In Dell, Shifting Attitude Toward Buyouts

IN DELL OFFERS, SHIFTING ATTITUDE TOWARD BUYOUTS  |  The battle over Dell puts into focus the question of whether management-led buyouts are in shareholders’ best interests, and it reflects a shifting ethos on Wall Street, “one that might be slightly less short-term greedy than that of previous generations,” Andrew Ross Sorkin writes in the DealBook column. “It appears that some shareholders of companies involved in buyouts would prefer to ride a wave of gains alongside the buyout kings rather than cash out immediately.”

The rival proposals from the Blackstone Group and Carl C. Icahn that emerged over the weekend appear designed to give long-term investors a seat at the table. They involve the bidders’ acquiring a majority of shares and leaving a small minority, known as a stub, in the public market. “In some ways, the shift is an ironic about-face for private equity firms, which have long evangelized on the merits of taking companies private that are in need of a turnaround and have spoken derisively about the pressures of the public markets,” Mr. Sorkin writes. The Dell shareholder Southeastern Asset Management said it was “pleased that the alternative proposals submitted to the Dell Special Committee are structured to give shareholders the opportunity to continue to participate in the company’s future prospects.”

Shares of Dell rose 2.6 percent on Monday to $14.51, suggesting investors expect a bid higher than the $13.65 a share offered by Dell’s founder, Michael S. Dell, and the private equity firm Silver Lake. “Mr. Dell, who has publicly committed to explore working with other partners in good faith, could himself reach out to Blackstone as soon as this week, according to a person briefed on the matter. But Mr. Dell still has concerns about Blackstone’s offer,” DealBook’s Michael J. de la Merced writes.

One Wall Street denizen, Leon Cooperman, had choice words for Mr. Dell’s proposal, telling Mr. Sorkin, “He’s not doing this because he thinks his company is overvalued. He wants to make money.”

UGLY SIDE OF LAW FIRM BILLING  |  A collection of internal e-mails at the law firm DLA Piper could reinforce a widespread perception that law firms inflate bills. The correspondence, which emerged in a court filing in a fee dispute between DLA Piper and a client, “provide a window into the thorny issue of law firm billing,” DealBook’s Peter Lattman reports. An example: “I hear we are already 200k over our estimate â€" that’s Team DLA Piper!” wrote Erich P. Eisenegger, a lawyer at the firm. Another DLA Piper lawyer, Christopher Thomson, referred to a third colleague, Vincent J. Roldan, in his reply: “Now Vince has random people working full time on random research projects in standard ‘churn that bill, baby!’ mode.”

The e-mails appear to show that churning, the creation of unnecessary work to pad a client’s bill, remains an insidious problem in the legal profession, said William G. Ross, a law professor at Samford University’s Cumberland School of Law. “Lawyers sometimes conflate their own financial interests with the interests of the client who pays the bills,” Professor Ross said. “Of course, most lawyers are ethical, but the billable hour creates perverse incentives.”

PUERTO RICO’S TAX HAVEN PITCH  |  Puerto Rico is fashioning a new identity for itself as a tax haven. With a campaign to promote tax incentives that took effect last year, the island has attracted a handful of under-the-radar millionaires, Lynnley Browning and Julie Creswell report in DealBook. “Several American executives of mostly smaller financial firms say they have already relocated to the island, and Puerto Rican officials say another 40 persons, mostly from the United States, have applied.”

John A. Paulson, the hedge fund billionaire, was perhaps the most prominent individual to take a look at the island. But he won’t be moving â€" his firm issued a statement saying he had no plans to relocate, after reports that he had scoped out real estate there.

Still, “government officials and real estate brokers in Puerto Rico hope to sell other wealthy mainland Americans on what they hope will become the next Singapore or Ireland as a favored low-tax destination,” DealBook writes. “Puerto Rico is closer and, compared with Ireland, decidedly warmer. And unlike in Switzerland or other havens, in Puerto Rico, Americans do not give up their citizenship.”

ON THE AGENDA  |  The S.&P./Case-Shiller housing price index for January is out at 9 a.m. Data on new home sales for February is out at 10 a.m. Jason Goldberg, chief executive of Fab.com, is on Bloomberg TV at 1 p.m. Barney Harford, chief executive of Orbitz Worldwide, is on CNBC at 4:30 p.m.

HULU IS SAID TO EXPLORE A SALE  |  The board of Hulu, the online video service, “has approached potential buyers to gauge their interest in buying” the company, according to Reuters, which cites three unidentified people close to the company. The report comes as Hulu’s owners, the News Corporation and the Walt Disney Company, are looking at possible options. Reuters continues: “The board sounded out several possible buyers as part of an internal strategic review begun recently, but it has not received a formal offer, one of the sources said on Monday.” The owners have explored selling Hulu previously, but ended up rejecting bids, Reuters notes.

Mergers & Acquisitions »

At 17, Entrepreneur Sells Summly App to Yahoo  |  A high school student named Nick D’Aloisio sold his news-reading app, Summly, to Yahoo on Monday for a price that AllThingsD reported was $30 million. “I’ve still got a year and a half left at my high school,” Mr. D’Aloisio told The New York Times.
NEW YORK TIMES

Buyout Effort Ended, Best Buy Founder Returns to Company  |  Richard Schulze, who explored and then abandoned a possible buyout bid for Best Buy, is returning to the electronics chain he founded as chairman emeritus.
DealBook »

A Shaky Start for New BlackBerry  |  The new Blackberry line “has received tepid marketing support from AT&T” since its debut on Friday, The Wall Street Journal writes.
WALL STREET JOURNAL

Deloitte Said to Be in Talks to Buy Roland Berger of Germany  | 
REUTERS

INVESTMENT BANKING »

Troubles Continue for Italian Bank  |  Monte dei Paschi di Siena, the old Italian bank that received a government bailout, “is poised to report a second straight loss on soaring bad-loan provisions,” Bloomberg News reports.
BLOOMBERG NEWS

Cantor Fitzgerald Puts a Focus on Hurricane Relief  |  The brokerage firm is distributing debit cards to families affected by Hurricane Sandy.
BLOOMBERG NEWS

Qatalyst Hires Morgan Stanley Banker  |  Qatalyst Group, the West Coast boutique advisory firm led by Frank Quattrone, has hired Marcie Vu, formerly of Morgan Stanley, as a partner.
DealBook »

Goldman Doesn’t Have Politics in Its Future  |  Goldman Sachs rejected a shareholder proposal that the firm run for political office, Bloomberg News reports.
BLOOMBERG NEWS

R.B.S. Chief for Middle East and Africa Steps Down  | 
BLOOMBERG NEWS

PRIVATE EQUITY »

Cerberus Plans to Wait Before Listing Japanese Rail Operator  |  Cerberus Capital Management, which owns 32.4 percent of Seibu Holdings, “wants to increase its stake and appoint three new directors before selling shares to the public in two or three years,” according to a lawyer for the firm, Bloomberg News reports. But Seibu opposes that plan.
BLOOMBERG NEWS

HEDGE FUNDS »

Hedge Fund Said to Be Ceasing Payments to Children’s Charity  |  The activist hedge fund known as the Children’s Investment Fund “has stopped giving a portion of its fees to the children’s charity” run by the wife of the fund’s manager, according to Financial News.
FINANCIAL NEWS

I.P.O./OFFERINGS »

Zuckerberg Said to Consider Forming Political Group  |  Mark Zuckerberg, Facebook’s chief executive, “is exploring the formation of a political advocacy group that would focus on topics such as immigration, the economy, education and scientific research funding, according to a person familiar with the matter,” Bloomberg News reports.
BLOOMBERG NEWS

Facebook Looks Beyond Its Walls for Data on Users  |  To shape its ads, Facebook “is no longer relying solely on what Facebook users reveal about themselves. Instead, it is tapping into outside sources of data to learn even more about them â€" and to sell ads that are more finely targeted to them,” The New York Times’s Somini Sengupta writes.
NEW YORK TIMES

Zynga Hires a Finance Executive  |  Atul Bagga, an analyst who worked at Lazard, was hired by Zynga as vice president of finance, AllThingsD reports.
ALLTHINGSD

For I.P.O.’s, a Strong Start to the Year  | 
FINANCIAL TIMES

VENTURE CAPITAL »

Apple Buys Start-Up for Indoor Mapping  |  Apple has acquired WiFiSlam, a start-up for mapping a user’s location indoors, as “indoor maps look like they could become a new battleground between big companies seeking a cartographical edge on their rivals,” the Bits blog writes.
NEW YORK TIMES BITS

Sequoia Capital Hires Newspaper Reporter as Head of Content  | 
ALLTHINGSD

LEGAL/REGULATORY »

Rengan Rajaratnam Pleads Not Guilty to Insider Trading Charges  |  Rengan Rajaratnam pleaded not guilty on Monday to insider trading charges, which come nearly two years after the conviction of his older brother, the fallen hedge fund titan Raj Rajaratnam.
DealBook »

Bankia Stock Value Is Nearly Wiped Out Under Recapitalization Plan  |  Shares in Bankia, the giant Spanish mortgage lender whose collapse last year led to a banking crisis in Spain, slumped 41 percent on Monday after regulators wiped out most of the stock’s value.
DealBook »

Broader Concerns Accompany Deal to Rescue Cyprus  |  The New York Times reports: “Stocks were down broadly in Europe on Monday, after the head of the Eurogroup, Jeroen Dijsselbloem, suggested that the idea of skimming savers’ accounts to bail out banks could be considered a ‘template’ for other countries. The borrowing costs of the financially shaky Spain and Italy surged upward as the markets digested the Cyprus news â€" and the broader implications for the euro currency union.”
NEW YORK TIMES

Cyprus Rescue Deal Addresses Important Principles  |  The bailout deal that Cyprus reached with its euro zone partners makes the best of an extremely bad situation, but there are lingering doubts on capital controls and the effect the debt will have on the economy, Hugo Dixon of Reuters Breakingviews writes.
REUTERS BREAKINGVIEWS

China Dream, Apple Nightmare  |  China’s leadership has been promoting a concept called “the Chinese Dream” that depends on continued economic growth and stable relations with the United States. Apple, meanwhile, finds itself the target of attacks in the official media, Bill Bishop writes in the China Insider column.
DealBook »

Sending a Message for Backpedaling on Settlements  |  Standard Chartered learned the hard way that prosecutors take deferred prosecution agreements quite seriously, when the government forced the chairman to retract his statements on the settlement, Peter J. Henning writes in the White Collar Watch column.
DealBook »