Aerospace Deal Talks Collapse

AEROSPACE DEAL TALKS COLLAPSE  |  Talks between the aerospace giants EADS and BAE Systems have fallen apart. The two companies, which were up against a noon deadline to submit a merger plan, said in a statement on Wednesday that “it has become clear that the interests of the parties' government stakeholders cannot be adequately reconciled with each other or with the objectives that BAE Systems and EADS established for the merger.” Officials in Germany, France and Britain had been haggling over the influence that each country would hold over the combined company.

 

FEWER JOBS, HIGHER PAY  |  “It's good work if you can get it,” the New York State comptroller, Thomas P. DiNapoli, said about Wall Street jobs. Pay in the financial industry rose 4 percent last year, to an average of $362,950 per employee, a level not seen since before the financial crisis, the comptroller said in a new report. That comes even as firms have been shedding jobs. The report estimated that 1,200 positions have been cut this year, with more than 20,000 jobs lost since late 2007. The justification for rich Wall Street pay is the same: banks need “to lure talent from other firms,” Susanne Craig and Ben Protess of DealBook write.

 

U.S. SUES WELLS FARGO  |  The mortgage mess continues to haunt big banks. In a new lawsuit, United States prosecutors are claiming that Wells Fargo deceived the federal government about the quality of mortgages during the housing boom. Wells Fargo's chief executive, John Stumpf, who got his job in 2007, “wasn't a mere bystander” during the period described in the new lawsuit, David Weidner writes in a column in MarketWatch. At the time, Mr. Stumpf led Wells Fargo's western banking operations.

 

REGULATOR PUSHES BACK  |  The Commodity Futures Trading Commission is resisting Wall Street's efforts to temper the Dodd-Frank regulatory overhaul. The agency is planning to appeal a court ruling that halted the so-called position limits rule, which would curb speculative Wall Street trading, DealBook's Ben Protess reports. Bart Chilton, a Democratic commissioner at the agency, said: “I hope that the agency will appeal in the next few days.”

Wall Street's fight continues on other fronts. Goldman Sachs may have found a loophole in the Volcker Rule, The Wall Street Journal reports. Some executives at the firm “believe they have found a way to extricate the credit funds from proposed limits on how much can be invested in hedge funds and private equity funds.” Goldman is apparently arguing that “these funds function like banks, just with a different structure.”

And criticism of the regulatory overhaul piles up. Harvey R. Miller and Maurice Horwitz, attorneys who worked on the bankruptcy of Lehman Brothers, argue that Dodd-Frank's “orderly liquidation authority,” which is supposed to give the government a way of safely winding down a failing financial firm, is “inadequate and, to some extent, ill-conceived.”

 

ON THE AGENDA  |  Costco announces earnings before the opening bell and Ruby Tuesday reports after the market closes. Mortimer B. Zuckerman, the real estate developer, is on Bloomberg TV at 8 a.m. Phil Angelides, who was the chairman of the Financial Crisis Inquiry Commission, is on Bloomberg TV at 8:30 a.m. In Paris, the French president, François Hollande, meets with Prime Minister Mariano Rajoy of Spain.

 

BACK FROM THE DEAD  |  Apollo Global Management pulled off a “miraculous” feat with the turnaround of the real estate company Realogy, the Deal Professor writes. “The private equity firm had the knowledge and wherewithal to keep working the capital markets and continuously restructure Realogy's debt to ensure its survival. Apollo also stepped up and was willing to risk even more money to support the company.”

Now, Apollo will test the public markets. Realogy is expected to price its I.P.O. on Wednesday. Shutterstock, a stock photography company, is also expected to price its offering on Wedneday. Bain Capital is planning an I.P.O. for one of its portfolio companies, Bright Horizons Family Solutions, according to Reuters. The child care and education company, which Bain bought for $1.3 billion in 2008, was praised last year by the first lady, Michelle Obama.

 

 

 

Mergers & Acquisitions '

Fraser & Neave Rejects $1.1 Billion Bid for Hospitality Unit  |  Weeks after agreeing to sell its brewing unit to Heineken for $4.6 billion, the Singaporean conglomerate Fraser & Neave has rejected a $1.1 billion bid for its serviced-apartment business while its shareholders are weighing an outright takeover offer from a Thai billionaire. DealBook '

 

Is Glencore Too Big to Fail?  |  An official at the Bank of Canada recently said there was a possibility that some commodities traders were “becoming systemically important,” notes a column in The Financial Times. FINANCIAL TIMES

 

Best Buy's C.F.O. Is Leaving  | 
WALL STREET JOURNAL

 

Europe Said to Have Concerns With U.P.S. Bid for TNT Express  | 
REUTERS

 

Twitter Buys a Video-Sharing Company  |  Twitter picked up Vine, a three-man start-up that has yet to begin operating publicly, AllThingsD reports. ALLTHINGSD

 

Variety Magazine Sold for About $25 Million  |  Variety, a magazine once considered the bible of Hollywood, has been sold for about $25 million in what “was essentially a fire sale,” the Media Decoder blog reports. Penske Media, the ow ner of a collection of entertainment news blogs, teamed up with the hedge fund Third Point to acquire the magazine. DealBook '

 

INVESTMENT BANKING '

A Warning From the I.M.F.  |  The International Monetary Fund predicts that European banks will shed assets amounting to more than 7 percent of their balance sheets by the end of next year, barring significant policy changes. FINANCIAL TIMES

 

Morgan Stanley and Mitsubishi Chiefs Said to Plan Meeting  |  James P. Gorman of Morgan Stanley and Katsunori Nagayasu of Mitsubishi UFJ are set to meet on Saturday in Tokyo to “discuss deepening their partnerships,” Bloomberg News reports, citing two unidentified people with knowl edge of the matter. BLOOMBERG NEWS

 

Morgan Stanley Wealth Managers Join R.B.C.  | 
REUTERS

 

Herb Allen Looks to Sell a Monet  |  The investment banker said his family was planning to auction one of Claude Monet's water lily paintings for between $30 million and $50 million, The Wall Street Journal reports. WALL STREET JOURNAL

 

Bank of America Names Investment Banking Executive in Europe  |  Rupert Hume-Kendall, a longtime capital markets specialist at Bank of America, is becoming chairman of the corporate and investment banking business in Europe, Reuters reports. REUTERS

 

Qatari Investment Bank Said to Be Cutting Jobs  |  “As many as 13 people are leaving” QInvest, according to Bloomberg News. BLOOMBERG NEWS

 

BNP Paribas Said to Cut Jobs in Asia  |  The French bank BNP Paribas eliminated about 15 equity research jobs in Asia in the last month, Bloomberg News reports. BLOOMBERG NEWS

 

Lone Star Said to Be Contender for Lloyds Portfolio  |  Lone Star Funds is among the bidders for parts of a roughly $2.6 billion portfolio of real estate loans being sold by the Lloyds Banking Group, according to Bloomberg News. BLOOMBERG NEWS

 

R.B.S. to Sell German Buildings  |  The Royal Bank of Scotland is selling two buildings in Frankfurt for about $1 billion, Bloomberg News reports, citing two unidentified people with knowledge of the matter. BLOOMBERG NEWS

 

PRIVATE EQUITY '

Bain Capital to Buy Apex Tool for $1.6 Billion  |  The private equity firm co-founded by the Republican presidential candidate Mitt Romney has agreed to buy the Apex Tool Group, a maker of hand and power tools, for $1.6 billion. DealBook '

 

Bain's Ties to China Create Political Dilemma  |  Mitt Romney has invested in Bain Capital f unds that hold investments linked to China, “a reminder of how he inhabits two worlds that at times have come into conflict during his campaign for the White House,” The New York Times reports. NEW YORK TIMES

 

Signs of a Revival in Indian Private Equity  |  Recent moves by the Blackstone Group, the Carlyle Group and Standard Chartered Private Equity suggest that “investors may be returning to Indian investments,” The Wall Street Journal writes. WALL STREET JOURNAL

 

Goldman Sachs Backs Restructuring Plan for Nine Entertainment  | 
FINANCIAL TIMES

 

HEDGE FUNDS '

A Focus on Structured Credit Has Paid Off  |  For hedge funds, “asset-backed fixed income has been the place to be in 2012,” The Financial Times writes. FINANCIAL TIMES

 

Hedge Fund Said to Attract $500 Million From Blackstone  |  PDT Partners, a hedge fund run by a longtime Morgan Stanley proprietary trader with a record of achieving high returns, raised more than $500 million from the Blackstone Group, Bloomberg News reports. BLOOMBERG NEWS

 

How a Hedge Fund Pulled Ahead of the Pack  |  Metacapital Management, a hedge fund started by a former Lehman Brothers trader, is up 34 percent this year, according to Bloomberg News. BLOOMBERG NEWS

 

No Fireworks at Procter & Gamble Meeting  |  William A. Ackman didn't even show up. REUTERS

 

I.P.O./OFFERINGS '

Facebook's Haggling With the S.E.C.  |  Before Facebook went public, the company's management was “hesitant to disclose information and still guessing at even rudimentary aspects of its business,” Bloomberg News reports. BLOOMBERG NEWS

 

Workday Raises I.P.O. Range to $24 to $26  |  Initial public offerings have largely sputtered over the last few weeks, but the dismal environment has done little to dent investors' enthusiasm for Workday, a maker of human res ources software. DealBook '

 

Australian Gold Companies Plan to Sell Shares  | 
WALL STREET JOURNAL

 

VENTURE CAPITAL '

Venture Capital Firms Raise Nearly $5 Billion in 3rd Quarter  | 
REUTERS

 

Silicon Valley's Cloud Wars  |  Young companies providing cloud computing services “may offer more innovative approaches” than the established giants, the Bits blog writes. NEW YORK TIMES BITS

 

LEGAL/REGULATORY '

Support Grows for Tax on Financial Transactions  |  “Italy and Spain joined nine other European Union countries on Tuesday in backing a tax on financial trades, bringing the most significant attempt at such an initiative a step closer to success,” The New York Times reports. NEW YORK TIMES

 

Expanded Stress Tests for Banks  |  Under new rules, banks will have to do two internal “stress tests” a year and publish some of the results, The Wall Street Journal reports. WALL STREET JOURNAL

 

Antitrust Scrutiny of Google Turns to Smartphones  |  The Federal Trade Commission has begun to look into “patents that apply to lucrative smartphone technology, and the conduct of Google's Motorola Mobility subsidiary,” The New York Times reports. NEW YORK TIMES

 

China Gets Back to Work  |  Uncertainty about China's political transition has hurt foreign confidence in its economy and may have led to policy inertia in the face of a slowing economy, writes Bill Bishop, DealBook's China Insider columnist. DealBook '

 

Firm Said to Be Reviewing Unusual Stock Trades  |  An unidentified firm was determining whether it would seek to cancel certain stock trades, the Financial Industry Regulatory Authority said, according to Dow Jones. DOW JONES

 

What's at Stake in Gupta's Sentencing  |  Rajat K. Gupta, a former Goldman Sachs director convicted of being part of an insider trading scheme, is set to be sentenced this month. WALL STREET JOURNAL

 

Judge Signs Off on Settlement With Former Dewey Partners  | 
WALL STREET JOURNAL