Week in Review: Contrarian Bets Looking Smart

WEEK IN VERSE Wilco provides the right soundtrack for anyone making a big bet this weekend.

We examined contrarian bets on European bonds that are looking pretty smart right now. And with Treasury set to reduce its A.I.G. bet below 50 percent, Andrew Ross Sorkin called a critic of the bailout.

A look back on our reporting of the past week's highs and lows in finance.

Thai Billionaire Tries to Edge Out Heineken for Singaporean Brewery | Charoen Sirivadhanabhakdi's $7.3 billion takeover offer for Fraser & Neave could scuttle plans by the Dutch brewer to buy its beer unit, Mark Scott reported. DealBook '

The battle for Asia Pacific Breweries comes as many of the world's beer companies are turning to emerging markets in search of growth.

Europe's Air and Military Companies in Merger Talks | EADS, which is the parent of Airbus, and BAE Systems said they were in discussio ns about a potential merger that would create an industry behemoth with a combined market value of nearly $50 billion, Nicola Clark reported. DealBook '

While government contracts provide steady revenues, large European countries and the United States are pulling back on their military spending, weighing on the prospects of BAE Systems. Passenger airlines, the main customers of Airbus, have perked up lately, after some difficult periods.

As BP Refocuses, It Sells Gulf Assets for $5.6 Billion | DealBook '

BP agreed “to sell a stake in a group of oil fields in the Gulf of Mexico to the Plains Exploration and Production Company of Houston for about $5.6 billion,” Stanley Reed reported.

Robert W. Dudley, chief executive of BP, is raising money to pay for cleanup costs and potential fines resulting from a huge oil spill in the Gulf of Mexico in 2010. Mr. Dudley has been refocusing BP on high-risk, high-return front ier exploration and production, including deepwater fields.

Glencore Revises Merger Offer to Xstrata | The world's largest commodities trader confirmed that it was offering 3.05 of its shares for every mining company share, Mr. Scott reported. “The deal would value the combined company at $90 billion. Large shareholders, including Qatar Holding, balked at the initial offer of 2.8 shares to one.” DealBook '

“The new proposal is structured far less aggressively than the straight takeover hinted at on Friday,” Ash Lazenby, an analyst at Liberum Capital in London, said in a research note on Monday. “We expect the revised structuring should get Xstrata board's recommendation.”

Book by Former Banker Promises Peek Inside Goldman Sachs | Greg Smith's memoir comes just seven months after his Op-Ed page article detailed business practices that reflected, more broadly, a corrosive culture at the nation's largest banks, Peter Lattman an Julie Bosman reported. DealBook '

While Mr. Smith's opinion article became rich fodder for critics of Wall Street banks and the reckless lending and business practices that led to the global financial crisis, it was largely devoid of specific details. Whether the 288-page book fills in the blanks remains an open question.

Morgan Stanley to Take Over Smith Barney, With Citigroup's Blessing | The banks agreed to value the brokerage operation at $13.5 billion. That figure was significantly closer to Morgan Stanley's estimate of the unit's worth, letting it buy the rest of the enterprise at a lower price, Michael J. de la Merced reported. DealBook '

Now the challenge will be whether the business of advising wealthy customers on their investments can help lift Morgan Stanley's sagging fortunes as its core investment banking and trading operations contend with difficult markets and a heavier regulatory burden .

Deal Professor: Seeking Critical Mass of Gender Equality in the Boardroom | Steven M. Davidoff says that whether women directors add value just by their presence is undetermined because the number of women on boards remains low. DealBook '

Gender equality is one goal, but those who think that the number of women directors will reach a critical mass and change the way boards are governed are likely to be disappointed.

Even if it is true that women are different, the way boards are run in the United States may make these differences meaningless.

Bets on European Bonds Paying Off for Funds | “With the extraordinary level of support from the central bank, mutual fund managers are reaping big returns on their purchases,” Peter Eavis reported. DealBook '

“This is a new chapter in monetary policy and a new chapter in the debt crisis,” said Scott A. Mather, head of global portfolio management a t the Pacific Investment Management Company, known as Pimco. “It doesn't mean all the problems are solved, but this is a more effective and powerful program.”

In I.P.O., Japan Airlines Aims for Valuation of $8.5 Billion | The airline set the stage for the world's second-largest initial public offering this year, after that of Facebook, Hiroko Tabuchi reported. DealBook '

After robust investor demand, particularly from retail investors, the airline, also known as JAL, will seek a price of 3,790 yen (about $48.40) a share, the airline said in a news release.

Trial to Begin for Former UBS Trader Accused of Hiding Huge Loss | The Swiss bank will face the harsh glare of the spotlight again, as opening arguments begin in the trial of Kweku M. Adoboli, Mr. Scott reported. DealBook '

If convicted, he could face up to 10 years in prison. The trial is expected to last up to eight weeks. Both current and form er UBS employees could be called as witnesses, though the firm has not been accused of any wrongdoing.

Legal restrictions in Britain limit the information that can be reported about the case to avoid biasing the proceedings. UBS and a lawyer for Mr. Adoboli declined to comment.

DealBook Column: Plot Twist in a Bailout: It Worked | Andrew Ross Sorkin called Neil M. Barofsky, former inspector general of the Troubled Asset Relief Program, to see if he had any regrets about his earlier pronouncements now that the rescue of American International Group appeared profitable. DealBook '

“Whoa! Whoa! Whoa! They are not making money!” Mr. Barofsky, now a senior fellow at New York University School of Law, said when I reached him. “They are on the path to very significant losses!”

What?

Treasury to Reduce A.I.G. Stake Below 50% | “With the sale of at least $18 billion worth of shares in A.I.G., a number that could grow to $20.7 billion if investors prove enthusiastic, the Treasury Department could reduce its holdings to as little as 15 percent from 53 percent,” Mr. de la Merced reported. DealBook '

Taking the government's stake in A.I.G. below 50 percent is the realization of a long-held goal by both the Obama administration and the company, helping to cut ties to one of the most controversial bailouts of the 2008 financial crisis. The Treasury Department expects to earn a profit on its investment in A.I.G., though it is unclear how large.

Lawmakers Push to Increase White House Oversight of Financial Regulators | Lawmakers are pushing a bill that could curb the influence of the Securities and Exchange Commission, the Commodity Futures Trading Commission and other regulators, Ben Protess reported. DealBook '

The measure, which a Senate committee is planning to debate this month, aims to empower the president in the rule-wri ting process. The proposal would allow the White House to second-guess major rules and mandate that agencies carefully study the economic effects of new regulation. The change could, in effect, delay a number of rules for the financial industry.