ConAgra Foods Strikes a Deal for Ralcorp

ConAgra Foods has agreed to acquire Ralcorp Holdings in a deal valued at roughly $6.8 billion including debt, the companies announced on Tuesday. The price of $90 a share is about 28 percent above Ralcorp's closing price on Monday. The agreement, which would create a packaged food company with revenue of about $18 billion a year, comes after a failed attempt last year, when Ralcorp rejected an earlier bid from ConAgra.

 

‘EXPERT NETWORKS' IN THE SPOTLIGHT  |  Gerson Lehrman, a firm that connects hedge fund investors with experts in various fields, has insisted that it plays by the rules. But the so-called expert network is once again in an uncomfortable spotlight, as federal prosecutors say one of its experts fed inside information to Mathew Martoma, a former employee at the hedge fund SAC Capital Advisors who appeared in cour t on Monday.

“The expert network business model is inherently perilous,” Andrew Ross Sorkin writes in the DealBook column. While there is an argument to be made that such firms act as a “high-priced Facebook for consultants,” Mr. Sorkin says, they have shown up in a number of insider trading scandals, including the case against Raj Rajaratnam. Mr. Sorkin writes: “Investors don't pay hundreds of thousands of dollars a year for information that isn't material - at least, material to them. In the best of worlds, the expert network business model is about pushing clients as close to the ‘line' as possible without crossing it.”

In the case against Mr. Martoma, the expert, Dr. Sidney Gilman, has struck a nonprosecution agreement with the government and has agreed to testify, DealBook's Peter Lattman reports. His cooperation is central to the government's case, and it appears to be the first time a nonprosecution agreement “has been used to secure eviden ce from an individual in a prominent white-collar crime case,” Peter J. Henning writes in the White Collar Watch column.

 

SCHAPIRO'S LEGACY AT THE S.E.C.  |  Mary L. Schapiro is leaving the Securities and Exchange Commission in better shape than it was when she became the chairwoman four years ago, having “revamped the management ranks, revived the enforcement unit and secured more funding from a budget-conscious Congress,” DealBook's Ben Protess and Susanne Craig report. Still, there is still plenty of work for her successor, Elisse B. Walter, a Democratic commissioner who was named the new chairwoman on Monday. Critics contend that Ms. Schapiro was not aggressive enough in going after bank executives or in opposing the JOBS Act, which loosened securities regulations. “Confrontation is not in her DNA,” said Arthur Levitt, the agency's chairman under President Bill Clinton.

As for her future plans, Ms. Schapiro said she had “no idea what is next.” DealBook reports that Mary J. Miller, a senior Treasury Department official, is a likely candidate to take over from Ms. Walter, and that Sallie L. Krawcheck, a former top executive at Citigroup and Bank of America, is also “in the running.”

 

BRITAIN'S NEW CENTRAL BANKER  |  Mark J. Carney, the head of Canada's central bank, was named on Monday to succeed Mervyn A. King as the next governor of the Bank of England, a job that will come with expanded powers. The New York Times reports: “The appointment was arguably the most significant in the bank's 318-year history. Mr. Carney will not only be the first foreigner to lead the bank, but will also take responsibility for the health of the British financial system. Besides doing the traditional job of setting interest rates, the cent ral bank will directly regulate and oversee the country's banks and other financial institutions. Until now, such regulation and oversight has been primarily the job of the Financial Services Authority, which will be scrapped.”

Mr. Carney also happens to be a member of the “Government Sachs” club of public officials who once worked at Goldman Sachs, DealBook's Michael J. de la Merced notes. Mr. Carney spent 13 years at Goldman and reportedly beat a current Goldman executive, Jim O'Neill, for his new position. He faces big challenges at the Bank of England and will have to “guide the central bank and the economy towards the least intolerable destination,” Martin Wolf writes in The Financial Times, bidding Mr. Carney “good luck.”

 

ON THE AGENDA  |  The head of Goldman Sachs, Lloyd C. Blankfein, is said to be among the chief executives scheduled to meet with Speaker John A. Boehner in Washington on Wednesday to discuss the “fiscal cliff,” according to Bloomberg News. Marissa Mayer, Yahoo's chief executive, “plans to talk about where she is taking Yahoo” at a Silicon Valley dinner on Tuesday evening hosted by Fortune magazine, according to an invitation cited by AllThingsD. Data on durable goods orders in October is released at 8:30 a.m. The S.&P./Case-Shiller housing price index for September is out at 9 a.m. The Conference Board index of consumer confidence in November is out at 10 a.m. Carson Block of Muddy Waters Research is on Bloomberg TV at 10 a.m. James C. Woolery, co-head of JPMorgan Chase's North American mergers business, is on CNBC at 10:45 a.m. Sheila Bair, former chairwoman of the Federal Deposit Insurance Corporation, is on CNBC at 11:20 a.m.

 

MORTGAGE INTEREST DEDUCTION MAY BE CAPPED  | 

As President O bama and Congress hash out a budget deal, they may look for savings in the mortgage interest deduction, a tax break for home buyers that has long been considered a “sacred cow,” DealBook's Peter Eavis writes. “Limits on a broad array of deductions could emerge in any budget deal. It is likely that any caps would be structured to aim at high-income households, and would diminish or end the mortgage tax break for many of those taxpayers.” Such a plan would be opposed by the real estate industry, Mr. Eavis writes, but the “tax numbers suggest it may not be hard to structure deduction limits in a way that leaves most middle-income households untouched.”

 

 

 

Mergers & Acquisitions '

Lehman Sells Property Firm in a Deal Worth $6.5 Billion  |  Archstone, the apartment complex company whose purchase in 2007 helped sink Lehman Brothers, will now be sold for about $6.5 billion in cash and stock to help pay off creditors. DealBook '

 

ConocoPhillips Plans to Sell Stake in Oil Field for About $5 Billion  |  But the energy company's partners in the field in Kazakhstan have 60 days to oppose the sale, Reuters reports. REUTERS

 

McGraw-Hill to Sell Education Unit to Apollo for $2.5 Billion  |  McGraw-Hill agreed on Monday to sell its education division to Apollo Global Management for about $2.5 billion, completing the publisher's transformation into a provider of high-end financial information. DealBook '

 

Nationwide of Britain Expresses Interest in R.B.S. Branches  | 
REUTERS

 

INVESTMENT BANKING '

Credit Suisse Said to Cut Investment Bank Jobs in Britain  |  Credit Suisse is eliminating 100 jobs at its investment banking operation in Britain as part of its cost-cutting program, according to a person with direct knowledge of the plan. DealBook '

 

Lower Bonuses Expected for London Bankers  |  Bloomberg News repor ts: “Investment bankers and traders at European banks should expect at least a 15 percent cut in pay this year, while U.S. lenders may leave compensation unchanged, three consultants surveyed by Bloomberg said.” BLOOMBERG NEWS

 

Dimon Is Buffett's Pick for Treasury Secretary  |  Warren E. Buffett told Charlie Rose that Jamie Dimon, JPMorgan Chase's chief executive, “would actually be the best person” to be Treasury secretary “if we did run into problems in markets,” according to Bloomberg News. BLOOMBERG NEWS

 

Deutsche Bank's Former Chief Criticizes Successor  |  Josef Ackermann, the former head of Deutsche Bank, “criticized his successor Anshu Jain on Monday for not agreeing to appear at a German par liamentary hearing this week on Libor manipulation,” Reuters reports. REUTERS

 

JPMorgan Expects Revenue From I.P.O.'s in China to Decline  |  Fang Fang, the head of JPMorgan Chase's investment bank in China, said more companies in the region were choosing to sell debt rather than equity, Bloomberg News reports. BLOOMBERG NEWS

 

PRIVATE EQUITY '

TPG Buys FleetPride For More Than $1 Billion  |  The private equity firm TPG Capital bought FleetPride, a truck and trailer parts distributor, from the Bahrain investment group Investcorp. REUTERS

 

Private Equity Takes a Shine to Ret ail  |  In the first nine months of the year, the dollar value of announced private equity deals in the retail and consumer sectors more than doubled, to $20 billion, according to PricewaterhouseCoopers, The Wall Street Journal reports. WALL STREET JOURNAL

 

Private Equity Boss Buys Apartment Owned by an Heiress  |  Frederick Iseman, founder of CI Capital Partners, paid $22.5 million for a Fifth Avenue residence that once belonged to the copper heiress Huguette Clark, The New York Post reports. NEW YORK POST

 

HEDGE FUNDS '

Argentina Bondholders Challenge a Court Ruling  |  Investors who participated in a debt swap with Argentina ar e fighting an order that the government pay the “holdout” creditors, including an affiliate of Elliott Management, Reuters reports. REUTERS  |  FINANCIAL TIMES

 

Founder of Muddy Waters Considers Starting a Hedge Fund  | 
REUTERS

 

I.P.O./OFFERINGS '

A Onetime Critic of Facebook Changes Tune  |  Bernstein Research was bearish on Facebook when it went public in May, but on Monday the firm lifted its rating on the social network to “outperform,” The Wall Street Journal reports. WALL STREET JOURNAL

 

MegaFo n Said to Receive Strong Demand for I.P.O.  | 
REUTERS

 

VENTURE CAPITAL '

The Man in Charge of Making Money for Twitter  |  Adam Bain, Twitter's president of global revenue, uses a “growing array of advertising tools” to generate cash from cultural memes, like a comment by Vice President Joseph R. Biden Jr. during a debate, Fortune writes. FORTUNE

 

LEGAL/REGULATORY '

Intrade Bars U.S. Bettors After Regulatory Action  |  Facing accusations that it allowed American investors to bet on the outcome of wars and other world events without the blessing of regulators, Intrade announc ed on Monday that it was closing its Web site to United States residents. DealBook '

 

Cravath Sets the Tone for Law Firm Bonuses  |  Bonuses for associates at the big law firm Cravath, Swaine & Moore ranged from $10,000 for first-year associates to $60,000 for senior associates, according to a memo obtained by DealBook. Those numbers are a big bump from last year. DealBook '

 

Warning Signs at Autonomy Before H.P. Deal  |  The Wall Street Journal reports: “Autonomy used aggressive accounting practices to make sure revenue from software licensing kept growing - thereby boosting the British company's valuation.” WALL STREET JOURNAL

 

Investors Sue H.P. Over Autonomy Deal  | 
FINANCIAL TIMES

 

Audit of Kabul Bank Finds Fraud  |  Kabul Bank, which became Afghanistan's largest financial institution, was a “well-concealed Ponzi scheme,” according to a confidential forensic audit, The New York Times reports. NEW YORK TIMES

 

European Finance Ministers Reach an Agreement on Greek Bailout  |  The New York Times reports: “Finance ministers from the euro zone and the International Monetary Fund patched up their differences over a bailout for Greece early Tuesday with a spate of measures bringing closer the release of long-delayed emergency aid.” NEW YORK TIMES

 

The Confusing Outlooks for China's Growth  |  The recent economic data out of China have been good, but there is still no consensus on predictions for 2013 growth, Bill Bishop writes in the China Insider column. DealBook '

 

Investors Begin to Sour on Puerto Rico  |  Though investors once had a “nearly insatiable appetite” for Puerto Rico's bonds, some are now “pruning their holdings” as the territory's troubles deepen, The New York Times reports. NEW YORK TIMES