Before Facebook Deal, Instagram\'s Talks With Twitter

BEFORE FACEBOOK DEAL, INSTAGRAM'S TALKS WITH TWITTER  |  Facebook's deal to buy Instagram for $1 billion stunned Wall Street and Silicon Valley when it was announced in April. But executives at Twitter had an additional reason to be surprised. Instagram's founders “held several meetings as late as March with top Twitter executives,” The New York Times's Nick Bilton reports. “The sides had verbally agreed weeks earlier on a price for Instagram of $525 million in cash and Twitter shares,” Mr. Bilton reports, citing people on both sides of the talks, who requested anonymity because the talks were private and because they were concerned about legal repercussions.

That would appear to contradict statements that Instagram's ch ief executive, Kevin Systrom, made under oath, according to Mr. Bilton. Mr. Systrom testified in August at a hearing of the California Corporations Department that his company “never received any offers” at the time of the negotiations with Facebook. Instagram, he said, “talked to other parties, but never received any formal offers from anybody else.”

But when the deal was announced, Twitter executives were “shocked that they had not been given an opportunity to present a counteroffer,” Mr. Bilton reports. The people familiar with the negotiations “said Twitter was prepared to make higher offers.” The Facebook deal closed at $735 million in early September, after Facebook's stock tumbled. Mr. Bilton writes: “It is possible investors would have been better off selling in an open auction, to Twitter or even to Google or Microsoft.”

It's not yet clear how Instagram might make money, but some of its users have built businesses that piggyback on the photo-sharing service, The New York Times reports.

A.I.G. PREPARES TO EXIT ASIAN INSURER  |  After becoming a fully private enterprise for the first time since 2008, the American International Group is now preparing to end its longtime association with the Asian insurer AIA Group. On Monday, A.I.G. said it was beginning a process to sell its 13.7 percent stake in AIA, valued at about $6.7 billion. Shares in AIA were suspended from trading in Hong Kong pending an announcement on the outcome of the sale process. Neil Gough of DealBook writes: “In the end, A.I.G. may sell only part of its stake. A.I.G said it would sell the shares t o institutional investors and will use the proceeds from the deal for general corporate purposes.” A.I.G. has been gradually reducing its stake in AIA since the Asian insurer was spun out in 2010.

ARGENTINE SHIP TO SAIL HOME  |  While Argentina remains locked in a fight with hedge funds over defaulted bonds, the government is at least getting its naval ship back. A United Nations court on Saturday ordered the immediate release of the Libertad, the Argentine ship that became a pawn in the legal battle when it was detained in Ghana in early October, The Financial Times reports. Elliott Management, one of the hedge funds trying to force Argentina to pay up on old bonds, had obtained a court order to detain the ship, leading to “one of the most spectacular and embarrassing” ep isodes in Argentina's years-long legal struggle.

ON THE AGENDA  |  Mario Draghi, president of the European Central Bank, speaks at the quarterly hearing of the European Parliament's Economic and Monetary Affairs Committee at 9:30 a.m. David Tepper of Appaloosa Management is on CNBC at 8 a.m. Mohamed El-Erian, chief executive of Pimco, is on CNBC at 3:10 p.m.

A DOCTOR'S DOUBLE LIFE  |  Sidney Gilman, the Alzheimer's researcher at the center of the insider trading case against a former employee of SAC Capital Advisors, “was living a parallel life, one in which he regularly advised a wide network of Wall Street traders through a professional matchmaking system,” The New York Times writes. “The riddle for Dr. Gilman's longtime friends and colleagues is why a nationally respected neurologist was pulled into the high-rolling life of a consultant to financiers and how he, by his own admission, crossed the line into criminal behavior.” This conversion was not readily apparent in Dr. Gilman's lifestyle in Michigan, but colleagues now say his story provides a cautionary tale for those in academic medicine.

With the latest insider trading cases, the government continues to circle near Steven A. Cohen, the founder of SAC Capital. E-mails that were made public in the trial against two former hedge fund managers suggest that Mr. Cohen may have been consulted on a questionable trade in Dell stock, Bloomberg News reports. “Guys, I w as talking to Steve about Dell earlier today and he asked me to get the two of you to compare notes before the print, as we are on opposite sides of this one,” Michael S. Steinberg, a longtime SAC portfolio manager, wrote to two others at the firm.

Mergers & Acquisitions '

Sprint Reaches Deal to Buy Out Clearwire  |  Sprint increases its offer for Clearwire and its valuable wireless spectrum to $2.97 a share from $2.90 and wins the support of its board.
DealBook '

First Quantum Offers $5.2 Billion for Inmet Mining  |  The mining company has begun an improved $5.2 billion takeover offer for rival Inmet Mining in its latest attempt to buy the copper producer.
DealBook '

Cisco Said to Seek Buyer for Linksys  |  Cisco Systems has hired Barclays to find a buyer for Linksys, which is likely to sell for less than the $500 million Cisco paid for the company in 2003, Bloomberg News reports, citing unidentified people with knowledge of the situation.
BLOOMBERG NEWS

Buffett Hints at Interest in Allentown, Pa., Newspaper  |  When asked if he mi ght buy The Allentown Morning Call, Warren E. Buffett said, “Allentown is our kind of place.”
ALLENTOWN MORNING CALL

Best Buy Gives Founder More Time to Make a Bid  |  The beleaguered electronics retailer says it will give its founder, Richard Schulze, until Feb. 28 to make a takeover bid for the company, so that he may look at holiday sales numbers.
DealBook '

INVESTMENT BANKING '

A Warning for Investors in Long-Term Bonds  |  The New York Times columnist Floyd Norris writes: “Much of the recent issuance in bonds has been because of refinancing, in which companies repay existing bonds with money borrowed on better terms. For holders, it can seem the worst of both worlds: if rates rise, they have old bonds that have lost value. If rates fall, their old bonds are redeemed by the company, depriving them of the yield they expected.”
NEW YORK TIMES

Morgan Stanley Names New Regional Chiefs for Mergers Unit  |  Morgan Stanley named new heads of mergers and acquisitions for the Americas and for Europe on Friday after a management reshuffling brought on by t he impending departure of the senior deal maker Paul Taubman.
DealBook '

Morgan Stanley Builds Up Its Private Bank  | 
FINANCIAL TIMES

Santander Considers Absorbing a Subsidiary  |  Banco Santander said it would study “fully absorbing its 90-percent owned subsidiary Banesto,” Reuters reports.
REUTER S

Lazard Hires Ex-KPMG Executive in Australia  | 
WALL STREET JOURNAL

PRIVATE EQUITY '

K.K.R. Said to Raise $6 Billion Fund for Asia  |  K.K.R. has amassed “the largest private equity pool ever assembled” for Asia, Reuters reports, citing unidentified people.
REUTERS

Rise of Leverage Recalls Precrisis Deals  |  The Wall Street Journal reports: “Private equity firms are using almost as much debt to fund acquisitions as they did before the financial crisis, as return-hungry investors rush to buy bonds and loans backing those takeovers.”
WALL STREET JOURNAL

A Wrinkle in Carlyle's Deal for TCW  |  The Carlyle Group's “planned $780 million takeover of TCW Group Inc could prove less lucrative than envisioned due to the investment manager's financial ties to buyout firm EIG Global Energy Partners LLC, a TCW document to its lenders shows,” Reuters reports.
REUTERS

HEDGE FUNDS '

Hedge Funds Face the Prospect of Lower Fees  |  Financial News writes: “For hedge fund managers, the year marked an acceptance that they would finally need to give up the lucrative fee rates.”
FINANCIAL NEWS

A Year When Many Hedge Funds Went Under  | 
FINANCIAL NEWS

I.P.O./OFFERINGS '

SeaWorld Said to Prepare for I.P.O. Filing  |  SeaWorld Parks and Entertainment, which is controlled by the Blackstone Group, is close to filing for an initial public offering that may aim to raise $500 million to $600 million, Reuters reports, citing three unidentified people familiar with the situation.
REUTERS

Hong Kong's Slowdown in I.P.O.'s  |  In the global rankings for initial public offerings, Hong Kong has fallen to fourth place this year after three years on top, The Financial Times reports.
FINANCIAL TIMES

VENTURE CAPITAL '

Apps That Recall Details of Your Past  |  Apps like Timehop and Rewind.me, which offer reminders of past activity on social media, “are byproducts of a time of information overload,” The New York Times's Jenna Wortham writes.
NEW YORK TIMES

LEGAL/REGULATORY '

S.E.C. Says Asset Firm Manipulated Trades to Enrich Some Clients  |  Federal regulators said that Aletheia Research and Management steered profits to some clients, and to the firm's co-founder, Peter J. Eichler Jr., at the expense of others.
DealBook '

British Authorities Charge Hedge Fund Founder  |  The founder of Weavering Capital, one of Britain's oldest hedge funds, has been charged with fraud, fraudulent trading and false accounting.
DealBook '

Gupta Challenges Goldman Over Legal Fees  |  Rajat K. Gupta, the former Goldman Sachs director convicted of leaking boardroom secrets, “said Friday that the investment bank hasn't justified its request for nearly $7 million in legal fees and other expenses it claims were spent in connection with his insider-trading case,” The Wall Street Journal reports.
WALL STREET JOURNAL

Google Antitrust Case Said to Be Near Resolution  |  The Bits blog reports: “In the talks between the Federal Trade Commission and Google to negotiate the terms for ending the agency's antitrust investigation, things seem to be going Google's w ay, two people who have been briefed on the discussions said Sunday.”
NEW YORK TIMES BITS

In Google Antitrust Case, Onetime Allies on Opposite Sides  |  Two lawyers on opposite sides of Google's antitrust struggle, Gary L. Reback and Susan A. Creighton, were once partners in the antitrust case against Microsoft 14 years ago, The New York Times writes.
NEW YORK TIMES