on, some turned to unconventional means to stay warm. DealBook '

 

German Court Backs Rescue Fund  |  The ruling by Germany's Federal Constitutional Court allows the 17 countries of the euro zone to go ahead with a plan to establish a facility that will handle bailouts and support the bonds of troubled governments, The New York Times reports. The court set certain conditions on Germany's contribution to the mechanism. NEW YORK TIMES

 

When the Fed Can't Avoid Politics  |  The Federal Reserve is poised to announce a plan on Thursday to stimulate the economy, and with the election coming up, the central bank's decision will inevitably be judged through a political lens, writes Binyamin Appelbaum in The New York Times. It wouldn't be the first time. NEW YORK TIMES

 

Moody's Warns It May Downgrade U.S.  |  The credit ratings agency said it would downg rade the government's debt if lawmakers did not resolve the looming “fiscal cliff” by year's end. NEW YORK TIMES

 

 

Mergers & Acquisitions '

Morgan Stanley to Take Over Smith Barney, With Citigroup's Blessing  |  Morgan Stanley and Citigroup agreed to value their brokerage joint venture, Morgan Stanley Smith Barney, at $13.5 billion, allowing Morgan Stanley to buy full control of the business at a favorable valuation. DealBook '

 

Did Morgan Stanley Get a Better Deal?  |  The Wall Street Journal's Heard on the Street column looks at the valuation of Morgan Stanley Smith Barney, writing, “All things considered, Morgan looks to have gotten a pretty good deal.â € But the article adds, “for Citi, there is at least some lemonade to be squeezed out of the valuation lemon.” WALL STREET JOURNAL

 

Yahoo Said to Be Near Closing Alibaba Deal  |  AllThingsD reports: “According to sources close to the situation, Yahoo will officially close the multibillion-dollar sale of half its assets in China's Alibaba Group in one week. Sources said the deal is set to be announced next Wednesday.” ALLTHINGSD

 

Infosys Considers Making Acquisitions  |  The Indian software company Infosys is looking for uses for its pile of cash, Bloomberg News reports. BLOOMBERG NEWS

 

G.E. May Sell Stake in Tha iland Bank  |  General Electric is weighing options for its $2.1 billion stake in Bank of Ayudhya, Bloomberg News reports, citing two unidentified people with knowledge of the matter. BLOOMBERG NEWS

 

Canadian Bank Weighs Sale of Latin American Assets  |  Bank of Nova Scotia, known as Scotiabank, is considering selling minority stakes in some Latin American businesses in order to bolster capital or finance an acquisition, Reuters reports. REUTERS

 

INVESTMENT BANKING '

Dimon Defends Big Banks  |  Saying that the United States has the best capital markets in the world, Jamie Dimon, the JPMorgan Chase chief, cautioned on regulatory re form: “Let's make sure we keep that before we do a bunch of stupid stuff that destroys that.” DealBook '

 

Perceived Conflicts Sting Goldman  |  It shows an “encouraging trend” that Goldman Sachs has given up a $20 million fee for its work on Kinder Morgan's merger with the El Paso Corporation, after being accused of conflicts of interest, Reuters BreakingViews writes. The essay continues: “It would have been tough to prove Goldman legally liable for any shareholder losses, yet the bank chose to fold rather than fight.” REUTERS BREAKINGVIEWS

 

Gundlach May Add Stocks to the Mix  |  Jeffrey Gundlach, who runs the bond firm DoubleLine Capital, is considering investing in equities in addition to fixed income, he told Bloomberg News. “I like the way equities are out of favor and I like doing things when they're unpopular,” he said. BLOOMBERG NEWS

 

Lehman, Alive and Selling  |  The sole objective of Lehman Brothers, which recently emerged from bankruptcy, is “to sell everything it owns so it can repay its lenders and disappear,” writes Adam Davidson in The New York Times Magazine. NEW YORK TIMES MAGAZINE

 

Lehman Bides Its Time  |  Lehman Brothers is now a trust company, with a portfolio of real estate to sell. The New York Times writes that it is waiting for better markets, on a “mission to extract every dollar from the trust's holdings.” NEW YORK TIMES

 

Some Americans Drift Away From Banks  |  Even relatively well-off families are choosing to use alternatives to bank accounts, with some irritated by fees, The Wall Street Journal writes. WALL STREET JOURNAL

 

BNP Paribas to Expand Services for Wealthy Americans  |  The French bank BNP Paribas began a five-year expansion of its wealth management business, which oversees about $10 billion, Bloomberg News reports. The expansion is aimed at United States clients. BLOOMBERG NEWS

 

PRIVATE EQUITY '

Private Equity Group Aims to Relate to Average Americans  |  A public relations campaign from the Pri vate Equity Growth Capital Council seeks to counteract the image problems the industry has faced during the election year cycle. The latest installment notes the industry's ties to pension funds, university endowments and charities. DealBook '

 

2 Pensions Raise Concerns With K.K.R. Deal  |  A pair of public pension funds is expressing worries about a deal by K.K.R. to take over the asset manager Prisma Capital Partners, but the concerns are not likely to scuttle the deal, The Wall Street Journal reports. WALL STREET JOURNAL

 

GoDaddy Says Hackers Didn't Cause Its Troubles  |  The Web site hosting company GoDaddy, which is backed by K.K.R. and other private equity firms, said on Tuesday that the extensive service inte rruptions on Monday, which affected several million Web sites, were caused by an internal network error. NEW YORK TIMES BITS

 

Hockey League's Would-Be Private Equity Deal  |  Bloomberg Businessweek writes that the National Hockey League could possibly be improved under private equity ownership. In 2005, Bain Capital made a bid (which later failed) to buy the league for $3.5 billion. BLOOMBERG BUSINESSWEEK

 

Private Equity Remains Active in Health Care I.T.  |  Some firms are betting on companies that provide information technology services to the health care sector, with several deals closing since the Supreme Court upheld the president's health care overhaul in June, The Wall Street Journal reports. WALL STREET JOURNAL

 

HEDGE FUNDS '

Investors Signal Frustration With Hedge Funds  |  Requests by investors to pull their money from hedge funds reached $7.4 billion in July, compared with $4.2 billion in June, according to data from BarclayHedge and TrimTabs Investment Research, Reuters reports. REUTERS

 

Icahn to Seek Information on Navistar  |  Responding to a statement by the board of Navistar, Carl C. Icahn said he would look to find information about “obvious failures” by the truck maker, Bloomberg News reports. BLOOMBERG NEWS

 

Telus of Canada Wins Case Against Hedge Fund  |  A court handed a victory to Telus, the Canadian telecommunications company, in its ongoing scuffle with the hedge fund Mason Capital Management, when it said Mason could not hold a shareholder meeting, Reuters reports. REUTERS

 

I.P.O./OFFERINGS '

Zuckerberg Acknowledges ‘Disappointing' I.P.O. Performance  |  In his first public appearance since a lackluster initial public offering in May, Facebook's chief executive, Mark Zuckerberg, acknowledged the “disappointing” performance of its share price, but said the company continued to build new things in the face of criticism. DealBook '

 

Treasury Sells Additional $2.7 Billion Worth of A.I.G. Shares   |  The Treasury Department said on Tuesday that it had sold an additional $2.7 billion worth of its holdings in A.I.G., as underwriters for the offering exercised what is known as an overallotment option to meet higher-than-expected demand. DealBook '

 

Coty Waits to Go Public  |  The perfume maker Coty is delaying its I.P.O. until at least the first quarter of next year, in order to “give its new chief executive more time to settle in,” The Wall Street Journal reports, citing an unidentified person close to the deal. WALL STREET JOURNAL

 

R.B.S. to Announce Plans to Take Unit Public  |  As early as Thursday, the Royal Bank of Scotland is expected to announce its plans for an I.P.O. of Direct Line, its insurance unit, in London, Reuters reports, citing unidentified people familiar with the matter. REUTERS

 

VENTURE CAPITAL '

Judge Says Twitter Could Be Fined  |  A judge ruled that if Twitter failed to hand over information about a user's posts by Sept. 14, it would be fined, Bloomberg News reports. The judge said he would ask for Twitter's recent earnings statements to decide on the fine. BLOOMBERG NEWS

 

Music Entrepreneur Looks to Build an Online Community  |  Seth Goldstein, who helped build the music start-up Turntable.fm, is preparing to show off a new project: DJZ, an online hub for fans of electronic dance music that has raised $1 million in seed money, Th e New York Times reports. NEW YORK TIMES

 

Tech Jargon, a Primer  |  New York magazine's Kevin Roose has recorded some phrases that were uttered at the TechCrunch conference in San Francisco. NEW YORK

 

LEGAL/REGULATORY '

Whistle-Blower Awarded $104 Million by I.R.S.  |  The Internal Revenue Service says information provided by Bradley C. Birkenfeld, a former banker at UBS, was so helpful that he would receive a $104 million whistle-blower award for revealing the secrets of the Swiss banking system. DealBook '

 

Regulators to Identify Which Non-Banks Pose Risks  |  Bloomberg News reports: “Regulators are poised to choose the first U.S. non-bank companies that are likely to be branded potential risks to the financial system, according to two people with knowledge of the plans. The Financial Stability Oversight Council plans to request confidential data from as many as five firms at a meeting this month, said the people, who declined to be identified because the plans aren't public.” BLOOMBERG NEWS

 

Peregrine Financial Chief to Plead Guilty to Fraud  |  Russell Wasendorf Sr., who is accused of stealing more than $200 million from customers when he ran the brokerage Peregrine Financial, has agreed to plead guilty to mail fraud, making false statements to regulators and embezzling customer funds, Reuters reports. REUTERS

 

M.&A. Lawyer Joins Communications Firm  |  Charles Nathan, a former co-chairman of the global mergers and acquisitions practice at the law firm Latham & Watkins, has joined the communications advisory firm RLM Finsbury as a partner. Stephen Labaton, a former New York Times reporter, is also joining the firm as a partner. DealBook '

 

Too Much Protection for Derivatives in Bankruptcy  |  Several courts have lately been expanding the already broad protections that derivatives and repo contracts enjoy, Stephen J. Lubben writes in the In Debt column. DealBook '