Energy Future Holdings Offers Bankruptcy Plan

Energy Future Holdings, the Texas energy giant that was taken private in 2007 in a record-breaking $45 billion buyout, disclosed Monday a potential bankruptcy plan to its creditors.

The proposal to restructure about $32 billion in debt is the opening move in what many say could be a long and contentious battle between the company and its largest creditors.

During the last month, Energy Future Holdings has held discussions with a group of investors that hold a large amount of the senior secured debt of the segment of the company that controls its power-generation business.

As part of those discussions, the company proposed a deal that would sharply reduce the amount of debt held by that segment while allowing the private equity owners to walk away with a sliver of the parent company’s stock.

Specifically, the plan would wipe out about $25 billion of debt in the affiliate that controls the retail energy and power-generation business. In exchange, the debt holders would get a stake in the parent company, as well as either $5 billion of new debt or cash, according to a filing made Monday with the Securities and Exchange Commission.

The buyout owners said they would support the proposal if they could retain 15 percent of the parent company’s equity, giving the creditors the remaining 85 percent, according to the filing.

The parent company, through another affiliate, holds an 80 percent stake in the utility company, Oncor, which some Wall Street analysts say could eventually be valuable to investors.

The buyout firms also said they would consider contributing new equity capital to Energy Future Holdings for a larger financial stake in the company.

The filing does not shed any light on when an actual restructuring could occur.

Moreover, a person with knowledge of the discussions between the company and its creditors described the negotiations as being in their early days, saying it still could be several months before an actual bankruptcy filing is made.

There is little pressure on the company to act immediately as it has ample cash on its balance sheet to make its next round of interest payments, Wall Street analysts say.

A spokesman for Energy Future Holdings echoed those sentiments in an e-mail, noting that the next big debt maturity does not occur until October 2014.

But the company’s largest creditors, which include some of the most experienced distressed investors on Wall Street, will want their payday sooner rather than later. Among the creditors who have amassed large amounts of the power-generation affiliate’s debt are Leon Black of Apollo Global Management, Blackstone’s GSO Capital Partners and the California investment firm Franklin Resources.

There was no reply Monday evening to an e-mail seeking response sent to the advisory firm that is negotiating for the largest creditors.

The disclosure proposal was made after the expiration of a confidentiality period that the creditors and company had agreed to as part of the talks during which the creditors could not trade their stakes in the company’s debt.

Energy Future Holdings, formed in a deal during the heyday of the private equity boom, and formerly known as TXU, has struggled under continued low natural gas and energy prices.

But analysts say the company, which has more than $37.8 billion of debt, cannot stay its current course. The private equity owners, which include Kohlberg Kravis Roberts, TPG Capital and the private equity arm of Goldman Sachs, have written down the value of the $8 billion they and others sank into the deal to zero.

Gold’s Plunge Shakes Confidence in a Haven

Gold prices tumbled 9 percent on Monday, the sharpest drop in 30 years, heightening fears that investors’ faith in the safe haven has been shattered.

The steep fall in gold, following a slump on Friday, led a broader sell-off in commodities and stock markets, with the Standard & Poor’s 500-stock index declining 2.3 percent â€" its sharpest one-day decline since early November. Crude oil prices fell to under $90 a barrel, and copper fell to a 17-month low.

The catalyst was disappointment over Chinese growth, which has been a bright spot in a global economy marred by uneven recoveries and Europe’s persistent debt problems. A report on Monday showed that Chinese economy unexpectedly slowed to an annual pace of 7.7 percent in the first months of the year, from 7.9 percent at the end of 2012, suggesting that China’s demand for industrial materials would soften.

Weak regional manufacturing data in the United States also weighed on the United States stock market as did the explosions in Boston later in the day.

Still it was gold that took the market spotlight on Monday.

The price of the metal has been undergoing extraordinary reversal from a decade-long rally. Since reaching a high of $1,888 an ounce in August 2011, gold has been on a downward slope. The decline picked up pace on Friday, when gold fell 4 percent, officially taking gold into a bear market, which is defined as a 20 percent drop from its recent high.

The damage grew much worse on Monday, when the price of an ounce of gold dropped 9.35 percent, or $140.40, to $1,360.60 for the April contract â€" the sharpest such one-day decline since February 1983. Last week, Goldman Sachs analysts advised clients to bet against gold.

“We’ve traded gold for nearly four decades and we’ve never … ever… EVER… seen anything like what we’ve witnessed in the past two trading sessions,” Dennis Gartman, a closely followed gold investor, wrote to clients on Monday.

The shift in gold’s fortunes presents a moment of reckoning for many so-called gold bugs, who had expected their financial lodestar to continue moving up in response to the Federal Reserve’s effort to stimulate the economy through bond-buying programs.

The assumption among gold bugs was that the flood of new money would cause inflation, making hard assets like gold more attractive. So far, though, there have been few signs of inflation taking root even as central banks in Japan and Europe have begun their own aggressive bond-buying programs.

“Gold has had all the reason in the world to be moving higher â€" but it hasn’t been able to do it,” said Matt Zeman, a metals trader at Kingsview Financial. “The situation has not deteriorated the way that a lot of people thought it could.”

The recent drop in gold prices has been attributed partly to signals from powerful members of the Fed that the central bank may begin to wind down its bond-buying programs. But the list of reasons to sell gold grows longer by the day. European politicians have indicated that Cyprus may need to sell off some of its gold holdings to pay for its bank bailout, which could lead other countries to do the same.

The market decline, like the decade-long run up has also been blamed on the new financial instruments that have made buying gold easier for a wide array of investors.

The most prominent products are gold exchange-traded funds, which can be traded on stock exchanges, and which together hold as much gold as all but a few of the world’s largest central banks.

Hedge funds have used gold E.T.F.’s to gain exposure to the precious metal, but have been selling those E.T.F.’s off en masse in recent weeks. The largest such E.T.F., with the ticker symbol GLD, saw its most active day ever on Monday.

“The exits are only so wide and there are too many people trying to leave all the sudden,” said Bart Melek, a commodity strategist at TD Securities.

Many gold analysts have said that the demand for physical gold is stronger than the demand for financial products linked to gold, such as E.T.F.’s and futures contracts. But this has not been enough to prop up the market.

On Monday, the most obvious catalyst for the carnage was the fthe disappointment Chinese economic data that led to talk that China will no longer need the same physical resources to expand.

In the commodities world, this did not just hurt gold. Silver dropped over 12 percent, platinum 5.6 percent and the benchmark oil contract was down 3.9 percent. Stock indexes fell 1.5 percent in Japan and 0.6 percent in England.

The Standard & Poor’s 500-stock index dropped 2.3 percent, or 36.49 points, to 1,552.36 on Monday. The Dow Jones industrial average closed down 1.8 percent, or 265.86 points, at 14,599.20. The Nasdaq composite index fell 2.4 percent, or 78.46 points, to 3,216.49.

In the bond market, interest rates fell as investors shifted their money to less risky assets. The price of the Treasury’s 10-year note rose 9/32, to 102-26/32, while its yield dropped to 1.69 percent, from 1.72 percent late Friday.

The Vague Promises of Dish’s Bid for Sprint

Dish Network’s $25.5 billion bid for Sprint mixes hype with reality.

Buying the cellphone carrier would help Charlie Ergen’s smaller pay-TV company, Dish Network, put its assets to work. But beating the offer from another enigmatic entrepreneur, SoftBank’s Masayoshi Son, needed a stretch. Mr. Ergen’s is to claim he can find $24 billion-worth of new revenue.

Dish generates a torrent of cash â€" it had $1 billion of free cash flow last year â€" but the future looks cloudy. Content producers are demanding an increasing chunk of revenue. Competition from Netflix and other Internet video services is growing stiffer by the day. And Mr. Ergen’s strategy of snapping up video rental firm Blockbuster and spectrum from struggling satellite firms perplexed observers.

Mr. Ergen is on safe ground saying that merging Dish with Sprint could generate savings. His famous limitations on spending could shave expenses at Sprint. Combining the two firms’ call centers and billing operations should cut costs. Dish estimates $1.8 billion of annual savings, or less than 3 percent of total spending, are worth about $11 billion today.

The Sprint bid also offers Dish an Internet survival strategy. Pay TV may wither, but if so it will be because everybody has a fast data connection. Dish noted there are about 35 million rural families in the United States without a good fiber or cable connection to the Web. Combining Dish’s 45 megahertz of unencumbered spectrum with Sprint’s network offers a way to profit from plugging this gap.

But then comes the hype. Part of Dish’s justification is that the deal would create new revenue opportunities worth almost as much, in present value terms, as the offer for Sprint. It’s the kind of vague promise that’s easy to make but very difficult to deliver.

Snatching Sprint from Mr. Son would be a huge bite for the $16 billion Dish - and it’s worth remembering that Sprint itself was worth only about $7 billion a year ago. Mr. Ergen once said he was following a “Seinfeld strategy” in which everything would become clear at the last minute.

If this is that moment, then Dish investors, who sent the company’s stock down 6 percent, aren’t yet seeing the joke.

Robert Cyran is a columnist for Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.

The Top 10 Private Equity Loopholes

Happy Tax Day. April 15 is a good day to reflect on how much you pay in taxes and what you receive in return. It’s also good to think about how your tax rate compares with what your friends, neighbors and colleagues pay.

If any of those people work in private equity, (1) they probably won’t tell you their tax rate. Here are 10 reasons it’s lower than yours:

Carried Interest. In exchange for managing an investment fund, managers receive a percentage of the fund’s profits, known as carried interest. The amount of carried interest is typically 20 percent, and in any given year, individual fund managers earn anywhere from nothing to tens of millions of dollars. Under current law, if the fund’s profits are capital gains, the manager’s carried interest is also taxed at capital gains rates. Proposed legislation would treat this income as ordinary income, like other types of labor income.

How to fix it: Pass the carried interest legislation.

Management Fee Waivers. Fund managers also receive a fixed management fee, often 2 percent of capital, for managing the fund. Management fees are normally taxed as ordinary income. To avoid this, some fund managers periodically waive their fees in exchange for an almost-risk-free priority allocation of profits taxed at capital gains rates.

How to fix it: Enforce current law. My view is that fee waivers rarely involve enough risk to avoid being recharacterized as ordinary income.

The Limited Partner Loophole. As labor income, management fees would normally be subject to the Medicare tax, now 3.8 percent for high-income individuals. Under current law, even investment income is subject to the 3.8 percent tax. Through careful structuring, some fund managers take their income through a limited partnership in which they are technically “limited partners” in the management company, even though it is their labor, and not their capital, that generates the fee income. Allocations to limited partners, however, are neither subject to the Medicare tax as self-employment income nor as investment income under section 1411.

How to fix it: Amend section 1402, as recommended by the tax section of the New York State Bar Association.

The S Corp Loophole. This is conceptually the same as the limited partner loophole: wages are funneled through an S Corporation to avoid employment taxes.

How to fix it: Make all S Corporation income subject to the 3.8 percent Medicare Tax.

Private Equity Publicly Traded Partnerships. Normally, publicly traded companies are taxed as corporations, which means that shareholders pay both an entity-level tax and also a shareholder-level tax on dividends or capital gains. But when the Fortress Investment Group, the Blackstone Group, the Carlyle Group and other investment firms went public, they used the favorable tax treatment of carried interest (which is treated as investment income, not labor income) to squeeze into an arcane exception to the publicly traded partnership rules for “qualifying income,” which includes investment income. So publicly traded private equity firms, unlike investment banks, avoid the corporate tax altogether.

How to fix it: Pass the carried interest legislation.

Supercharged public offerings Private equity firms that went public structured the initial public offerings to resemble a sale of the firm’s assets to the newly public company, creating for the public company a new, higher “cost basis” in the firm’s assets. The value of those assets attributable to the goodwill of the firm could then be amortized over 15 years, generating new tax deductions at a 35 percent rate. As part of the deals, the newly public companies entered into tax receivable agreements, in which the companies promise to pay 85 percent of the tax benefits back to the selling founders

In short, not only did the founders pay tax on the sale at low capital gains rate, they get a check each year from the newly public companies to thank them for doing so.

How to fix it: Change the rules for taxing the sale of a partnership interest.

Enterprise Value. If the carried interest legislation were passed, individual managers may try to cash out by selling their carried interests to a third party and recognizing capital gain. The proposed legislation closes that loophole, but still allows the managers to sell interests in the management company â€" most of the value of which is attributable to past and future carried interest income and management fees â€" at capital gains rates. While I understand the political necessity to cede this issue, in a better world I’d suggest taxing more of the value of those partnership interests as “hot assets” that give rise to ordinary income when sold.

How to fix it: Change the rules for taxing the sale of a partnership interest.

The Angel Investor Loophole. Section 1202 allows investors in “qualified small business stock,” mostly angel investors and venture capitalists, to exclude 100 percent of their capital gains, in most cases up to $10 million.

How to fix it: Repeal Section 1202.

I.R.A. Stuffing. Fund managers sometimes take partnership interests or shares in underlying portfolio companies and contribute those interests to I.R.A.’s at artificially low valuations. Once the interests are inside the I.R.A., appreciation in the value of the investments goes untaxed until distributed.

How to fix it: Limit I.R.A. investments to actively traded securities.

Interest Deductions. Right at the core of the private equity business model is taking a company private, loading it up with debt that was used to finance the acquisition and using the interest deductions to shield the portfolio company from tax liability.

How to fix it: A Harvard Business School professor, Robert C. Pozen, has suggested disallowing 30 percent of interest deductions. My own preference would be to level the playing field between the tax treatment of debt and equity.

“Tax reform will close special-interest loopholes to help lower rates,” said Senator Max Baucus, the chairman of the Senate Finance Committee, and Representative Dave Camp, the chairman of the House Ways and Means Committee, in a recent Wall Street Journal opinion article. Mr. Baucus and Mr. Camp have led a great process thus far. Let’s keep this column as a scorecard and see how they’re doing in six months.

Victor Fleischer is a professor at the University of Colorado Law School, where he teaches partnership tax, tax policy and deals. Twitter: @vicfleischer

A Merger Monday for Barclays

Barclays‘ investment bank is having its moment in the sun.

The British bank is involved in two big deals that were announced Monday, advising Dish Network on its $25.5 billion offer for Sprint Nextel and working with Thermo Fisher Scientific on its $13.6 billion acquisition of Life Technologies.

In addition to fees, Barclays is getting sought-after bragging rights. The deals vault the bank to third place from eighth in the global league tables for mergers and acquisitions so far this year, according to Thomson Reuters data.

The investment bank now commands a 17.4 percent market share, ahead of Morgan Stanley and behind only JPMorgan Chase and Goldman Sachs, according to Thomson Reuters. On Friday, the market share was 10.3 percent.

It’s a welcome development for the investment bank, which is undergoing staff reductions under the chief executive of Barclays, Antony P. Jenkins, who took over last year after the rate-rigging scandal.

After emerging as a major player in global deal making with the acquisition of Lehman Brothers assets in 2008, Barclays’s investment bank has won business in part by offering financing in addition to advice.

Those services were evident in the Life Technologies deal, which would allow Thermo Fisher to expand its market share in the production of genetic sequencing machines. Barclays and JPMorgan Chase, the two advisers to Thermo Fisher, are also providing bridge financing for the deal.

As the adviser to Dish, Barclays is in a position to reap significant fees. The pay-TV company’s offer for Sprint is a challenge to the planned deal with the Japanese telecommunications company SoftBank, which agreed in October to acquire a 70 percent stake in Sprint for about $20 billion.

Dish began serious discussions with advisers in February about an offer for Sprint, according to a person with knowledge of the matter.

But the chairman of Dish, Charles W. Ergen, had been laying the groundwork for a telecommunications deal for some time, hunting for wireless spectrum and making an offer for Clearwire in January.

The deal for Life Technologies was finalized over the weekend, after a competitive auction, a person with knowledge of the matter said. Thermo Fisher approached the company after news leaked that it was exploring a sale, the person said.

Pre-Emptive Moves Should Help J.C. Penney Shore Up Cash Position

Here’s the good news: J.C. Penney appears to at least understand that it has entered the endgame.

But Myron E. Ullman III, reinstalled as chief executive last week, now has to show how he’s going to win it.

His first big move occurred on Monday, when J.C. Penney said in a statement that it had borrowed $850 million from a credit line that makes a total of $1.85 billion available to the company.

For all its woes, the retailer’s operations have until recently produced reasonably robust cash flows. And at the end of January, J.C. Penney had just over $900 million of cash in hand.

Therefore, the decision to tap its loan now, rather than wait till later in the year when the company’s cash use spikes, suggests that the J.C. Penney has had a particularly bad start to the year. Customers haven’t responded well to brash changes instituted by Ron Johnson, the previous chief executive. Sales have been slumping for months.

And another piece of news in Monday’s statement could deepen the cash concerns. The company said that, in addition to tapping its credit line, it was looking into other ways of raising money.

Though this may seem like desperate moves, there are good reasons to undertake these measures: J.C. Penney’s executives are wisely taking pre-emptive steps to avert the sort of panic that has felled many a retailer.

When a department store company faces financial problems, suppliers get nervous and demand that they get paid for their goods much more quickly - or even upfront. This can reduce cash balances at the retailer, in turn prompting suppliers to demand even stiffer payment terms. Eventually the spiral can lead to bankruptcy. Witness what happened to Circuit City, which collapsed four years ago.

It doesn’t have to end like that, though. There are instances of retailers taking actions to buy time - and quelling the nerves of suppliers in the process. One example is Sears, which last year avoided an aggressive supplier squeeze even though its operations are still faltering.

Fighting panic often has a psychological element, something J.C. Penney’s board and large shareholders appear to grasp. A desire to pacify suppliers, often called vendors in the industry, may also have been behind the departure of Mr. Johnson. “Keeping the vendors happy is key for the company at this point, and that seemed to be a driving factor in the C.E.O decision,” said James Goldstein, a senior credit analyst at CreditSights.

It is also a numbers game.

Having drawn down part of the credit line, J.C. Penney now has an extra $850 million in the bank, at least for now. If it raised another $1 billion from others sources, suppliers might breathe more easily, and the retailer may never need to spend any of the new money. J.C. Penney did not immediately respond to a request for comment.

If J.C. Penney does try other methods to raise new cash, much depends on how it does it. One way is just to sell new shares, which might hurt the already pulverized stock price. But an infusion of new equity could strengthen the balance sheet, since it wouldn’t add to the company’s debt levels.

However, selling a large amount of new stock may be tough, given the pain the stock decline has caused, says Carol Levenson, director of research at Gimme Credit.

“Let’s face it, two major investment firms have already held minority stakes for sometime, Vornado and Pershing Square, and both have lived to regret it,” she said in an e-mail. “Does anybody have Warren Buffett’s number” Vornado Realty Trust is a public company that owns and manages commercial buildings. Pershing Square is a hedge fund run by William A. Ackman.

J.C. Penney could try and raise new cash by selling debt. In that case, it would be intriguing to see what it provides as collateral to the new creditors. On paper, banks already have the right to some assets, like inventory. One option would be to use some of J.C. Penney’s buildings as collateral. Analysts at J.P. Morgan estimate that the retailer’s owned real estate is worth about $2.5 billion.

But there is also a lot of skepticism about how much value can be wrought out of stores owned by struggling retailers. In recent weeks, some analysts said that J.C. Penney could spin off a separate company that would then lease its unused buildings. But Ms. Levenson isn’t convinced by such theories. “Don’t you think if there was something smart to do with Penney’s real estate, Vornado would have thought of it during the past couple of years” she said.

Just about everyone in the retail industry will now be parsing J.C. Penney’s quarterly free cash flows, a metric that looks at how much cash the company’s operations generated after taking into account expenditures on things like new store fittings.

In its latest financial year, which ended in early February, the company had negative free cash flows of $820 million. In the previous year, J.C. Penney had positive free cash flow of nearly $200 million.

But historical numbers won’t be enough. Vendors, shareholders and creditors will also want Mr. Ullman to start detailing how he will try and get concrete improvements in J.C. Penney’s actual operations. That is made especially hard by the fact that the company is in the middle of a transformation that may not work. Therefore, Mr. Ullman has to communicate how far he will go in unwinding Mr. Johnson’s initiatives and reimposing his own. Some of Mr. Johnson’s changes may benefit J.C. Penney, but implementing them can also eat up a lot of cash. And Mr. Ullman’s methods may not be enough.

Ms. Levenson believes J.C. Penney has some time.

She thinks the credit line will provide the company to get through the year, and even allow it to make $800 million of planned capital spending. “During that time, the sales declines could stabilize and perhaps even turn positive, with fresh merchandise, spiffed up stores, and, naturally, more promotions,” she said.

One thing is clear, though: J.C. Penney needs its suppliers to believe in that outcome.

Challenges Mount for China’s President

Whatever honeymoon Chinese President Xi Jinping may have been having appears to be over. If you think you are having a difficult Monday, consider his challenges.

China has now reported 63 infections and 14 deaths from the H7N9 bird flu virus and the flu has spread to Beijing and Henan Province. A seven-year-old girl, daughter of Beijing poultry sellers, is in hospital and recovering from the virus. A four-year-old neighbor tested positive for the virus although he has not yet shown any symptoms, which at least one expert says may be worrisome:

“With asymptomatic cases around, I think everything changes,” said Ian Mackay, an associate professor of clinical virology at the University of Queensland in Brisbane, in a telephone interview today. “There has been a spike in pneumonia cases that have drawn the health officials’ attention, but the virus may have been going around as a normal cold.”

China has invited four foreign flu experts to visit the country to “offer technical advice… to identify the source and mode of transmission of the H7N9 avian influenza.” Chicken consumption is falling and companies with exposure to Chinese poultry like Yum Brands may not see a quick recovery.

Tensions surrounding North Korea are still high. Secretary of State John Kerry was in Beijing this weekend but left for Tokyo with no evident breakthrough on North Korea. The good news is that Kim Jung-Eun did not use today’s birthday celebration for Kim Il-Sung, the founder of the Democratic People’s Republic of Korea and his grandfather, to test fire a missile as some had expected.

China’s goal appears to be to lower the acute level of tensions so that the status quo can be maintained. Conflict, collapse or reunification are not in China’s interest but neither is regime change. The United States should not expect China to exert expect real, sustained pressure on North Korea barring a real provocation from Pyongyang that may force Beijing’s hand.

THE ECONOMY MAY BE SPUTTERING, another headache for Mr. Xi’s new administration. First-quarter growth slowed to 7.7 percent year-on-year from 7.9 percent in the fourth quarter of 2012 and below the consensus forecast of 8 percent growth.

Capital Economics’ Mark Williams and Wang Qinwei, who forecast 7.6 percent growth in the first quarter gross domestic product, wrote today in the note “Hopes for sustained recovery fade” that:

“Given that policymakers already seem concerned about the current pace of credit growth and excess investment in property, neither seems likely.

Widely held hopes of a continued acceleration in growth into 2014 have taken a big knock today. Our 2013 GDP forecast remains 8.0 percent with risks to the downside. Our 2014 forecast is 7.5 percent”

China’s official GDP growth target for 2013, reiterated last month by outgoing premier Wen Jiabao, is 7.5 percent. Last weekend Mr. Xi, in a meeting with business leaders, reiterated that the era of “super- high or ultra-high-speed growth” is over and said that the slowdown in 2012 was “partially due to our efforts to control the speed of growth.”

One of the reasons so many analysts overestimated first quarter GDP growth is that total lending in the quarter surged to 6.1 trillion renminbi. The government has announced steps to reign in credit growth but a significant drop in lending could cause painful short-term economic challenges.

The government says publicly that it is willing to absorb the pain as it grapples with ballooning debt, entrenched special interests and the difficult rebalancing of the economy from investment to consumption. A Chinese economist affiliated with the National Development and Reform Commission said after Monday’s G.D.P. release that:

…using short-term stimulus to boost growth to back above 8 percent would be like “drinking poison to quench a thirst,” arguing that moves to ease policy are seeing diminishing returns.

“They’re having a smaller and smaller impact on boosting growth â€" first quarter lending was quite strong but growth still wasn’t that good,” she said. “This is what people call overheating finance but a cooling economy.”

Premier Li Keqiang on Sunday hinted at the possibility of short-term stimulus measures, though not if they cause long-term damage, as the stimulus response to the 2008 financial crash so clearly did. While chairing a seminar, the premier said that “if interim measures have to be carried out, they should not set up barriers for promoting market-oriented reform and development in the future.”

Many analysts blame the disappointing quarterly growth in part on Mr. Xi’s “Eight Rules” and the ongoing frugality and anti-corruption campaigns. If the crackdowns really took a dent out of G.D.P. growth then one has to wonder how much of the consumption over the last few years has actually been government spending.

Those campaigns are set to continue. The People’s Daily newspaper on Friday had three supportive articles and Saturday’s CCTV Evening News broadcast an expose of officials in Beijing satisfying their gluttony by quietly visiting private clubs instead of public restaurants.

Mr. Xi’s efforts to reign in corruption may “make cleansing the Augean stables simplicity itself” but he seems more determined than many expected. Frugality bites, for restaurants and investors.

With White at S.E.C., Debevoise Picks a Successor

Mary Beth is succeeding Mary Jo.

With Mary Jo White departing Debevoise & Plimpton for the Securities and Exchange Commission, the law firm announced on Monday that it had named Mary Beth Hogan as co-chair of its litigation department. Ms. White held this role, alongside John S. Kiernan, until the Senate cleared her last week to become S.E.C. chairwoman.

The new role for Ms. Hogan, a 22-year Debevoise veteran, will make her one of Wall Street’s top lawyers. Debevoise routinely counsels JPMorgan Chase and other big banks when they encounter federal investigations.

It is familiar work for Ms. Hogan. She has represented JPMorgan, UBS and the Carlyle Group, among other financial giants. And in recent years, she built a practice focused on the mortgage industry, including investigations into mortgage-backed securities.

“I am excited and humbled to work with the members of what has become one of the nation’s leading litigation departments,” Ms. Hogan said in a statement announcing the move.

In her tenure at Debevoise, Ms. Hogan has held several senior roles. After making partner in 1999, she served two terms on the firm’s management committee. And she co-founded a group that champions the advancement of women at the firm.

Unlike Ms. White, Ms. Hogan has no government experience. But she sits on the boards of nonprofit groups, including Nazareth Housing, which focuses on homelessness prevention efforts.

“Mary Beth is a logical choice for this important role,” Michael W. Blair, Debevoise’s presiding partner, said in the statement. “We are very pleased that she will assume this key position.”

Thermo Fisher Reaches $13.6 Billion Deal for Rival in Gene Sequencing Equipment

The scientific equipment maker Thermo Fisher agreed on Monday to buy rival Life Technologies Corporation for $13.6 billion.

The deal will help Thermo Fisher, based in Waltham, Mass., expand its market share in the production of genetic sequencing machines, a fast-growing area used by scientists and drug companies to create specialized medicines for patients.

Under the terms of the deal, Thermo Fisher is offering shareholders $76 for each of their shares in Life Technologies, a 12 percent premium on the company’s closing stock price on Friday. Early this year, Life Technologies announced that it was undertaking a strategic review of its operations.

The takeover is the latest in a series of deals for Thermo Fisher, which was itself created through the merger of Thermo Electron and Fisher Scientific in 2006.

“The acquisition of Life Technologies enhances all three elements of our growth strategy: technological innovation, a unique customer value proposition and expansion in emerging markets,” Thermo Fisher’s chief executive, Marc N. Casper, said in a statement.

Life Technologies manufacturers more than 50,000 different types of scientific equipment, including genetic sequencing and DNA analysis machines. The company, based in California, reported revenues of $3.8 billion, according to a company statement.

The deal for Life Technologies is expected to close early next year.

JPMorgan Chase, Barclays and the law firm Wachtell, Lipton, Rosen & Katz and WilmerHale advised Thermo Fisher on the deal, while Deutsche Bank, Moelis & Company and the law firm Cravath, Swaine and Moore advised Life Technologies.

Thermo Fisher Reaches $13.6 Billion Deal for Rival in Gene Sequencing Equipment

The scientific equipment maker Thermo Fisher agreed on Monday to buy rival Life Technologies Corporation for $13.6 billion.

The deal will help Thermo Fisher, based in Waltham, Mass., expand its market share in the production of genetic sequencing machines, a fast-growing area used by scientists and drug companies to create specialized medicines for patients.

Under the terms of the deal, Thermo Fisher is offering shareholders $76 for each of their shares in Life Technologies, a 12 percent premium on the company’s closing stock price on Friday. Early this year, Life Technologies announced that it was undertaking a strategic review of its operations.

The takeover is the latest in a series of deals for Thermo Fisher, which was itself created through the merger of Thermo Electron and Fisher Scientific in 2006.

“The acquisition of Life Technologies enhances all three elements of our growth strategy: technological innovation, a unique customer value proposition and expansion in emerging markets,” Thermo Fisher’s chief executive, Marc N. Casper, said in a statement.

Life Technologies manufacturers more than 50,000 different types of scientific equipment, including genetic sequencing and DNA analysis machines. The company, based in California, reported revenues of $3.8 billion, according to a company statement.

The deal for Life Technologies is expected to close early next year.

JPMorgan Chase, Barclays and the law firm Wachtell, Lipton, Rosen & Katz and WilmerHale advised Thermo Fisher on the deal, while Deutsche Bank, Moelis & Company and the law firm Cravath, Swaine and Moore advised Life Technologies.

Thermo Fisher Reaches $13.6 Billion Deal for Rival in Gene Sequencing Equipment

The scientific equipment maker Thermo Fisher agreed on Monday to buy rival Life Technologies Corporation for $13.6 billion.

The deal will help Thermo Fisher, based in Waltham, Mass., expand its market share in the production of genetic sequencing machines, a fast-growing area used by scientists and drug companies to create specialized medicines for patients.

Under the terms of the deal, Thermo Fisher is offering shareholders $76 for each of their shares in Life Technologies, a 12 percent premium on the company’s closing stock price on Friday. Early this year, Life Technologies announced that it was undertaking a strategic review of its operations.

The takeover is the latest in a series of deals for Thermo Fisher, which was itself created through the merger of Thermo Electron and Fisher Scientific in 2006.

“The acquisition of Life Technologies enhances all three elements of our growth strategy: technological innovation, a unique customer value proposition and expansion in emerging markets,” Thermo Fisher’s chief executive, Marc N. Casper, said in a statement.

Life Technologies manufacturers more than 50,000 different types of scientific equipment, including genetic sequencing and DNA analysis machines. The company, based in California, reported revenues of $3.8 billion, according to a company statement.

The deal for Life Technologies is expected to close early next year.

JPMorgan Chase, Barclays and the law firm Wachtell, Lipton, Rosen & Katz and WilmerHale advised Thermo Fisher on the deal, while Deutsche Bank, Moelis & Company and the law firm Cravath, Swaine and Moore advised Life Technologies.

Dish’s $25.5 Billion Offer for Sprint

Dish Network offered on Monday to buy Sprint Nextel for $25.5 billion in cash and stock, challenging the planned takeover of Sprint by the Japanese telecommunications company SoftBank. The offer of $7 a share is worth about 13 percent more than the SoftBank proposal, Dish said in a statement. “The Dish proposal clearly presents Sprint shareholders with a superior alternative to the pending SoftBank proposal,” Charles W. Ergen, chairman of Dish, said in a statement. The Dish offer, he added, would yield “substantial synergies that are not attainable through the pending SoftBank proposal.” SoftBank has proposed a $20.1 billion deal to acquire a 70 percent stake in Sprint.

HEDGE FUND PAYDAYS STRETCH TO 10 FIGURES  |  Despite lackluster performance in the industry over all, a few hedge fund titans posted big returns last year, earning giant paydays, Julie Creswell reports in The New York Times. At the same time, some hedge fund managers were paid well even for disappointing returns.

David Tepper, who oversees $15 billion at Appaloosa Management, was the best compensated hedge fund manager in 2012, with a $2.2 billion payday, according to the annual ranking released on Monday by Institutional Investor’s Alpha. He oversaw a 30 percent gain after fees, thanks in part to bets on Citigroup, Apple and US Airways. Leon Cooperman of Omega Advisors, who made $560 million, delivered a 28 percent gain for investors.

Not everyone was so successful. Ray Dalio, the founder of Bridgewater Associates, could not quite beat the market, and yet he earned $1.7 billion, putting him at No. 2 on the list. Steven A. Cohen of SAC Capital Advisors, which has been under intense government scrutiny, fell short of market returns yet made about $1.4 billion.

“Pay for the top 25 earners came in at $14.14 billion last year. As high as that is, it was the lowest amount earned since the financial crisis in 2008, but comparable to the $14.4 billion the top 25 earned last year, according to Institutional Investor’s Alpha,” Ms. Creswell writes. “Swashbuckling bets and robust returns are exactly what investors are hoping for â€" and paying for in outsize fees â€" when they allocate money to hedge funds. But far too often in recent years, investors have paid hefty fees for lackluster returns.”

LIFE TECHNOLOGIES SAID TO BE NEAR $13 BILLION SALE  |  A winner may be emerging in the contest for Life Technologies, a maker of genetic testing equipment. Thermo Fisher Scientific, which makes life sciences instruments, “is nearing a deal” to buy Life Technologies for close to $13 billion, or roughly $75 a share, Reuters reports, citing four unidentified people familiar with the matter. “Life Technologies’ board met on Saturday to review three takeover offers,” choosing Thermo Fisher over Sigma-Aldrich and a group of private equity firms, according to Reuters. “A deal could come as soon as Monday, though negotiations could yet fall apart as terms are being finalized.”

WHEN SHAREHOLDER VOTES AREN’T HEARD  |  At 41 publicly traded companies, directors remained in place despite losing shareholder elections last year, James B. Stewart, a columnist for The New York Times writes. For instance, at Cablevision Systems, the New York cable and media company controlled by the Dolan family, “three directors lost shareholder elections twice in the last three years â€" in 2010 and 2012 â€" and received only tepid support in 2011. Nonetheless, the three remain on the board.”

“That an electoral system unworthy of Soviet-era sham democracies is flourishing today in corporate America is largely thanks to the management- and director-friendly policies of Delaware, where more than half of United States companies are incorporated and where the corporate franchise tax contributes disproportionately to the state’s revenue,” Mr. Stewart says. “State law controls board governance, and Delaware has long tolerated plurality voting. The Delaware Supreme Court has also affirmed the power of boards to reject the resignations of directors who fail to gain a majority of votes.”

ON THE AGENDA  |  Citigroup reports earnings before the market opens. Shawn Matthews, chief executive of Cantor Fitzgerald & Company, is on Bloomberg TV at 7:48 a.m. Glenn Schorr, a Nomura analyst, is on CNBC at 12:30 p.m.

FOR NEW S.E.C. CHIEF, CLOCK IS TICKING  |  Mary Jo White, who was confirmed as the new head of the Securities and Exchange Commission, is facing urgency in her new job. “Here’s hoping that one priority is to determine, and ramp up, investigations and whistle-blower complaints that are approaching their five-year statute of limitations,” Gretchen Morgenson writes in her column for The New York Times. “For a lot of cases involving questionable practices and disclosures arising from the mortgage bust of 2008, time is running out.”

Mergers & Acquisitions »

CVC in Talks Over British Online Gambling Firm  |  CVC Capital Partners said it was in talks over making a takeover offer for Betfair, the British online gambling exchange. REUTERS

Liberty Global Wins European Approval for Virgin Media Takeover  | 
REUTERS

Glencore Expected to Agree to Concessions in China  |  For Glencore, securing regulatory approval in China would be “the final regulatory hurdle in its $32 billion acquisition of miner Xstrata,” Reuters writes. REUTERS

Regulatory Concerns to Delay Bank Merger  |  M&T Bank said on Friday that a review by the Federal Reserve of its procedures and systems to fight money laundering would delay the closing of its $3.7 billion acquisition of Hudson City Bancorp. DealBook »

A Coffee Deal for the Long Haul  |  Joh. A Benckiser of Germany is paying a rich price for its latest coffee acquisition, but rivals may be in for a jolt, Quentin Webb of Reuters Breakingviews writes. REUTERS BREAKINGVIEWS

INVESTMENT BANKING »

Goldman Raises Directors’ Pay by 500 Shares  |  Goldman Sachs directors, who were already among the best-compensated corporate directors in the country, will receive an additional 500 shares a year, according to a securities filing. DealBook »

Drop in Home Loans Takes Toll on Banks  |  Wells Fargo and JPMorgan Chase reported strong earnings, but added that mortgage income was declining. DEALBOOK

Wells Fargo Profit Rises 22%  |  Wells Fargo posted earnings of $5.2 billion for its 13th consecutive rise in quarterly earnings. Its revenue dipped slightly. DealBook »

Wells Fargo Reduces List of Approved Money Managers  |  The bank is cutting the list of money managers marketed to wealthy clients. “Executives said the clampdown protects clients from exposure to a plethora of investment models that have received little oversight,” Reuters reports. REUTERS

More Banks Offering Services to Fight Activist Investors  | 
REUTERS

Citigroup Names Head of Hedge Fund Services in Asia  | 
WALL STREET JOURNAL

PRIVATE EQUITY »

Texas Energy Company Said to Seek to Delay Bankruptcy  |  Energy Future Holdings, the company that was taken private in the largest leveraged buyout ever, “intends to make debt payments in May that could let it stave off a bankruptcy filing for as long as another 18 months, according to people close to the situation,” The Wall Street Journal reports. WALL STREET JOURNAL

LVMH Fund Invests in Australian Retailer  |  A private equity firm backed by LVMH Moët Hennessy Louis Vuitton agreed to buy a 49.9 percent stake of R.M. Williams, an Australian retailer, The Wall Street Journal reports. WALL STREET JOURNAL

Warburg Pincus Buys Stake in Avtec of India  | 
REUTERS

HEDGE FUNDS »

As Gold Falls, Paulson Loses $300 Million  |  John A. Paulson lost more than $300 million of his personal wealth as the price of gold declined, according to Bloomberg News. BLOOMBERG NEWS

Hedge Fund Said to Put Pressure on Jones Group  | 
WALL STREET JOURNAL

I.P.O./OFFERINGS »

Now in the I.P.O. Market: Dividends  |  “In the past six months, nearly half of all companies that sold shares through an I.P.O., or 26 in total, have paid a dividend,” Fortune writes. FORTUNE

HD Supply, Backed by Carlyle and Bain, Files for I.P.O.  |  HD Supply Holdings, an industrial distribution company owned by a group of private equity firms, has filed to go public. It plans to use the proceeds to reduce debt. DealBook »

Virtus Health Said to Seek $712 Million Valuation in I.P.O.  | 
WALL STREET JOURNAL

VENTURE CAPITAL »

The Flawed Logic of ‘Bitbugs’  |  Paul Krugman, a columnist for The New York Times, says that devotees of bitcoins, or “bitbugs,” suffer from a philosophical misconception. “Goldbugs and bitbugs alike seem to long for a pristine monetary standard, untouched by human frailty. But that’s an impossible dream. Money is, as Paul Samuelson once declared, a ‘social contrivance,’ not something that stands outside society.” NEW YORK TIMES

Goldman Invests in Upstart Online Broker  |  Motif Investing, a firm based in San Mateo, Calif., announced on Friday that it had raised a $25 million round of financing from investors including Goldman Sachs. DealBook »

LEGAL/REGULATORY »

Support Grows for European Effort to Fight Tax Havens  |  Efforts to crack down on tax havens are gaining momentum after the number of European countries agreeing to share more bank information doubled. DealBook »

Google Reaches Deal in Europe on Searches  |  The New York Times reports: “Google has for the first time agreed to legally binding changes to its search results after an antitrust investigation by European regulators into whether it abuses its dominance of online search.” NEW YORK TIMES

Zandi Said to Be Candidate to Lead Housing Agency  |  The economist Mark Zandi “has emerged as a leading candidate to head” the Federal Housing Finance Agency, according to The Wall Street Journal. WALL STREET JOURNAL

Creditors of Lehman’s European Arm May Be Fully Repaid  |  Bloomberg News reports: “Creditors to Lehman Brothers International Europe may be repaid in full after administrators settled disputes with some of the failed investment bank’s affiliates, increasing the size of expected future recoveries.” BLOOMBERG NEWS

Former Credit Suisse Executive Pleads Guilty to Inflating the Value of Mortgage Bonds  |  Kareem Serageldin, a former senior trader at Credit Suisse, admitted in court on Friday that he fraudulently inflated the value of mortgage bonds as the housing market collapsed. DealBook »

Start-Up Looks to Make Law Firm Billing More Transparent  |  Amid questions about industry practices, Viewabill offers law firms an app that can show their clients in real time what they are being charged for. DealBook »

In This Economy, Company Size Matters  |  “American giants are benefiting from productivity gains and renewed growth in China and other overseas markets, allowing them to increase profits even if business at home remains lackluster,” The New York Times writes. NEW YORK TIMES

Citigroup’s Earnings Rose 30% in First Quarter

Citigroup on Monday reported first quarter profit of $3.8 billion or $1.23 a share, exceeding analysts’ estimates, as the bank continues to slash costs and unload troubled assets. The company also reported higher revenue of $20.5 billion in the first quarter, buoyed by continued gain’s in Citigroup’s investment banking business and strong loan demand.

In the lead up to the bank’s quarterly earnings, analysts estimated the bank would post earnings of $1.18 a share on revenue of $20.17 billion, according to a survey by Thomson Reuters. Adjusted for certain charges, the company reported a profit of $4 billion on revenue of $20.8 billion in the first quarter.

“Achieving consistent, high-quality earnings is one of my top priorities and these results are encouraging,” Michael Corbat, the bank’s chief executive said in a statement. “During the quarter, we benefitted from seasonally strong results in our markets businesses, sustained momentum in investment banking, continued year-over-year growth in loans and deposits in Citicorp, and a more favorable credit environment.”

The results follow a particularly disappointing fourth quarter for Citi when profits were dampened by mortgage woes stemming from the financial crisis. Last quarter, for example, Citigroup shouldered $1.3 billion in legal costs and related expenses.

Citigroup has been aggressively whittling down a morass of soured loans and cutting less-profitable business lines in an ongoing effort to reduce costs. In December, Citigroup said it would cut 11,000 jobs worldwide.

Like its rivals, Citigroup faces increasing pressure to cut costs and bolster return to shareholders. Mr. Corbat addressed the continued difficulty within the banking industry as the economy limps toward a recovery. In a statement Monday, Mr. Corbat said that “the environment remains challenging and we are sure to be tested as we go through the year.”

Capitalizing on its vast international footprint, Citigroup has been focusing on developing countries that offer more opportunities for growth than the United States.

Deposits across the bank grew by 3 percent to $934 billion. Total loans also ticked upward, growing 5 percent to $539 billion.

Citigroup’s Earnings Rose 30% in First Quarter

Citigroup on Monday reported first quarter profit of $3.8 billion or $1.23 a share, exceeding analysts’ estimates, as the bank continues to slash costs and unload troubled assets. The company also reported higher revenue of $20.5 billion in the first quarter, buoyed by continued gain’s in Citigroup’s investment banking business and strong loan demand.

In the lead up to the bank’s quarterly earnings, analysts estimated the bank would post earnings of $1.18 a share on revenue of $20.17 billion, according to a survey by Thomson Reuters. Adjusted for certain charges, the company reported a profit of $4 billion on revenue of $20.8 billion in the first quarter.

“Achieving consistent, high-quality earnings is one of my top priorities and these results are encouraging,” Michael Corbat, the bank’s chief executive said in a statement. “During the quarter, we benefitted from seasonally strong results in our markets businesses, sustained momentum in investment banking, continued year-over-year growth in loans and deposits in Citicorp, and a more favorable credit environment.”

The results follow a particularly disappointing fourth quarter for Citi when profits were dampened by mortgage woes stemming from the financial crisis. Last quarter, for example, Citigroup shouldered $1.3 billion in legal costs and related expenses.

Citigroup has been aggressively whittling down a morass of soured loans and cutting less-profitable business lines in an ongoing effort to reduce costs. In December, Citigroup said it would cut 11,000 jobs worldwide.

Like its rivals, Citigroup faces increasing pressure to cut costs and bolster return to shareholders. Mr. Corbat addressed the continued difficulty within the banking industry as the economy limps toward a recovery. In a statement Monday, Mr. Corbat said that “the environment remains challenging and we are sure to be tested as we go through the year.”

Capitalizing on its vast international footprint, Citigroup has been focusing on developing countries that offer more opportunities for growth than the United States.

Deposits across the bank grew by 3 percent to $934 billion. Total loans also ticked upward, growing 5 percent to $539 billion.

Creditors of Lehman Europe Could Be Completely Repaid

LONDON - Creditors of the European division of the defunct American bank Lehman Brothers may receive all their money back, according to a report from the accounting firm PricewaterhouseCoopers.

The announcement follows a series of legal settlements with Lehman Brothers’ business units in the United States, Switzerland and Luxembourg that has freed up an additional $9.1 billion to repay creditors of Lehman Brothers International Europe.

In November, PricewaterhouseCoopers, which is overseeing the return of assets to creditors and money to clients of the European unit of Lehman Brothers, paid a total of $11 billion to more than 1,500 creditors.

The accounting firm said it was now planning to distribute a new round of funds to creditors, as well as the first refund of clients’ money, later this month.

“To be able to advise ordinary unsecured creditors that we now have a reasonable chance of eventually repaying their claims in full marks a significant milestone,” said Tony Lomas, a partner at PricewaterhouseCoopers, in statement. “There is still a lot to do before finalizing the wind-down but we do expect to pay a second, significant dividend to creditors in the near future.

The announcement follows a five-year legal fight following the collapse of Lehman Brothers in 2008.

Lehman Brothers International Europe has been the subject to ongoing legal battles with local subsidiaries and clients after the division failed to keep separate its own money from that of its customers.

PwC has previously said that it could take more than a decade for all of the Lehman Brothers’ creditors to be compensated from the collapse of the bank’s European business.

Dish Network Makes $25.5 Billion Bid for Sprint Nextel

The pay-TV operator Dish Network said on Monday that it had submitted a $25.5 billion bid for Sprint Nextel.

The move is an attempt to scupper the planned takeover of Sprint Nextel by the Japanese telecommunications company SoftBank, which agreed in October to acquire a 70 percent stake in the American cellphone operator in a complex deal worth about $20 billion.

Dish Network thinks it can do better.

Under the terms of its proposed bid, Dish Network said it was offering a cash-and-stock deal worth about 13 percent more than SoftBank’s bid.

Dish Network said it was offering Sprint Nextel shareholders a deal worth $7 a share, including $4.76 in cash and the remainder in its shares.

“The Dish proposal clearly presents Sprint shareholders with a superior alternative to the pending SoftBank proposal,” said Charles W. Ergen, Dish Network’s chairman.

Support Grows for European Effort to Fight Tax Havens

DUBLIN â€" Europe’s effort to crack down on tax havens gained momentum during the weekend as the number of countries agreeing to share more bank information doubled.

Algirdas Semeta, the European tax commissioner, welcomed the progress.

Miroslav Kalousek, the Czech finance minister, pledged to join the push for more automatic exchanges of bank records that already had the backing of Britain, France, Germany, Italy and Spain, a spokesman for the Czech representation to the European Union said Sunday.

The spokesman said the Czech minister made his overture on Saturday during a two-day meeting of European finance ministers where Poland, followed by Belgium, the Netherlands and Romania, also signed up, bringing the number of countries supporting the initiative to 10. The campaign is being strongly backed by the French finance minister, Pierre Moscovici.

For France, the issue has taken on greater urgency since Jérôme Cahuzac resigned as budget minister after acknowledging he had foreign holdings in Switzerland that he had previously denied.

“The surge in member states’ appetite for progress and action in the fight against evasion is extremely welcome,” Algirdas Semeta, the Union’s commissioner for taxation, said Saturday after two days of meetings in which ministers discussed adoption of Europe-wide laws modeled on the Foreign Account Tax Compliance Act, a U.S. initiative to find hidden accounts overseas.

“The tools are already on the table, waiting to be seized,” Mr. Semeta said, referring to plans in Europe to provide greater exchanges of information on interest earned on savings, including from trusts and foundations.

Mr. Semeta said that the European crackdown against tax evasion could eventually extend to dividends, capital gains and royalties, significantly expanding the revenue earned by national treasuries. He also encouraged countries to set an earlier date â€" it is currently foreseen as 2017 â€" for when those revenues are meant to fall under the microscope.

Europe is also being pushed toward greater transparency by the recent release of an investigative report on thousands of offshore bank accounts and shell companies, and by the prospect of a meeting of finance ministers from the Group of 20 leading economies on Thursday in Washington, where tax transparency is expected to be discussed.

In the French case, the Socialist government of François Hollande was deeply embarrassed by the revelations that Mr. Cahuzac had foreign holdings at a time of economic hardship for many citizens, and Mr. Moscovici led the calls for reforms at a hastily assembled news conference on Friday evening.

Taking leadership on the issue of tax havens “is very important for ensuring that citizens can trust the efficiency and fairness of our tax systems,” Mr. Moscovici said, flanked by Wolfgang Schäuble, the German finance minister, and George Osborne, Britain’s chancellor of the Exchequer, and by ministers from Poland, Spain and Italy.

The initiative should eventually cover “all kinds of revenues” and would be similar to the American tax compliance act, Mr. Moscovici said.

One European tax haven, Luxembourg, bowed to such pressure on Wednesday and said it would begin forwarding the details of its foreign clients to their home governments.

Standing in the way is Austria, which has resisted agreeing to an automatic exchange of banking information between E.U. countries.

Chancellor Werner Faymann of Austria recently suggested that talks were possible, and European officials said they thought that Austria eventually would offer concessions. But the country’s finance minister, Maria Fekter, has showed no signs of backing down.

“We will fight for bank secrecy,” Ms. Fekter said on Saturday. “We are no tax haven,” she said. A day earlier she sought to portray Britain as one of the Union’s biggest tax havens.

Mr. Osborne said on Friday that he was pushing for more transparency from the Cayman Islands and British Virgin Islands.

More European countries are expected to join the campaign in coming weeks after Herman Van Rompuy, the president of the European Council, said on Friday that the bloc’s 27 leaders would discuss the issue at a summit meeting of leaders next month in Brussels.

A version of this article appeared in print on April 15, 2013, on page B2 of the New York edition with the headline: In Europe, Tax Haven Effort Grows.