Sprint Clinches Deal With SoftBank

SPRINT CLINCHES DEAL WITH SOFTBANK  |  Sprint Nextel is selling 70 percent of itself to SoftBank for $20.1 billion. The deal, which was announced on Monday, is Sprint's boldest attempt to improve its fortunes as it faces new pressure from rivals, DealBook reports.

SoftBank, a big Japanese telecommunications company, said it would pay $8 billion to buy newly issued Sprint stock and $12.1 billion to buy existing stock from other investors at a premium. Sprint's shares have risen 14 percent since the company confirmed on Thursday it was in talks with SoftBank. The transaction, which is expected to close in the middle of 2013, ends speculation about Sprint's fate after T-Mobile agreed to combine with MetroPCS. DealBook notes that “Sprint is also working to gain more control over Clearwire, the wireless broadband company in which it owns a large stake, people famil iar with the matter said.”

 

CITIGROUP TO REPORT EARNINGS  |  Bank earnings continue with Citigroup at 8 a.m. Analysts expect the bank to report earnings of 96 cents a share, compared with $1.23 a share in the period a year earlier. The results, in any case, will be analyzed for clues to the health of the broader banking sector. JPMorgan Chase and Wells Fargo, which reported earnings on Friday, were helped by a pickup in mortgage lending. But investors still had reservations, as shares of both banks closed lower on Friday.

On Citigroup's conference call at 11 a.m., you can expect to hear about how regulations are affecting the bank's business. Bankers tend to blame the government for hindering mortgage lending, DealBook's Peter Eavis writes, but that argument leaves out some important realities.

 

NOBEL GOES T O 2 AMERICANS  |  The Nobel Memorial Prize in Economic Sciences was awarded to Alvin E. Roth of Harvard (soon to be at Stanford) and Lloyd S. Shapley of U.C.L.A., “for the theory of stable allocations and the practice of market design.”

 

MORGAN STANLEY TO BE SUED OVER MORTGAGES  |  Banks' risky ways during the mortgage boom are coming back to haunt them, with Wells Fargo and JPMorgan Chase being sued this month. Now, the American Civil Liberties Union is taking aim at Morgan Stanley's mortgage machine in a lawsuit expected to be filed on Monday, claiming that the investment bank fueled risky mortgage lending directed at African-American borrowers, Jessica Silver-Greenberg reports in The New York Times. The lawsuit says Morgan Stanley pressured a now-defunct lender, New Century, to “churn out the wildly profitable loans that came wit h ‘dangerous' characteristics,” according to The Times.

 

ON THE AGENDA  | 
The president of the Federal Reserve Bank of New York, William C. Dudley, speaks at a National Association for Business Economics conference in New York at 8 a.m. George Soros speaks at the conference at 11:45 a.m. Paul Volcker is at N.Y.U.'s Stern School of Business at 5:45 p.m. in a conversation with William L. Silber, the author of a new book on the former Fed chairman. Laurence Fink of BlackRock and Robert Greifeld of Nasdaq join two other chief executives for a discussion on the federal debt at 4 p.m. on Bloomberg TV. Randi Zuckerberg, sister of Mark and executive producer for “Start-ups: Silicon Valley,” is on CNBC at 10:40 a.m. Charles Schwab reports earnings before the opening bell, and the brokerage firm's chief executive is on CNBC at 7 p.m. Data on retail sales for September are to be released at 8:30 a.m.

 

HIGH-SPEED TRADING COOLS DOWN  | 
Dominating the stock market may not be so lucrative after all. High-frequency trading firms, “struggling to hold onto their gains,” are expected to make no more than $1.25 billion in profit this year, down 35 percent from last year, Nathaniel Popper reports in The New York Times. “While no official data is kept on employment at the high-speed firms, interviews with more than a dozen industry participants suggest that firms large and small have been cutting staff, and in some cases have shut down.”

 

ROMNEY'S IN-HOUSE ECONOMIST  | 
The economist behind Mitt Romney's policies is R. Glenn Hubbard, the dean of Columbia Business School, who straddles “the occasionally uncomfortable line between acade mia and politics,” The New York Times writes. Mr. Hubbard, like the Republican candidate, would like to repeal the Dodd-Frank financial overhaul and lower taxes. But he is more than just a pundit. If Mr. Romney is elected, Mr. Hubbard may be in the running for the job of Treasury secretary or even Federal Reserve chairman, The Times writes. He may have more to say on CNBC on Monday at 4:20 p.m.

 

 

 

Mergers & Acquisitions '

Advent Offers to Buy Douglas Holding for $1.9 Billion  |  The private equity firm Advent International has ended a year of talks with a deal to buy Douglas Holding, the German cosmetics retailer. BLOOMBERG NEWS

 

Bidders Line Up for R.B.S. Branches  |  Virgin Money and the private equity investor Christopher Flowers are each interested in branches being sold by the Royal Bank of Scotland, according to The Financial Times. The assets were to be sold to Banco Santander, but that agreement fell apart last week. FINANCIAL TIMES  |  REUTERS

 

Amazon Said to Be in Talks for Unit of Texas Instruments  |  The online retailer Amazon is looking to buy the mobile chip business of Texas Instruments, according to a report in an Israeli newspaper. REUTERS

 

Vivendi Assets Attract Interest From Potential Bidders  |  Vivendi's Brazilian telecommunications business GVT and its stake in an African phone operator are being eyed by some potential buyers, and bidding “may begin within a month or two,” The Wall Street Journal reports. WALL STREET JOURNAL

 

Bid to Buy China Gas for $2.2 Billion Collapses  |  Sinopec and ENN Energy Holdings said they had abandoned their offer after failing to get regulatory approval. REUTERS

 

INVESTMENT BANKING '

HSBC Said to End Agreements With Some Hedge Funds  |  HSBC is ending fund-administration agreements with some smaller Asian hedge funds “to focus on more profitable ones,” according to Bloomberg News. BLOOMBERG NEWS

 

Gorman, Wall Street ‘Visionary'  |  William D. Cohan writes in a column in Bloomberg News that James P. Gorman, Morgan Stanley's chief executive, has evidently decided that “the time has come to refashion Wall Street into a lower-risk, presumably far safer enterprise.” BLOOMBERG NEWS

 

Charges Dropped in Stabbing Case  |  A former Morgan Stanley executive who was accused of stabbing a cabdriver will not face charges, Bloomberg News reports. BLOOMBERG NEWS

 

Banks Make a Push to Hire Military Veterans  | 
WALL STREET JOURNAL

 

PRIVATE EQUITY '

< span class="title">Cinven Said to Raise $5.2 Billion for Latest Fund  |  The British private equity firm is 80 percent of the way toward its goal for the fund, according to Bloomberg News. BLOOMBERG NEWS

 

Blackstone Collects on London Real Estate Investments  | 
BLOOMBERG NEWS

 

Virgin Mobile Looks to Tap Private Equity  |  The carrier is raising up to $100 million from “wealthy investors and private equity groups,” according to The Financial Times. FINANCIAL TIMES

 

HEDGE FUNDS '

Failing Grades for University Endowments  |  James B. Stewart writes in his column in The New York Times that data show that university endowments of various sizes “all underperformed a simple mix of 60 percent stocks and 40 percent bonds over one-, three- and five-year periods.” NEW YORK TIMES

 

Man Group Insiders to Be Allowed to Sell Shares  |  The founders of GLG Partners, a hedge fund that was bought by the Man Group two years ago, will be able to sell shares on Monday. But the deal that brought them into the giant hedge fund has amounted to a $220 million paper loss, The Financial Times writes. FINANCIAL TIMES

 

Caxton Associates to Lower Its Fees  |  The $7.5 billion hedge fund is reducing its management fee to 2.6 p ercent from 3 percent, and its performance fee to 27.5 percent from 30 percent, The Wall Street Journal reports, citing unidentified people familiar with the firm. WALL STREET JOURNAL

 

I.P.O./OFFERINGS '

Workday Soars 74% in Debut  |  Capping a spate of strong initial offerings last week, Workday, the software company, opened 72 percent above its offer price of $28 in its debut on Friday, on heavy trading volume. DealBook '

 

Abraaj Capital Considers I.P.O. of Egyptian Medical Company  | 
REUTERS

 

VENTURE CAPITAL '

A Large Adv ertiser Favors Twitter  |  General Motors did not see much value in advertising on Facebook, but the company says there has been a robust response to its ads on Twitter, The Financial Times reports. FINANCIAL TIMES

 

New Details of Cornell's High-Tech Campus  |  Cornell's new school, to be completed in 2037, is “expected to transform Roosevelt Island from a sleepy bedroom community into a high technology hothouse,” The New York Times writes. NEW YORK TIMES

 

LEGAL/REGULATORY '

Admirers of Gupta Urge Leniency  |  Bill Gates and Kofi Annan wrote letters to a judge on behalf of Rajat K. Gupta, a former McKinsey & Company leader fac ing sentencing for insider trading, Bloomberg News reports. BLOOMBERG NEWS

 

Fresh Scrutiny for Reverse Mortgages  |  Regulators are finding new instances of abuses in reverse mortgages, including lenders that are “aggressively pitching loans to seniors who cannot afford the fees associated with them, not to mention the property taxes and maintenance,” The New York Times reports. NEW YORK TIMES

 

The Political Viability of a Cap on Bank Size  |  Simon Johnson writes in a column in Bloomberg News that a recent argument by Daniel K. Tarullo, a Fed governor, is “a significant - perhaps even dramatic - shift in thinking at the central bank.” BLOOMBERG NEWS

 

The Limits to Liquidation Authority  |  A challenge to the Dodd-Frank power by some states is not compelling, yet questions remain over how authorities would deal with subsidiaries when a big financial institution fails, Stephen J. Lubben writes in the In Debt column. DealBook '

 

Bernanke Defends Global Effects of Fed's Policy  | 
REUTERS

 

Little Agreement Among Global Financial Leaders  | 
WALL STREET JOURNAL

 

F.T.C. Raises Antitrust Pressure on Google  |  The Federal Trade Commission is preparing to recommend that the government sue Google, The New York Times reports. NEW YORK TIMES

 

Trial Date Set for Sidelined Goldman Executive  |  The Securities and Exchange Commission's case against Fabrice Tourre, who is on leave as a Goldman Sachs vice president, is set to begin trial on July 15. BLOOMBERG NEWS