A Deal for Dell

A deal for Dell is almost here. In what would be the biggest buyout since the financial crisis, Dell was close to an agreement to sell itself to a consortium of its founder, Microsoft and the private equity firm Silver Lake for more than $23 billion, people briefed on the matter told DealBook’s Michael J. de la Merced.

The final details were being worked out on Monday, and an agreement could be announced as soon as Tuesday, although the talks could still collapse, the people briefed on the matter said. The investors are expected to pay $13.50 to $13.75 a share, with Michael S. Dell, the founder, contributing his nearly 16 percent stake to the deal, worth about $3.8 billion under the current terms. Silver Lake would likely contribute about $1 billion, and Microsoft is expected to put in about $2 billion in the form of preferred shares or debt, the people added. Dell may also bring home some of its ofshore cash to help finance the deal.

“The question will now turn to whether taking the personal computer maker private will accomplish what years of previous turnaround efforts have not,” Mr. de la Merced writes. “Mr. Dell has sought to move the company into the more lucrative and stable business of providing corporations with software services, spending billions of dollars on acquisitions to lead that transformation. The aim is to refashion Dell into something more like I.B.M. or Oracle. Even so, manufacturing PCs still makes up half of the company’s business.”

LIBERTY GLOBAL IN TALKS TO BUY VIRGIN MEDIA  |  Liberty Global, the cable company owned by the American billionaire John C. Malone, is in talks to buy Virgin Media, the British company said on Tuesday. Shares in Virgin Medi! a rose almost 15 percent in early trading in London on Tuesday. The company’s enterprise value is around $19.4 billion according to data from Thomson Reuters. “The British company, whose primary listing is on Nasdaq, is the second-largest pay-TV provider in Britain after BSkyB, which is partly owned by Rupert Murdoch’s News Corporation. A potential deal for Virgin Media would put Mr. Malone head-to-head with Mr. Murdoch, his longtime rival,” DealBook’s Mark Scott writes.

U.S. ACCUSES S.&P. OF FRAUD  |  The Justice Department on Monday filed civil charges against Standard & Poor’s, the nation’s biggest credit-rating agency, accusing it of inflating the ratings of mortgage investments. “The suit, filed in federal court in Los Angeles, is the first significant federal action against the ratings industry, which during the boom years reaped record profits as it bestowed gilt-edged ratings n complex bundles of home loans that quickly went sour,” Andrew Ross Sorkin and Mary Williams Walsh write in DealBook. More than a dozen state prosecutors are expected to join the federal suit, and New York’s attorney general is readying a separate action.

S.&P. “knowingly and with the intent to defraud, devised, participated in, and executed a scheme to defraud investors” in mortgage-related securities from September 2004 through October 2007, according to the suit filed against the company and its parent, McGraw-Hill Companies. The credit-rating agency also falsely represented that its ratings “were objective, independent, uninfluenced by any conflicts of interest,” the suit claimed. S.&P., for its part, said it had acted in good faith. “A D.O.J. lawsuit would be entirely without factual or legal merit,” the company said, adding that its competitors had given the same ratings to the securities believed to be in question.

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“Settlement talks between S.&P. and the Justice Department broke down in the last two weeks after prosecutors sought a penalty in excess of $1 billion and insisted that the company admit wrongdoing, several people with knowledge of the talks said,” Mr. Sorkin and Ms. Walsh write. “That amount would wipe out the profits of McGraw-Hill for an entire year. S.&P. had proposed a settlement of around $100 million, the people said. S.&P. also sought a deal that would allow it to neither admit nor deny guilt; the government pressed for an admission of guilt to at least one count of fraud, said the people. S.&P. told prosecutors it could not admit guilt without exposing itself to liability in a multitude of civil cases.”

McGraw-Hill’s stock tumbled almost 14 percent on Monday, to close at $50.30 a share.

HERBALIFE’S ELUSIVE SALES DATA  |  The hedge fund manager William A. Ackman has clashed with aother big investor, Daniel S. Loeb, over whether the nutritional supplements company Herbalife is a pyramid scheme. Regulators scrutinizing the company will have an interesting problem, DealBook’s Peter Eavis writes. “The public numbers do not provide a clear picture of who buys Herbalife products â€" and why. So-called direct-sales companies like Herbalife operate in an accounting gray area that allows them to book goods bought by its network of sales representatives as revenue. Most traditional retailers record sales when a customer buys something. The uncertainty has left shares of Herbalife vulnerable to wild swings in recent months.”

Herbalife claims it is a strong company, but it is hard to discern the underlying demand. “The company doesn’t specify how many of those products are eventually sold to customers outside the sales network. Nor does it detail how many products are consumed by members of its network.”

One for! mer sales! woman for Herbalife, Ana Arias, of Scottsdale, Ariz., is considering legal action against the company, estimating she lost $210,000 after three years in the company’s network. “They want to make people believe there is this long line of consumers,” she said. “I realized it was going to go nowhere.”

ON THE AGENDA  |  The Commodity Futures Trading Commission holds a daylong public meeting starting at 9:30 a.m. on proposed rules to protect client funds held by futures commission merchants and derivatives clearing organizations. NYSE Euronext, BP and Sirius XM Radio report earnings on Tuesday morning. Zynga announces results in the evening. The ISM nonmanufacturing survey for January is out at 10 a.m. Apple release its newest version of the iPad.

BRIDGEWATER SAID TO PLAN NEW FUND  |  Bridgewater Associates, the world’s largest hedge fund firm, has told investors it will start a new fund this year, to help make sure another fund does not get too big, The Wall Street Journal reports. The new fund, All Weather Major Markets, was described as a variation of its All Weather strategy, which returned 15.3 percent in 2012, gross of fees, according to the newspaper. The firm also said it had sold a minority equity stake to an outside investor whom it did not identify, the newspaper says. Last year, the Teacher Retirement System of Texas bought a $250 million stake in Bridgewater.

Mergers & Acquisitions Â'

Singapore Exchange Said to Be in Talks for Stake in LCH.Clearnet  |  The Financial Times reports: “SGX, the Singapore exchange, is in discussions about taking a stake in LCH.Clearnet, the transatlantic clearing house, as bourses gear up for sweeping reform of derivatives and equities markets.” FINANCIAL TIMES

Before SoftBank Deal, Sprint Said to Have Talked With 4 Others  |  Reuters reports: “Sprint Nextel Corp, the No. 3 U.S. mobile service provider, said that it talked to four different companies about a potential deal before it announced its agreement to sell 70 percent of its shares to Japan’s SoftBank Corporation for $20 billion.” REUTERS

Wheat Exchange to Close  |  The CME Group “plans to close the storied grain-trading pits at the Kansas City Board of Trade this summer, ending a 157-year run for the wheat-futures exchange,” The Wall Street Journal reports. WALL STREET JOURNAL

Oracle to Buy Acme Packet for $2.1 Billion  |  Oracle’s deal machine has come to life once more, as the enterprise software giant agreed on Monday to buy Acme Packet for $2.1 billion to bolster its communications prod! uct offer! ings. DealBook Â'

Unit of China Resources to Buy Kingway Brewery in $863.2 Million Deal  | 
REUTERS

GlaxoSmithKline Increases Stake in Indian Consumer Arm  | 
REUTERS

INVESTMENT BANKING Â'

UBS Posts $2 Billion Loss Tied to Legal Settlements  |  The Swiss bank cited costs to settle legal matters, including its role in the rate manipulation scandal. DealBook Â'

UBS Said to Tie Bonuses to Capital Requirements  |  The Financial Times reports: “UBS has shaken up its pay scheme, becoming the first big bank to give thousands of senior bankers bonuses in the form of bonds that can be wiped out if the lender fails to meet capital requirements.” FINANCIAL TIMES

Goldman’s Cohn Says Europe Is Still a Concern  |  “No one has solved the European economic issue for me yet,” Gary Cohn, Goldman ! Sachs’s! president, told Bloomberg TV, saying the Continent still faced “fundamental problems.” BLOOMBERG NEWS

Moody’s Warns Jefferies on ‘Excessive’ Pay  |  The credit rating agency said in a note on Monday that it regarded the large compensation packages awarded to top executives as a potentially ominous event for bondholders. DealBook Â'

Fidelity’s Target Date Funds Lag Behind Those of Rivals  |  The New York Times reports: “Fidelity Investments is the giant of ‘target date’ mutual funds, one of the hottest ideas in 401(k) plans For its customers, the payoff has hardly been outsize.” NEW YORK TIMES

Former JPMorgan Banker to Start Advisory Firm  |  Ian Hannam, JPMorgan Chase’s former global chairman of equity capital markets who was fined $708,000 by British authorities last year, is planning to start a new investment and advisory firm. DealBook Â'

PRIVATE EQUITY Â'

Longtime K. K. R Executive Said to Depart  |  “Frederick Goltz, wh! o has bee! n with K..K.R. for 18 years and ran the firm’s mezzanine business, has left the global buyout shop,” peHUB reports. PEHUB

Carlyle’s Investment Ideas, by Podcast  |  In its latest foray into new media, the private equity firm Carlyle Group releases a podcast in which William E. Conway Jr., the co-founder and co-chief executive, discusses the investment outlook for the coming year. DealBook Â'

HEDGE FUNDS Â'

Avenue Caital Prepares New Fund for Europe  |  The hedge fund run by Marc Lasry is in the process of raising a $500 million fund to invest in distressed European assets, signaling the firm’s continued belief in a long-term recovery for the region. DealBook Â'

Swiss Ski Resort Under Pressure From Hedge Fund Investor  |  The Swiss ski resort of Saas-Fee is facing pressure from Edmond Offermann, “a nuclear scientist turned millionaire working for hedge fund Renaissance Technologies,” who has invested $16.4 million to try to revive the ski-lift company, Bloomberg News reports. BLOOMBERG NEWS

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I.P.O./OFFERINGS Â'

Sinopec to Raise $3.1 Billion in Hong Kong  |  The China Petroleum and Chemical Corporation, the oil and refining giant better known as Sinopec, said proceeds from the private placement of new shares would be used to finance business development. DealBook Â'

Moscow Exchange Prices I.P.O.  |  Russia’s largest stock Exchange said it had priced its shares at 55 rubles to 63 rubles, in a listing that would value the company at up to $4.6 billion. DealBook Â'

VENTURE CAPITAL Â'

More Start-Ups Enter the Billion-Dollar Club  |  The New York Times reports: “The number of privately held Silicon Valley start-ups that are worth more than $1 billion shocks even the executives running those companies.” NEW YORK TIMES

Samsung Announces $100 Million Seed Investment Fund  | 
PEHUB

Venture Capital’s Sluggish Performance  |  Investors need to strip the venture capital industry of its mystique and demand greater transparency and a better deal, Robert Cyran of Reuters Breakingviews writes. DealBook Â'

LEGAL/REGULATORY Â'

Barclays Sets Aside an Additional $1.6 Billion for Legal Costs  |  The British bank Barclays has made additional provisions totaling $1.6 billion to cover legal costs related to the inappropriate selling of insurance and interest-rate hedging products. DealBook Â'

Head of Japanese Central Bank Offers to Resign Early  |  The Wall Street Journal reports: “Bank of Japan Gov. Masaaki Shirakawa said he had offered to step down March 19, about three weeks before his term expires on April 8.” WALL STREET JOURNAL

Corporations Could Face More Cases of Criminal Liability  |  Mary Jo White expressed disdain for corporate criminal liability while she was in private practice. But that does not mean companies under investigation can expect an easy ride under her reign, Peter J. Henning writes in the White Collar Watch column. White Collar Watch Â'

A Tangle of Possible Conflicts Among S.E.C. Officials  | 
WALL STREET JOURNAL

Despite Reorganizations, Scant Signs of Change in Airline Industry  |  Major airlines have followed one of two main paths in their reorganization cases. But they never seem to use Chapter 11 to consider a new business model, Stephen J. Lubben writes in his column, In Debt. DealBook Â'

A New Year, but Some Old Issues  |  Those who say China has too many railroads and roads should travel in the country this week, when the annual Spring Festival migration by hundreds of millions of people gets under way, Bill Bishop writes in the China Insider column. DealBook Â'