Fairway, New York Grocery With Big Ambitions, Goes Public

Until recently, Fairway was not much more than a popular market on Manhattan’s Upper West Side, where residents went for goods like smoked salmon, medjool dates and cheeses.

Today, it is a fast-growing 12-store grocery chain with ambitions of opening 300 outlets across the country.

On Wednesday, Fairway hopes the investing public will aid in its expansion after its stock starts trading for the first time.

Its initial public offering got off to a strong start Tuesday evening, with Fairway pricing its shares at $13 each, above the expected range, according to a person briefed on the matter. It raised $177.5 million, valuing the whole company at $536.1 million.

Fairway’s tag line claims that it is “like no other market,” yet it is seeking to expand in a hypercompetitive industry. A chief rival is Whole Foods, which has aggressively expanded in the New York metropolitan area and in August opened its seventh store in the city.

Grocers have also lost customers to the big-box retailers like Walmart and Target, which have become forces in the food business. And even drugstore chains like Duane Reade and CVS sell products once available only in supermarket aisles.

Driving Fairway’s growth is Sterling Investment Partners, a private equity firm that acquired an 80.1 percent stake in the company in 2007 and will continue to control it after the I.P.O. With Sterling’s support, Fairway expanded in New York, New Jersey and Connecticut and is making plans to open stores at a rate of three to four a year.

But with the expansion has come fresh risks. The company lost $11.9 million in the fiscal year that ended in April 2012, even as sales increased 14 percent, to $554.9 million. Its debt has grown, reaching $203.6 million as of last April.

The store in the Red Hook section of Brooklyn, one of the most promising outposts, suffered when Hurricane Sandy struck in late October. Five feet of water washed through the store, destroying its inventory and damaging equipment.

Fairway had recently filed to go public. But with the Red Hook store closed, the company lost out on what might have been $12.7 million in sales, judging by results in the period a year earlier. The store reopened at the beginning of March with a celebration attended by Mayor Michael R. Bloomberg.

For decades, Fairway was a family business, beginning in the 1930s as a fruit and vegetable stand run by Nathan Glickberg. Originally known as 74th Street Market, the store expanded in 1954, adding meat, cheese and dairy products, and adopted its current name in an effort to reflect its fair prices.

The founder’s grandson, Howard Glickberg, who is vice chairman of development, will continue to own a small stake after the I.P.O. and will receive a $1.8 million bonus connected to the offering. His son, Daniel, who recently resigned as a director, has sold shares in the deal but will also retain a small stake.

Philip Lempert, the editor of Supermarket Guru, an online food-industry publication, said that Fairway would face challenges in the transformation from a local chain to a national one. But he said that two things the company had going for it were “adventure and value,” a combination that appeals to younger generation of food shoppers.

“Millennials wake up every morning not wanting to eat the same food twice in their lifetime,” he said. “Fairway has the Bounty paper towels and Coke but also these small-batch, artisanal items that make it an adventure.”

The original store on Broadway has become a Manhattan institution. Like its Upper West Side neighborhood, it has a frumpy elegance. Navigating a shopping cart through its narrow aisles is a full-on contact sport, like driving a bumper car through a Middle Eastern souk.

But loyal customers find order in the chaos. Strategically placed employees, wearing “Do you have a food question today” aprons, stand ready to help customers find Sicilian sea salt, dried prunes or a pork tenderloin. Piles of parsnips and broccoli rabe seem to be restocked as rapidly as shoppers can fill their baskets.

The store’s core customers are people like Alan D. Pekelner, who on Tuesday spent about $3 on a half-gallon of milk, an onion and two plum tomatoes. “I just needed some fill-in items for a salad,” he said.

Mr. Pekelner, 77, who lives by himself and practices law out of his apartment on West End Avenue, said he had been shopping at the Fairway for about 35 years and likes its variety and reasonable prices. But as competition has popped up in the neighborhood, he has found himself frequenting other stores, like Trader Joe’s, which opened just a few blocks down Broadway in 2010.

By the water in Red Hook, Fairway has a different character, with wide aisles that, compared with the original store, seem downright palatial. At 75,814 square feet, the store, which opened in 2006, is the biggest of Fairway’s New York outlets. (The original store is 59,468 square feet.)

Karline F. Moeller drives to the Fairway market from her home in the Dumbo section of Brooklyn. Ms. Moeller, 27, who manages artists like Maxwell Snow and Shelter Serra, said she appreciated the convenience and prices.

“Sometimes Whole Foods drives me crazy because it doesn’t have the commercial brands,” she said on Tuesday. “This place has everything.”

Around noon on Tuesday, Mordecai Rosenfeld, a writer and retired lawyer, was exploring the market on an outing with his friends, who marveled at the expansive aisles.

“We’re so used to the Fairway at Broadway and 74th, we couldn’t imagine it would be here,” said Mr. Rosenfeld, 83, who lives in Greenwich Village. “Where do they get their people from”

Asked if he would consider investing in the I.P.O., Mr. Rosenfeld said he had one condition.

“If they throw in some olives with the shares, we’re going to buy them,” he said.

Fairway, New York Grocery With Big Ambitions, Goes Public

Until recently, Fairway was not much more than a popular market on Manhattan’s Upper West Side, where residents went for goods like smoked salmon, medjool dates and cheeses.

Today, it is a fast-growing 12-store grocery chain with ambitions of opening 300 outlets across the country.

On Wednesday, Fairway hopes the investing public will aid in its expansion after its stock starts trading for the first time.

Its initial public offering got off to a strong start Tuesday evening, with Fairway pricing its shares at $13 each, above the expected range, according to a person briefed on the matter. It raised $177.5 million, valuing the whole company at $536.1 million.

Fairway’s tag line claims that it is “like no other market,” yet it is seeking to expand in a hypercompetitive industry. A chief rival is Whole Foods, which has aggressively expanded in the New York metropolitan area and in August opened its seventh store in the city.

Grocers have also lost customers to the big-box retailers like Walmart and Target, which have become forces in the food business. And even drugstore chains like Duane Reade and CVS sell products once available only in supermarket aisles.

Driving Fairway’s growth is Sterling Investment Partners, a private equity firm that acquired an 80.1 percent stake in the company in 2007 and will continue to control it after the I.P.O. With Sterling’s support, Fairway expanded in New York, New Jersey and Connecticut and is making plans to open stores at a rate of three to four a year.

But with the expansion has come fresh risks. The company lost $11.9 million in the fiscal year that ended in April 2012, even as sales increased 14 percent, to $554.9 million. Its debt has grown, reaching $203.6 million as of last April.

The store in the Red Hook section of Brooklyn, one of the most promising outposts, suffered when Hurricane Sandy struck in late October. Five feet of water washed through the store, destroying its inventory and damaging equipment.

Fairway had recently filed to go public. But with the Red Hook store closed, the company lost out on what might have been $12.7 million in sales, judging by results in the period a year earlier. The store reopened at the beginning of March with a celebration attended by Mayor Michael R. Bloomberg.

For decades, Fairway was a family business, beginning in the 1930s as a fruit and vegetable stand run by Nathan Glickberg. Originally known as 74th Street Market, the store expanded in 1954, adding meat, cheese and dairy products, and adopted its current name in an effort to reflect its fair prices.

The founder’s grandson, Howard Glickberg, who is vice chairman of development, will continue to own a small stake after the I.P.O. and will receive a $1.8 million bonus connected to the offering. His son, Daniel, who recently resigned as a director, has sold shares in the deal but will also retain a small stake.

Philip Lempert, the editor of Supermarket Guru, an online food-industry publication, said that Fairway would face challenges in the transformation from a local chain to a national one. But he said that two things the company had going for it were “adventure and value,” a combination that appeals to younger generation of food shoppers.

“Millennials wake up every morning not wanting to eat the same food twice in their lifetime,” he said. “Fairway has the Bounty paper towels and Coke but also these small-batch, artisanal items that make it an adventure.”

The original store on Broadway has become a Manhattan institution. Like its Upper West Side neighborhood, it has a frumpy elegance. Navigating a shopping cart through its narrow aisles is a full-on contact sport, like driving a bumper car through a Middle Eastern souk.

But loyal customers find order in the chaos. Strategically placed employees, wearing “Do you have a food question today” aprons, stand ready to help customers find Sicilian sea salt, dried prunes or a pork tenderloin. Piles of parsnips and broccoli rabe seem to be restocked as rapidly as shoppers can fill their baskets.

The store’s core customers are people like Alan D. Pekelner, who on Tuesday spent about $3 on a half-gallon of milk, an onion and two plum tomatoes. “I just needed some fill-in items for a salad,” he said.

Mr. Pekelner, 77, who lives by himself and practices law out of his apartment on West End Avenue, said he had been shopping at the Fairway for about 35 years and likes its variety and reasonable prices. But as competition has popped up in the neighborhood, he has found himself frequenting other stores, like Trader Joe’s, which opened just a few blocks down Broadway in 2010.

By the water in Red Hook, Fairway has a different character, with wide aisles that, compared with the original store, seem downright palatial. At 75,814 square feet, the store, which opened in 2006, is the biggest of Fairway’s New York outlets. (The original store is 59,468 square feet.)

Karline F. Moeller drives to the Fairway market from her home in the Dumbo section of Brooklyn. Ms. Moeller, 27, who manages artists like Maxwell Snow and Shelter Serra, said she appreciated the convenience and prices.

“Sometimes Whole Foods drives me crazy because it doesn’t have the commercial brands,” she said on Tuesday. “This place has everything.”

Around noon on Tuesday, Mordecai Rosenfeld, a writer and retired lawyer, was exploring the market on an outing with his friends, who marveled at the expansive aisles.

“We’re so used to the Fairway at Broadway and 74th, we couldn’t imagine it would be here,” said Mr. Rosenfeld, 83, who lives in Greenwich Village. “Where do they get their people from”

Asked if he would consider investing in the I.P.O., Mr. Rosenfeld said he had one condition.

“If they throw in some olives with the shares, we’re going to buy them,” he said.

Money Funds Are Likely to Face Rule Changes

After fierce industry lobbying and internal bickering, the Securities and Exchange Commission is moving closer to overhauling the money market fund industry.

Just days after Mary Jo White became its chairwoman, the agency’s spokesman, John Nester, said on Tuesday that “the staff expects to have something for the commission’s consideration in the near future.”

In the aftermath of the financial crisis, a wide array of regulators disputed the supposed safety of money market funds. The funds, they argued, could be hit again by the kind of shock they experienced in 2008 after the collapse of Lehman Brothers.

Last summer, the S.E.C. was moving toward a vote on new rules. But the agency’s chairwoman, Mary L. Schapiro, dropped that effort after three of the agency’s five commissioners opposed the plan. Ms. Schapiro’s decision was seen as a victory for the mutual fund industry, which had waged a big lobbying campaign to scuttle a crackdown.

The prospect of a new reform proposal emerged on Tuesday morning when Laurence D. Fink, the chief executive of BlackRock, announced the company’s first-quarter results. In response to an analyst’s question about money market funds, Mr. Fink said the situation was “pretty dynamic.” But he suggested that with Ms. White in place, “I think we’re going to see some type of announcement from the S.E.C. shortly.”

The S.E.C. declined to discuss what the deal might look like, but Mr. Fink said he expected that it would involve some money market funds dropping their stable $1 a share value and moving to a so-called floating net asset value.

Judge Approves SAC Settlement in Insider Trading Case

A judge approved a settlement between the hedge fund SAC Capital Advisors and securities regulators that allows the firm to pay a record $602 million fine to resolve a civil insider trading case without admitting any guilt, but conditioned his ruling on a pending Federal Appeals Court ruling.

In an opinion released Tuesday, Judge Victor Marrero of Federal District Court in Manhattan said he had serious concerns with the “neither admit nor deny” language contained in the agreement, but said that he would await guidance from a case involving Citigroup.

The pending appellate case, heard by the United States Court of Appeals for the Second Circuit, involves the review of a ruling by Judge Jed S. Rakoff, who rejected a $285 million settlement in a fraud case brought against Citigroup by the Securities and Exchange Commission. The agreement let the bank avoid acknowledging that it did anything wrong. Judge Rakoff called the settlement “chump change” for Citigroup and suggested it was not in the public interest; the bank and the S.E.C. said that the judge overstepped his bounds in interfering with the decision of a government agency.

The S.E.C. has traditionally permitted defendants to settle regulatory actions by paying a fine while not admitting liability, arguing that the practice is efficient and less costly than taking deep-pocketed financial firms to court and risk losing the case.

Much of Judge Marrero’s 34-page opinion centered on the “neither admit nor deny wrongdoing” language contained in the SAC settlement and many other settlements struck by the S.E.C. In recent months, federal judges across the country have followed Judge Rakoff’s lead and suggested that the S.E.C. and other government agencies are letting defendants off lightly by not forcing them to acknowledge wrongdoing.

Judge Marrero indicated that the “neither admit nor deny wrongdoing” language had no place in a post-financial crisis world.

“Perhaps we live in a different era,” Judge Marrero wrote. “In this age when the notion labeled ‘too big to fail’ (or jail, as the case may be) has gained currency throughout commercial markets, some cynics read the concept as code words meant as encouragement by an accommodating public - a free pass to evade or ignore the rules, a wink and a nod as cover for grand fraud, a license to deceive unsuspecting customers.”

“Perhaps, too, in these modern times,” he added, “new financial, industrial, and legal patterns have merged that call for enhanced regulatory and, as appropriate, judicial oversight to counter these sinister attitudes.”

Despite his skepticism about the S.E.C.’s settlement practices, Judge Marrero tentatively signed off on the commission’s deal with SAC. The case related to the conduct of a former SAC portfolio manager, Mathew Martoma, who was charged in November with illegal trading in two pharmaceutical stocks and helping SAC make $276 in illicit profits and avoided losses. Mr. Martoma has denied the charges.

Last month, Judge Harold Baer Jr. approved a separate S.E.C. insider trading case against SAC, signing off on a $14 million settlement that resolved accusations that the firm’s Sigma Capital unit illegally traded in shares of technology. As part of that agreement, SAC neither admitted nor denied wrongdoing. Judge Baer, however, raised no issues with the deal.

SAC, which is based in Stamford, Conn., and owned by the billionaire investor Steven A. Cohen, has emerged as a focus of the government’s multiyear investigation into insider trading at hedge funds. The two civil matters - the $602 million case, and the $14 million one - are the only legal actions against SAC, but the government has brought criminal insider trading charges against several of its former employees, including four who have pleaded guilty.

Representatives of the S.E.C. and SAC declined to comment on the judge’s ruling. Mr. Cohen has not been accused of any wrongdoing.

Judge Marrero laid out a court’s balancing act in weighing the approval of settlements struck by government agencies that do not force a defendant to admit liability.

“The court must avoid undue meddling and second-guessing, and must accord government agency law enforcement and financial determinations such as those now before it the proper level of deference they are due,” the judge wrote. “At the same time, the court cannot conceive that Congress intended the judiciary’s function in passing upon these settlements as illusory, as a predetermined rubber stamp for any settlement put before it.”

The judge’s words seemed to suggest that he was grudgingly approving the SAC settlement. On page after page, Judge Marrero used strong language - and lengthy sentences - to convey his discomfort the S.E.C.’s policy. In one part of the opinion, he said he was “troubled” by the practice; a paragraph later, he expressed “misgivings” about it. At another point, he called the settlement terms “both counterintuitive and incongruous” and sharply criticized the government’s settlement practices.

“The damage the victims suffer cannot always be blamed on acts of God or the mischief of leprechauns,” said Judge Marrero. “There cannot be proper closure when incidents causing extensive loss occur, if the individuals or entities responsible for the large scale wrongful consequences are not properly held accountable.”

Judge Approves SAC Settlement in Insider Trading Case

A judge approved a settlement between the hedge fund SAC Capital Advisors and securities regulators that allows the firm to pay a record $602 million fine to resolve a civil insider trading case without admitting any guilt, but conditioned his ruling on a pending Federal Appeals Court ruling.

In an opinion released Tuesday, Judge Victor Marrero of Federal District Court in Manhattan said he had serious concerns with the “neither admit nor deny” language contained in the agreement, but said that he would await guidance from a case involving Citigroup.

The pending appellate case, heard by the United States Court of Appeals for the Second Circuit, involves the review of a ruling by Judge Jed S. Rakoff, who rejected a $285 million settlement in a fraud case brought against Citigroup by the Securities and Exchange Commission. The agreement let the bank avoid acknowledging that it did anything wrong. Judge Rakoff called the settlement “chump change” for Citigroup and suggested it was not in the public interest; the bank and the S.E.C. said that the judge overstepped his bounds in interfering with the decision of a government agency.

The S.E.C. has traditionally permitted defendants to settle regulatory actions by paying a fine while not admitting liability, arguing that the practice is efficient and less costly than taking deep-pocketed financial firms to court and risk losing the case.

Much of Judge Marrero’s 34-page opinion centered on the “neither admit nor deny wrongdoing” language contained in the SAC settlement and many other settlements struck by the S.E.C. In recent months, federal judges across the country have followed Judge Rakoff’s lead and suggested that the S.E.C. and other government agencies are letting defendants off lightly by not forcing them to acknowledge wrongdoing.

Judge Marrero indicated that the “neither admit nor deny wrongdoing” language had no place in a post-financial crisis world.

“Perhaps we live in a different era,” Judge Marrero wrote. “In this age when the notion labeled ‘too big to fail’ (or jail, as the case may be) has gained currency throughout commercial markets, some cynics read the concept as code words meant as encouragement by an accommodating public - a free pass to evade or ignore the rules, a wink and a nod as cover for grand fraud, a license to deceive unsuspecting customers.”

“Perhaps, too, in these modern times,” he added, “new financial, industrial, and legal patterns have merged that call for enhanced regulatory and, as appropriate, judicial oversight to counter these sinister attitudes.”

Despite his skepticism about the S.E.C.’s settlement practices, Judge Marrero tentatively signed off on the commission’s deal with SAC. The case related to the conduct of a former SAC portfolio manager, Mathew Martoma, who was charged in November with illegal trading in two pharmaceutical stocks and helping SAC make $276 in illicit profits and avoided losses. Mr. Martoma has denied the charges.

Last month, Judge Harold Baer Jr. approved a separate S.E.C. insider trading case against SAC, signing off on a $14 million settlement that resolved accusations that the firm’s Sigma Capital unit illegally traded in shares of technology. As part of that agreement, SAC neither admitted nor denied wrongdoing. Judge Baer, however, raised no issues with the deal.

SAC, which is based in Stamford, Conn., and owned by the billionaire investor Steven A. Cohen, has emerged as a focus of the government’s multiyear investigation into insider trading at hedge funds. The two civil matters - the $602 million case, and the $14 million one - are the only legal actions against SAC, but the government has brought criminal insider trading charges against several of its former employees, including four who have pleaded guilty.

Representatives of the S.E.C. and SAC declined to comment on the judge’s ruling. Mr. Cohen has not been accused of any wrongdoing.

Judge Marrero laid out a court’s balancing act in weighing the approval of settlements struck by government agencies that do not force a defendant to admit liability.

“The court must avoid undue meddling and second-guessing, and must accord government agency law enforcement and financial determinations such as those now before it the proper level of deference they are due,” the judge wrote. “At the same time, the court cannot conceive that Congress intended the judiciary’s function in passing upon these settlements as illusory, as a predetermined rubber stamp for any settlement put before it.”

The judge’s words seemed to suggest that he was grudgingly approving the SAC settlement. On page after page, Judge Marrero used strong language - and lengthy sentences - to convey his discomfort the S.E.C.’s policy. In one part of the opinion, he said he was “troubled” by the practice; a paragraph later, he expressed “misgivings” about it. At another point, he called the settlement terms “both counterintuitive and incongruous” and sharply criticized the government’s settlement practices.

“The damage the victims suffer cannot always be blamed on acts of God or the mischief of leprechauns,” said Judge Marrero. “There cannot be proper closure when incidents causing extensive loss occur, if the individuals or entities responsible for the large scale wrongful consequences are not properly held accountable.”

Judge Approves SAC Settlement in Insider Trading Case

A judge approved a settlement between the hedge fund SAC Capital Advisors and securities regulators that allows the firm to pay a record $602 million fine to resolve a civil insider trading case without admitting any guilt, but conditioned his ruling on a pending Federal Appeals Court ruling.

In an opinion released Tuesday, Judge Victor Marrero of Federal District Court in Manhattan said he had serious concerns with the “neither admit nor deny” language contained in the agreement, but said that he would await guidance from a case involving Citigroup.

The pending appellate case, heard by the United States Court of Appeals for the Second Circuit, involves the review of a ruling by Judge Jed S. Rakoff, who rejected a $285 million settlement in a fraud case brought against Citigroup by the Securities and Exchange Commission. The agreement let the bank avoid acknowledging that it did anything wrong. Judge Rakoff called the settlement “chump change” for Citigroup and suggested it was not in the public interest; the bank and the S.E.C. said that the judge overstepped his bounds in interfering with the decision of a government agency.

The S.E.C. has traditionally permitted defendants to settle regulatory actions by paying a fine while not admitting liability, arguing that the practice is efficient and less costly than taking deep-pocketed financial firms to court and risk losing the case.

Much of Judge Marrero’s 34-page opinion centered on the “neither admit nor deny wrongdoing” language contained in the SAC settlement and many other settlements struck by the S.E.C. In recent months, federal judges across the country have followed Judge Rakoff’s lead and suggested that the S.E.C. and other government agencies are letting defendants off lightly by not forcing them to acknowledge wrongdoing.

Judge Marrero indicated that the “neither admit nor deny wrongdoing” language had no place in a post-financial crisis world.

“Perhaps we live in a different era,” Judge Marrero wrote. “In this age when the notion labeled ‘too big to fail’ (or jail, as the case may be) has gained currency throughout commercial markets, some cynics read the concept as code words meant as encouragement by an accommodating public - a free pass to evade or ignore the rules, a wink and a nod as cover for grand fraud, a license to deceive unsuspecting customers.”

“Perhaps, too, in these modern times,” he added, “new financial, industrial, and legal patterns have merged that call for enhanced regulatory and, as appropriate, judicial oversight to counter these sinister attitudes.”

Despite his skepticism about the S.E.C.’s settlement practices, Judge Marrero tentatively signed off on the commission’s deal with SAC. The case related to the conduct of a former SAC portfolio manager, Mathew Martoma, who was charged in November with illegal trading in two pharmaceutical stocks and helping SAC make $276 in illicit profits and avoided losses. Mr. Martoma has denied the charges.

Last month, Judge Harold Baer Jr. approved a separate S.E.C. insider trading case against SAC, signing off on a $14 million settlement that resolved accusations that the firm’s Sigma Capital unit illegally traded in shares of technology. As part of that agreement, SAC neither admitted nor denied wrongdoing. Judge Baer, however, raised no issues with the deal.

SAC, which is based in Stamford, Conn., and owned by the billionaire investor Steven A. Cohen, has emerged as a focus of the government’s multiyear investigation into insider trading at hedge funds. The two civil matters - the $602 million case, and the $14 million one - are the only legal actions against SAC, but the government has brought criminal insider trading charges against several of its former employees, including four who have pleaded guilty.

Representatives of the S.E.C. and SAC declined to comment on the judge’s ruling. Mr. Cohen has not been accused of any wrongdoing.

Judge Marrero laid out a court’s balancing act in weighing the approval of settlements struck by government agencies that do not force a defendant to admit liability.

“The court must avoid undue meddling and second-guessing, and must accord government agency law enforcement and financial determinations such as those now before it the proper level of deference they are due,” the judge wrote. “At the same time, the court cannot conceive that Congress intended the judiciary’s function in passing upon these settlements as illusory, as a predetermined rubber stamp for any settlement put before it.”

The judge’s words seemed to suggest that he was grudgingly approving the SAC settlement. On page after page, Judge Marrero used strong language - and lengthy sentences - to convey his discomfort the S.E.C.’s policy. In one part of the opinion, he said he was “troubled” by the practice; a paragraph later, he expressed “misgivings” about it. At another point, he called the settlement terms “both counterintuitive and incongruous” and sharply criticized the government’s settlement practices.

“The damage the victims suffer cannot always be blamed on acts of God or the mischief of leprechauns,” said Judge Marrero. “There cannot be proper closure when incidents causing extensive loss occur, if the individuals or entities responsible for the large scale wrongful consequences are not properly held accountable.”

As Shareholder Fights Heat Up, Activists Aim at Bigger Targets

The annual proxy season battle between shareholders and corporations appears to have reached a tipping point in favor of shareholders this year. And while some may hope that this will change public companies for the better, we may instead end up with something resembling trench warfare.

What is clear is that shareholder activism is reaching further into corporate America. The proxy advisory service Institutional Shareholder Services is projecting that there could be as many as 17 contests for the election of directors.

This is only a slight uptick from last year, but the difference is that the contests are much bigger this time around and include six at companies with a market value of more than $1 billion. Last year, the only billion-dollar company to have a contested election was the Oshkosh Corporation, which successfully thwarted an effort by the activist investor Carl C. Icahn to get directors on to the board.

Already this year, two billion-dollar companies have held contested elections: TPG-Axon Capital Management’s effort to remove the entire board at the oil and gas explorer SandRidge Energy, and the Ader Group’s effort to elect three directors at International Game Technology, a manufacturer of gambling machines. At SandRidge, a settlement with activist investors led to four nominees of the hedge fund being put on the board and an agreement for the departure of the chief executive. In the case of International Game, one independent director was elected.

These victories illustrate that activists win more often than not in board elections. So far this year, according to the data provider FactSet SharkRepellent, 66 percent of contests have been successful for the activists. This is up from 51 percent last year, though we are still early in the season.

Activists owe part of their success to I.S.S. and a rival, Glass, Lewis & Company. I.S.S. in particular is followed by many mutual funds and other institutional investors, and studies have found that it can sway up to 10 percent of the vote and much more in very public ones. And it often recommends in favor of the dissidents. Last year, it recommended in favor of the dissidents in 52 percent of campaigns. So far this year, that number is up to 73 percent. This is not completely surprising because the companies that are targets for activists are typically poor performers or in need of change.

This year, the activists are leveraging this advantage to supersize their contests. Elliott Management is taking aim at the $23 billion Hess Corporation, an energy company that Elliott contends has underperformed the market by more than 460 percent over the last 17 years while paying its management and directors $540 million.

Hess has responded the way that many other companies now do when faced with an activist: try to change. The company has replaced directors wholesale and disclosed that it is pursuing a strategy to dispose assets and become focused on exploration and production. Elliot is unimpressed and is pursuing its contest.

So not even big companies are immune to proxy activism. But as activists aim at bigger targets, they are adapting their strategies. A popular tactic in years past has been to argue for spinoffs of a company’s low-growth businesses. Now, the goals can be much more varied. David Einhorn, for example, has sought to make an issue of Apple’s enormous cash pile. Then there is the increasingly prominent opposition activism in mergers that we are seeing with Dell and its shareholder revolt led by Southeastern Asset Management.

There also campaigns to separate the job of chairman of the board from the chief executive, like the proposal at JPMorgan Chase. In all, Alliance Advisors is predicting more than 600 proposals for some type of corporate action this year, like separating the chairman and chief executive roles and changing corporate political spending.

Success is bringing new entrants. The California teachers’ pension fund has joined forces with the investment firm Relational Investors to campaign for the breakup of the Timken Company into steel and bearing businesses.

Former employees of star activists are forming their own funds. The heated battle to replace the board at Commonwealth REIT is being led by a former Icahn disciple, Keith Meister, and Corvex Management, while Mick McGuire of Marcato Capital Management, who recently won a seat on the board of the Lear Corporation, is from William A. Ackman’s Pershing Square. There is even a project affiliated with Harvard Law School to bring proposals to force boards to have annual instead of staggered elections.

The surge in shareholder activism is not all puppies and rainbows, however. There are questions about whether these changes push companies to focus on the short term or are too distracting from the real business of running these companies. And of course, there is always the question whether boards or shareholders are better situated to decide the future of the company.

Many companies are getting prepared for the activists and are ready to fight back.

They are doing so in two ways. First, companies are adopting provisions to fend off the activists. Long and convoluted notice periods are now commonplace, and many companies are adopting shareholders rights plans, or poison pills, with low thresholds, effectively limiting the number of shares an activist can acquire to 5 to 10 percent of a company.

And not surprisingly, companies are trying to regulate this type of activism out of business. The Securities and Exchange Commission is preparing to announce rules for the regulation of proxy advisers, and corporate America is lobbying to try to diminish the influence of I.S.S. through these rules. Companies and their representatives are also trying to get regulators to increase the disclosure requirements for activists.

This may be only a start. In the 1980s, when corporate America was under attack from hostile raiders, companies pushed hard to get legislatures to adopt anti-takeover measures and to validate poison pills. They succeeded. As activism becomes more commonplace, expect the companies to push back harder by looking for a way to avoid these attacks.

In other words, don’t expect corporate America to fold quietly. Instead, the battle is more likely to spread to regulators and legislators as companies take a proactive stance in anticipation of shareholder activism. But if anything, that activism is here to stay. It all means that the battle between shareholders and companies is likely to only get worse in coming years years as the barbarians at the gate become ever more bolder and innovative.

Thermo Fisher’s Deal Shows Life in Strategic Bids

Corporate bidders have life in them yet. Thermo Fisher Scientific is paying $13.6 billion for genetic test equipment maker Life Technologies, edging out a group of private equity suitors.

After Dell and Heinz, the merger playing field now looks flatter.

Thermo Fisher’s offer of $76 for each Life Tech share trumped a bid of $65, or a bit more, from Blackstone, Carlyle, KKR and Singapore’s Temasek. The difference is about $2 billion in value. Thermo Fisher, which manufactures health care equipment, expects annual cost synergies of about $250 million. In present value terms after tax at a 20 percent rate - Thermo Fisher’s is typically lower - those savings are, coincidentally or not, worth about the same as the value gap between the two bids.

That’s as it ought to be: a corporate advantage over private equity when there’s a decent fit. It hasn’t always been obvious. In the $20 billion-plus bidding for Dell, for instance, buyout firms seem to have had the upper hand from the start over industry rivals approached by the PC maker’s advisers. And H.J. Heinz, which should make for a prime strategic target, sold for $28 billion in February to private equity firm 3G Capital and Warren Buffett’s Berkshire Hathaway.

Each deal is, of course, different and size can deter strategic bidders. But buyout firms awash in committed capital from investors and with access to wide-open debt markets and ultra-low interest rates will often be able to stretch further than recently cautious corporate counterparts. On the other hand needing to club together, as with Thermo Fisher, could curb private equity ambitions. And if companies are big enough and themselves willing to borrow to make acquisitions, that helps redress the balance.

Life Tech is collecting nearly 40 percent more for shareholders than its stock price on Jan. 17 before it revealed it was on the block. That implies pitting financial buyers against strategic ones paid off. Meanwhile, the year’s biggest “Merger Monday” was dominated by another so-called strategic deal â€" Dish Network’s bid for Sprint Nextel. The growing competition among buyers could make it a full-fledged seller’s market.

Richard Beales is assistant editor at Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.

Europe Votes to Curb Banker Bonuses

BRUSSELS - European politicians approved major new rules on Tuesday that will cap the amount that bankers at the region’s largest institutions will receive in bonuses.

As part of a hard-fought deal, the compensation limits will restrict bonus payments to one year’s base salary, though that figure can be doubled if a majority of shareholders approve.

The legislated had faced major opposition from Britain, home to Europe’s largest financial center, which was eventually outvoted by other European Union countries that wanted to rein in the excesses and risky trading that contributed to the financial crisis.

“The rules will put an end to the culture of excessive bonuses, which encouraged risk-taking for short-term gains,” said Jose Manuel Barroso, the president of the European Commission. “This is a question of fairness. If taxpayers are being asked to pick up the bill after the financial crisis, banks must also make a contribution.”

The legislation will have apply to all banks active in Europe, as well as the international divisions of European firms like Barclays and UBS. The bonus limits come as many of the world’s largest financial institutions are slashing jobs and reducing their exposure to risky trading activity in an effort to increase profitability and cut costs.

As part of the deal approved by the European Parliament on Tuesday, at least one quarter of any bonus that exceeds 100 percent of salary must be deferred for at least five years.

“The new set of rules is the farthest-reaching banking regulation in the E.U. to date,” said Othmar Karas, an Austrian member of the Parliament who prepared the report on the law. “The rules on bankers’ bonuses will instill fairness and transparency and contribute to a change in banking culture,” he said.

The new crackdown on bankers’ bonus will take effect from the beginning of next year, and forms part of a major overhaul of European banking legislation that also includes new capital requirements for the Continent’s largest banks. Many firms including HSBC and Deutsche Bank have been shedding assets in a bid to increase their capital reserves to protect against future financial shocks.

The 27 member states must still give formal approval to the plan, though analysts say that is a mere formality after the European parliament voted in favor of a previously agreed compromise.

Dell Strikes Deal With Icahn

A special committee of Dell’s board has reached an agreement with one of its suitors, Carl C. Icahn, that limits his ownership stake in the company while allowing him to contact other shareholders about a possible bid for the computer maker.

Under the deal announced on Tuesday, Mr. Icahn has agreed not to acquire more than 10 percent of Dell’s shares or enter into agreements with shareholders who collectively own more than 15 percent of the shares. In return, the company has given the activist investor a limited waiver under Delaware corporate law that enables him to engage with other Dell shareholders.

“The special committee believes that granting the limited waiver to Mr. Icahn while capping his share ownership will maximize the chances of eliciting a superior proposal from Mr. Icahn while at the same time protecting shareholders against potential accumulation of an unduly influential voting interest,” the Dell committee said in a statement.

Mr. Icahn and the private equity firm Blackstone Group were the two preliminary bidders to emerge last month from the special committee’s process of soliciting potential alternatives to the proposed $13.65-a-share take-private offer from the company’s founder, Michael S. Dell and the private equity firm Silver Lake.

The two parties have been inspecting Dell’s books before deciding whether to make final rival bids to the $24.4 billion buyout.

Mr. Icahn has previously outlined an offer of $15 a share for about 58 percent of the company. Under that scenario, the investor would have a 24.1 percent stake in Dell.

Blackstone, which is working with the investment firms Francisco Partners and Insight Venture Partners, has proposed offering more than $14.25 a share for control of Dell, but not for the whole company.

Goldman’s Earnings Show Strength

Goldman Sachs on Tuesday reported profit of $2.2 billion in the first quarter, driven by strength in investment banking and lending. The earnings of $4.29 a share represented a 9 percent increase from the quarter a year earlier. The results beat analysts’ expectations of $3.89 a share, according to Thomson Reuters. “Our strong client franchise across our businesses drove generally solid results. Still, the potential for macroeconomic instability was felt in the quarter and constrained overall corporate and investor activity,” Lloyd C. Blankfein, Goldman’s chairman and chief executive, said in a statement. Goldman’s stock rose slightly in premarket trading on Tuesday. A conference call to discuss the results is being held at 9:30 a.m.

DISH AIMS TO COMBINE PHONE AND TV  |  With a $25.5 billion bid for Sprint Nextel, the pay-TV operator Dish Network wants to roll television, high-speed Internet and cellphone services into a single package. The proposal, according to Charles W. Ergen, Dish Network’s chairman, “really means that we’re going to give consumers what every consumer wants.” The bid is an attempt to scuttle the planned takeover of Sprint by the Japanese telecommunications company SoftBank; Dish said its cash-and-stock deal is worth about 13 percent more than the SoftBank bid.

SoftBank struck back on Tuesday, saying in a brief statement that its offer represented better value for shareholders than Dish Network’s “highly conditional preliminary proposal.” But markets appeared to disagree, as shares in SoftBank fell 6.8 percent in trading in Tokyo on Tuesday.

Another question is whether such consolidation is good for customers. A Dish-Sprint merger could pose a greater challenge to AT&T and Verizon, the two giants of the industry, analysts said. But it would also weaken T-Mobile USA, the No. 4 carrier.

ENERGY FUTURE HOLDINGS OFFERS BANKRUPTCY PLAN  |  Energy Future Holdings has a plan to resolve its troubles, but creditors apparently are less than enthusiastic. The Texas energy giant, which was taken private in 2007 in the largest buyout ever, disclosed on Monday a potential bankruptcy plan to its creditors, proposing to restructure about $32 billion in debt. But creditors rejected the plan, according to The Financial Times.

The proposal is “the opening move in what many say could be a long and contentious battle between the company and its largest creditors,” Julie Creswell writes in DealBook.

ON THE AGENDA  | 
BlackRock and Coca-Cola report earnings before the market opens, while Intel and Yahoo announce results this evening. Laurence Fink, chief executive of BlackRock, is on CNBC at 3:10 p.m. Sheila Bair, the former chairwoman of the Federal Deposit Insurance Corporation, is on Bloomberg TV at 7:30 a.m. The International Monetary Fund releases its World Economic Outlook at 9 a.m. A House Financial Services subcommittee holds a hearing at 2 p.m. on too-big-to-fail institutions. The Consumer Price Index for March is out at 8:30 a.m. Data on housing starts for March is released at 8:30 a.m.

GOLD TAKES A PLUNGE  | 
Gold prices fell 9 percent on Monday, the steepest drop in 30 years, “heightening fears that investors’ faith in the safe haven has been shattered,” Nathaniel Popper writes in DealBook. The fall, which led to a broader sell-off in commodities and stock markets, was apparently catalyzed by disappointment over Chinese growth. “The price of the metal has been undergoing an 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 it into a bear market, which is defined as a 20 percent drop from its recent high.”

Mergers & Acquisitions »

Glencore-Xstrata Deal Said to Win Approval in China  |  With approval from Chinese authorities, Glencore has “cleared the final regulatory hurdle in its $30 billion takeover of Xstrata,” according to Bloomberg News, which cites three unidentified people with knowledge of the matter.
BLOOMBERG NEWS

AMR Submits Plan to Leave Bankruptcy  |  The filing by AMR, the parent of American Airlines, brings the company closer to finalizing a merger with US Airways.
REUTERS

Nestle to Sell Pfizer Business in Mexico  |  Mexican authorities accepted a proposal by Nestlé to sell the Pfizer baby formula business in Mexico, to address competition concerns, The Wall Street Journal reports.
WALL STREET JOURNAL

Pre-emptive Moves Should Help J.C. Penney Shore Up Cash Position  |  The decision to borrow $850 million from a credit line now, rather than later in the year when cash use spikes, suggests a particularly bad start to the year.
News Analysis »

Thermo Fisher Reaches Deal for Rival in Gene Sequencing Equipment  |  Thermo Fisher agreed to buy rival Life Technologies for $13.6 billion, a move that will expand its market share in the production of genetic sequencing machines.
DealBook »

INVESTMENT BANKING »

UBS Lures European Deal Maker Away From Nomura  |  William Vereker, the former joint head of global investment banking at Nomura, has joined UBS as head of corporate client solutions in Europe.
DealBook »

A Merger Monday for Barclays  |  By advising Dish Network and Thermo Fisher Scientific on two large deals, the investment bank takes a big jump up the M.&A. league table.
DealBook »

Goldman Sachs and A.I.G., Together Again  |  “For those who follow bailout sagas, the idea of a Goldman bankers handling A.I.G.’s bailout repayment and being congratulated by a former government official has a certain degree of irony,” Lauren Tara LaCapra writes on Reuters’s Unstructured Finance blog.
REUTERS

American Express Names Edward Gilligan President  | 
WALL STREET JOURNAL

As Citigroup’s Profit Surges, Skittish Borrowers Hurt the Consumer Unit  |  Citigroup reported first-quarter profit of $3.8 billion, exceeding analysts’ estimates, as the bank continued to reduce costs and unload troubled assets.
DealBook »

PRIVATE EQUITY »

The Top 10 Private Equity Loopholes  |  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 the private equity industry pays, Victor Fleischer writes in the Standard Deduction column.
DealBook »

Bain Capital Said to Attract $3 Billion for New Fund  | 
FORTUNE

K.K.R. Executive Discusses Deal for First Data  |  Scott Nuttall, head of global capital and asset management at K.K.R., recalls in a video for Privcap that when the private equity firm first looked at First Data, the credit card processor, “the senior management team was not on speaking terms at the time.”
PRIVCAP

HEDGE FUNDS »

Gold’s Fall Weighs on Paulson  |  “Hedge-fund manager John Paulson’s wager on gold wiped out almost $1 billion of his personal wealth in the past two trading days as the precious metal plummeted 13 percent,” Bloomberg News reports.
BLOOMBERG NEWS

Rothschild Seeks to Build Fund-of-Funds Business  |  Rothschild is on the lookout for an acquisition in the United States to help it grow its business that invests in hedge funds, Reuters reports.
REUTERS

I.P.O./OFFERINGS »

In I.P.O., Fairway Seeks Premium to Rivals  |  The New York grocery store chain Fairway “is seeking to go public at a valuation that’s more expensive than peers including Whole Foods Market,” Bloomberg News reports.
BLOOMBERG NEWS

VENTURE CAPITAL »

Start-Up Lets You Track Who Tracks You  |  A start-up called Disconnect offers a browser connection that “is meant to block an invisible network of around 2,000 separate tracking companies,” the Bits blog writes.
NEW YORK TIMES BITS

Spotify Announces Plans to Expand in Latin America and Asia  | 
WALL STREET JOURNAL

LEGAL/REGULATORY »

Italian Prosecutors Seize Nomura Assets  |  Prosecutors in Siena “are seizing about 1.8 billion euros ($2.3 billion) of assets from Nomura Holdings” as part of an inquiry into derivatives used by Monte dei Paschi di Siena, Bloomberg News reports.
BLOOMBERG NEWS

Regulators Said to Fault JPMorgan Over Madoff Activity  |  Reuters reports: “Regulators plan to fault JPMorgan Chase & Co, which served as Bernie Madoff’s main bank for two decades, for failing to conduct adequate due diligence and report suspicious activity, according to a person familiar with the matter.”
REUTERS

Ex-Rochdale Trader Admits to Unauthorized Apple Trade  |  David Miller, the former Rochdale Securities trader whose purchase of about $1 billion of Apple stock led to the demise of his employer, pleaded guilty to wire fraud and conspiracy, Reuters reports.
REUTERS

With White at S.E.C., Debevoise Picks a Successor  |  Debevoise & Plimpton has named Mary Beth Hogan as co-chair of its litigation department, a job that was formerly held by Mary Jo White, now the chairwoman of the Securities and Exchange Commission.
DealBook »

Greece Reaches Deal for More Rescue Money  | 
NEW YORK TIMES

Challenges Mount for China’s President  |  Reports of infections and deaths from the H7N9 bird flu virus grow, while the economy shows signs of sputtering, Bill Bishop writes in the China Insider column.
DealBook »

French Officials, Under Orders, Disclose Financial Worth  | 
NEW YORK TIMES

Glencore’s $30 Billion Takeover of Xstrata Gains Chinese Approval

LONDON - The commodities trader Glencore International on Tuesday received the final regulatory approval for its proposed $30 billion takeover of the mining company Xstrata.

To ease Chinese antitrust concerns, Glencore said it would sell a Peruvian copper mine currently owned by Xstrata.

The combined mining and commodities trading company would be one of the world’s largest producers of copper, and the Chinese authorities had been worried that its local companies could be forced to pay higher prices for a variety of metals.

The China’s Ministry of Commerce, which has dragged on for more than a year after Xstrata’s shareholders initially balked at the price of the proposed all-share offer from Glencore, is the final regulator to back the deal.

European antitrust authorities approved the takeover in November after Glencore agreed to sell assets and reduce its operations on the Continent. South Africa regulators also signed off on the deal earlier this year.

Shares in Glencore rose 3.5 percent in afternoon trading in London, while Xstrata’s stock price also rose 4.5 percent.

Glencore also said that Mick Davis, the current chief executive of Xstrata who was expected to head the merged company for six months, will now step down as soon as the takeover is finished.

Mr. Davis had been at the center of tense negotiations last year as Qatar Holding, the Middle Eastern sovereign wealth fund and a major Xstrata shareholder, had fought to force Glencore to improve its original bid.

Eventually, the Swiss commodities trader relented, and increased its offer to 3.05 of its shares for every Xstrata share compared to its initial 2.8-per-share proposal.

In return, however, Glencore had demanded that its chief executive, Ivan Glasenberg, take over from Mr. Davis of Xstrata earlier than previously had been announced.

The original takeover had called for the Xstrata executives Mr. Davis; John Bond, chairman; and Trevor Reid, chief financial officer, to hold the same positions at the new company.

Glencore’s latest agreement with China’s antitrust authorities includes the sale of Xstrata’s Las Bambas copper mine in Peru. The commodities giant said it would inform the regulators about the sale no later than the end of July, with a potential sale to be completed by next summer.

Glencore also has agreed to supply Chinese companies with a minimum amount of copper, zinc and lead concentrate until the end of the decade to ease concerns that the Asian country may not be able to access sufficient levels of the metals needed for its local economy.

The deal is expected to be completed in early May.

Glencore’s $30 Billion Takeover of Xstrata Gains Chinese Approval

LONDON - The commodities trader Glencore International on Tuesday received the final regulatory approval for its proposed $30 billion takeover of the mining company Xstrata.

To ease Chinese antitrust concerns, Glencore said it would sell a Peruvian copper mine currently owned by Xstrata.

The combined mining and commodities trading company would be one of the world’s largest producers of copper, and the Chinese authorities had been worried that its local companies could be forced to pay higher prices for a variety of metals.

The China’s Ministry of Commerce, which has dragged on for more than a year after Xstrata’s shareholders initially balked at the price of the proposed all-share offer from Glencore, is the final regulator to back the deal.

European antitrust authorities approved the takeover in November after Glencore agreed to sell assets and reduce its operations on the Continent. South Africa regulators also signed off on the deal earlier this year.

Shares in Glencore rose 3.5 percent in afternoon trading in London, while Xstrata’s stock price also rose 4.5 percent.

Glencore also said that Mick Davis, the current chief executive of Xstrata who was expected to head the merged company for six months, will now step down as soon as the takeover is finished.

Mr. Davis had been at the center of tense negotiations last year as Qatar Holding, the Middle Eastern sovereign wealth fund and a major Xstrata shareholder, had fought to force Glencore to improve its original bid.

Eventually, the Swiss commodities trader relented, and increased its offer to 3.05 of its shares for every Xstrata share compared to its initial 2.8-per-share proposal.

In return, however, Glencore had demanded that its chief executive, Ivan Glasenberg, take over from Mr. Davis of Xstrata earlier than previously had been announced.

The original takeover had called for the Xstrata executives Mr. Davis; John Bond, chairman; and Trevor Reid, chief financial officer, to hold the same positions at the new company.

Glencore’s latest agreement with China’s antitrust authorities includes the sale of Xstrata’s Las Bambas copper mine in Peru. The commodities giant said it would inform the regulators about the sale no later than the end of July, with a potential sale to be completed by next summer.

Glencore also has agreed to supply Chinese companies with a minimum amount of copper, zinc and lead concentrate until the end of the decade to ease concerns that the Asian country may not be able to access sufficient levels of the metals needed for its local economy.

The deal is expected to be completed in early May.

Glencore’s $30 Billion Takeover of Xstrata Gains Chinese Approval

LONDON - The commodities trader Glencore International on Tuesday received the final regulatory approval for its proposed $30 billion takeover of the mining company Xstrata.

To ease Chinese antitrust concerns, Glencore said it would sell a Peruvian copper mine currently owned by Xstrata.

The combined mining and commodities trading company would be one of the world’s largest producers of copper, and the Chinese authorities had been worried that its local companies could be forced to pay higher prices for a variety of metals.

The China’s Ministry of Commerce, which has dragged on for more than a year after Xstrata’s shareholders initially balked at the price of the proposed all-share offer from Glencore, is the final regulator to back the deal.

European antitrust authorities approved the takeover in November after Glencore agreed to sell assets and reduce its operations on the Continent. South Africa regulators also signed off on the deal earlier this year.

Shares in Glencore rose 3.5 percent in afternoon trading in London, while Xstrata’s stock price also rose 4.5 percent.

Glencore also said that Mick Davis, the current chief executive of Xstrata who was expected to head the merged company for six months, will now step down as soon as the takeover is finished.

Mr. Davis had been at the center of tense negotiations last year as Qatar Holding, the Middle Eastern sovereign wealth fund and a major Xstrata shareholder, had fought to force Glencore to improve its original bid.

Eventually, the Swiss commodities trader relented, and increased its offer to 3.05 of its shares for every Xstrata share compared to its initial 2.8-per-share proposal.

In return, however, Glencore had demanded that its chief executive, Ivan Glasenberg, take over from Mr. Davis of Xstrata earlier than previously had been announced.

The original takeover had called for the Xstrata executives Mr. Davis; John Bond, chairman; and Trevor Reid, chief financial officer, to hold the same positions at the new company.

Glencore’s latest agreement with China’s antitrust authorities includes the sale of Xstrata’s Las Bambas copper mine in Peru. The commodities giant said it would inform the regulators about the sale no later than the end of July, with a potential sale to be completed by next summer.

Glencore also has agreed to supply Chinese companies with a minimum amount of copper, zinc and lead concentrate until the end of the decade to ease concerns that the Asian country may not be able to access sufficient levels of the metals needed for its local economy.

The deal is expected to be completed in early May.

BlackRock Earnings Rise 10% as Investors Step Back Into Markets

The asset management giant BlackRock reported on Tuesday that profit rose 10 percent in the first quarter on gains from renewed investor interest in the stock market.

Investors put $39.4 billion of new money into BlackRock products, with most of that going into stock-related investments. That, along with rising markets, helped the assets under management at BlackRock increase 7 percent from a year ago, and 4 percent from a quarter earlier.

The company’s revenue and profit grew from a year ago, though both were down slightly from the record levels reached in the final quarter of 2012. BlackRock’s net income in the first quarter was $632 million, or $3.62 a share. The earnings per share was slightly higher than the $3.58 cents a share expected by analysts.

The firm’s chief executive, Laurence D. Fink, said in a statement that in the current atmosphere of low interest rates, Americans have been shifting away from the bond investments that used to be the most popular choice for many retirees.

“Investors turned to iShares as a way to quickly and efficiently increase their exposure to equity markets,” Mr. Fink said in the statement.

An economic recovery that appeared to be gaining a steadier footing broadly drove Americans to step back into the stock market. At BlackRock, 86 percent of the inflows, or $34 billion, went into equity investments, with much of that going into BlackRock’s iShares exchange traded funds, which are baskets of stocks, bonds and other assets that can be traded on a stock exchange.

BlackRock has been expanding its marketing effort for iShares to maintain its position as the largest provider of E.T.F.’s. BlackRock recently signed a deal with Fidelity to provide its investors with easier access to iShares E.T.F.’s.

Goldman Sachs’s First Quarter Profit Beats Estimates

7:59 a.m. | Updated

Goldman Sachs on Tuesday reported a first-quarter profit of $2.2 billion, or 4.29 a share, up from the year-ago period and driven by investment banking and investment and lending. It was well of analysts’ expectations of $3.89 a share, according to Thomson Reuters. Earnings per share were up 9 percent when compared to the same quarter in 2012.

Analysts had been anticipating a fairly decent quarter for Goldman, in part because many of its rivals have posted strong results in their investment banking and securities divisions.

“Our strong client franchise across our businesses drove generally solid results. Still, the potential for macro-economic instability was felt in the quarter and constrained overall corporate and investor activity. We continue to be very focused on controlling our costs and efficiently managing our capital,” Goldman’s chairman and chief executive, Lloyd C. Blankfein, said in a press release.

The results had an immediate effect on the firm’s stock, sending it up slightly in premarket trading on Tuesday.

The firm reported $10.1 billion in revenue in the quarter ended March 31, almost flat from year ago levels when revenue came in at $10 billion. Analysts had been forecasting revenue of $8.35 billion.

Net revenue in Goldman’s powerful division that trades bonds, currencies and commodities was $3.2 billion, down 7 percent from the year-ago period. The firm said net revenues were lower in most businesses, “primarily reflecting significantly lower net revenues in interest rate products compared with a strong first quarter of 2012.”

The firm’s investing and lending division however did quite well, posting revenue of $2.07 billion, up 8 percent from year-ago levels. Goldman said this unit benefited from an increase in equity prices in the quarter, and a $24 million gain from the firm’s stake in the Industrial and Commercial Bank of China, a strategic investment Goldman made in 2006.

The firm’s investment banking division also weighed in with strong first quarter results, posting revenue of $1.57 billion, up 36 percent from the year-earlier period. The firm attributed the rise to “significantly higher net revenues in debt underwriting, due to leveraged finance and commercial mortgage-related activity. “ Goldman added that revenues in equity underwriting were also “significantly higher compared with the first quarter of 2012, reflecting an increase in client activity.”

Goldman is one of a number of Wall Street banks releasing earnings this week. Morgan Stanley will round out bank earnings season on Thursday. Analysts polled by Thomson Reuters are expecting it to earn 57 cents a share.

Goldman Sachs’s First Quarter Profit Beats Estimates

7:59 a.m. | Updated

Goldman Sachs on Tuesday reported a first-quarter profit of $2.2 billion, or 4.29 a share, up from the year-ago period and driven by investment banking and investment and lending. It was well of analysts’ expectations of $3.89 a share, according to Thomson Reuters. Earnings per share were up 9 percent when compared to the same quarter in 2012.

Analysts had been anticipating a fairly decent quarter for Goldman, in part because many of its rivals have posted strong results in their investment banking and securities divisions.

“Our strong client franchise across our businesses drove generally solid results. Still, the potential for macro-economic instability was felt in the quarter and constrained overall corporate and investor activity. We continue to be very focused on controlling our costs and efficiently managing our capital,” Goldman’s chairman and chief executive, Lloyd C. Blankfein, said in a press release.

The results had an immediate effect on the firm’s stock, sending it up slightly in premarket trading on Tuesday.

The firm reported $10.1 billion in revenue in the quarter ended March 31, almost flat from year ago levels when revenue came in at $10 billion. Analysts had been forecasting revenue of $8.35 billion.

Net revenue in Goldman’s powerful division that trades bonds, currencies and commodities was $3.2 billion, down 7 percent from the year-ago period. The firm said net revenues were lower in most businesses, “primarily reflecting significantly lower net revenues in interest rate products compared with a strong first quarter of 2012.”

The firm’s investing and lending division however did quite well, posting revenue of $2.07 billion, up 8 percent from year-ago levels. Goldman said this unit benefited from an increase in equity prices in the quarter, and a $24 million gain from the firm’s stake in the Industrial and Commercial Bank of China, a strategic investment Goldman made in 2006.

The firm’s investment banking division also weighed in with strong first quarter results, posting revenue of $1.57 billion, up 36 percent from the year-earlier period. The firm attributed the rise to “significantly higher net revenues in debt underwriting, due to leveraged finance and commercial mortgage-related activity. “ Goldman added that revenues in equity underwriting were also “significantly higher compared with the first quarter of 2012, reflecting an increase in client activity.”

Goldman is one of a number of Wall Street banks releasing earnings this week. Morgan Stanley will round out bank earnings season on Thursday. Analysts polled by Thomson Reuters are expecting it to earn 57 cents a share.

Goldman Sachs’s First Quarter Profit Beats Estimates

7:59 a.m. | Updated

Goldman Sachs on Tuesday reported a first-quarter profit of $2.2 billion, or 4.29 a share, up from the year-ago period and driven by investment banking and investment and lending. It was well of analysts’ expectations of $3.89 a share, according to Thomson Reuters. Earnings per share were up 9 percent when compared to the same quarter in 2012.

Analysts had been anticipating a fairly decent quarter for Goldman, in part because many of its rivals have posted strong results in their investment banking and securities divisions.

“Our strong client franchise across our businesses drove generally solid results. Still, the potential for macro-economic instability was felt in the quarter and constrained overall corporate and investor activity. We continue to be very focused on controlling our costs and efficiently managing our capital,” Goldman’s chairman and chief executive, Lloyd C. Blankfein, said in a press release.

The results had an immediate effect on the firm’s stock, sending it up slightly in premarket trading on Tuesday.

The firm reported $10.1 billion in revenue in the quarter ended March 31, almost flat from year ago levels when revenue came in at $10 billion. Analysts had been forecasting revenue of $8.35 billion.

Net revenue in Goldman’s powerful division that trades bonds, currencies and commodities was $3.2 billion, down 7 percent from the year-ago period. The firm said net revenues were lower in most businesses, “primarily reflecting significantly lower net revenues in interest rate products compared with a strong first quarter of 2012.”

The firm’s investing and lending division however did quite well, posting revenue of $2.07 billion, up 8 percent from year-ago levels. Goldman said this unit benefited from an increase in equity prices in the quarter, and a $24 million gain from the firm’s stake in the Industrial and Commercial Bank of China, a strategic investment Goldman made in 2006.

The firm’s investment banking division also weighed in with strong first quarter results, posting revenue of $1.57 billion, up 36 percent from the year-earlier period. The firm attributed the rise to “significantly higher net revenues in debt underwriting, due to leveraged finance and commercial mortgage-related activity. “ Goldman added that revenues in equity underwriting were also “significantly higher compared with the first quarter of 2012, reflecting an increase in client activity.”

Goldman is one of a number of Wall Street banks releasing earnings this week. Morgan Stanley will round out bank earnings season on Thursday. Analysts polled by Thomson Reuters are expecting it to earn 57 cents a share.

SoftBank Shares Drop After Dish’s Competing Bid for Sprint

A day after the satellite-TV operator Dish Network offered to buy Sprint Nextel for $25.5 billion, Softbank, its Japanese rival to buy the cell phone operator, struck back.

In a brief statement on Tuesday, the Japanese telecommunications giant said its $20.1 billion offer for a 70 percent stake in Sprint still represented better value for the company’s shareholders compared to Dish Network’s “highly conditional preliminary proposal.”

The markets, though, disagreed. Shares in SoftBank fell as much as 9.3 percent during trading in Tokyo on Tuesday, and finished down 6.8 percent by the end of the day.

Investors are concerned that Dish’s proposal to combine its own TV and broadband services with Sprint’s cellphone operations may trump SoftBank’s multibillion-dollar bid, which would be the largest ever international acquisition by a Japanese company.

“The SoftBank-Sprint transaction is in the advanced stages of receiving the necessary approvals and we expect to consummate the transaction on July 1,” SoftBank said in a statement.

The battle to control Sprint comes as the world’s telecommunications industry is in flux. The parent company of T-Mobile USA, Deutsche Telekom, is moving closer to a multibillion-dollar agreement to buy MetroPCS, while rumors abound that the British cell phone company Vodafone may offload its 45 percent stake in Verizon Wireless.

And in Europe, private equity buyers are circling Everything Everywhere, a British cell phone company jointly owned by Deutsche Telekom and France Telecom, over a potential multibillion-dollar takeover.

In the latest deal in the United States, SoftBank, led by the Japanese billionaire Masayoshi Son, may yet increase its offer to satisfy Sprint’s shareholders, though the Japanese company could be in line for a major payout if Sprint walks away from the deal.

As part of the details of the proposed takeover announced last year, SoftBank could pocket $600 million in so-called break-up fees if Dish outmuscles the Japanese company for control of Sprint.

SoftBank also could receive around $1 billion from the proceeds of a $3.1 billion convertible bond that it bought from Sprint in October, as the American company’s share price has risen by more than one third since the deal with SoftBank was first announced.

Sprint said on Monday that it would look at Dish’s proposal, but declined to comment further on its plans.

Deutsche Bank, the Raine Group and Mizuho Securities are advising SoftBank. Barclays is advising Dish Network on its proposed bid, while Citigroup, Rothschild and UBS are advising Sprint Nextel.

UBS Poaches European Deal Maker from Nomura

LONDON - William Vereker, the former joint head of global investment banking at Nomura, has joined UBS as head of corporate client solutions in Europe.

The appointment is the latest move by Andrea Orcel, chief of UBS’s investment bank, to overhaul the division that is undergoing a drastic revamp, as the Swiss bank shifts its operations towards its wealth management unit.

Mr. Vereker gained a deal-making reputation by advising natural resource companies including Xstrata in its recent $30 billion deal with the commodities trading company Glencore International.

The London-based banker previously worked at Morgan Stanley and Lehman Brothers before joining Nomura after the Japanese bank acquired the European and Asian operations of the defunct American firm. He was appointed vice chairman of Nomura’s investment banking division in September.

It is the second time so far this year that UBS has poached leading figures from Nomura.

In January, Piero Novelli was appointed global chairman of mergers and acquisitions at the Swiss bank after he left Nomura where he had been its global co-head of the merger advice business.

Last year, UBS said would cut as many as 10,000 jobs to reduce costs and shrink its investment banking operations. Over the next two years, the Swiss bank plans to reduce its work force by as much as 16 percent, to 54,000.

On Monday, UBS also said David Soanes, who previously ran the bank’s corporate client solutions division in Europe, had been appointed as chief of its global financial institutions group.

During the first quarter of the year, the Swiss bank fell three positions, to tenth place, in the European investment banking fees table, according to the data provider Thomson Retuers.

UBS’s bankers, though, remain some of the best paid. The firm’s average compensation for each of its full-time employees totaled 191,646 euros ($250,000) in 2012, according to the data provider SNL Financial.

The figure placed UBS second behind rival Swiss bank Credit Suisse in the rankings of average pay at 17 of the largest global banks, and well ahead of U.S. firms JPMorgan Chase and Citigroup.