“As activist hedge funds continue to get more of their preferred candidates on the boards of companies, some of the hedge funds are angling for certain directors to be paid twice: once by the company, and once by the hedge funds that supported their candidacy,†DealBook’s David Gelles reports.
“In two efforts earlier this year, dissident candidates up for election at the Hess Corporation and the Canadian fertilizer company Agrium â€" two companies targeted by activists â€" were offered large bonuses by the hedge funds that nominated them. At Hess, Elliott Management nominated five candidates to the oil company’s 14-member board, saying current management had underperformed. And at Agrium, Jana Partners nominated five directors to a 12-person board. In both cases, the directors nominated by the hedge funds would have received their bonuses only if the companies’ stock rose sharply.
“None of the activist directors joined the boards with such arrangements in place. The dissident slate at Agrium was rejected, and while some new directors joined the board at Hess, they did so without the extra compensation. Nonetheless, the prospect of such incentives upset the stuffy world of corporate governance. And the simmering dispute around director compensation from third parties is the latest front in the growing war of influence being waged between activist hedge funds and corporate boards.â€
THE PARIS HILTON OF CURRENCY  | “How can bitcoin be anything but a passing fad? It seems you can’t open a newspaper or read a website these days without hearing about the super-yet-mysterious virtual currency known as bitcoin,†Andrew Ross Sorkin writes in the DealBook column. “Today bitcoin goes for $800 each, depending on the day. And the value can swing by more than $100 a day, if not more.â€
“If it all feels a bit like a 1999-style craze, that’s because it is. Peter Leeds of the Penny Stock newsletter put it to me this way: ‘In a matter of months you won’t be hearing about it. It will go the same way of Paris Hilton. People will move on to the next thing.’†Mr. Sorkin continues: “There seems to be a disconnect between the idea of what makes a great investment â€" or a great speculation â€" and a new currency that will be universally accepted.â€
ON THE AGENDA  | Data on housing starts in October is released at 8:30 a.m. The Standard & Poor’s/Case-Shiller home price index for September is out at 9 a.m. Barnes & Noble and Tiffany & Company report earnings before the market opens, while Hewlett-Packard reports earnings this evening. Alan Greenspan is on Fox Business Network at 11 a.m.
CLIENT CONFLICTS UNDERMINE MERGER OF 2 LAW FIRMS  | Orrick, Herrington & Sutcliffe and Pillsbury Winthrop Shaw Pittman were in advanced merger talks that would have created one of the country’s 10 largest firms with about 1,700 lawyers â€" in the biggest law firm merger of the year. But on Monday, the firms issued a joint statement that the deal was off, DealBook’s Peter Lattman reports.
“We mutually determined that we will not be able to proceed due to prospective client conflicts that we have not been able to resolve, notwithstanding each firm’s best efforts,†the statement said. Mr. Lattman writes: “Client conflicts often scuttle deals between large law firms. With Orrick and Pillsbury, there were a number of issues that the two firms were unable to resolve. Orrick, for example, has a large public finance practice, and some of those representations clashed with Pillsbury’s corporate clients.â€
Bayer in Bid to Acquire Norwegian Cancer Drug Firm  | The offer by Bayer of Germany is 27 percent above Algeta’s closing share price on Monday. The companies are partners in a new prostate cancer drug. DealBook »
Jones Energy Buys Assets in Anadarko Basin  | The deal comes as exploration and production companies are snapping up assets amid a new energy boom. It is the largest deal yet for Jones Energy, which went public earlier this year. DealBook »
Intel Looking to Sell Pay-TV Unit  | Bloomberg News reports: “Intel Corp. is asking about $500 million for OnCue, the online pay-TV service that the world’s largest chip maker developed before dialing back its ambitions, according to people with knowledge of the process.†BLOOMBERG NEWS
BlackBerry Chief Removes Some Senior Executives  | The New York Times reports: “Gone from the company are Kristian Tear, the chief operating officer, and Frank Boulben, the chief marketing officer. In addition, Brian Bidulka has been replaced as chief financial officer, although he will remain with BlackBerry for the balance of its fiscal year as an adviser.†NEW YORK TIMES
Apple Buys 3-D Sensor Company PrimeSense  | PrimeSense’s innovations contributed to the early development of Kinect, Microsoft’s motion-sensing camera, and Apple has demonstrated interest in the technology. DealBook »
How the Pritzker Empire Broke Up  | “We didn’t do it perfectly. It wasn’t Camelot,†Thomas Pritzker told The Wall Street Journal of the yearslong breakup of his family’s business empire. WALL STREET JOURNAL
Standard & Poor’s Ratings Names President  | Neeraj Sahai, who has been head of Citigroup’s securities and fund services business since 2005, will succeed Douglas Peterson, who became president and chief executive of McGraw Hill Financial. DealBook »
Final Bidders Line Up for Societe Generale Unit in Asia  | DBS Group Holdings of Singapore and ABN Amro are among the parties placing final bids for the Asian private bank unit of Société Générale, in a roughly $400 million deal, Reuters reports. REUTERS
Bank of Cyprus Hires a Former R.B.S. Executive  | Euan Hamilton is the second former executive of the Royal Bank of Scotland to help lead the restructuring of the Bank of Cyprus. REUTERS
Bain Capital Is Said to Be Looking to Sell Applied Systems  | Bain Capital “is in talks with other private equity firms to sell its insurance software provider Applied Systems Inc. for more than $1 billion, three people familiar with the matter said on Monday,†Reuters reports. REUTERS
Former Goldman Trader Plans Hedge Fund Focused on Asia  | Reuters reports: “Former Goldman Sachs Group Inc. trader Andrew Wang is preparing to launch an Asia hedge fund that will bet mainly on the coveted combination of Chinese and Japanese shares, people familiar with the matter said.†REUTERS
In Delay of Chrysler I.P.O., Fiat May Have Gained Upper Hand  | The autoworkers’ union probably needs Chrysler to be valued at $18 billion to make an initial public offering worthwhile, but recent price talk has fallen short of that, Antony Currie of Reuters Breakingviews writes. REUTERS BREAKINGVIEWS
A Top Nasdaq Executive Steps Down  | Eric Noll, who oversaw Nasdaq’s trading operations in the United States, was seen as one of the leading candidates to succeed Robert Greifeld as chief executive. DealBook »
F.D.A. Demands a Halt to a DNA Test Kit’s Marketing  | In a crackdown on genetic testing offered directly to consumers, the agency is demanding that 23andMe immediately cease marketing its main DNA service until it receives marketing clearance, reports Andrew Pollack for The New York Times. DealBook »
China Plans to Limit Lending Among Banks  | The Financial Times reports: “Chinese regulators are set to place new limits on interbank loans after banks exploited a loophole to ratchet up leverage in the financial system, according to draft rules.†FINANCIAL TIMES
What the Convertible Debt Boom Means for Bankruptcy  | Distressed companies will be able to coast for a while on their existing funding. But eventually all that debt will come due, and then we’ll find out what happens, Stephen J. Lubben writes in the In Debt column. DealBook »
