Apple Rolls Out a Cleaner iTunes

November 30, 2012, 7:14 pm

Well, it finally happened: Apple got around to fixing iTunes.

Over the years, that program had become more and more cluttered as Apple saddled it with more and more burdens. In the beginning (2001), it was meant to be nothing more than a jukebox program. Then it became the loading dock for the iPod. Then it was the front end for the iTunes Music Store online. Then it was asked to manage TV shows and movies. Then podcasts. Then e-books. Then it became the syncing headquarters for iPhones and iPads. Then it was supposed to manage apps. Then it was the front end for Ping, Apple's flopped music-discussion service.

Eventually, it became a sluggish, cluttered, spreadsheety hangnail on our digital lives.

On Friday, Apple introduced the free iTunes 11 for download (Mac and Windows). It's still the front end for mus ic, videos and iGadgets, and its features and personality are much the same. But the design has been overhauled - deeply, controversially, but, in general, successfully.

You'll probably notice the declutterization first, what Apple calls “edge-to-edge” design. There's nothing on the right, left or bottom borders: the entire window is filled with album covers, or song lists, or whatever view you've selected in the bar across the top.

You can restore the left-side list of sources and the bottom-edge status bar if you miss them. But the proposed setup works fine: You choose the file type from the top-left pop-up menu (Music, Movies, TV Shows, Books, Podcasts, Apps), then click a category button across the top to change the display (like Songs, Albums or Artists.).

Each of those criteria (Songs, Albums…) has its own layout now. The Album view is especially cool. You see a grid of your album covers; when you click one, an information strip appears beneath, listing the songs. The strip is color-coded to the dominant color of the album cover itself. Slick.

Little buttons with “>” on them appear on just about everything; each produces a pop-up menu of options for that song, album or video (Add to Playlist, for example, or Show in iTunes Store).

A great new feature called Up Next is a list of songs that iTunes intends to play next - because they're in a playlist you made, or they're part of an album, or iTunes's Genius feature is lining them up like a robot D.J., or just because you feel like building an on-the-fly playlist. You can delete the ones you don't want to play, drag new songs into the lineup or reorder the songs that are there.

You can now redeem iTunes gift cards without having to type in that 723-digit code number. Just hold the bar code up to your computer's Webcam; iTunes does the rest.

Apple also fixed some of the dumber design elements that have always plagued iTunes. For years, the store was represented only as one item in the left-side list, lost among less important entries like Radio and Podcasts. Now a single button in the upper-right corner switches between iTunes's two personalities: Store (meaning Apple's stuff) and Library (meaning your stuff).

And you know those three round buttons in the upper-left corner of the window? They're supposed to mean Close, Minimize and Maximize. But the green one, for years, didn't maximize the window - it shrank the window to a miniplayer, in frustrating violation of Apple's own design guidelines.

Not anymore. Now the green button does what it's supposed to - makes iTunes fill your screen - and a new Miniplayer button opens a new, better floating Miniplayer window.

The miniplayer offers far more power now. You can search your entire library, switch to a different song or playlist and manipulate the Up Next list, without ever having to jump back to the full iTunes window. At last, you can park t he miniplayer in a corner of your screen as you do other work, while still flinging new songs into the lineup.

Unfortunately, Apple hasn't fixed the Search box. As before, you can't specify in advance what you're looking for: an app, a song, a TV show, a book. Whatever you type into the Search box finds everything that matches, and you can't filter it until after you search. It feels like a two-step process when one should do.

And then, of course, there's the eternal question: “Is iTunes doing too much?”

Sometimes, there's synergy. Sometimes, it seems to make sense that the jukebox, video, store and iGadget-loading features are all mashed into a single program - but not always. Sometimes, you feel like you're using separate, grafted-together programs.

In many ways, iTunes 11 is a classic Apple move. It replaces something you knew with something that Apple considers better - with little regard to the time it will take you to learn where everything went. Online, there's already a lot of “Noooo! They eliminated feature X!” - when feature X has just been moved or demoted.

iTunes 11 is, on the whole, better than what came before it - if only because it's faster, far less cluttered and laid out more sensibly. Yes, change always ruffles people's feathers - you could argue that Apple's specialty is feather-ruffling - but this time, at least, the overall direction is up.

Hedge Funds, Expecting a Bigger Buyback, Snap Up Greek Debt

LONDON - It is looking less likely that the Greeks can do a debt buyback on the cheap.

As Greece and its financial advisers race to set the terms for a crucial buyback of the country's deeply discounted bonds, opportunistic hedge funds are adding to their positions on the expectation that the government and its creditors will ultimately have to meet their price demand.

Hedge funds are holding firm on their stance that they will not sell for any price below 35 cents on the euro - a significant premium to today's average price of around 30 cents.

Traders say that the once trade-by-appointment market for Greek bonds has become quite robust, with as much as a billion dollars a day exchanging hands.

By Monday, Greece is expected to make clear to investors what price it will pay to get a deal done as the country tries to pay down its debt pile that tops 340 billion euros.

European officials and the International Monetary Fund have indicated that th e buyback, which aims to reduce the country's debt load by as much as 30 to 40 billion euros in order to meet future debt sustainability targets, must be completed by Dec. 13.

If the deal fails, the International Monetary Fund is unlikely to sign off on last week's debt agreement, raising the possibility that other European countries might follow suit. That would result in a bankruptcy for Greece.

Until recently, the view in Europe was that Greece, backed by a 10 billion euro loan from Europe - would be able to retire a healthy chunk of its debt by offering a close to market price of below 30 cents and then threatening to make use of collective action clauses to force holdouts to accept the offered price.

But the I.M.F.'s insistence that a buyback must take place before it signs off on new loans has emboldened hedge funds to buy more bonds in the view that Greece's creditors will not risk blowing up this week's carefully constructed deal if it means lending Greece additional funds to complete a buyback at a higher price.

Asked if there was any chance that the government would present a price below 30 cents, a person advising Greece on the deal said no.

Big macro funds such as Third Point and Brevin Howard in recent months have accumulated very large Greek bond positions expecting to be offered more on the buyback. At a price of 35 cents, some hedge funds that have scooped up debt at around 15 cents would more than double their money.

Traders say that even now, Greek bonds are attracting new buyers who are certain that they will be able to sell out of their positions at 32 cents and above.

But the question remains: will Germany sign off on additional loans that will lock in higher killings for hedge funds, even if the end result is reduced debt for Greece.

“Germany may accept a price of 35 cents,” said one Athens-based investment adviser at the center of many of these dealings. “But anything over 35 cents - no way.”

Week in Review: Portraits of a Hedge Fund Titan

Even before Steven A. Cohen's very bad week, the media narrative surrounding the hedge fund billionaire was well known: an intimidating temper that has mellowed with age, a bad back enflamed by the same, a hedge fund with a track record better than the Yankees and partial ownership of a baseball team whose standing is decidedly less stellar. This week, we review the highlights.

Like many billionaires Mr. Cohen, who has not been accused of any wrongdoing, shuns the media spotlight, but that hasn't stopped journalists and colleagues from painting colorful portraits that compare him to characters from Henry Melville and Miguel de Cervantes.

“It's a Darwinian and pressure-packed culture with ridiculous amounts of money at stake,” a former employee of SAC Capital told DealBook last year.

The closest Mr. Cohen has gotten to a media grilling recently was a sit-down with Paul Tudor Jones, another hedge fund manager, at a Wall Street-sponsored conference. Mr. Cohen is “almost as secretive as Howard Hughes,” one source told Businessweek in 2003. The comparison has stuck with the money manager despite his prominent forays into worlds of art, sports and politics.

In 2006, his hedge fund was focus of a widely criticized “60 Minutes” report on short sellers. His ex-wife, Patricia Cohen, told New York magazine that the television report was the impetus for her lawsuit over money involved in their 1990 divorce. The suit was later dismissed.

As the charges against former traders at his $14 billion hedge fund mounted, Mr. Cohen gave a rare interview in 2010 to Vanity Fair, saying that “in some respects I feel like Don Quixote fighting windmills.”

Or perhaps Mr. Cohen is, as Reuters described last year, the Feds' Moby Dick, an allegory that would make Robert S. Mueller, director of the Federal Bureau of Investigation, a modern-day empty-handed Captain Ahab.

In the end, the high-minded literary reference s may not capture Mr. Cohen's story as well as a man who inspired Bruce Springsteen, New Jersey's true poet laureate. It could be that Preet Bharara, the United States attorney in Manhattan, could write the hedge fund titan's final chapter.

A look back on our reporting of the past week's highs and lows in finance.

Two Firms Make Offers for Knight | Getco and Virtu Capital are said to be keenly interested in Knight's market-making trading operations, though they may sell less desirable parts of the company, Michael J. de la Merced and Nathaniel Popper reported. DealBook '

ConAgra to Buy Ralcorp, Solidifying Market Share | ConAgra is betting that private-label goods - made for bakeries, grocery chains and other customers - will be a higher source of growth worldwide, Mr. de la Merced and Stephanie Strom reported. DealBook '

Lehman Sells Property Firm in a Deal Worth $6.5 Billion | The deal that helped sink Lehman Brothers will play an important role in paying off the failed investment bank's creditors, Mr. de la Merced reported. DealBook '

MegaFon Raises $1.7 Billion in I.P.O., but Shares Fall | “The new listing, which is the largest Russian I.P.O. since the aluminum maker Rusal raised $2.2 billion in 2010, comes at a difficult time for European financial markets,” Andrew E. Kramer and Mark Scott reported. DealBook '

A Long-Term Vision | His stakes, once worth as much as $1.3 billion, are now valued at roughly $378 million, but Vinod Khosla seems unwavering in his commitment to the clean energy industry, Randall Smith reported. DealBook '

S.E.C. Weighs Suing SAC Capital | Steven A. Cohen is defending his $14 billion hedge fund against an intensifying government investigation into insider trading, Peter Lattman reported. DealBook '

• SAC Capital to Try to Reassure Investors | Only 40 percent of the money managed by the hedge fund comes from outside clients. DealBook '
• Former Analyst Is Freed on Bail in an Insider Case | Mathew Martoma appeared in Federal District Court in Manhattan to face the charges against him. DealBook '
• DealBook Column: Knowledge Is Money, but the Peril Is Obvious | Andrew Ross Sorkin examines “a business model that some said was tailor-made to foster insider trading on Wall Street.” DealBook '
• New Breed of SAC Capital Hire Is at Center of Insider Trading | Former employees of Mr. Cohen said that the case against Mr. Martoma highlighted SAC's high-stress, pressure-packed culture. DealBook '

As Official Drops Outs, Race Shifts for S.E.C. | With Mary J. Miller, a senior Treasury Department official, withdrawing, Sallie L. Krawcheck, a longtime Wall Street executive, has emerged as a potential front-runner, Ben Protess and Susanne Craig reported. DealBook '

• Rebuilding Wall St.'s Watchdog | Mary L. Schapiro “leaves behind a stronger S.E.C., an overhaul characterized by her attention to detail and meticulous preparation.” DealBook '

The Trade: Fledgling Monitor for Wall St. Risks an Early Compromise | Jesse Eisinger of ProPublica says that the Office of Financial Research “is looking as if it will be a tool of the financial services industry, instead of a check on it.” DealBook '

Deal Professor: In Battle With Hedge Funds, a Small Victory for Argentina | Steven M. Davidoff says that a stay of a federal judge's order on debt payment may provide an opportunity for Argentina's lawyers to raise questions that an appeals court may not have fully considered before. DealBook '

Autonomy's Ex-Chief Calls on H.P. to Defend Claims | “In the fight between Hewlett-Packard and the founder of its Autonomy unit, the gloves are well and truly off,” Mr. de la Merced reported. DealBook '

News Analysis: A Tax Break Once Sacred Is Now Seen as Vulnerable | “As President Obama and Congress try to hash out a deal to reduce the budget deficit, th e mortgage interest deduction will likely be part of the discussion,” Peter Eavis reported. DealBook '

Cravath Sets the Tone for Law Firm Bonuses | “Cravath kicked off bonus season by announcing year-end bonuses that were substantially higher than they had been the previous two years,” Mr. Lattman reported. DealBook '

Intrade Bars U.S. Bettors After Regulatory Action | The Commodity Futures Trading Commission took aim at the Dublin company and an affiliate in a civil complaint filed in federal court in Washington, Mr. Protess reported. DealBook '

UBS Fined $47.6 Billion in Rogue Trading Scandal | Britain's Financial Services Authority fined UBS £29.7 million for failing to prevent a $2.3 billion loss caused by a former trader, Mark Scott reported. DealBook '

WEEK IN VERSE: ‘I Don't Know, Krawcheck, It Sounded a Little Pitchy, Dawg.' DealBook commenters are tough judges. They've reacted to the candidat es to lead the S.E.C. as if they were watching a bad audition on American Idol.

H.P.'s Blunder for the Record Books

The dubious title of worst corporate deal ever had seemed to be held in perpetuity by AOL's acquisition of Time Warner in 2000, a deal that came to define the folly of the Internet bubble. It destroyed shareholder value, ended careers and nearly capsized the surviving AOL Time Warner.

After the Autonomy deal was announced, Ray Lane, Hewlett-Packard's chairman, heard from disgruntled shareholders.

The deal was considered so bad, and such an object lesson for a generation of deal makers and corporate executives, that it seemed likely never to be repeated, rivaled or surpassed.

Until now.

Hewlett-Packard's acquisition last year of the British software maker Autonomy for $11.1 billion “may be worse than Time Warner,” Toni Sacconaghi, the respected technology analyst at Sanford C. Bernstein, told me, a view that was echoed this week by several H.P. analysts, rivals and disgruntled investors.

Last week, H.P. stunned investors still reeling from more than a year of management upheavals, corporate blunders and disappointing earnings when it said it was writing down $8.8 billion of its acquisition of Autonomy, in effect admitting that it had overpaid by an astonishing 79 percent.

And it attributed more than $5 billion of the write-off to what it called a “willful effort on behalf of certain former Autonomy employees to inflate the underlying financial metrics of the company in order to mislead investors and potential buyers,” adding, “These misrepresentations and lack of disclosure severely impacted H.P. management's ability to fairly value Autonomy at the time of the deal.”

H.P. has declined to document the basis for its charges, saying it has turned the results of its internal investigation over to the Securities and Exchange Commission and Britain's Serious Fraud Office “for civil and criminal investigation.” In an unusually aggressive public relations counterattack, Autonomy's founder, Michael Lynch, a Cambridge-educated Ph.D., has denied the charges and accused Hewlett-Packard of mismanaging the acquisition. H.P. asked Mr. Lynch to step aside last May after Autonomy's results fell far short of expectations.

But others say the issue of fraud, while it may offer a face-saving excuse for at least some of H.P.'s huge write-down, shouldn't obscure the fact the deal was wildly overpriced from the outset, that at least some people at Hewlett-Packard recognized that, and that H.P.'s chairman, Ray Lane, and the board that approved the deal should be held accountable.

A Hewlett-Packard spokesman said in a statement: “H.P.'s board of directors, like H.P. management and deal team, had no reason to believe that Autonomy's audited financial statements were inaccurate and that its financial performance was materially overstated. It goes without saying that they are disappointed that much of the information they relied upon appears to have been manipulated or inaccurate.”

It's true that H.P. directors and management can't be blamed for a fraud that eluded teams of bankers and accountants, if that's what it turns out to be. But the huge write-down and the disappointing results at Autonomy, combined with other missteps, have contributed to the widespread perception that H.P., once one of the country's most admired companies, has lost its way.

Hewlett-Packard announced the acquisition of Autonomy, which focuses on so-called intelligent search and data analysis, on Aug. 18, 2011, along with its decision to abandon its tablet computer and consider getting out of the personal computer business. H.P. didn't stress the price - $11.1 billion, or an eye-popping multiple of 12.6 times Autonomy's 2010 revenue - but focused on Autonomy's potential to transform H.P. from a low-margin producer of printers, PCs and other hardware into a high-margin, cutting-edge software company. “Together with Autonomy we plan to reinvent how both structured and unstructured data is processed, analyzed, optimized, automated and protected,” Léo Apotheker, H.P.'s chief executive at the time, proclaimed.

Autonomy had already been shopped by investment bankers by the time H.P. took the bait. The pitch book was prepared by Qatalyst Partners, founded by Frank Quattrone, the Silicon Valley investment banker whose 2004 conviction on witness tampering and obstruction of justice was reversed on appeal. Qatalyst projected double-digit revenue and earnings growth in both 2011 and 2012, and suggested a visionary future of great opportunities: “The secular migration towards unstructured data has created a large and meaningful addressable opportunity in managing, regulating and monetizing the use of information.”

Berkshire Moves Into Spain With CaixaBank Reinsurance Deal

Warren E. Buffett has generally shied away from dipping his toe into southern Europe. But Mr. Buffett is nothing if not full of surprises.

His investment firm, Berkshire Hathaway, agreed on Friday to pay $780.8 million to claim the future cash flows of a life insurance portfolio held by CaixaBank, a major Spanish lender.

CaixaBank, which will continue to service the portfolio, will claim a pretax profit of about $680 million.

With the reinsurance deal, Mr. Buffett and his sizable insurance team are betting that at least one Spanish firm is in good financial shape, even as its home country remains on shakier economic ground.

He has repeatedly offered a dour assessment of Europe since the onset of its sovereign debt crisis, calling it a serious problem with few obvious solutions.

“I don't know how it plays out in Europe,” Mr. Buffett said at Berkshire's annual investor conference earlier this year. Referring to the European Central Bank, he added, “We have seen the E.C.B. here recently give $1 trillion to banks which are loaded with sovereign debt, which really is questionable in many cases.”

And he said during a visit to Japan two weeks ago that had no idea how the crisis would be resolved.

That said, Mr. Buffett said during the same meeting that he still saw plenty of opportunities to invest in Europe - outside of debt. “There are stocks I like and wonderful businesses,” he said, according to Reuters.

And the arm of Berkshire that is behind the CaixaBank deal, its big reinsurance division, has repeatedly demonstrated a greater appetite for risk than the rest of the company.

Many firms, including the American International Group and Lloyds, have struck agreements with Berkshire to help clean up their balance sheets. CaixaBank, for example, will be able to use the proceeds from the deal to meet new banking rules that require it to hold more capital.

Mr. Buffett and his top insurance lieutenant, Ajit Jain, agree to take on such potentially risky transactions because they provide additional assets to bulk up Berkshire's “float,” or insurance premiums that haven't been paid out yet. While the company may eventually need to pay out on insurance claims, it is betting that it will have made far more money by investing them elsewhere first.

Mark Scott contributed reporting.

Duke Energy\'s Latest C.E.O. Drama

Duke Energy faces even more management upheaval.

As part of a wide-ranging settlement with regulators in North Carolina, James E. Rogers, the company's chairman and chief executive, will retire at the end of 2013.

The settlement relates to the boardroom drama that elevated Mr. Rogers to the role in the first place.

Following the utility's merger with Progress Energy, William D. Johnson, the chief executive of Progress, was to run the combined company. But hours after the $32 billion deal was completed on July 2, the board pushed Mr. Johnson out and brought back Mr. Rogers. The coup set off loud protests in North Carolina, where both Duke and Progress were based, and state inquiries over whether regulators were misled.

Duke's board defended its actions, saying simply that it had lost confidence in Mr. Johnson's ability to lead the company and that the board alone had sole authority over this decision. Mr. Johnson, who was hired this month to run the Tennessee Valley Authority, said he was a scapegoat for Duke's board as its desire to complete the merger waned.

The combined Duke has more than seven million customers in its regulated businesses across six states in the Midwest and Southeast. The company is readying two large rates cases before the North Carolina utilities commission. The uncertainty over this investigation and its relationship with regulators has weighed on the company's stock, which was off about 10 percent from its summer high but up nearly 2 percent in trading on Friday morning.

As part of the settlement, Duke, which is based in Charlotte, will be required to keep at least 1,000 jobs in Raleigh for at least five years, rehire one of Mr. Johnson's former top assistants for two years and replace Marc Manly, one of Mr. Rogers's top lieutenants, as general counsel. The settlement also spells out the manner in which Duke's board will search for a replacement for Mr. Rogers, one of the nation's longest-serving utility executives.

While the settlement says that Duke's agreement isn't an admission of unlawful or improper action, it does require the company to issue a statement that says its activities have “fallen short” of the commission's expectations. The settlement must be approved by the full commission, which meets Monday and is expected to sign off on the deal.

SAC Chief Gave Testimony

SAC CHIEF'S TESTIMONY  |  The hedge fund manager Steven A. Cohen has offered little public explanation of the stock trades that are the focus of an intensifying government investigation. But Mr. Cohen, the head of SAC Capital Advisors, gave testimony to the Securities and Exchange Commission on the matter, which involves allegations of insider trading by a former portfolio manager.

Mr. Cohen said that his hedge fund sold the stocks in question after a portfolio manager said he was “no longer comfortable” with the position, The Financial Times reports, citing unidentified people familiar with the testimony. Any details of the conversation between Mr. Cohen and the manager, Mathew Martoma, are likely to feature prominently in the coming court action. The criminal case against Mr. Martoma is the first time the government has linked M r. Cohen to questionable trades. The hedge fund was also warned by the S.E.C. that it might be the target of a civil fraud lawsuit.

The firm held a call with employees on Thursday after the market closed, reassuring them that Mr. Cohen had no plans to retire, CNBC's Kate Kelly reported. That followed a conference call with investors on Wednesday, in which executives tried to allay concerns. Six former employees of SAC have now been linked to insider trading by the government, and three have been convicted. Still, investors stuck with the firm, adding as much as $1.6 billion in new capital to the flagship funds between 2010 and 2011, according to Absolute Return.

KHOSLA KEEPS A BULLISH BET ON CLEAN TECH  |  A cyclical downdraft in the clean energy sector has not discouraged one prominent investor, Vinod Khosla, from committing more money to his bets, Randall Smith reports for Dea lBook. Mr. Khosla, the founder of Khosla Ventures, once controlled stakes worth as much as $1.3 billion in biofuel companies, but at least on paper, that value has dwindled to roughly $378 million, Mr. Smith reports. To one of his supporters, Andy Bechtolsheim, who co-founded Sun Microsystems with Mr. Khosla 30 years ago, Mr. Khosla is “a visionary who likes to make big bets on ideas that can really change the world.” Still, as Pavel Molchanov, an analyst at Raymond James & Associates, notes, “The whole clean tech sector has been out of favor.” Mr. Smith writes: “Despite the crosscurrents, Mr. Khosla seems unwavering in his commitment.”

ON THE AGENDA  |  Mario Draghi, president of the European Central Bank, and Christine Lagarde, managing director of the International Monetary Fund, join the finance ministers of Italy and France at a conference in Pari s. Michael Milken, chairman of the Milken Institute, is on Bloomberg TV at 1:30 p.m. Gene Sperling, director of President Obama's National Economic Council, is on Bloomberg TV at 9 p.m. Data on personal income and outlays for October is released at 8:30 a.m.

RIFTS IN THE BUSINESS LOBBY  |  The United States Chamber of Commerce, the powerful industry group, is trying to retain its “influence and swagger” after a string of political losses, and as another group, the Campaign to Fix the Debt, raises its profile, The New York Times reports. As President Obama and Congress negotiate over the “fiscal cliff,” the Chamber of Commerce is pushing for a deal without tax increases, while some prominent chief executives are acknowledging that taxes might have to be raised. “Many business leaders are looking to the chamber as a bulwark against the White House's push for higher taxes, but it is unclear if the century-old association has the clout it once did,” The Times writes.

For the business leaders who comprise Fix the Debt, the group offers more than access to political power. It's also an extended networking session, an “elite hobnobber's paradise,” New York magazine's Kevin Roose reports, quoting one unidentified member as saying, “We have these great dinners.”

WHEN DIRECTORS ELECT THEMSELVES  |  As Orient-Express Hotels considers an unsolicited takeover offer from the Indian Hotels Company, a subsidiary of the Tata Group, its board of directors is in a strong position, Steven M. Davidoff writes in the Deal Professor column. That's because the directors can elect themselves, “a unique characteristic among companies worldwide. Shareholders have no real say in the selection of Orient-Express's directors.” Mr. Davidoff explains: “Orient-Express's shares are divided into Class A and Class B shares, with the Class B shares controlling 64 percent of the votes. Who owns the Class B shares? It is actually Orient-Express itself.” This feature of Orient-Express, which is based in Bermuda, “wouldn't be allowed under Delaware law,” Mr. Davidoff says. “This wouldn't be so bad, except Orient-Express has a history of poor performance.”

Mergers & Acquisitions '

U.P.S. Offers Concessions to Secure TNT Express Takeover  |  United Parcel Service has submitted concessions to European antitrust authorities as it seeks regulatory approval for its proposed $6.8 billion takeover of the Dutch shipping company TNT Express.
DealBook '

Duke's Chief to Retir e as Part of Settlement Deal  |  Jim Rogers, the chief executive of Duke Energy, “is retiring, and the power company's board will be overhauled, in a sweeping settlement with North Carolina regulators over a controversial boardroom coup last summer,” The Wall Street Journal reports.
WALL STREET JOURNAL

R.B.S.'s Deal to Sell Indian Operations Falls Through  |  The Royal Bank of Scotland had agreed to sell its retail and commercial banking operations in India to HSBC, but the deal collapsed on Friday, and R.B.S. said it would now wind down the business, Reuters reports.
REUTERS

Wonga, British Lender, Said to Be in Talks to Acquire U.S. Firm  |  Wonga.com, a British company that pr ovides loans online, “is in discussions to acquire U.S. small business lender On Deck Capital Inc. as it looks to expand into North America, according to a person familiar with the situation,” Bloomberg News reports.
BLOOMBERG NEWS

2 Bidders Said to Vie for Dean Foods Unit  |  Michael Foods and Saputo of Canada are each looking to buy the Morningstar dairy division of Dean Foods, “in a deal that could fetch between $1 billion and $1.5 billion,” Reuters reports, citing unidentified people familiar with the matter.
REUTERS

Icahn Urges Oshkosh Shareholders to Accept Offer  | 
REUTERS

INVESTMENT BANKING '

Financial Sector Leads a Rise in Corporate Profits  |  United States corporate profits reached a record high in the third quarter, and “all of the growth in domestic corporate profits was accounted for by the financial sector,” the Economix blog writes.
NEW YORK TIMES ECONOMIX

Berkshire in Reinsurance Deal With CaixaBank  |  Berkshire Hathaway agreed to pay the Spanish lender CaixaBank $778.7 million for future cash flow from a life insurance portfolio, “a rare dip into a fiscally stressed euro-zone country” for Warren E. Buffett's company, The Wall Street Journal reports.
WALL STREET JOURNAL

Morgan Stanley's Chief Laments Wall Street Scandals  |  James P. Gorman said at a conference on Thursday that Wall Street's reputation was “in the doghouse,” in part because of trading scandals like the one at UBS, Bloomberg News reports.
BLOOMBERG NEWS

At Citigroup, Lower Bonuses and More Job Cuts  |  Bloomberg News reports that Citigroup's “trading and investment-banking division plans to eliminate 150 more jobs while shrinking bonuses by as much as 10 percent, extending the toll of Wall Street's revenue slump, two people with direct knowledge of the decisions said.”
BLOOMBERG NEWS

Citigroup Hires Head of Financial Institutions Group for Singapore  | 
WALL STREET JOURNAL

British Banks May Be Undercapitalized, Bank of England Governor Warns  |  Britain's banks need more capital to protect against the fallout from the euro zone crisis, the rate-manipulation investigations and other potential costs, according to a report from the Bank of England. The health of Britain's major financial institutions is probably overstated because possible future losses and costs related to bad loans may be larger than expected, Julia Werdigier reports in The New York Times.
DealBook '

PRIVATE EQUITY '

S.E.C. Accuses Private Equity Manager of Misleading Investors  |  Bloomberg News reports that the “Securities and Exchange Commission sued Resources Planning Group, a Chicago-based investment adviser, and one of its owners, over cl aims they raised money for a failing private equity fund to pay off existing clients.”
BLOOMBERG NEWS

Cerberus's Talks With Supervalu Said to Hit a Snag  |  Bloomberg News reports that Cerberus Capital Management's talks to acquire Supervalu have “stalled because the private equity firm has had trouble obtaining the funds for a leveraged buyout, said people familiar with the matter,” Bloomberg News reports.
BLOOMBERG NEWS

HEDGE FUNDS '

Muddy Waters Offers to Pay for Olam Debt Rating  |  The short-seller introduced an unusual twist in its battle against the Singapore commodity company: an offer to pay for the company to get its debt rated by Standard & Poor 's.
DealBook '

In Battle With Hedge Funds, a Small Victory for Argentina  |  A stay of a federal judge's order on debt payment may provide an opportunity for Argentina's lawyers to raise questions that an appeals court may not have fully considered before, Steven M. Davidoff writes in the Deal Professor column.
DealBook '

I.P.O./OFFERINGS '

China Insurer Raises $3.1 Billion in I.P.O.  |  The deal ranks as Hong Kong's biggest of the year, but more than half of the shares sold by the People's Insurance Company (Group) of China went to 18 so-called cornerstone investors, many of them state-owned companies.
DealBook '

Status Quo at Groupon as Board Stands by Chief  |  A Groupon spokesman, Paul Taaffe, said that the board and the management team are “aligned.” For now, it appears Mr. Mason isn't going anywhere.
DealBook '

VENTURE CAPITAL '

Thiel Invests in Accounting Software Company  |  Peter Thiel, the PayPal co-founder, joined other investors in committing $49 million to Xero, which makes online accounting software for small businesses, TechCrunch reports.
TECHCRUNCH

LEGAL/REGULATORY '

Judge Gives Final Approval to Hostess Wind-Down Plan  |  A bankruptcy judge signs off on a liquidation plan that includes paying out up to $1.8 million in bonuses to executives. In addition, advisers to company say they are in active talks with about 110 suitors.
DealBook '

Barclays to Contest Energy Market Manipulation Case  |  Barclays said Thursday that it would fight charges filed by the Federal Energy Regulatory Commission over claims that it manipulated rates in California's energy markets.
DealBook '

Journalist Implicated in Insider Trading Case  |  Michael Baron, sen ior editor for TheStreet.com, is described in a criminal complaint as being connected to an insider trading ring, The Wall Street Journal reports.
WALL STREET JOURNAL

How Auditors Clashed in H.P.'s Autonomy Deal  |  The New York Times columnist Floyd Norris writes that in H.P.'s disastrous Autonomy deal, there is an answer to the question “Where were the auditors?” He writes: “They were everywhere.”
NEW YORK TIMES

George C. Kern Jr., Innovative M.&A. Lawyer, Dies at 86  |  The founder of the mergers and acquisitions practice at Sullivan & Cromwell in the late 1970s, Mr. Kern “played a major role in the corporate takeover battles of the 1980s,” The New York Times writes.
NEW YORK TIMES

A Warning to Life Insurers on Reserve Risk  |  The New York Times reports: “After more than a year studying a surge of intricate financial deals in the life insurance industry, regulators said Thursday that they had found transactions that could ‘give the industry a black eye,' but could not agree on what to do about them.”
NEW YORK TIMES

Strauss-Kahn Said to Reach Settlement Deal With Hotel Housekeeper  |  The New York Times reports: “Dominique Strauss-Kahn and the hotel housekeeper who accused him of sexually assaulting her last year have quietly reached an agreement to settle a lawsuit she brought against him stemming from the case, which made international headlines, people with knowledge of the matter said Thursday.”
NEW YORK TIMES

U.P.S. Offers Concessions to Secure TNT Express Takeover

LONDON - United Parcel Service said on Friday that it had submitted concessions to European antitrust authorities as it continues to seek regulatory approval for its proposed takeover of the Dutch shipping company TNT Express.

U.P.S. said the remedies would include the sale of certain business units and the granting of access to some of its airline network to rivals. The company, based in Atlanta, Georgia, did not provide specifics on which of its operations would be sold.

European antitrust authorities had raised concerns that the proposed 5.2 billion euro, or $6.8 billion, takeover of TNT Express would significantly reduce competition in the Continent's package delivery sector.

Joaquín Almunia, the European competition commissioner, had called on U.P.S. to offer significant concessions to gain regulatory approval for the takeover.

‘‘The proposed remedies aim to address the European Commission's concerns regarding the competitive effects of t he intended merger on the international express small package market in Europe,'' U.P.S. said in a statement on Friday.

The U.S. company added that the concessions would not change the terms of its offer for TNT Express.

As part of the concessions, the deadline for European regulators to rule on the takeover also has been extended until Feb. 5.

The ongoing antitrust concerns have weighed on the deal since it was first announced in March. Stock in TNT Express is currently trading at a 20.5 percent discount to U.P.S.'s offer of 9.50 euros-a-share, though TNT's share price has risen around 41 percent over the last 12 months.

TNT Express announced earlier in November that it would sell its airline operations to win antitrust approval for the deal with U.P.S.

ASL Aviation, which already owns 90 aircraft used for freight and passenger services, had agreed to buy Group TNT Airways and Pan Air Lineas Areas, which are both owned by TNT. The sale, whose f inancial terms were not disclosed, is dependent on U.P.S.'s successful take over of TNT Express.

If U.P.S. succeeds in its multibillion-dollar offer, the deal would be largest acquisition in the 105-year history of the American company, whose biggest purchase to date was its $1.2 billion takeover of Overnite Corp, in 2005, according to data from Capital IQ.

China Insurer P.I.C.C. Raises $3.1 Billion in I.P.O.

HONG KONGâ€"Hong Kong's market for new stock listings, which has been moribund for months, is showing new signs of life thanks to a small circle of very big investors.

On Friday, one of China's biggest state-owned insurers raised 24 billion Hong Kong dollars, or $3.1 billion, in the city's largest initial public offering of the year after the company priced its shares near the bottom of their previously indicated price range.

P.I.C.C. is the biggest player in China's fragmented market for property and casualty insurance. The company sold 6.9 billion shares that were priced Friday at 3.48 Hong Kong dollars, or $0.45, apiece, according to two people with direct knowledge of the deal. That was at the lower end of the range of 3.42 to 4.03 dollars per share that the company had sought. The I.P.O would have raised as much as $3.6 billion at the top end of the range.

But more than half of the shares sold by the People's Insurance Company (Group) of China, or P. I.C.C., founded in October 1949 as the Communist Party came to power, went to 18 so-called cornerstone investors. Those are large companies and funds that commit to buying a big chunk of the offered stock and agree not to sell their holdings for a fixed period, in this case six months. Companies and their bankers see this as a way to shore up support for new listings among institutional investors and the general public.

P.I.C.C.'s cornerstone investors together bought shares worth $1.82 billion and accounting for an exceptionally high 59 percent of the total. These buyers included foreign peers like American International Group, the European reinsurer Scor SE, Tokio Marine of Japan and Ingosstrakh Insurance of Russia.

But Chinese state-owned companies also played a crucial role in lending support, with eight buying $845 million worth of shares, for 46 percent of the cornerstone allocation. Among the government-owned buyers were China's biggest electricity grid op erator, a machinery manufacturer, an aerospace company and even a domestic rival, China Life Insurance, the country's biggest insurer with assets of more than 1 trillion renminbi, or $160 billion.

The heavy reliance on cornerstone investors in the P.I.C.C. deal represents a rising trend in Asian listings that is most pronounced in Hong Kong. Of share sales worth $1 billion or more so far this year, cornerstone investors in Hong Kong have taken up an average of 49 percent of the total deal value. That compares with 22 percent of such deals last year, and between 10 percent and 18 percent of such deals from 2007 to 2010, according to figures from the data provider Dealogic.

The increasing preference for precommitted investment has helped a number of deals get through despite difficult markets. Including the P.I.C.C. offering, there have been 47 new share sales in Hong Kong in the first 11 months of the year that have raised $9.9 billion. That value is down 63 perce nt from the same period a year earlier, when $26.9 billion was raised via 70 deals.

Still, in a sign that I.P.O. interest might be heating up, the retail portion of the insurer's offering saw strong demand. Applications for shares by the general public exceeded the amount of shares available to them by 17.5 times, according to one of the sources familiar with the deal. That led to a so-called clawback, which increased the retail portion of the I.P.O. to 7.5 percent of the shares being sold, up from the standard 5 percent.

No fewer than 17 banks acted as underwriters on the deal, which was led by Goldman Sachs, Deutsche Bank, Credit Suisse, China International Capital Corp. and HSBC as the global coordinators.

Muddy Waters Offers to Pay for Olam Debt Rating

HONG KONGâ€"Short-sellers have a number of tools at their disposal when seeking to profit from a drop in a target company's share price.

But Friday, Muddy Waters Research, the short-seller founded by Carson C. Block, introduced an unusual twist in its battle against the Singapore agricultural commodity company Olam International: an offer to pay for Olam to get its debt rated by Standard & Poor's.

‘‘We hereby make a bona fide offer to pay for Olam to have one of its public debt issues rated by S.&P.,'' Muddy Waters said in a statement published on its Web site and circulated via e-mail.

The latest volley from Muddy Waters, the short-seller based in the United States and Hong Kong, followed another week of testy exchanges between Muddy Waters and Olam.

The war of words started Nov. 19, when Mr. Block, in a speech in London, questioned Olam's accounting and the sustainability of its debt load. Olam responded by temporarily haltin g trading in its shares and filing a defamation lawsuit in Singapore High Court against Muddy Waters and Mr. Block.

Last Monday, the short-seller published a 135-page report that likened Olam to Enron, a U.S. company that went bankrupt in 2001, saying the Singapore company was ‘‘likely to fail'' and questioning the bookkeeping on its acquisition of a flour milling business in Nigeria, among other issues.

Two days later, Olam responded with a 45-page report of its own that dismissed the findings of Muddy Waters as ‘‘false and misleading.'' Olam said it faced no risk of insolvency and elaborated at length on the valuation and performance of its many trading and operating businesses around the world. It said the short-seller was attempting to ‘‘distract and create panic'' among its shareholders and bondholders, something it called ‘‘a strategy of shouting fire in a crowded room.''

In its statement Friday, Muddy Waters said Olam's allegations were defamatory. ‘‘The shares we have shorted are a fraction of the number of shares short,'' the statement said. ‘‘We are not working in concert with a group of hedge funds to try to drive the stock price down.''

Muddy Waters added that its offer to pay for the debt rating would expire next Wednesday.

Representatives for Olam did not immediately respond Friday to requests for comment.