Deal Helps a Bank Catch Up in Capital

One of the nation's bigger regional banks, M&T Bank, has had a hectic few days of deal-making.

Last week, the Buffalo-based M&T Bank paid back the government its bailout money, and on Monday, it announced the acquisition of Hudson City Bancorp, a struggling mortgage lender.

The transactions appear to affirm M&T Bank's reputation as a hardy institution that has sought since the financial crisis to avoid hurting the interests of its shareholders.

But the deals also show M&T Bank as a lender in need of more capital.

M&T Bank is paying roughly $3.7 billion for Paramus, N.J.-based Hudson City, which was held up as paragon of sound residential mortgage lending in the midst of the financial crisis. In the last two years, however, Hudson City's earnings have suffered as interest rates have fallen and demand for its mortgages has diminished.

On a conference call on Monday, analysts asked M&T Bank executives how the bank's business, which focuses heavil y on commercial real estate and lending to companies, fits with Hudson City's, which is dominated by residential mortgages.

M&T Bank executives said the Hudson City branches will help M&T attract business borrowers in new areas. They also said M&T can sell wealth management products to Hudson City customers.

Analysts say M&T Bank has managed to successfully integrate recent big acquisitions.

“This acquisition is pretty consistent with M&T's strategy of buying troubled institutions and turning them round,” said Todd Hagerman, an analyst with Sterne Agee.

But another key to understanding the acquisition may lie in M&T Bank's capital.

Since the crisis, regulators have cared most about Tier 1 common equity because it focuses on a high-quality measure of capital. On that measure, M&T Bank scores well below regional peers. M&T Bank's Tier 1 common equity capital was 7.15 percent of its assets in the second quarter. Regional banks of a similar size are typically well above 9 percent.

Investors so far have not worried too much about M&T's lower ratio because of the bank's relatively low losses after the financial crisis.

Bank regulators, however, may be harder to win over. To do well in annual Federal Reserve stress tests, M&T Bank may want to increase its Tier 1 common ratio substantially.

The Hudson City deal helps on that score. On Monday, M&T Bank said the deal could add 0.3 to 0.4 of a percentage point to its Tier 1 common ratio.

There is another capital ratio that M&T Bank may lag on. It is the so-called Basel III common ratio, which comes from the international banking standards that United States banks must start complying with at the start of next year. Deutsche Bank analysts estimate that M&T Bank's Basel III ratio is 5.4 percent. That is well below the 7.9 percent that U.S. Bancorp gives as its estimated Basel III ratio.

M&T Bank has not given out its own estimate of Basel III c apital. M&T Bank's chief financial officer, Rene F. Jones, said on Monday that it was still trying to calculate the ratio, saying the bank had “lots of M.B.A.'s trying to figure out how the rule works.”

But Mr. Hagerman, the analyst, said, “It's frustrating; I am assuming they know what the number is, and it's like M&T to provide limited information and limited transparency.”

M&T Bank executives on Monday stressed the strategic importance of the Hudson City acquisition. The deal will allow M&T Bank to bolster its presence in important markets, particularly New Jersey. In all, M&T will add 135 branches and $25 billion in deposits. Based on the terms of the deal, M&T Bank is paying a roughly 17 percent premium on Hudson City's closing share price on Friday.

“It's a very strategic deal,” said Michael P. Pinto, M&T Bank's vice chairman. “You couldn't draw the map any prettier.”

The deal follows M&T Bank's exit last week from the Troubled A sset Relief Program. Large regional banks that were not crippled by the financial crisis chose to pay off all their TARP investments as soon as they could, often issuing large amounts of common shares to do so. M&T Bank, however, held off on repaying all its TARP investment. It said it wanted to avoid issuing common equity because that can hurt the value of shares held by existing shareholders.

M&T Bank's repayment of $382 million to the Treasury Department had a twist. M&T Bank first negotiated a change in the terms of preferred shares with the Treasury Department, which then sold the modified shares in the market to recoup its initial investment. The preferred shares originally had a provision whereby the dividend would rise to a 9 percent return after November 2013 from 5 percent. M&T Bank was also able to buy back the original preferred shares at will.

The new preferred shares will pay out 6.375 percent after November 2013, and M&T Bank cannot choose to pay t hem off until November 2018. Without the changes, the Treasury might have had to sell the preferred shares at a slight loss, preventing it from recovering all its investment in M&T Bank. As it is, M&T Bank paid the expenses of the preferred sale, ensuring the Treasury recouped 100 percent of its money.

But the TARP deal may not assuage concerns about capital. M&T Bank keeps the new preferred shares on its balance sheet as capital, but they do not count toward the ratios that investors and regulators care most about.

“Their common equity remains below peer averages,” Mr. Hagerman, the analyst, said.

Willard C. Butcher, Former Chief of Chase Manhattan, Dies at 85

Willard Carlisle Butcher, the former chairman and chief executive of the Chase Manhattan Corporation who led the bank during a period of vast international growth in the 1980s, died on Saturday at his home in Hobe Sound, Fla. He was 85.

The cause was kidney cancer, said Fraser P. Seitel, a former spokesman for Chase.
Mr. Butcher joined Chase National, the predecessor to Chase Manhattan, in 1947, starting as a junior executive in the bank's Midtown Manhattan retail branches. He moved to the international operations in 1969, which he eventually ran. In 1972, David Rockefeller Sr., then Chase's chief executive, named him the bank's president and chief operating officer.

He succeeded Mr. Rockefeller as chief executive in 1980 and became chairman the following year. At the time, Chase was the country's third-largest bank in assets behind its rivals Citicorp and Bank of America. Mr. Butcher had big shoes to fill, replacing a man who personified the aristocratic banker-statesman.

“Two weeks from now, the institution that came to be known as ‘David's Bank' will become ‘Bill Butcher's Bank,'” said an article in The New York Times just before he took over.

Under Mr. Butcher's leadership, Chase started operations in more than 50 countries, including China, Egypt and the Soviet Union.

Mr. Rockefeller, 97, issued a statement that Mr. Butcher was “a close friend and valued colleague, who, when he succeeded me as chairman of The Chase, worked tirelessly to enhance the bank's position around the world.”

Chase's push into foreign markets came with a cost. By 1990, the bank was saddled with hundreds of millions of dollar of losses from bad loans made in less-developed countries like Brazil. There were also other challenges during his tenure, as large corporations began to raise money through the securities markets and shun the more traditional route of borrowing from banks.

A burly man with a booming voice, Mr. Butcher became a leading critic of the hostile takeovers and junk-bond financing that had come to characterize that era on Wall Street.

“A lot of these ‘leveragers' and ‘greenmailers' are undermining the fundamental structure of our economy,” he said in a 1985 interview with The Chicago Tribune. “Other than maximizing short-term profits for the speculators, these activities don't add any intrinsic wealth to the country.”

Following Mr. Butcher's retirement in 1991, Chase began an aggressive expansion through mergers, combining with Chemical Banking in 1996 and then J.P. Morgan in 2000.

Mr. Butcher was born on Oct. 25, 1926, in Bronxville, N.Y., and grew up in nearby Scarsdale. His father was an executive at Consolidated Edison. His mother was a Greek and Latin teacher. Mr. Butcher started his college studies at Middlebury College before a stint in the Navy. After his military service, he enrolled at Brown University, graduating in 1947 and later serving for many years on its board.

After stepping down, Mr. Butcher continued his involvement at the bank, serving as vice chairman of the Chase International Advisory Committee. He also was on the boards of several organizations and companies, including as chairman of the board of trustees of the American Enterprise Institute, a trustee at the Museum of Modern Art; and a director of Firestone Tire and Rubber, International Paper and Texaco.

Twice widowed, Mr. Butcher is survived by his wife of 33 years, Carole McMahon Butcher, who was working in the Chase's special events department when they met. Also surviving Mr. Butcher are five children, John, Willard Jr., Sarah Garonzik, Helen Bennet and Barbara Uboe, and 11 grandchildren.

An American history buff, Mr. Butcher once likened his fierce devotion to Chase to Robert E. Lee's undying loyalty to the South. “No one,” he said, “should go into the chairman's role unless he is willing to d evote his life to the organization.”

Far From Wall St. and Silicon Valley, a Focus on Family Ties

MILWAUKEE - When the hedge fund manager David Einhorn was just another investment analyst in the mid-1990s, his family gave him $500,000 to get his fund, Greenlight Capital, off the ground. Now that he is a billionaire after a career of doing battle with large corporations, he has returned the favor.

A world away from Wall Street and the tech money culture of Silicon Valley, the Einhorn family started a venture capital firm here, which raised a $40 million fund last year.

David Einhorn is the largest investor in the fund, run by his brother, Daniel, and their father, Stephen. The firm, Capital Midwest Fund, also led by another partner, Alvin Vitangcol, aims to tap the Midwestern work ethic and has ambitions of changing the way early-stage investments are run.

“This isn't Silicon Valley, where you're almost encouraged to fail a couple times, and your next opportunity is in walking distance,” said Daniel Einhorn, who is 40.

Capital Midwest, howeve r, is still a smaller player in the sector. Located in an office building across the street from a strip mall near the edge of the city limits, the company got started years after prominent venture firms in the region and around the country had established themselves. Its fund is about a fourth the size of the industry average, according to Thomson Reuters and the National Venture Capital Association.

But the company has its own views on how to manage investments. Instead of merely serving as an angel investor that provides money but little hands-on support, Capital Midwest pays close attention to a company's ability to chart a path to generating revenue. And if a company financed by the new fund doesn't provide the investors an exit within five years - through an acquisition - then Capital Midwest requires the company to buy back its shares.

Daniel Einhorn doesn't hesitate to put executives on the spot. Last month, surrounded by Brewers memorabilia in his office , he questioned the chief executive of one of his portfolio companies. It was a start-up based in Ann Arbor, Mich., called CytoPherx, and the firm was discussing clinical trials of a medical device that were not going smoothly. At one point, with the receiver on mute, Mr. Einhorn said the chief executive was making a “poor me” excuse.

So far, Capital Midwest has benefited from a scarcity of venture capital in the region. Its current fund had an internal rate of return of about 43 percent through late August, according to Daniel Einhorn. In March, the firm sold its stake in one company, Therapeutic Proteins, which manufactures generic versions of biological drugs, for double its initial investment.

David Einhorn, 43, sits on the advisory board but is not involved in the day-to-day operations of Capital Midwest. While they work in different sectors of finance, the two brothers share a contrarian spirit when it comes to investing.

Unlike many hedge funds t hat prefer a low-key, almost invisible, approach to their holdings, David Einhorn rose to prominence with short-sale bets against Allied Capital and Lehman Brothers. He has mastered the art of harnessing the spotlight to hammer away at firms he views as troubled.

Family ties were enough to persuade David Einhorn to invest in Capital Midwest. He and his family committed $15 million out of $40 million to a second fund the firm started.

“My parents were big supporters when we launched Greenlight,” David Einhorn said in an e-mail. “When Dad and Danny started Capital Midwest, I was thrilled to support them and the firm.”

Daniel Einhorn sees little need to measure his track record against his brother's, whose comportment with corporate management is the stuff of Wall Street legend. Pictures of David Einhorn decorate Capital Midwest's office, but here, the hedge fund manager is just family.

“You can't live your life trying to compete with your brot her,” Daniel Einhorn said. “I wish him all the success in the world. I don't need to get to that level.”

And certainly, a good portion of the investors for the second venture fund were local foundations and dozens of individuals, many of whom were drawn in by longstanding relationships with Stephen Einhorn rather than by a need to chase after a star Wall Street hedge fund manager.

The family has been based in Milwaukee since 1976, when Stephen Einhorn, 69, left New Jersey with his wife and two young sons and started an investment banking business, a firm that became Einhorn Associates, from a bedroom office. Daniel Einhorn, whose career began in country club management and took him to a Texas hedge fund and a position overseeing an investment portfolio at an insurance company, joined the firm in 2004.

Only recently did the family move into venture capital, when Stephen Einhorn, who had a long career advising specialty chemical companies, opted to try something new. In 2008, tapping Stephen Einhorn's local connections, the firm raised its first venture fund, of just $4.5 million, and became known as Capital Midwest.

With few competitors in the region, the new fund was able to invest in 11 young companies. One went bankrupt last year, and the others, though they have yet to provide a hoped-for exit, are still in business.

“The bottom line is, there's a lot of low-hanging fruit here - a lot of great opportunities and very few funding sources locally,” said John Neis, managing director of Venture Investors, a competitor firm based in Madison, Wis., that manages about $200 million.

Daniel Einhorn has focused on companies in the biomedical sector. After his daughter, Emma, received a diagnosis of leukemia at age 3, Mr. Einhorn raised more than $50,000 for cancer research and was honored by the Leukemia & Lymphoma Society in June. Emma, now 7, has been in remission for 19 months.

Family connections h ave helped the venture capital firm, but not all have proved fruitful. Sheryl Sandberg, the chief operating officer of Facebook, is Daniel and David Einhorn's cousin. She arranged a meeting this year with one of Capital Midwest's portfolio companies, LiquidCool Solutions, to discuss using the company's technology to cool Facebook's computer hardware.

The meeting did not go particularly well. Soon after, for broader reasons, Capital Midwest replaced LiquidCool's entire management team. Such a move might seem unusual in Silicon Valley, where founders are often chief executives and are closely identified as crucial to the success of the firm.

Capital Midwest tends to keep its distance from flashy young companies. A frequent target of Daniel Einhorn's scorn is Groupon, a Midwestern company that became a darling of Silicon Valley but has suffered since its public debut last year. Daniel Einhorn says he advised David to bet against Groupon when it went public. The hedg e fund manager declined. (A representative of Groupon declined to comment.)

“He still owes me for that one,” Daniel Einhorn said with a laugh, adding, “It was one of the best ideas I've had.”

In Dollar Thrifty Deal, Hertz Bets Big on Certainty of Closing

It took Hertz Global Holdings two years to reach an agreement to buy the Dollar Thrifty Automotive Group.

But the car rental giant appears confident that the $2.3 billion takeover that it announced on Monday will stick.

Hertz's chief executive, Mark Frissora, told analysts on Monday that his “transformational deal” would pass muster with the Federal Trade Commission, with the antitrust regulator likely to provide its approval within the next six or so weeks.

Crafting a proposal that the F.T.C. would be expected to support has consumed much of the past year, certainly since Hertz withdrew its last bid for Dollar Thrifty in the fall.

Weighing on the regulator's mind was the industry consolidation that any such combination would bring: Hertz, Enterprise Rent-a-Car and the Avis Budget Group together would control at least three-quarters of the American car rental industry.

For his part, Mr. Frissora argued on Monday that the car rental industr y remained highly competitive, with a number of regional players still in the mix. Furthermore, he said that prices have been going down in recent years.

And he had made it clear that his company would be willing to sell its Advantage brand, which competes directly with Dollar Thrifty, to win F.T.C. approval.

Actually putting together a deal that could work required a bit more work, however. Mr. Frissora said that the process included reviewing the combined Hertz and Dollar Thrifty's presences at every airport in the United States, where each company had negotiated separate leasing arrangements with the facilites' management teams.

What Hertz eventually worked out was a deal to sell Advantage to Franchise Services of North America and Macquarie Capital, a proposal that was submitted to the F.T.C. by the end of June. It was a complicated process that a series of discussions among the four parties, according to Mr. Frissora.

“Not everyone's working at the speed of Hertz,” the executive joked.

Not until the particulars of the Advantage sale were set did Hertz again approach Dollar Thrifty about moving their merger discussions forward. “We thought we could accelerate the F.T.C. process if we had the right price and the right terms in place,” Mr. Frissora told DealBook in a telephone interview.

He and his counterpart at Dollar Thrifty, Scott Thompson, ultimately concluded that the Advantage sale would be enough to win antitrust approval.

Since then, the two have drawn up an unusually lenient merger agreement. Monday's transaction allows Dollar Thrifty 30 days to shop itself around to fetch a higher price, according to people with direct knowledge of the matter. Should the company decide to go with another bidder, however, it won't be obligated to pay Hertz a break-up fee.

At the same time, Hertz will not be obligated to pay a reverse break-up fee if the deal fails to win antitrust approval, and it is not obligated to sell businesses beyond what was agreed to in the Advantage transaction.

Why? According to this person, Hertz and Dollar Thrifty had reached two conclusions: One, no one else would try to top Monday's deal, and two, that proposal will be approved by the F.T.C.

From Hertz's perspective, no other company would be willing to pay as much as it is offering. And Avis Budget, which had sought to play spoiler by making its own bid for Dollar Thrifty last year, was seen as facing a bigger antitrust problem because its Budget unit is larger than Advantage.

“We feel pretty good about our deal with Dollar Thrifty,” Mr. Frissora told DealBook. He added that it's “pretty unlikely” at this point that a rival bidder would emerge.

Shares of Hertz leaped more than 9 percent by Monday afternoon, to $14.37. And shares of Dollar Thrifty were up nearly 7.5 percent, at $87.05.

Consumer Bureau Shuffles Staff

The nation's consumer financial watchdog shuffled its staff on Monday as a top official departed for the private sector.

Leonard Chanin, a senior lawyer who oversaw regulation at the Consumer Financial Protection Bureau, will join the law firm Morrison & Foerster. In turn, the bureau announced that Kelly Thompson Cochran, one of Mr. Chanin's deputies, will take his spot.

The bureau on Monday also filled top legal positions, the latest roster changes at the two-year-old federal agency. Deepak Gupta, an enforcement official at the agency, recently departed. And in January, President Obama used a Congressional recess to appoint Richard Cordray as the agency's leader, ending a contentious battle with Republican lawmakers who opposed the nomination.

“I am pleased to announce these new additions and updates to the C.F.P.B. leadership team,” Mr. Cordray said in a statement on Monday. “We look forward to welcoming them as we continue to work on behalf of th e American consumer.”

A cornerstone of the Dodd-Frank regulatory overhaul, the bureau is responsible for rooting out wrongdoing in the mortgage industry, credit card business and in other financial products. The agency oversees big Wall Street banks as well as the darker corners of the financial industry, like payday lenders.

The personnel changes at the bureau follow Mr. Chanin's departure, which Morrison & Foerster announced last week. It will be his second stint with the firm. At the bureau, Mr. Chanin was tasked with writing dozens of consumer protection rules for the financial industry.

“Leonard will return to us with important insights and broad experience on consumer regulation, having been at the center of regulatory developments in a time of great change in this important area,” Rick Fischer, co-head of the financial services practice at Morrison & Foerster, said in a statement last week.

In addition to naming Ms. Thompson Cochran as his replacement, the bureau said on Monday that it had hired Chris Lipsett as senior counsel in the Office of the Director. He joined the agency from the law firm Wilmer Cutler Pickering Hale & Dorr, where he was a partner.

The bureau also promoted Stephen Van Meter, currently a lawyer for the bureau, to deputy general counsel, and named Delicia Reynolds Hand the new staff director for the Consumer Advisory Board and Councils. She was previously the legislative director for the National Association of Consumer Advocates.

Deal for About.com Fits Diller\'s Strategy

Barry Diller has a new toy.

With the $300 million purchase of the About Group from The New York Times Company, Mr. Diller's IAC/InterActiveCorp has once again added to its expanding portfolio of Internet and media brands.

The acquisition, in many ways, is classic Diller.

IAC is known for snapping up businesses that generate cash and fit nicely into the existing portfolio of brands. The About Group, owner of About.com, a popular advice site, checks each box here. While group's profit shrank last year after Google tweaked its search algorithm, it still posted $41 million in profit. About.com also complements IAC's Ask.com, a question-and-answers site that it purchased in 2005.

The acquisition also underscores how Mr. Diller's deal-making has shifted over the years. A decade ago, he made headlines for a string billion-dollar Internet acquisitions of growth companies like Expedia and Ask Jeeves, which later became Ask.com

Nowadays, Mr. Diller - wh o relinquished the title of chief executive in 2010 but remains the company's chairman - could be described as more conservative in his ambitions. Since Ask Jeeves, IAC's deals have been more modest in size and largely turnaround stories. About.com, which was initially purchased by the Times Company for roughly $400 million, has struggled to increase user engagement. In 2011, IAC picked up Newsweek, which was hemorrhaging cash, and recently acquired the rest of Meetic, a European dating site, which IAC has described a “turnaround project.”

“Diller doesn't seem to have an appetite for huge deals anymore,” said James Dobson, a Benchmark Company analyst. “The message is, they're not going to spend money frivolously and they are not willing to buy high growth assets. They're looking for assets they can turn around.”

While Mr. Dobson says IAC didn't get the About Group for cheap, he believes the unit will dovetail nicely with the company's strategy for Ask .com. After initially trying to compete with the likes of Google and Microsoft, IAC has gone back to promoting Ask.com as a niche, questions-and-answers search engine, according to the analyst. It has also been spending more on Ask.com marketing, through television ads and billboards, which should increase About.com's sagging numbers once the sites are more interwoven.

Goldman Executive Is Said to Buy $27 Million Luxury Apartment

It is an apartment fit for a king, or, perhaps, a Goldman Sachs chief executive.

J. Michael Evans, a Goldman Sachs vice chairman and leading candidate to become the bank's next chief, bought an apartment at 995 Fifth Avenue for $27 million, according to a person with direct knowledge of the purchase.

Spanning the entire 16th floor, the 14-room apartment is 8,360 square feet and has 10-foot ceilings. There is a six-room master-bedroom suite, and nine-and-a-half bathrooms, according to the real-estate Web site StreetEasy.

Who needs that much space? Well, if anyone does - and has the money to afford it - it's Mr. Evans. He and his wife, Lise Evans, have eight children (each has three children from prior marriages, and they have two children together).

The apartment, is in the former Stanhope Hotel across from the Metropolitan Museum of Art. Mr. Evans paid $27,376,940, about 9 percent less than the $30 million listing price, according to real estate re cords. The Stanhope was converted into residences several years ago by Extell Development.

Nikki Field, an executive at Sotheby's International Realty who had the listing, declined to comment. The New York Post reported earlier on Mr. Evans's purchase.

Mr. Evans, who for many years was based in Hong Kong, where he led the bank's push into Asia, recently moved back to New York. Last year, he was given the newly created post running the bank's emerging-markets business across the globe. He joined Goldman in 1993 from Salomon Brothers and was named partner the following year.

Mr. Evans and his twin brother, Mark, rowed on the Canadian men's eights team that won the gold medal at the 1984 Olympics.

Lloyd C. Blankfein, Goldman's current chief, has run the firm since 2006 and has said he has no plans to step aside (he is living comfortably at 15 Central Park West).

But he has begun to bump up against the average tenure for Goldman's chiefs, leading t o speculation about his successor. One logical candidate is Gary D. Cohn, the bank's president who is close to Mr. Blankfein.

Another possibility is Mr. Evans, who recently served as co-chairman of Goldman's business standards committee, which the bank formed after it came under criticism for its conduct during the financial crisis. One of four vice chairmen at the bank, Mr. Evans owns about 700,000 Goldman shares, which, at the bank's current stock price, are worth about $75 million.

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IBM Snaps Up Kenexa

For enterprise software businesses with a social spin, valuations are rising.

I.B.M. announced on Monday that it had agreed to acquire Kenexa, a maker of recruitment software, for $1.3 billion in cash. I.B.M. is paying Kenexa shareholders $46 a share, 42 percent above the closing stock price on Friday.

Kenexa is a Web-based service that is part of the so-called social business vertical. Its software is intended to help companies recruit and manage talent through online social networking, collaboration and consulting tools.

“Every company, across every business operation, is looking to tap into the power of social networking to transform the way they work, collaborate and out innovate their competitors,” Alistair Rennie, general manager of I.B.M.'s social business division said in a statement. “I.B.M. is uniquely positioned to help clients generate real returns from their social business investments, while helping them gain intelligence into the data being generated in these networks to be more competitive in their markets.”

The transaction complements I.B.M.'s current suite of social business products, a group that includes social networking and instant messaging solutions. It comes on the heels of Microsoft‘s acquisition of Yammer in June.

The $1.2 billion deal for Yammer, the enterprise social network, was seen as a big push by Microsoft into the social enterprise market.

Best Buy to Open Books for Founder

Best Buy said on Monday that it has finally agreed to let its founder, Richard Schulze, take a closer look at its financial statements to help him firm up his potential takeover proposal for the electronics retailer.

The pact follows more than a week of negotiations between the two sides, a time punctuated by remarkably prickly public statements by both sides as they jockeyed over terms of a prospective agreement.

Earlier this month, Mr. Schulze proposed buying the company he founded 46 years ago for up to $8.8 billion. The retailer, however, has been cautious, preferring at the moment to stick to a turnaround effort that will be led by an incoming chief executive, Hubert Joly.

Now, Mr. Schulze, his potential partners and financial backers will gain access to Best Buy's books immediately. They will then have 60 days to present a fully financed deal.

Should Best Buy's board reject Mr. Schulze's proposal, he would have to wait until January to make a second offer. Company directors would then have 30 days to review that newer plan, before he could go directly to the retailer's shareholders, at either its annual investor meeting or at a special meeting that he can call with the support of 25 percent of stockholders. (He already owns a 20 percent stake.)

If the second offer is rejected by the board and by shareholders, he would then be barred from offering to buy the company again for a year.

Best Buy is offering Mr. Schulze two seats on Best Buy's board, though he cannot hold onto them if he takes an offer directly to shareholders or if he violates his agreement.

A Regulator\'s Key Role in Failed Mutual Fund Reform

Luis A. Aguilar, one of five members of the , is generally known as one of its strongest advocates for tougher oversight of the securities industry. In public statements this year, he has pushed his S.E.C. colleagues to be more aggressive, contending that the commission was not protecting investors assiduously enough.

But last week, Mr. Aguilar derailed one of the most significant current efforts to tighten regulations on the financial industry. His opposition to a proposal put forward by the S.E.C. chairwoman, Mary L. Schapiro, which was intended to improve the safety and soundness of a popular investment, money market , put Mr. Aguilar in lock step with the powerful and aggressive mutual fund industry in which he worked as a lawyer from 1994 to 2002. Mr. Aguilar's decision to oppose Ms. Schapiro's plan last week became the third and deciding S.E.C. vote against the proposal.

His public criticisms of the approach taken by Ms. Schapiro closely echo those made by the industry in its fierce lobbying effort to scuttle a regulatory plan that had won support from nearly every top financial regulator, including the Federal Reserve chairman, Ben S. Bernanke, and Treasury Secretary Timothy F. Geithner.

It is not uncommon, of course, for regulators to side with the industries they oversee. But Mr. Aguilar has been adamant that he is not against prudent reform. He has said instead that he wants to be sure regulators have enough information before they move forward with new rules.

Behind the scenes, though, Mr. Aguilar had not requested that additional information, according to people briefed on his actions in recent months.

In his statement outlining his opposition to Ms. Schapiro's plan, for instance, he said “there are larger macro questions and concerns about the cash management industry as a whole” that needed to be studied before the S.E.C. could move forward with efforts to improve money market funds. Mr. Aguilar did not mention the need for further study to Ms. Schapiro until two days before he went public with his opposition last week, commission officials said.

Possible changes to money market funds have been discussed within the agency for over a year, and Ms. Schapiro distributed the 414-page proposal in June to the four other members of the commission, including Mr. Aguilar. During that time, S.E.C. staff members made numerous overtures to Mr. Aguilar to address any concerns he might have had about the proposal, but most were rebuffed, the people said. On the other hand, Mr. Aguilar met with mutual fund companies 11 times this year as the proposal was being developed, according to S.E.C. records.

Mr. Aguilar also defended his opposition to Ms. Schapiro's plan by noting his discomfort with a recent S.E.C. staff list that showed how many money funds had asked the commission for approval to receive financial support from their parent companies. Mr. Aguilar contended that the commission “was never given the chance to assess the staff's underlying methodology to understand how the list was compiled.” But S.E.C. officials said that he and the other commissioners received the complete list in early July and that Mr. Aguilar had raised no questions about it.

Mr. Aguilar did not respond to requests for comment, but last week he said in an interview that he wanted to be sure to fully understand the implications of any changes to avoid the possibility that they would unnecessarily drive investors out of money market funds.

Mr. Aguilar's positions have taken on such significance because they have become the deciding factor in one of the most contentious issues facing financial regulators.

Though not guaranteed by the government, money market funds, which invest in the short-term debt of governments, banks and other companies, have long been seen as low-risk investments, in part because of their apparently stable $1 value per share.

During the financial crisis, however, a large fund lost money on the short-term debt of Lehman Brothers and fell below that $1 a share value, leading investors to withdraw $300 billion within a few weeks from what was a $3.6 trillion industry.

The run ended when the Federal Reserve and the Treasury Department stepped in to stabilize the funds. Both agencies have said that because of rule changes made in the Dodd-Frank financial legislation, the government no longer has tools to help the funds if they face another crisis.

Thoma Bravo Agrees to Take Deltek Private for $1.1 Billion

Thoma Bravo, the Chicago-based private equity firm, has agreed to buy Deltek, an enterprise software company, for $1.1 billion in cash.

The deal, valued at $13 a share, is slightly below Friday's closing price of $14.01, but more than 22 percent above Deltek's price in mid-June, when the company first began to shop the business to potential buyers.

“We have a long history of investing in highly respected and industry-leading software companies,” Orlando Bravo, managing partner at Thoma Bravo, said in a statement.  “In Deltek, we found a vertical market leader with unmatched solutions, a loyal and broad customer base, passionate employees and significant organic and acquisition-led growth opportunities.”

Deltek specializes in project management software to government contractors and corporations, such as accounting and consulting firms. The company, which will keep its headquarters in Herndon, Va., after the close of the transaction, has roughly 1600 employees and generates annual sales of $341 million.

“Deltek's powerful brand presence in the government contractor, professional services, and project-oriented markets makes it well poised for continued global industry leadership,” Holden Spaht, a partner at Thoma Bravo said.

Deltek hired Greenhill & Company and Credit Suisse to serve as financial advisers and Fried, Frank, Harris, Shriver & Jacobson to be its legal advisor. Thoma Bravo was assisted by Jeffries & Company and Kirkland & Ellis, the Chicago-based corporate law firm.

The deal, which is expected to close in the fourth quarter, has the approval of the board and Deltek's majority shareholder, New Mountain Capital.

M&T Bank to Buy Hudson City Bancorp for $3.7 Billion

M&T Bank Corp. has agreed to buy Hudson City Bancorp, expanding the financial firm's reach on the east coast.

Under the terms of the deal, M&T will pay roughly $3.7 billion in cash and stock. The price represents a nearly 16 percent premium to Hudson City's market value on Friday.

With the acquisition, M&T will bolster its presence in key markets, including New York, New Jersey and Connecticut. In all, M&T will add 135 branches.

“As a thrift, Hudson City focused primarily on deposits and mortgages,” Robert G. Wilmers, M&T chief executive, said in a statement. “M&T will build on Hudson City's loyal customer base to create a comprehensive community banking franchise.”

TPC Group to Go Private in $850 Million Deal

TPC Group, a specialty chemical maker, will be taken private in a deal valued at $850 million.

The private equity firms, First Reserve Corporation and SK Capital Partners, have agreed to pay $40 a share in cash for TPC. The deal, which also includes debt, represents a 20 percent premium to TPC's closing price on Friday.

TPC, which produces butadiene, has been struggling amid weak demand. With butadiene prices dropping by 26 percent in the latest quarter, TPC notched earnings of $3 million, down from $34 million a year ago.

Late last year, the company started considering “strategic and financial alternatives.” The deal on Monday “recognizes the value of TPC Group's business and prospects and provides our stockholders with an immediate cash premium for their valued investment,” Michael E. Ducey, Non-Executive Chairman of the TPC Group Board of Directors said in a statement.

Perella Weinberg Partners, a financial firm, and Baker Botts, a law fi rm, are advising TPC. Jefferies & Company and Simpson Thacher & Bartlett are working with First Reserve and SK Capital. Skadden, Arps, Slate, Meagher & Flom is advising the special committee to the TPC board.

Morning Take-Out

After Long Pursuit, Hertz to Buy Dollar Thrifty for $2.3 Billion  |  Two giants of the rental car industry agreed to merge late on Sunday, as Hertz Global Holdings announced a deal valued at $2.3 billion for the Dollar Thrifty Automotive Group.

The agreement caps a multiyear pursuit by Hertz, one that survived a rival bid by the Avis Budget Group and a rejection by Dollar Thrifty shareholders of an earlier, lower offer.

Under the terms of the transaction, Hertz will pay $87.50 a share in cash through a tender offer for Dollar Thrifty stock. That represents an 8 percent premium to Dollar Thrifty's closing price on Friday.

In an important component of the deal, Hertz said it would sell its Advantage Rent a Car discount unit to Franchise Services of North America, a car rental franchiser, and Macquarie Capital.
DealBook '

DEAL NOTES

Tax Credits Offer Clues to Romney's Finances  |  While Mitt Romney has refused to disclose more than his most recent two years of tax returns, some tax experts are focusing on a foreign tax credit he claimed in 2010. The return for that year suggests the candidate paid at least some federal tax every year going back to 2000, writes James B. Stewart in his Common Sense column.
NEW YORK TIMES

For Monied Interests, a Parallel Political Convention  |  This year's Republican National Convention, in Tampa, Fla., will include lobbyists, corporate executives and donors like Paul Singer, the billionaire founder of the hedge fund Elliott Management, who is holding events w ith figures like Karl Rove and Condoleezza Rice.
NEW YORK TIMES

Plenty Blame to Go Around in Europe's Crisis  |  Despite a popular perception in Germany, it wasn't just the Greeks who caused the crisis in Europe. The New York Times reports: “The circle of perpetrators could also include the fickle bond investors who underpriced the risk of Greek debt before 2010 and whose volatile reaction to even minor events has lately been wreaking havoc with Spanish and Italian borrowing costs and, by extension, those countries' economies.”
NEW YORK TIMES

Mergers & Acquisitions '

Times Agrees to Sell About for $300 Million  |  The New York Times Company has reached a dea l with Barry Diller's IAC/InterActiveCorp to sell the About Group, which includes About.com, for about $300 million in cash, the company said on Sunday.
NEW YORK TIMES MEDIA DECODER

H.P.'s Tough Choices Ahead  |  As soon as Oct. 3, when Hewlett-Packard will hold its industry analyst day in San Francisco, the company could face pressure to do something radical, like take a big write down or sell off some pieces, the Bits blog writes.
NEW YORK TIMES BITS

Sundance Resources Agrees to $1.4 Billion Sale  |  The Australian mining company Sundance Resources accepted a lowered takeover offer of $1.42 billion from the Hanlong Group of China, with iron ore prices near a three-year low, Reuters reports.
REUTERS

Samsung to Buy Stake in ASML Holding  |  Samsung Electronics is paying 500 million euros ($625 million) for a 3 percent stake in ASML Holding, which supplies equipment to computer chip makers, The Associated Press reports.
ASSOCIATED PRESS

PTT of Thailand Offers to Take Over Sakari Resources  |  The Thai energy firm PTT is looking to expand into coal mining with a $960 million offer for the 55 percent of Sakari resources it does not already own, Reuters reports.
REUTERS

Trimble Navigation to Buy Software Maker for $335 Million  |  Trimble, which makes equipment for marine navigation, is paying cash for the en terprise software company TMW Systems, Reuters reports.
REUTERS

INVESTMENT BANKING '

Spain Expects to Use $75 Billion of Bank Rescue Financing  |  The Spanish economy minister said the government expected to use about 60 billion euros, or $75 billion, of the 100 billion euros of bank rescue financing offered by European finance ministers, The New York Times reports.
NEW YORK TIMES

Deutsche Bank Introduces Rules to Take Back Pay  |  The Financial Times reports: “Deutsche Bank has become the first global bank to introduce rules allowing it to strip staff of bonuses they earned at previous employers in the latest crackdown on pay.”
FINANCIAL TIMES

Nomura Said to Outline a Plan for Cuts  |  As part of an overhaul of its strategy, Nomura is finalizing plans to cut hundreds of jobs, mainly in equities and investment banking, Reuters reports, citing unidentified people with knowledge of the planning.
REUTERS

Morgan Stanley Taps Small Investors to Buy Distressed Assets  |  Morgan Stanley is raising a fund to buy distressed mortgage assets from financial institutions, including the banks in Europe, and is looking to retail investors for the money, The Financial Times reports.
FINANCIAL TIMES

For Goldman, a Final Proprietary Trade  |  Goldman Sachs's thir d-quarter results are likely to show a profit on the purchase and subsequent sale of Knight Capital's stock portfolio, Reuters writes.
REUTERS

Goldman's Evans Said to Buy $27 Million Apartment  |  J. Michael Evans, a Goldman Sachs executive who is rumored to be a candidate for the top job, and his wife, Lise, have bought a 8,360-square-foot condo at 995 Fifth Ave. in Manhattan, The New York Post reports.
NEW YORK POST

British Bankers Enjoy Working in Singapore  |  In a survey, investment bankers in Britain said Singapore offered relatively lower taxes and higher wage growth than New York or London, Bloomberg News reports.
BLOOMBERG NEWS

PRIVATE EQUITY '

Blackstone Said to Groom Executives for Top Job  |  Joe Baratta, a 41-year-old deal maker at the Blackstone Group, who was named the new global head of private equity last month, is one of six senior Blackstone executives being groomed to one day take the reins from Stephen A. Schwarzman, Reuters reports, citing unidentified Blackstone insiders.
REUTERS

Company Owned by Bain to File for Bankruptcy  |  One of the portfolio companies of Bain Capital, Contec Holdings, a cable box repair company, is preparing to file for bankruptcy protection this week, The Wall Street Journal reports, citing unidentified people familiar with the matter.
WALL STREET JOURNAL

TPG Begins Due Diligence on Billabong  |  The Australian surf wear company Billabong reported an annual loss on Monday and said it had opened its books to the private equity firm TPG, The Wall Street Journal reports.
WALL STREET JOURNAL

Private Equity Investing on a Smaller Scale  |  The big firms may get all the attention, but a class of individual private equity investors is gaining ground. Paul Sullivan, writing in his Wealth Matters column, calls them the “do-it-yourself Romneys.”
NEW YORK TIMES

Buyout Firms Vie for Indonesian Health Care Stake  |  Blackstone, Bain Capital, K.K.R. and Abraaj Capital of Dubai are the bidders in the second phase of an auction for a fifth stake of Siloam, a private Indonesian healthcare operator, that could be worth as much as $300 million, Reuters reports, citing unidentified people.
REUTERS

IAC Agrees to Acquire About for $300 Million

By MICHAEL J. DE LA MERCED

The New York Times Company has agreed to sell the About Group, which includes the About.com network of topic sites, to Barry Diller's IAC/InterActiveCorp for about $300 million in cash, the company said on Sunday.

The deal, which is expected to close in the next several weeks, continues a corporate overhaul that is refocusing The Times on its core newspaper and Web site operations.

“This sale will allow the Times Company to focus on the development and growth of our core brands locally, nationally and on a global scale,” Arthur Sulzberger Jr., chairman of The New York Times Company, said in a statement.

In May, the Times Company sold off the remains of its stake in the Fenway Sports Group, the owner of the Boston Red Sox. And in January, the company sold its regional newspaper group to Halifax Media Holdings for $143 million.

For Mr. Diller, the About acquisition is just the latest for a longt ime deal maker who built his company out of a collection of properties like Match.com, Newsweek and The Daily Beast. In making his bid, he topped an earlier $270 million offer for About by Answers.com, a question-and-answer Web site backed by two private investment firms, Summit Partners and TA Associates.

About's primary asset is About.com, a collection of sites devoted to specific topics handled by individuals, like cooking, travel and pregnancy. A primary goal is for content to appear high up in search engine results, the better to draw in advertising dollars.

The Times Company bought the business in 2005 for a little over $400 million, giving the news provider an asset whose profits drew in revenue as the publishing industry faltered.

But About suffered from a decline in online traffic last year. Changes to Google's search algorithm reduced the prominence of the group's content, which has sometimes been criticized for lacking in substance. Revenue at th e group tumbled 8.7 percent in its most recent quarter, to $25.4 million. That prompted the Times Company to disclose that it would write down the value of About by $194.7 million.