Avago Technologies said on Monday that it had agreed to buy the LSI Corporation for about $6.6 billion in cash, moving into the world of networking and storage chips in a bet on the increased use of cloud and mobile software.
To finance the deal, Avago turned to Silver Lake, which acquired the company with Kohlberg Kravis Roberts in 2005 and took it public three years later, DealBook’s Michael J. de la Merced writes. The leveraged buyout yielded a return of five times the original investment.
Under the terms of the transaction, Avago will pay $11.15 a share, about 41 percent above LSI’s closing stock price on Friday. As part of the deal, Silver Lake will invest $1 billion in the form of a convertible note, supplementing a $4.6 billion loan from a group of banks.
NEW DEAL FOR A.I.G.’S AIRCRAFT UNIT The American International Group struck a new deal for its big aircraft leasing arm, agreeing to sell the business to AerCap Holdings of the Netherlands for $5.4 billion.
The transaction is the second that A.I.G. has announced for the International Lease Finance Corporation in just over 12 months, Mr. de la Merced reports. A group of Chinese investors agreed to buy the unit â€" known as I.L.F.C. â€" last December, but its financing fell apart, leaving room for a new bidder to emerge.
Now AerCap, a rival airplane lessor, is stepping in. The company will pay about $3 billion in cash and issue 97.5 million new shares. That would make A.I.G. its biggest shareholder, with a stake of roughly 46 percent.
“The combination of AerCap’s young fleet of in-demand aircraft and proven portfolio management capabilities with I.L.F.C.’s attractive order book and broad marketing reach will continue to lead the industry,†Robert H. Benmosche, A.I.G.’s chief executive, said in a statement. “However, as we have said all along, the aircraft leasing business is not core to our insurance operations.â€
MONCLER SHARES RISE IN MARKET DEBUT Investors warmed to Moncler, the luxury winter apparel maker, as the Italian company’s shares rose 41 percent in their first day of trading, DealBook’s Chad Bray writes.
Moncler, which abandoned plans to go public in 2011 because of market turmoil, made its stock market debut after pricing its shares at 10.20 euros, or about $14, valuing the company at $3.51 billion. The offering was priced on Wednesday at the top end of the expected range and was heavily oversubscribed.
ON THE AGENDA Lawyers for Michael S. Steinberg, a former top manager at SAC Capital Advisors, are scheduled to present their case to jurors. It will be short, however, and Mr. Steinberg is not expected to testify.
A PARADISE OF UNTOUCHABLE ASSETS Forget the Cayman Islands or Switzerland. The newest haven for offshore assets â€" as Denise Rich, the convicted Ponzi schemer R. Allen Stanford and doctors fearful of malpractice claims can attest â€" appears to be a country of 15 small islands in the South Pacific Ocean: the Cook Islands.
Leslie Wayne writes in The New York Times: “The Cook Islands offer a different form of secrecy. The long arm of United States law does not reach there. The Cooks generally disregard foreign court orders, making it easier to keep assets from creditors, or anyone else.â€
Carrefour in Deal to Acquire European Shopping Malls  | The French retail company Carrefour has agreed to buy a group of European shopping malls for about $2.75 billion from the French real-estate firm Klepierre, The Wall Street Journal reports. Wall Street Journal
Thai Retailer and Chinese Supermarket End Merger Attempt  | Wumart Stores and C.P. Lotus did not finalize a deal by their self-imposed deadline of Saturday, and both said on Monday that they had agreed not to extend negotiations. DealBook »
Shareholders Urge Troubled British Insurer to Seek a Sale  | Large shareholders in the British insurer RSA Group are urging the company to solicit takeover offers after questions about accounting in its Irish business led to the resignation of its chief executive last week, The Sunday Times of London reports. Sunday Times
South African Fund Rejects Offer for Drug Maker Adcock Ingram  | Reuters writes: “South Africa’s state pension fund on Sunday rejected a sweetened offer for drug maker Adcock Ingram, likely derailing a $1.2 billion bid by Chile’s CFR Pharmaceuticals to enter fast-growing Africa.†Reuters
Sprint May Make Bid for T-Mobile Next Year  | Sprint may make a bid for T-Mobile US in the first half of next year, The Wall Street Journal writes, saying such a deal, if approved by regulators, would leave the American mobile phone market with three dominant players. Wall Street Journal
GSK to Raise Stake in Indian Unit  | GlaxoSmithKline plans to spend about $1 billion to increase its stake in its Indian unit, the latest Western company to bolster its holdings in Indian, The Financial Times reports. Financial Times
AOL Preparing to Wind Down Patch  | “Tim Armstrong, the chief executive of AOL, is finally winding down Patch, a network of local news sites that he helped invent and that AOL bought after he took over,†David Carr writes in The New York Times. “At a conference in Manhattan last week, Mr. Armstrong suggested that Patch’s future could include forming partnerships with other companies, an acknowledgment that AOL could not continue to go it alone in what has been a futile attempt to guide Patch to profitability.†New York Times
Volcker Rule’s Success Depends on Regulators  | Gretchen Morgenson of The New York Times writes: “Put simply, the success or failure of the Volcker Rule will depend upon the appetite of financial regulators to regulate. This is always the case, of course, with regulation. But it is particularly so with the Volcker Rule because some of its most important measures are open to interpretation.†New York Times
Bankers and Lawyers Concerned With British ‘Ring Fencing’ Efforts  | Securities lawyers and bankers in London are concerned with flaws in draft legislation intended to protect retail bank customers from risky trading activities by investment banks, a process known as “ring fencing,†The Financial Times reports. Financial Times
British Bankers Expect Bonuses to Rise in 2013 Â |Â Top bankers in London are expecting a 44 percent increase in their bonuses this year despite efforts by the European Union to reign in outsize pay packages, Bloomberg News reports, citing a survey by a recruitment firm. Bloomberg
Credit Suisse to Finance Banking Software Marketplace  | The Financial Times writes: “Credit Suisse will finance an online marketplace for investment banking and hedge fund software, in the latest attempt by a bank to reduce the sector’s rapidly spiraling technology costs.†Financial Times
Carlyle to Invest $200 Million in New Energy Exploration Firm  | The Carlyle Group has agreed to invest up to $200 million in the next three years in Discover Exploration, a new oil and natural gas exploration company based in London. DealBook »
Japan Blocks Lone Star Bid for Train Operator  | Reuters writes: “Lone Star Funds’ $755 million bid to buy an Osaka-based train and warehouse operator was blocked by a municipal government on Monday, derailing what would have been a big comeback acquisition for the United States private equity firm in Japan.†Reuters
Gottex Fund Management to Acquire Rival EIM Â |Â The Swiss hedge fund Gottex Fund Management has agreed to acquire the EIM Group, creating a combined company with about $10 billion in assets under management, Reuters writes. The deal is expected to be completed in the first half of 2014. Reuters
BlackRock Ordered to Disclose Telecom Italia Stake  | Italian regulators have threatened to fine BlackRock for not disclosing its increased stake in Telecom Italia, saying it must disclose the stake by Monday, Reuters reports. BlackRock said in a regulatory filing with the Securities and Exchange Commission that its stake doubled in October. Reuters
Driller With Ties to Chesapeake Co-Founder Seeks $2 Billion  | The Wall Street Journal writes: “A partnership linked to Aubrey McClendon, the former chief executive of Chesapeake Energy Corporation, filed for a public offering to raise up to $2 billion to buy and drill oil and gas prospects†in the United States. Wall Street Journal
Power Assets to List Hong Kong Electric Unit  | Power Assets Holdings Ltd., a company controlled by Asia’s wealthiest person, Li Ka-shing, plans to publicly list the shares of its Hong Kong electric unit in a spinoff next month, Reuters writes. The listing could generate up to $5.7 billion in new capital to finance acquisitions by Power Assets. Reuters
Airbnb Starts First National Ad Campaign  | The New York Times writes: “Airbnb, which lets travelers rent accommodations in private residences worldwide, is introducing its first integrated, national advertising campaign on Monday, using birds and birdhouses as a metaphor for its customers and their accommodations.†New York Times
New Venture Capital Fund Looks to Invest in Middle East Technology  | A new venture capital fund looking to invest in Middle Eastern and North African technology firms has been launched in Dubai, The Wall Street Journal reports. Wall Street Journal
Former Swiss Banker to Appear in Court on Tax Charges  | Raoul Weil, a former UBS executive, is expected to appear in a Florida courtroom on Monday after he was extradited from Italy on charges that he helped Americans hide billions of dollars overseas, Reuters reports. Reuters
More Swiss Banks to Join U.S. Tax Pact  | Reuters reports: “Several Swiss regional banks said on Monday they would cooperate with U.S. officials to avoid prosecution in a crackdown on Swiss lenders suspected of helping wealthy Americans evade taxes through offshore accounts.†Reuters
Supreme Court to Hear Case on 401(k) Funds  | The Supreme Court will hear an appeal in a case involving Fifth Third Bancorp over whether workers can sue for losses in 401(k) funds that include their employer’s shares, The Wall Street Journal reports. Wall Street Journal
Ikea Spying Revelations Stir Outrage in France  | A French court is examining whether executives at the furniture maker Ikea broke the law by ordering investigations of its employees’ personal lives over the course of a decade, The New York Times writes. New York Times
