BARE KNUCKLES AT SOTHEBY’S  | The battle between Sotheby’s and Daniel S. Loeb, the outspoken hedge fund mogul and the auction house’s biggest shareholder, is heading to its final stages, Alexandra Stevenson and Michael J. de la Merced write in DealBook. On Thursday, Mr. Loeb gained an advantage in the standoff as the proxy advisory firm Institutional Shareholder Services recommended that shareholders vote for two of the three board nominees he has proposed.
Mr. Loeb is no stranger to no-holds-barred corporate battles, but this one is a bit different. For one, Ms. Stevenson and Mr. de la Merced write, “It is almost as much a test of his reputation as an art aficionado as it is of his skills as an investor.†The battle is not only making waves among investors but also in the art world, where some are wondering whether Mr. Loeb is doing what is best for the business of art.
Sotheby’s, hard hit in the financial crisis, has been a target of activist investors, who anticipate a shake-up of the art market. To Mr. Loeb, Sotheby’s has not adapted quickly enough, making it a prime target for the sort of corporate agitation that has made billions for himself and his hedge fund, Third Point. Ms. Stevenson and Mr. de la Merced write: “To some outsiders, Sotheby’s seems to be receptive to some of its critics’ recommendations. The question is whether its executives are making certain changes fast enough.â€
JUSTICE DEPT. TO BANK OF AMERICA: LET’S MAKE A DEAL  | Bolstered by its multibillion-dollar mortgage settlement with JPMorgan Chase last year, the Justice Department has now set its sights on a deal with Bank of America, Ben Protess and Jessica Silver-Greenberg write in DealBook. The Justice Department is said to have made Bank of America an opening settlement offer of roughly $20 billion several weeks ago, a move that raised the stakes for the government’s crackdown on banks that sold the troubled mortgage investments during the financial crisis.
But that amount is a somewhat inflated starting point for negotiations, they write. What’s more, Bank of America has not yet made a counteroffer. By one measure, Bank of America will ultimately pay about $16 billion to settle every investigation into its sale of mortgage securities before the 2008 financial crisis, they add. The settlement negotiations with Bank of America come as the government is under pressure to extract enormous penalties from Wall Street for its role in the financial crisis.
LOOSENING INSIDER TRADING RULES  | Insider trading laws used to be for amateurs. Then prosecutors changed the rules, putting wiretaps on traders’ phones. But now, an appellate court â€" which heard arguments this week on whether to reverse the convictions of two hedge fund managers, Todd Newman and Anthony Chiasson â€" appears inclined to change the rules again, Floyd Norris writes in the High & Low Finance column. If the court does so, it will make it easier for professional traders to escape liability.
The managers, in the words of one of their lawyers, were “remote tippees,†having heard the information on which they used to trade from analysts rather than from the original sources themselves, or even from the first people tipped by those insiders. This was enough for a conviction in the managers’ first trial, but they received a sympathetic hearing from at least two of the three judges on the appellate panel, who focused on Supreme Court rulings that have said that trading on inside information is legal unless it is obtained from someone who violates a duty to keep it secret and receives something of value.
“If the defendants prevail, hedge fund managers will be given a road map to evading the insider trading law. It won’t matter whether the government can prove the information came from an insider who was paid off and that the trader knew an insider was the source as long as there is no evidence the trader knew about the payoff,†Mr. Norris writes. “Hedge fund managers will be careful not to ask about such things. After all, there is no reason for them to want to know. What they want to know is whether the information is reliable.â€
ON THE AGENDA Â |Â The Thomson Reuters/University of Michigan consumer sentiment index for April is out at 9:55 a.m. Howard Schultz, the chief executive of Starbucks, is on CNBC at 9 a.m. Happy birthday, Richard S. Fuld Jr., the former chief executive of Lehman Brothers, who turns 68 on Saturday.
ZIMMER JUMPS INTO DEAL FRAY Â |Â The merger spree in the pharmaceutical and medical technology sectors continued on Thursday, as Zimmer Holdings agreed to acquire Biomet Inc. in a cash-and-stock deal valued at $13.35 billion, including debt, David Gelles and William Alden write in DealBook. The deal will bring together two big providers of orthopedic, surgical and dental products.
The deal is the latest health care industry megadeal announced this week. Already, Novartis and GlaxoSmithKline announced $20 billion in asset-swapping deals between the two firms, and Valeant Pharmaceuticals made a $45 billion hostile takeover bid for Allergan. Because Zimmer’s deal for Biomet essentially eliminates a top five competitor, Zimmer and its remaining rivals may all have the opportunity to raise prices. The deal could also put pressure on the remaining companies to grow, leading to more mergers.
Investors Enthusiastic About Zimmer’s Deal for Rival  | Zimmer’s stock value soared after it announced that it would acquire Biomet as shareholders bet on growth in the market for medical devices, Robert Cyran writes in Reuters Breakingviews.
DealBook »
Digital Mapping May Be Nokia’s Hidden Jewel  | Though a laggard in smartphone location apps, Nokia’s Here mapping system is a leader in car navigation and might be a tantalizing takeover target, The New York Times writes.
NEW YORK TIMES
Alstom Denies Report of G.E. Takeover Bid, but Its Shares Surge  | Shares of the French industrial conglomerate Alstom soared after a news report said General Electric was seeking to buy the company for about $13 billion. Alstom said it was not aware of any takeover bid.
DealBook »
Michael Dell May Sell Gardening Firm  | Michael Dell, the chief executive of Dell, is likely to sell ValleyCrest, his corporate gardening company, to Brickman, a rival backed by the private equity firm Kohlberg Kravis Roberts, The Financial Times writes.
FINANCIAL TIMES
R.B.S. to Drop Bonus Plan After British Agency Balks  | The bank, based in Edinburgh, had sought to pay its bankers bonuses of up to two times their annual salaries, but an agency that manages the British government’s stake in the lender refused to back the proposal.
DealBook »
Barclays Shareholders Vent Frustration Over Bonuses  | At the Barclays annual meeting on Thursday, shareholders questioned a decision to increase compensation at the bank, which is in the midst of a painful restructuring.
DealBook »
Bank of America Names New Risk Officer  | Bank of America appointed Geoffrey Greener its new chief risk officer, Reuters writes.
REUTERS
K.K.R. Profit Falls but Tops Estimates  | The private equity giant Kohlberg Kravis Roberts reported economic net income of $630 million in the first quarter as it reaped gains from selling some of its investments.
DealBook »
Warburg Pincus to Invest in PayScale, a Compensation Data Firm  | Warburg Pincus said on Thursday that it would invest up to $100 million for a majority stake in PayScale, a cloud-based software company that collects compensation data and offers the information to businesses.
DealBook »
Legal Memo Defends Ackman’s Actions in Allergan Bid  | An independently issued memo from Cleary Gottlieb Steen & Hamilton reaffirms how William A. Ackman’s unusual hostile bid was within the legal bounds.
DealBook »
Daley, Former White House Chief of Staff, Joins Hedge Fund  | William M. Daley, a former JPMorgan Chase executive, has been named a managing partner and the head of United States operations at Argentière Capital, a Swiss hedge fund founded less than a year ago.
DealBook »
A ‘Corporate Raider’ Tries to Correct the Record  | T. Boone Pickens, in the latest issue of Time magazine, discusses his friend Carl C. Icahn and the labels they have picked up over the years.
DealBook »
Bob Evans Investor Agitates for Change, Again  | The activist investor Sandell Asset Management nominated eight candidates to the restaurant chain’s board in its push for change at the company.
DealBook »
Alibaba’s I.P.O. Could Set Record  | Alibaba is said to be considering adding new shares to its initial public offering, which could help make the I.P.O. the largest on record, The Wall Street Journal writes.
WALL STREET JOURNAL
Canada’s Kinaxis Plans I.P.O.  | Kinaxis, a Canadian software company, is said to be preparing an initial public offering that could raise more than $90 million, The Wall Street Journal writes, citing unidentified people familiar with the situation. The move could signal a resurgence in Canada’s I.P.O. market.
WALL STREET JOURNAL
For Women in Tech, Pay Gap Is Unusually Small  | Female computer scientists make 89 percent of what men in the same occupation make, a significantly better percentage than in other professions, Claire Cain Miller writes in The Upshot.
NEW YORK TIMES UPSHOT
Square to Open New Office in New York City  | Square, the digital payments company, announced on Thursday that its employees in New York City will move into a new 40,000-square-foot office this summer in Manhattan’s SoHo neighborhood, ReCode writes.
RECODE
Investors Bet on Virtual Reality Treadmill  | Virtuix, a start-up based in Houston, closed $3 million from venture investors for its multidirectional treadmill, The Wall Street Journal writes.
WALL STREET JOURNAL
Technology Giants Settle Hiring Suit  | Apple, Google, Intel and Adobe reached an agreement with plaintiffs over accusations that the companies conspired not to hire one another’s employees, The New York Times writes.
NEW YORK TIMES
New Evidence May Reopen Broker Fraud Case  | A Long Island couple is seeking an appeal in an arbitration hearing involving their stockbroker and his employer, Oppenheimer & Company, because critical evidence was not submitted in the case.
DealBook »
Schwab Agrees to Drop Effort to Prevent Class-Action Lawsuits  | The Financial Industry Regulatory Authority, Wall Street’s self-regulator, said on Thursday that the discount brokerage firm had also agreed to pay a $500,000 fine.
DealBook »
Lobbying Efforts Intensify After F.C.C. Tries Third Time on Net Neutrality  | The sparring will be closely watched by every company that depends, even peripherally, on the Internet â€" which is to say, just about every company, The New York Times reports.
NEW YORK TIMES
The Cloud Industry Needs Aereo to Win. But Consumers Need Something Better. Â |Â The Supreme Court battle over Aereo could cast a pall over the cloud computing industry. For consumers, though, Aereo is too inefficient to become a useful service, Farhad Manjoo writes on the Bits blog.
NEW YORK TIMES BITS
