The deal to take Dell private faces a major roadblock. Southeastern Asset Management, the company’s largest outside shareholder with an 8.5 percent stake, said on Friday that it would oppose the buyout plan, contending in a letter to the board that the offer of $24.4 billion, or $13.65 a share, was too low. Saying the company was worth closer to $24 a share, Southeastern laid out a range of possible tactics, including a proxy fight and lawsuits, to block the “ill-advised transaction,†DealBook’s Michael J. de la Merced reports.
Though the deal was initially treated as a near certainty on Wall Street, opposition may grow, Andrew Bary of Barron’s writes. Another shareholder, Pzena Investmnt Management, is calling the current offer unfair. “There’s no logic for this deal other than greed,†Richard Pzena, the firm’s chief investment officer, said. “If Michael Dell wants a bigger ownership stake, let Dell make a tender offer for the stock. Why does he have to force out everyone else†The company has agreed to a 45-day go-shop period, to allow any rival bidders to submit offers, but “it is highly unlikely that another bidder will emerge,†Steven M. Davidoff writes in the Deal Professor column.
If the deal does succeed, Michael S. Dell, the founder, would face an array of challenges, Jeff Sommer, a columnist for The New York Times, writes. “Dell now faces lean Asian competitors like Lenovo, Asus and Acer that make PCs more cheaply and accept lower profit ! margins,†and in addition, “the entire PC industry is stagnant at best.†The company’s best hope, said Toni Sacconaghi, an analyst at Sanford C. Bernstein, might be to “hold PC profits flat or, worst case, down 5 percent a year, while they grow the rest of the business to more than offset that.â€
AIRLINE MERGER MAY COME THIS WEEK  | Months of negotiations may culminate this week in an announcement that American Airlines and US Airways plan to merge, creating the nation’s biggest airline, Jad Mouawad reports in The New York Times. “A merger would expand American’s domestic network, particularly in the Northeast and the Southwest, and create a more formidable competitor internationally. The combined airline would jump ahead of UnitedAirlines and Delta Air Lines, both of which have grown through mergers of their own in recent years.†American’s parent has been in bankruptcy since November 2011.
“The boards of both carriers are expected to meet some time this week to approve the combination, which then needs to be approved by a bankruptcy judge in New York. A deal could be struck this week or possibly next week, as talks are continuing. A union also requires the approval of federal regulators and antitrust authorities. But analysts expect regulators to approve the deal since there is little overlap between the two networks and no hubs in the same cities.â€
NEW APPROACH AT BARCLAYS  | The British bank Barclays plans to announce an overhaul of its business units on Tuesday, after its reputation was tarnished last year in a rate-manipulation scandal. Antony P. Jenkins, the chief executive, writes in an opinion essay in The Sunday Telegraph that “there is a deeply-held skepticism about the desire for fundamental change within banking. Such skepticism is understandable. The bad news about banking shows little sign of abating. The headlines may be about past behavior but they expose just how badly our industry lost its way. A pursuit of short-term profits saw banking become too aggressive and disconnected from the needs of our customers, clients and wider society.â€
But the shift at Barclays may not be as pronounced as some are expecting. The new plan will “leave the bank’s strategy largely intact, according to people briefed on the matter,†The Wall Street Journal reports. “The presentation, at the imposing redbrick headquarters of London’sRoyal Horticultural Society, will be Barclays’s latest attempt to recast itself as a kinder, gentler institution that also happens to be profitable.â€
ON THE AGENDA Â |Â The Group of 30, a private body that brings together business leaders and policy makers, releases a report in London on global finance. John Bogle, founder of the Vanguard Group, is on CNBC at 3:10 p.m. Ralph Schlosstein, chief executive of Evercore Partners, is on CNBC at 4:30 p.m.
FOR SAVERS, RISKY INVESTMENTS TURN SOUR  | Americans whose stock portfolios lost money in the financial crisis have turned to speculative investments promoted by aggressive financial advisers â€" leading to steep losses and accusations of fraud. “Those alternative investments have now had time to go sour in big numbers, state and federa! l securit! ies regulators say, and are making up a majority of complaints and prosecutions,†Nathaniel Popper reports in The New York Times. “Last Wednesday, Mr. Galvin’s office ordered one of the nation’s largest brokerage firms, LPL Financial, to pay $2.5 million for improperly selling the real estate bundles, known as nontraded REITs, or real estate investment trusts, to hundreds of state residents from 2006 to 2009, in some cases overloading clients’ accounts with them.â€
“Brokers promoting bad investments to unsophisticated investors is nothing new. But while the easy prey used to be people looking to get rich quick, the pool has widened to include savers looking for ways to earn the kind of income once reliably available from traditional investments. Regulators are warning investors that the dangers are unlikely to recede, given the Federal Reserve’s pledg to keep interest rates near zero and the push among financial firms to earn more revenue from so-called alternative investments marketed to retail investors.â€
Hakon Invest to Buy Stake in Nordic Retailer for $3.1 Billion  | The Swedish company Hakon Invest has agreed to buy the remaining stake in the Nordic retailer ICA that it does not already own for $3.1 billion. DealBook Â'
Google’s Schmidt to Sell Part of Stake  | Eric Schmidt, Google’s executive chairman, “is sell! ing rough! ly 42 percent of his stake in the Internet search company, a move that could potentially net the former chief executive a $2.51 billion windfall,†Reuters reports. REUTERS
Deal-Making Shows Signs of a Revival  |Â
FINANCIAL TIMES
A Healthy Challenge to Brewery Deal  | The New York Times editorial board writes: “Consumers will benefit from the Justice Department’s antitrust suit to block Anheuser-Busch InBev, the country’s largest brewing company, from acquiring one of its competitors. This kind of action was seen less frequently in the Bush administration.€ NEW YORK TIMES
CIT Said to Have Considered a Sale  | The CIT Group “had preliminary talks over the past year and a half to sell itself to banks, including Toronto-Dominion Bank and Wells Fargo & Company, but nothing came of the conversations, according to three people familiar with the specialty finance company,†Reuters reports. REUTERS
Longtime Wall Street Deal Maker Expands Advisory Firm  | Robert Wolf, a for! mer chair! man of UBS, was expected to formally announce on Monday the hiring of several executives for his firm, 32 Advisors, including former members of the Obama administration. DealBook Â'
Why Wall Street Analysts Bungled a Call on Apple  | Professional stock analysts can suffer from a range of conflicts, and they also “fall into the same pitfalls that afflict most investors,†James B. Stewart, a columnist for The New York Times, writes. NEW YORK TIMES
At Lew’s Confirmation Hearing, a Fund May Be in the Spotlight  | Jack Lew, President Obam’s nominee to be Treasury secretary, had $56,000 invested in a Citigroup venture capital fund based in the Cayman Islands as recently as 2010, an issue that was expected to come up at his confirmation hearing on Wednesday, The Caucus blog writes. NEW YORK TIMES CAUCUS
In Emerging Markets, Private Equity’s Growing Pains  | In emerging markets, “private equity fund-raising and investment soared pre-2008 on the back of the credit bubble, plunged in the bust, and then … it gets complicated,†The Financial Times writes in a blog post. FINANCIAL TIMES
Apollo’s Profit Nearly Doubles on Investment Gains  | Apollo Global Management reported on Friday a $697 million profit for the fourth quarter, as improvements in its private equity holdings offset weaker performance in other operations. DealBook Â'
Activist Investors Turn to Financial Institutions  | The Financial Times reports: “Financial institutions face fresh attention from aggressive activist and hedge fund investors, adding another distraction to alist of troubles that already includes increased regulation and diminished profits. Some of the biggest names in finance are already in the cross hairs.†FINANCIAL TIMES
Former Analyst Tries Hand at Activist Investing  |Â
REUTERS
Money Transfer Business Prepares to Go Public  | Xoom, which operates a service that lets immigrants in the United States send money home, “is looking to raise as much as $86.3 million†and re! cord a st! arting market value as high as $468 million, The Wall Street Journal writes. WALL STREET JOURNAL
For a Growing App, Impermanence Has Value  | Snapchat, an app that lets people send images that disappear after a few seconds, “recently raised $13.5 million in venture financing, led by Benchmark Capital, which values the company at $60 million to $70 million even without an established revenue stream,†The New York Times reports. NEW YORK TIMES
Apple Developing a Wristwatch-Like Device  | Apple “is experimenting with wristwatchlike devices made of curved glass, according to people familiar with the company’s explorations,†and such a device could “be used to make mobile payments, with Apple’s Passbook payment software,†Nick Bilton writes on the Bits blog. NEW YORK TIMES BITS
A Less-Than-Smooth Journey in Tesla’s Sedan  | The New York Times describes a test drive in Tesla’s Model S sedan. NEW YORK TIMES
S.E.C.’s Revolving Door Hurts Its Effectiveness, Report Says  | A watchdog group’s study pointed to cases where companies hired former agency employees to wage successful fights against the commission’s enforcement and policy efforts. DealBook Â'
Appeals Court Hears Arguments Over Rejected Citigroup Settlement  | Lawyers for the S.E.C. and Citigroup argued that Judge Jed S. Rakoff exceeded his authority when he rejected a settlement that allowed Citigroup to avoid an admission of wrongdoing. DealBook Â'
Macmillan Agrees to Settle Suit Over E-Book Pricing  | The Media Decoder blog reports: “Macmillan said on Friday that it had agreed to settle a lawsuit brought by the Justice Department over the pricing of e-books, asserting that the potential costs of continuing to fight the action were too high.†NEW YORK TIMES MEDIA DECODER
Breaking Into Credit-Rating Club Proves Difficult  | An upstart credit-rating firm, R&R Consulting, “has been trying to get recognition as a credit-rating agency since 2011. Frustrated by what it perceives as roadblocks erected by the S.E.C.! , its exe! cutives are beginning to wonder if the commission really wants increased competition,†Gretchen Morgenson writes in The New York Times. NEW YORK TIMES
Trying to Shut Down the Consumer Agency  | The Consumer Financial Protection Bureau’s apparent effort to police the financial industry is “what worries Republicans. They can’t prevent the bureau from regulating their financial supporters,†the editorial board of The New York Times writes. NEW YORK TIMES
