Jeffrey P. Bezos, the founder of Amazon.com, has agreed to buy The Washington Post for $250 million in cash, in a deal that has shocked the newspaper industry. Donald E. Graham, chairman and chief executive of The Washington Post Company, said he and the publisher “decided to sell only after years of familiar newspaper-industry challenges made us wonder if there might be another owner who would be better for the Post.†The sale is expected to be completed within 60 days.
The purchase price is a pittance for Mr. Bezos, a technology mogul with an estimated fortune of more than $25 billion. “But the deal was still an astonishing move for a magnate who has kept a low profile in politics and has said almost nothing about his interest in newspapers, except that he reads them,†Nick Wingfield and David Streitfeld report in The New York Times. “I am happily living in ‘the other Washington’ where I have a day job that I love,†Mr. Bezos wrote to the newspaper’s employees.
“If it wasn’t clear that newspapers have become trophies for the wealthy with an interest in journalism or power â€" or a combination of both â€" it should be now,†Andrew Ross Sorkin writes in the DealBook column. In addition to the sale of the Post, The Boston Globe was sold on Friday for $70 million and Newsweek was sold over the weekend for next to nothing. The deals “don’t make financial sense,†said Ken Doctor, an analyst at Outsell, a research and consulting firm for the publishing industry.
Based on the math, the $250 million valuation for The Washington Post seems hard to justify, Mr. Sorkin writes. But the newspaper was not just a business. “If journalism is the mission, given the pressures to cut costs and make profits, maybe (a publicly traded company) is not the best place for The Post,†Katharine Weymouth, the publisher, said in an interview with the newspaper. A running joke on Twitter on Monday was expressed by Ben Popper, the editor at the Web site the Verge: “Jeff Bezos has reputation for building great companies with little to no profit, perfect guy to own a newspaper.â€
The bank behind the sale of the newspaper was Allen & Company, which spoke to a “half-dozen†possible buyers before settling on Mr. Bezos, according to the Post’s own report on the deal. “Mr. Graham and Mr. Bezos were both at Allen & Company’s annual conference in Sun Valley, Idaho, last month,†Michael J. de la Merced writes in DealBook. “The high-powered gathering of media and technology moguls may have lent cover for the two to cement the deal.â€
SONY REJECTS LOEB PROPOSAL FOR BREAKUP  | Sony said late on Monday that it planned to keep all of its entertainment arm, rejecting a proposal by the activist hedge fund manager Daniel S. Loeb. “The decision, announced in a publicly disclosed letter to Mr. Loeb, raises questions about whether he will stage a public fight with Sony,†Mr. de la Merced writes in DealBook. The letter came after a meeting between Mr. Loeb and Sony’s bankers on July 17 in Manhattan.
The chief executive of Sony, Kazuo Hirai, wrote in the letter that the company had considered Mr. Loeb’s proposal of spinning off part of the entertainment unit in a public offering. But he said that after consulting with its financial advisers, Sony believed that owning all of the business would let it better mesh with the core electronics operations, without the legal complications of a partial spinoff.
BANKERS’ PAY DEFERRALS ARE TOUGHER IN EUROPE  | Four years after international regulators proposed an overhaul of Wall Street’s lush pay packages that was supposed to apply equally to employees of American investment banks and their big European rivals, “Europeans might be forgiven for wondering what happened to the American effort,†DealBook’s Peter Eavis writes.
“A central theme of the overhaul was to make bankers wait for a significant portion of their pay, so they would have less of an incentive to take the sort of short-term risks that led in 2008 to crippling losses. Today, however, European firms appear to be holding back, or deferring, substantially more of their top risk-takers’ pay than American banks. European banks like Barclays and Credit Suisse are deferring as much as 70 percent of the compensation granted to top employees, according to an analysis by The New York Times of the banks’ annual reports. American firms, by contrast, generally appear to be deferring about half.â€
ON THE AGENDA Â |Â
Dish Network and Michael Kors Holdings report earnings before the market opens. The Walt Disney Company and Zillow report earnings in the evening. A report on the international trade gap for June is out at 8:30 a.m. Sheila C. Bair, former chairwoman of the Federal Deposit Insurance Corporation, is on CNBC at 8 a.m. Ashton Kutcher, who is performing the role of Steven P. Jobs in an upcoming movie, is on CNBC at 4:40 p.m.
NEW YORK CRACKS DOWN ON ONLINE LENDERS  | “Government authorities are homing in on a lucrative loophole that allows online lenders to offer short-term loans at interest rates that often exceed 500 percent annually, the latest front in a crackdown on the payday lending industry,†Jessica Silver-Greenberg and Ben Protess report in DealBook. “New York State’s financial regulator joined the effort on Monday as he sent letters to 35 of the online lenders, instructing them to ‘cease and desist’ from offering loans that violate local usury laws, according to documents reviewed by The New York Times. The regulator, Benjamin M. Lawsky, ordered the lenders to halt the ‘illegal’ loans within two weeks.â€
Alliant Techsystems Said to Be in Talks to Buy Bushnell  | Alliant Techsystems, the giant ammunition maker, “is in advanced talks to buy Bushnell Outdoor Products†in a deal that could be worth around $1 billion, Reuters reports, citing two unidentified people familiar with the matter. REUTERS
With New Acquisition, BMC Software Opens App Store  | BMC Software, the enterprise software company that recently agreed to sell itself to private equity investors, announced on Tuesday a new app store called BMC AppZone, which the company said it acquired through its purchase of Partnerpedia. BMC SOFTWARE
Hellman & Friedman in Deal for Insurance Brokerage Firm  | Hellman & Friedman funds are acquiring Hub International, a global insurance brokerage firm, in a deal that values the company at $4.4 billion. DealBook »
Airlines Secure European Approval for Merger  | US Airways and the parent company of American Airlines agreed to give up a slot at Heathrow Airport in London and foster competition in the London-Philadelphia route, The Associated Press reports. ASSOCIATED PRESS
Disney Magic May Not Have Worked on Pixar  | A Breakingviews analysis suggests the studio’s value to the Magic Kingdom falls short of the $7.4 billion purchase price, Jeffrey Goldfarb of Reuters Breakingviews writes. REUTERS BREAKINGVIEWS
Standard Chartered’s First-Half Profit Fell 24%  | The British bank Standard Chartered reported that profit fell 24 percent, to $2.1 billion, in the first half of the year, as the firm took a $1 billion charge related to its operations in South Korea. DealBook »
Credit Agricole’s Profit Soars After Bank Leaves Greece  | The French bank said its second-quarter profit rose more than 12 times, to $922 million, from the period a year earlier, after it sold Greek and Italian units that had weighed on its results. DealBook »
Amid Disappointing Growth, Goldman Sachs Rethinks Brazil  | Goldman Sachs has changed its plans for an expansion in Brazil after the economy grew less than expected, Bloomberg News reports. The report continues: “About a quarter of Goldman Sachs’s roughly 45-person Brazil investment-banking division have left, people familiar with the matter said, asking not to be identified because the bank hasn’t announced the departures. Five managing directors, four from the eight-person executive committee, are no longer at the firm, the people said.†BLOOMBERG NEWS
Wealth Management Firm Targets a New Generation  | Ascent Private Capital Management, a new unit of U.S. Bancorp, increased its assets under advisement in 2012 by 96 percent, according to Bloomberg Markets magazine. The firm’s president said it is trying to “appeal to the new billionaire.†BLOOMBERG MARKETS
Staff Turnover at Deutsche Bank’s Prime Finance Unit  | The unit of Deutsche Bank that works with hedge funds has experienced accelerating turnover in recent months, Absolute Return reports. ABSOLUTE RETURN
Piling on Debt, Paying Out Dividends  | The Wall Street Journal reports: “Private equity firms are adding debt to companies they own to fund payouts to themselves at a record pace, as fears mount that the window for these deals will close if interest rates rise.†WALL STREET JOURNAL
Hedge Fund Manager Rejects Comparisons  | Paul Singer of Elliott Management wrote in a letter to investors, according to Absolute Return: “The last thing we want to hear when we hit a soft patch (and the least helpful when trying to dig our way out) is a question about our performance relative to someone else’s.†ABSOLUTE RETURN
Pershing Square Said to Stumble in July  | Pershing Square Capital Management, the hedge fund run by William A. Ackman, was down 2.2 percent in July, but it remains up 3.8 percent year-to-date, Reuters reports, citing an unidentified investor familiar with the numbers. REUTERS
Neiman Marcus Said to Hire Banks for I.P.O.  | The development is “the latest sign that the high-end department store is leaning toward a listing over pursuing an outright sale,†Reuters reports, citing two unidentified people familiar with the matter. REUTERS
Third Point Reinsurance Fund Arm Seeks Up to $370.6 Million in I.P.O.  | The reinsurance arm of Third Point, the hedge fund run by Daniel S. Loeb, disclosed on Monday that it was seeking to raise up to $370.6 million from its forthcoming initial public offering. DealBook »
A Study Bolsters Twitter’s Advertising Strategy  | Nielsen has found in a study that an increase in Twitter commentary about a television show can increase the show’s viewership as it airs, AllThingsD reports. The study “will be seen as validation for a pitch Twitter has been making to TV networks and advertisers for a couple years.†ALLTHINGSD
Chicago Sees Pension Crisis Brewing  | “A crushing problem lurks beneath the signs of economic recovery in Chicago: one of the most poorly funded pension systems among the nation’s major cities,†The New York Times writes. NEW YORK TIMES
F.B.I. Finds Flaws in System Controlling Economic Data  | The Wall Street Journal reports: “The Federal Bureau of Investigation has discovered vulnerabilities in the government’s system for preventing market-moving economic reports from leaking to traders before public release.†WALL STREET JOURNAL
The Gray Line of ‘Confidential’ Information  | The insider trading case against an analyst who tipped off a portfolio manager at SAC Capital Advisors in 2009 is not typical because he also shared the information with others, Peter J. Henning writes in the White Collar Watch column. White Collar Watch »
The Changing State of Smartphone Competition in China  | A look at the competition from Chinese makers to Apple’s iPhone, which is no longer the most sought-after phone in the country, and the state of the government’s effort to stabilize economic growth, Bill Bishop writes in the China Insider column. DealBook »
Fed Official Says More Names Being Considered for Chairman  | “Not all the names you’ve read about are all the names being considered,†Richard Fisher, president of the Federal Reserve Bank of Dallas, said after a speech, according to Bloomberg News. BLOOMBERG NEWS
