DuPont to Split Into 2 as It Spins Off a Major Segment

DuPont, via Agence France-Presse â€" Getty Images Ellen Kullman, the chairwoman and chief executive of DuPont.

The industrial conglomerate DuPont is splitting in two.

DuPont produces everything from solar panel components to Kevlar, and has a market value of nearly $57 billion. But in recent years, even as it increased its focus on higher growth areas such as agriculture and nutrition, a large portion of its revenue still came from the more volatile sale of conventional industrial products.

On Thursday, DuPont said it would spin off its performance chemicals segment into a new publicly traded company. The unit â€" which makes a pigment that turns paints, paper and plastics white, as well as refrigerants and polymers for cables â€" generated about $7 billion in revenue in 2012. But prices for its pigment products plunged in the second quarter, sending operating profits for the unit down 56 percent.

In July, DuPont announced it would explore strategic alternatives for its performance chemicals unit.

Soon after that announcement, the activist investor Nelson Peltz revealed that his fund, Trian Partners, had previously acquired a stake in DuPont. His holding of more nearly six million shares was worth about $345 million at the time of the investment, but represented less than 1 percent of the company. Mr. Peltz was later reported to have increased his stake to 2.2 percent, owning more than 21 million shares, according to The Wall Street Journal.

But DuPont’s chief executive, Ellen Kullman, denied that Mr. Peltz had influenced her decision to conduct a strategic review of the unit.

DuPont expects the spin-off to be completed in about 18 months, and said it would be tax-free to shareholders, who will receive stock in the new company. DuPont has hired Evercore and Goldman Sachs to advise it on the spin-off.

The DuPont that remains will have three main areas of focus, each trying to make products that address global population growth. Its agriculture business will develop and produce seeds and herbicides designed to boost crop yields around the globe. A bioindustrials unit will be involved in the production of biofuels in an effort to reduce the world’s reliance on fossil fuels. And an advanced materials segment will make components for green buildings and solar panels, as well as products like Kevlar.

“Following a thorough strategic review process over the last year, the spin-off of performance chemicals is clearly the best option to deliver enhanced value for our shareholders,” Ms. Kullman said in a statement. “This separation will advance the transformation of DuPont and result in two strong, highly competitive companies.”

Spinning off its performance chemicals business is the latest big step in DuPont’s transformation. Last year, it sold its performance coatings business, which made paint for vehicles, to the Carlyle Group for $4.9 billion.

The spin-off is the latest example of big conglomerates divesting units and focusing on their higher growth businesses. Big institutional shareholders are looking for companies to separate their high and low growth units, and activist investors have also been pushing for spin-offs as a way to unlock value.

Mr. Peltz has been among those pushing for such changes at other companies. He successfully agitated for Ingersoll-Rand to spin-off units last year, and has a stake in Pepsi, which he is encouraging to spin its snacks business into a merger with Mondelez.

DuPont, based in Wilmington, Del., was founded more than 200 years ago by Eleuthère Irénée du Pont, a French political economist who fled to America during the French Revolution. The company evolved from a top gunpowder producer, supplying the U.S. Army during the Civil War, into the largest American chemical company. In recent years, DuPont has shifted from a focus on traditional industrial chemicals to investments on biotechnology and agricultural products.

DuPont shares, which have already risen 36 percent this year, were up another 2 percent in after hours trading on Thursday.

DuPont to Split Into 2 as It Spins Off a Major Segment

DuPont, via Agence France-Presse â€" Getty Images Ellen Kullman, the chairwoman and chief executive of DuPont.

The industrial conglomerate DuPont is splitting in two.

DuPont produces everything from solar panel components to Kevlar, and has a market value of nearly $57 billion. But in recent years, even as it increased its focus on higher growth areas such as agriculture and nutrition, a large portion of its revenue still came from the more volatile sale of conventional industrial products.

On Thursday, DuPont said it would spin off its performance chemicals segment into a new publicly traded company. The unit â€" which makes a pigment that turns paints, paper and plastics white, as well as refrigerants and polymers for cables â€" generated about $7 billion in revenue in 2012. But prices for its pigment products plunged in the second quarter, sending operating profits for the unit down 56 percent.

In July, DuPont announced it would explore strategic alternatives for its performance chemicals unit.

Soon after that announcement, the activist investor Nelson Peltz revealed that his fund, Trian Partners, had previously acquired a stake in DuPont. His holding of more nearly six million shares was worth about $345 million at the time of the investment, but represented less than 1 percent of the company. Mr. Peltz was later reported to have increased his stake to 2.2 percent, owning more than 21 million shares, according to The Wall Street Journal.

But DuPont’s chief executive, Ellen Kullman, denied that Mr. Peltz had influenced her decision to conduct a strategic review of the unit.

DuPont expects the spin-off to be completed in about 18 months, and said it would be tax-free to shareholders, who will receive stock in the new company. DuPont has hired Evercore and Goldman Sachs to advise it on the spin-off.

The DuPont that remains will have three main areas of focus, each trying to make products that address global population growth. Its agriculture business will develop and produce seeds and herbicides designed to boost crop yields around the globe. A bioindustrials unit will be involved in the production of biofuels in an effort to reduce the world’s reliance on fossil fuels. And an advanced materials segment will make components for green buildings and solar panels, as well as products like Kevlar.

“Following a thorough strategic review process over the last year, the spin-off of performance chemicals is clearly the best option to deliver enhanced value for our shareholders,” Ms. Kullman said in a statement. “This separation will advance the transformation of DuPont and result in two strong, highly competitive companies.”

Spinning off its performance chemicals business is the latest big step in DuPont’s transformation. Last year, it sold its performance coatings business, which made paint for vehicles, to the Carlyle Group for $4.9 billion.

The spin-off is the latest example of big conglomerates divesting units and focusing on their higher growth businesses. Big institutional shareholders are looking for companies to separate their high and low growth units, and activist investors have also been pushing for spin-offs as a way to unlock value.

Mr. Peltz has been among those pushing for such changes at other companies. He successfully agitated for Ingersoll-Rand to spin-off units last year, and has a stake in Pepsi, which he is encouraging to spin its snacks business into a merger with Mondelez.

DuPont, based in Wilmington, Del., was founded more than 200 years ago by Eleuthère Irénée du Pont, a French political economist who fled to America during the French Revolution. The company evolved from a top gunpowder producer, supplying the U.S. Army during the Civil War, into the largest American chemical company. In recent years, DuPont has shifted from a focus on traditional industrial chemicals to investments on biotechnology and agricultural products.

DuPont shares, which have already risen 36 percent this year, were up another 2 percent in after hours trading on Thursday.

After Muddy Waters Report, NQ Mobile Falls by Half

When the stock market opened on Thursday, NQ Mobile, a Chinese mobile security company, had a valuation of $1.1 billion. Just hours later, half of its value was erased.

Call it the Muddy Waters effect. A short-selling firm known for its scathing reports on Chinese companies, Muddy Waters released a harsh assessment of NQ Mobile on Thursday, calling it a “massive fraud.”

NQ Mobile immediately experienced a stomach-turning plunge, with its shares falling more than 50 percent. The stock, which opened the day at $23 a share, fell as low as $8.46 before recovering slightly to close at $12.09. The company is listed on the New York Stock Exchange.

In its research note, Muddy Waters argued that “at least 72 percent of NQ’s purported 2012 China security revenue is fictitious,” saying the company was a “zero.”

“NQ’s largest customer by far is really NQ,” Muddy Waters, which is run by Carson C. Block, said. The note added that the company’s “future is as bleak as its past,” and that its “acquisitions are highly likely to be corrupt.”

In a statement, NQ said the accusations were “false,” adding that it would issue a more detailed response before the market opens in the United States on Friday.

“NQ Mobile will respond quickly, transparently and forcefully to these false allegations regarding our company,” the statement said.

The damage control effort wasn’t enough to prop up the stock, which previously had experienced a rapid rise this year as big investors reported holding significant stakes. SAC Capital Advisors, a big hedge fund contending with accusations of insider trading, is a major investor in NQ Mobile, according to disclosures at the end of August.

SAC, which is owned by the billionaire Steven A. Cohen, was the company’s 10th largest shareholder, with a 1.91 percent stake as of Aug. 28, a disclosure shows. And a unit of SAC, CR Intrinsic, was the fifth-largest holder, with a stake of 2.86 percent.

A previous bet by Muddy Waters affected another big hedge fund. In 2011, Muddy Waters released a critical report on Sino-Forest, a Chinese forestry company, wiping billions of dollars from its market value. Sino-Forest’s investors included Paulson & Company, the hedge fund run by John A. Paulson.

On Thursday, Muddy Waters said NQ Mobile was a “strong sell.” Though the company says it has a 55 percent market share in China, the number is actually closer to 1.5 percent, Muddy Waters claimed.

On its Web site, NQ Mobile says it “strives to become the most trusted mobile Internet platform for consumers and enterprises around the world.”

Not all of Muddy Water’s calls result in big stock movements. In July, shares of the American Tower Corporation fell just 1.1 percent on the day that Muddy Waters called it a “strong sell.”

After American Tower announced a big acquisition in September, Muddy Waters said in a report that it was “more skeptical than ever.”

Focused Effort to Narrow the Gender Gap on Corporate Boards

The dearth of women on corporate boards has been a persistent issue for decades. Yet little has changed over the years, despite much public hand-wringing over the stubborn gender gap.

Men hold most of the 5,488 board seats at American companies, according to the Alliance for Board Diversity, a group of leadership organizations. Women lag at 16.6 percent, a level that has remained nearly constant since 2004, when the alliance started monitoring the figures.

It has been a Sisyphean challenge to nudge the numbers and create a clearer path for women to obtain seats as corporate directors. Even as more women become chief executives and studies highlight the paucity of female directors, boards remain a largely male preserve.

The latest effort to attack the problem, a program at George Washington University School of Business, is trying a two-pronged initiative: helping women make it onto the short lists to be considered for open seats and training women to be ready to step into those posts.

The approach is being supported by influential women, including financing from Linda Rabbitt, founder of the Rand Construction Corporation, a construction firm based in Washington with more than $263 million in annual revenue.

The program, called On the Board, has 15 female executives in its first class, most of whom have little or no experience sitting on corporate boards but are top managers at major corporations.

The program may soon be chalking up its first success story. One of its first fellows, Anita M. Sands, a group managing director at UBS Wealth Management Americas, was nominated and elected on Tuesday to the board of the global security software giant Symantec Corporation.

The scarcity of women at the highest corporate rung struck Ms. Rabbitt last year when she realized she was the only woman being honored at an awards ceremony for board directors.

“It was 10 men and me,” said Ms. Rabbitt, who is also the chairwoman of the Federal Reserve Bank of Richmond and sits on the boards of the Greater Washington Board of Trade and Towers Watson & Company. “I’ve been in a mostly all-male environment for nearly 30 years. But I have encountered very few women around board tables, and I wanted to do something about it.”

She decided on a two-part approach, she said, because “women are newer at this. It’s not just skills; they also need a network and know how to use it to find the right board fit.”

Women are overlooked because companies often favor sitting or retired chief executives for their boards, said Caryl Athanasiu, chief operations risk officer for Wells Fargo, who is a program participant. “If a woman doesn’t have that C.E.O. moniker, it’s that much harder to be considered.”

Also hindering women is the traditional recruitment practice of tapping established corporate networks, which often exclude qualified women.

“You don’t apply; you have to be invited on a board,” said Brande Stellings, head of corporate board resources for Catalyst, the nonprofit group that focuses on women in the workplace. “Subtle stereotypes or latent bias mean women are often overlooked.”

To overcome this barrier, the George Washington project stresses networking to tackle a major sticking point for female candidates: the decision-making process that determines how board seats are filled. Too often, diversity advocates say, company executives recruit familiar business colleagues to fill a seat instead of casting a wide net.

Unspoken barriers derailed Penny McIntyre, former head of the consumer group of Newell Rubbermaid, three years ago when she was being considered for an empty board seat. Rather than inquiring about her experience, interests or even her golf handicap, the company’s directors, all men, spent the interview lunch parsing their own golf games.

“When I asked if they had any questions, one replied, ‘No, the C.E.O. likes you and you’ll be just fine,’ ” she recalled. “It felt like a throwback to the 1950s.”

She decided not to pursue the post but remains interested in joining a board and is participating in the George Washington effort to create a cadre of women for board openings.

The United States trails some developed countries like Norway, a nation that has intensive programs and quotas to increase women on boards. Now, 36.1 percent of its corporate directors are women, according to a GMI Ratings survey. (Sweden and Finland followed close behind).

In the United States, few women â€" less than 2 percent â€" have joined board ranks since 2009, according to GMI. And nearly 10 percent of Fortune 500 companies have no female board members at all, according to Catalyst, the workplace research group.

The On the Board program is holding several three- to four-day sessions over the course of the year for its fellows, who were selected from 90 applicants. In-depth sessions include topics like cybersecurity and the duties of independent auditors.

The program, which includes meetings with federal officials to help participants better understand government regulations, is heavy on financial topics, which helps combat the perception that women’s lack of financial experience â€" real or perceived â€" disqualifies them from directorships.

“Financial reform laws have put a focus on having financially astute people on boards,” said a program fellow, Carrie Schwab-Pomerantz, a senior vice president at Charles Schwab & Company, who is the daughter of the firm’s founder, Charles Schwab. “The program exposes you, for example, to what regulators are thinking and what to look for when you are serving on the board.”

Ms. Rabbitt turned to the International Women’s Forum, where she is one of 5,000 members, for female executives to mentor each program fellow.

The mentors, who have corporate board service, provide guidance and help create networks with people, including executive recruiters, who scout for potential directors. One mentor is Maria M. Klawe, president of Harvey Mudd College in California and a director at both Microsoft and Broadcom.

“Too often,” Ms. Klawe said, “there’s a feeling that you’ve got one or two women on the board, so you don’t need another.” In reality, “the number of women directors is tiny, and there is a lot of room for more.”

Even when women reach the top of possible directorship lists, they still face the glacial pace of board turnover, said Doug Guthrie, a professor of international business and management at George Washington’s business school, who worked with Ms. Rabbitt, also a university trustee, to create the program.

Board retirement age can be flexible, and the six-figure pay and travel are incentives to sit at the board table for a long time. Two-thirds of Fortune 500 company directors have occupied their seats for 10 to 15 years, according to a recent report from Stuart Spencer, the executive recruiting firm. That means only a few hundred such slots change hands annually.

“The average number of women joining boards is about 16 each year,” said Professor Guthrie, who said the program, which is financed for at least four years, aims to substantially raise that number.

New Liquidity Rule Proposed to Guard Against Cash Squeeze

During the financial crisis of 2008, the big banks fell dangerously short of cash, forcing them to take out enormous government loans to survive the tumult.

To help prevent another giant cash squeeze, federal regulators on Thursday proposed a rule that requires big banks to hold a set amount of assets that they can quickly turn into cash.

The hope is that, in times of turbulence, banks will have adequate funds to replace cash that might be leaving them at a rapid clip. The new rule, known as the liquidity coverage ratio, is the first to systematically require banks to be in a position to cover a set amount of cash outflows. The rule is designed to complement new, separate rules on capital, which focus more on making banks resilient to losses on loans and securities.

“The proposed rule would, for the first time in the United States, put in place a quantitative liquidity requirement,” Ben S. Bernanke, chairman of the Federal Reserve, said in a statement. He added that it “would foster a more resilient and safer financial system in conjunction with other reforms.”

The liquidity rule works by asking large banks to estimate how much cash might flee in a 30-day period. They then have to have enough assets on hand that they could quickly sell to cover that outflow.

The requirement, scheduled to come into full effect at the start of 2017, could dent the profits of banks, particularly Wall Street firms that rely on huge amounts of short-term market borrowings to finance their businesses.

Still, regulators are concerned that the big institutions remain vulnerable to bank runs. And based on comments from prominent banking regulators on Thursday, banks should expect additional measures to make them less reliant on potentially flighty borrowings.

“In some sense, this is just a big but only first step down the road to achieving that durability of funding,” Daniel K. Tarullo, the Fed governor who oversees regulation, said on Thursday at a board meeting on the rule.

The new liquidity ratio, which was conceived by an international grouping of bank regulators soon after the crisis, addresses a thorny dilemma at the heart of modern banking. For decades, central banks have been willing to provide emergency loans to their banking systems in times of stress, recognizing that bank runs can do terrible damage to the wider economy. But if banks come to expect that their central bank will always act as a lender of last resort, they might be encouraged to take excessive risks.

The support “creates potential moral hazard problems,” Jerome H. Powell, a Fed governor, said on Thursday. The new rule “puts private liquidity in front of the taxpayer,” he said.

“The new rule is a measured response,” Darrell Duffie, a finance professor at Stanford, said. “It says, ‘We’re still here as a lender of last resort, but we want you to be more self reliant.’ ”

Analysts expect that most large banks would already comply with the rule. The industry and other parties have 90 days to comment on the rule.

But the operations of large foreign banks are also subject to it, and some of them may have to do more to comply. Some foreign banks have already criticized the Fed for making their United States operations comply with more stringent capital rules than they might face at home. If foreign regulators are planning liquidity rules that are more lenient than the American one, foreign banks could step up their lobbying of the Fed.

In calculating how much liquidity is needed, safe and liquid assets like Treasuries would count at full value. But assets like stocks and corporate bonds aren’t counted at their full value, to reflect that their price might be falling in a panicked market. The top quality assets have to comprise at least 45 percent of the liquid asset pool.

Though some Wall Street firms may already comply with the liquidity rule, they may still find the adjustment difficult. Broker-dealers are still dependent on short-term funding, which is effectively targeted by the rule. Goldman Sachs, for instance, funds two-thirds of its assets with shorter-term market borrowings, based on an analysis of its latest securities filing.

In particular, the new rule might reduce the profitability of a practice that is common on Wall Street, according to Robert Maxant, a partner at Deloitte & Touche.

Brokers provide loans to clients to buy securities. To obtain the money that they lend to clients, the brokers take out their own loans in the market, pledging securities as collateral. To ensure it profits on the arrangement, the broker needs to get more in interest on the client loan than it is paying on its own loan. To achieve this cost advantage, the broker typically takes out a loan that is of a shorter term than the client’s loan.

But the new rule could penalize a bank that uses this approach, because it assumes the broker’s short-term loan would evaporate in a crisis, and a shortfall would occur that would need to be covered. Amassing the liquid assets to cover the shortfall adds a cost to the brokerage business.

“The regulators have been very concerned about short-term funding,” Mr. Maxant said.

Ackman to Sell Part of His Stake in Canadian Pacific

More than a year after the activist investor William A. Ackman won a bitter battle for control of Canadian Pacific, he is cashing in part of his investment at a substantial profit.

On Thursday, Mr. Ackman’s hedge fund Pershing Square Capital Management said it will sell around $800 million of its stake in Canadian Pacific, or 5.9 million shares, in an open market transaction at an undisclosed price per share. Following the sale, Pershing Square will hold a 9.8 percent stake in the company and will remain Canadian Pacific’s largest shareholder.

The move marks a victory for Mr. Ackman, who will have nearly tripled his investment in Canadian Pacific, at a time when he needs it most. He first began buying the shares in 2011, when they were trading at about 46 Canadian dollars a share. Shares closed on Thursday at 147.95 Canadian dollars.

It’s been a difficult year for Mr. Ackman, who has been in the spotlight for bets that have soured. In August, he was forced to retreat from a bruising and public fight at J.C. Penney, and a $1 billion bet that Herbalife is a pyramid scheme has failed to gain traction with shareholders.

Mr. Ackman has had more sympathy from shareholders in his campaign against the board at Canadian Pacific, one of Canada’s oldest companies. In May 2012, he won a public battle with the board at Canadian Pacific, removing Fred Green, its chairman, and four other board members. He later brought in E. Hunter Harrison, a former chief executive of Canadian National, a rival to Canadian Pacific.

The share sale will be led by Credit Suisse, and Bank of America Merrill Lynch and Morgan Stanley will also participate in the transaction.

Ackman to Sell Part of His Stake in Canadian Pacific

More than a year after the activist investor William A. Ackman won a bitter battle for control of Canadian Pacific, he is cashing in part of his investment at a substantial profit.

On Thursday, Mr. Ackman’s hedge fund Pershing Square Capital Management said it will sell around $800 million of its stake in Canadian Pacific, or 5.9 million shares, in an open market transaction at an undisclosed price per share. Following the sale, Pershing Square will hold a 9.8 percent stake in the company and will remain Canadian Pacific’s largest shareholder.

The move marks a victory for Mr. Ackman, who will have nearly tripled his investment in Canadian Pacific, at a time when he needs it most. He first began buying the shares in 2011, when they were trading at about 46 Canadian dollars a share. Shares closed on Thursday at 147.95 Canadian dollars.

It’s been a difficult year for Mr. Ackman, who has been in the spotlight for bets that have soured. In August, he was forced to retreat from a bruising and public fight at J.C. Penney, and a $1 billion bet that Herbalife is a pyramid scheme has failed to gain traction with shareholders.

Mr. Ackman has had more sympathy from shareholders in his campaign against the board at Canadian Pacific, one of Canada’s oldest companies. In May 2012, he won a public battle with the board at Canadian Pacific, removing Fred Green, its chairman, and four other board members. He later brought in E. Hunter Harrison, a former chief executive of Canadian National, a rival to Canadian Pacific.

The share sale will be led by Credit Suisse, and Bank of America Merrill Lynch and Morgan Stanley will also participate in the transaction.

Activist Bet on Evercore Would Have Beaten One on Lazard

Nelson Peltz must be happy with his stake in Lazard. The activist investor jumped into the stock early last year. Since then, Lazard’s stock has gone up 50 percent and its third-quarter results on Thursday show the firm is on track.

There’s just one wrinkle for Mr. Peltz: he would have done even better, doubling his money, owning smaller advisory outfit Evercore Partners.

Mr. Peltz, who often advocates change at companies he invests in, has not been agitating publicly for Lazard’s chief executive, Ken Jacobs, to improve his firm’s performance. Instead, he endorsed the stringent targets Mr. Jacobs set out 18 months ago, describing the firm as one of the best brands in the business. What’s more, Mr. Peltz made clear in a regulatory filing earlier this year that he’s a passive shareholder.

His faith in Mr. Jacobs has been rewarded. Lazard’s operating margin breached 20 percent in the three months to September, well on the way to the chief executive’s target of 25 percent by the end of 2014.

The firm’s merger bankers have done well in a sluggish market, restricting the decline in their top line since the 2007 peak to around 15 percent while rivals have lost as much as half their revenue. On top of that, Lazard’s asset management unit accounted for just over half sales in both the last quarter and the previous 12 months.

That’s desirable diversification, but it may also partly explain why Lazard’s stock rise has not been as stellar as Evercore’s. Investors tend to award higher valuation multiples to boutique advisory firms than to asset managers. In Evercore’s case, pure investment banking revenue alone would warrant a premium - it rose 27 percent in the first nine months of this year compared with a 10 percent drop at Lazard. It’s perhaps no surprise the stock has surged 100 percent since April last year.

Lazard’s operating margin is bigger than Evercore’s. Yet both firms trade at a discount to the 23 times expected 2014 earnings enjoyed by Greenhill, whose third-quarter operating margin was a dismal 6 percent - though for the year so far, it’s still a strong 23 percent. That underlines how hard it is to link performance directly with valuations. Mr. Peltz has no reason to regret his bet on Lazard, but the investor might wish he’d also looked elsewhere.

Antony Currie is an associate editor at Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.

Twitter Said to Be Close to Unveiling Price Range for I.P.O.

Twitter is preparing to announce a price range for its eagerly awaited initial public offering within the next two days, a person briefed on the matter said on Thursday, as it readies a road show for investors.

Company executives and their advisers will crisscross the country presenting their case in a series of meetings as soon as Monday. A video presentation that will be available online will also go up shortly.

Twitter has also moved up the pricing of its offering by more than a week, to Nov. 6, this person said. That means that the social network would then begin trading on the New York Stock Exchange, under the ticker symbol “TWTR,” the next day.

The I.P.O. is currently expected to raise between $1 billion and $1.5 billion. Though it will not be the biggest in terms of size â€" Plains GP Holdings, an energy company, raised $2.8 billion last week â€" the Twitter deal is one of the most hotly anticipated offerings since Facebook‘s market debut last year.

Though the social network valued itself at more than $12 billion in August, the company is expected to seek an even higher valuation in its offering.

News of the pricing’s timeline was reported earlier by The Wall Street Journal.

K.K.R. Profit Jumps 23% on Improved Markets

Rising markets have proved good for Kohlberg Kravis Roberts and its holdings.

The private equity firm disclosed on Thursday that its third-quarter profit rose 23 percent from the same time last year, to $601.8 million, as it collected bigger fees from its investments.

The profit, reported as economic net income after taxes, amounted to 84 cents per unit. That far outstripped the average analyst estimate of 55 cents a unit, as compiled by Standard & Poor’s Capital IQ.

K.K.R.’s profit for the quarter using generally accepted accounting principles was $204.7 million, up nearly 61 percent from the year-ago period.

Private equity firms have benefited as improving markets have helped push up the value of their investments. Several of K.K.R.’s holdings, including the hospital operator HCA and the pharmacy operator Alliance Boots, rose well above their cost of investment in the quarter. Over all, the value of the firm’s portfolio rose nearly 6 percent for the quarter.

That helped bolster the firm’s fee-related earnings, which rose 17 percent to $106 million.

Unlike other buyout firms that have focused largely on selling off portfolio companies, K.K.R. also kept busy buying new companies. It completed the acquisitions of the industrial parts maker Gardner Denver and the clinical researcher PRA International, among other transactions.

The relative slowdown in sales helped contribute to lower distributable earnings, which track payouts to investors. The firm reported a 25 percent drop, to $251.1 million, though it will pay unitholders a dividend of 23 cents.

But while it is best known for leveraged buyouts, K.K.R. has steadily expanded into new businesses in part to help bolster assets under management, which now stands at $90.2 billion. During the quarter, the firm announced that it planned to buy Avoca Capital, an investor in European debt.

‘The Daily Show’ on Wall Street

“It’s a shake-down, witch-hunt, scalping jihad,” said Jon Stewart of ‘The Daily Show,’ mocking financial television’s coverage of the $13 billion JPMorgan Chase settlement.

Wednesday’s night’s episode featured a clip of Salon reporter Alex Pareene questioning whether Jamie Dimon should lose his job as the chief executive of the bank.

“I think a lot of their earnings and revenue we’ve seen have come from really shady dealings,” said Mr. Pareene appearing on CNBC. “I think then.”

“Oh, come on,” Maria Bartiromo said.

“It’s a fact. It’s in the news. Everyone knows about it,” Mr. Pareene replied.

“What’s a fact? What’s a fact?” the CNBC anchor asked.

“The fact that they hired the children of prominent party officials,” Mr. Pareene said. “And there’s this spreadsheet on which it’s connected to deals they were trying to do in China.”

“I don’t like spewing things that are not actual fact on this program,” Ms. Bartiromo said.

“Anyone can just Google China and JPMorgan,” the Salon reporter said. “It was in The New York Times.”

“Oh, The New York Times,” said Ms. Bartiromo, waving her hands in the air. “Oh, okay.”

“Oh, The New York Times,” responded Mr. Stewart in mock exaggeration. “The paper of record for crackheads and liars. Just out of curiosity, financial journalist seem to feel that The New York Times reporting is beneath their veracity standards. Is there a news source that you feel is fact-filled and trustworthy enough to quote on your hallowed CNBC air?”

News clips aired of Ms. Bartiromo and other colleagues praising a Wall Street Journal editorial that compared the settlement to medieval justice. “You’ve got to work for the editorial board to get this,” Joe Kernan told Becky Quick. “You might as well work at The New York Times.”

“See,” Mr. Stewart said. “Basically the only place that these financial guys consider factual enough for rebroadcast is the one part of the Rupert Murdoch bias machine explicitly labeled opinion.”

‘The Daily Show’ on Wall Street

“It’s a shake-down, witch-hunt, scalping jihad,” said Jon Stewart of ‘The Daily Show,’ mocking financial television’s coverage of the $13 billion JPMorgan Chase settlement.

Wednesday’s night’s episode featured a clip of Salon reporter Alex Pareene questioning whether Jamie Dimon should lose his job as the chief executive of the bank.

“I think a lot of their earnings and revenue we’ve seen have come from really shady dealings,” said Mr. Pareene appearing on CNBC. “I think then.”

“Oh, come on,” Maria Bartiromo said.

“It’s a fact. It’s in the news. Everyone knows about it,” Mr. Pareene replied.

“What’s a fact? What’s a fact?” the CNBC anchor asked.

“The fact that they hired the children of prominent party officials,” Mr. Pareene said. “And there’s this spreadsheet on which it’s connected to deals they were trying to do in China.”

“I don’t like spewing things that are not actual fact on this program,” Ms. Bartiromo said.

“Anyone can just Google China and JPMorgan,” the Salon reporter said. “It was in The New York Times.”

“Oh, The New York Times,” said Ms. Bartiromo, waving her hands in the air. “Oh, okay.”

“Oh, The New York Times,” responded Mr. Stewart in mock exaggeration. “The paper of record for crackheads and liars. Just out of curiosity, financial journalist seem to feel that The New York Times reporting is beneath their veracity standards. Is there a news source that you feel is fact-filled and trustworthy enough to quote on your hallowed CNBC air?”

News clips aired of Ms. Bartiromo and other colleagues praising a Wall Street Journal editorial that compared the settlement to medieval justice. “You’ve got to work for the editorial board to get this,” Joe Kernan told Becky Quick. “You might as well work at The New York Times.”

“See,” Mr. Stewart said. “Basically the only place that these financial guys consider factual enough for rebroadcast is the one part of the Rupert Murdoch bias machine explicitly labeled opinion.”

Icahn Tries New Tack to Stir Things Up at Apple: His Own Web Site

Did Carl C. Icahn just change the rules of the activist game?

On Thursday, the septuagenarian activist investor who has been stirring things up at Apple, ratcheted up the pressure by posting a letter to Timothy D. Cook, Apple’s chief executive, on his new Web site. The letter, which Mr. Cook received on Wednesday, urged Apple to immediately begin an offer to buy back $150 billion in Apple shares at the current share price of $525 a share, “financed with debt or a mix of debt and cash on the balance sheet.”

His letter goes on: “While this would certainly be unprecedented because of its size, it is actually appropriate and manageable relative to the size and financial strength of your company. Apple generates more than enough cash flow to service this amount of debt and has $147 billion of cash in the bank.”

He ends the letter by saying he does not plan to personally benefit from such a stock buyback. “To invalidate any possible criticism that I would not stand by this thesis in terms of its long term benefit to shareholders,” he writes, “I hereby agree to withhold my shares from the proposed $150 billion tender offer. There is nothing short term about my intentions here.”

Apple shares slipped 0.1 percent to $523.64 in morning trading.

The move to the Web is unusual, even for the outspoken Mr. Icahn who is known for taking a caustic approach with corporate executives. Activist investors like Mr. Icahn air their views through print and television media, but the letters they send to corporate executives typically find their way to the media through back channels.

But Mr. Icahn seems set to shake things up. He timed his letter to Mr. Cook to the introduction of his new Web site, the Shareholders’ Square Table. It’s an idea Mr. Icahn has had for some time. In an interview in 2005, he said that he was thinking of setting up a forum that would be “the shareholders’ answer to the business roundtable.”

A cartoon on the Web site’s main page depicts shareholders trying to scale the walls of a castle. Corporate executives are perched on top of the castle, throwing down poison pills, while slipping stock options and a new jet to a chief executive on the side. One executive is holding a bag of gold that says, “Cheap stock.”

Mr. Icahn has been publicly agitating since August for Apple to do something with its large cash reserves, using his personal account on Twitter as his platform to apply pressure. (He has 103,335 followers.)

The campaign began with a short tweet on Aug. 13, when Mr. Icahn announced that his firm Icahn Enterprises had a “large” position in Apple and said he thought the company was “extremely undervalued,” later adding that he had spoken with Mr. Cook.

A week later, Mr. Icahn tweeted that Mr. Cook “believes in a buyback” and that the size would be discussed over dinner. That dinner took place at Mr. Icahn’s apartment on Sept. 30. The following day, Mr. Icahn tweeted an update:

“Had a cordial dinner with Tim last night. We pushed hard for a 150 billion buyback. We decided to continue dialogue in about three weeks.”

But not wanting to limit his update to a 140-character tweet, Mr. Icahn took to CNBC to explain his view that Apple should borrow money through the debt markets to buy back shares and boost the share price.

Now he’s taken to an even more versatile platform to achieve his goals â€" his own Web site. If it this all seems carefully choreographed, that’s because it probably is. But, as Mr. Icahn said in 2005, he’s just fighting for shareholders’ rights.

Speaking about his idea for a new forum, he said, “Just maybe shareholders will get a square deal.”

Football App, a German Start-Up, Gets U.S. Investment

BERLIN - Lucas von Cranach has come a long way since starting his professional career at a German machinery production company in the mid-2000s.

After struggling to keep up with the goings-on at his favorite soccer team, F.C. Cologne, Mr. von Cranach created Football App in 2008 to allow people to use a cellphone to track leading global soccer teams like Real Madrid or Manchester United.

On Thursday, Mr. von Cranach’s fledgling company, and the wider Berlin technology scene, got a boost after Union Square Ventures, a New York firm that has backed companies like Twitter, Zynga and Tumblr, announced that it had invested $7 million in Football App.

The new investment follows a previous $13 million fund-raising round this year from a consortium of local investors, including the venture firm Earlybird Venture Capital of Berlin.

“With Union Square’s investment, we want to build a global network,” Mr. von Cranach said in his Berlin office. The walls are decorated with large posters of soccer stars like Diego Maradona. “They have a reputation for helping to build social networks from scratch.”

Over the last five years, the app, which provides news, team updates and the opportunity to communicate with other fans about games or teams, has been downloaded more than 10 million times.

Mr. von Cranach said the firm was getting up to 50,000 daily downloads and that he hoped to use the World Cup in Brazil next year to branch out into emerging markets. Germany, Italy and Britain remain its largest markets, though Brazil ranks fourth, based on downloads.

The investment by an American venture firm in a company based in Berlin comes as the city is gaining credibility as one of Europe’s largest high-tech hubs.

Companies like the music service SoundCloud, which has also raised money from Union Square, and the online game maker Wooga have become global players in their respective markets, and are increasingly turning to firms in the United States to raise additional capital.

Yet while Berlin is gaining traction, it is still dwarfed by rivals like London in raising money.

Berlin’s tech sector received a combined $87.1 million in venture capital money in the first half of the year, according to the data provider Dow Jones Venture Source. That compares with $351.7 million in the same period for companies based in London.

Lazard Reports Jump in Profit on Deals and Cost Cutting

An improving market for deals and cost cutting helped bolster Lazard’s third-quarter earnings, as the investment bank reported on Thursday a 75 percent jump in profit from the same period a year ago.

The firm said that it earned $62 million in adjusted profit for the quarter, amounting to 46 cents a share. Analysts, on average, had been expecting a profit of 45 cents a share, according to estimates compiled by Standard & Poor’s Capital IQ.

It also reported a 10 percent rise in operating revenue, to $489 million.

“It was a solid quarter on both sides of the business,” Kenneth Jacobs, Lazard’s chief executive, said in a telephone interview.

The improvement in Lazard’s results reflect, in part, a rise in markets, which has helped both the firm’s core financial advisory arm and its asset management business.

Its best-known operation, its mergers arm, reported a 3 percent rise in revenue, to $192 million. Assignments that the firm completed in the quarter included the sale of the Dutch coffee and tea company D.E. Master Blenders 1753 to Joh. A. Benckiser and Ameristar Casinos’ $2.8 billion sale to Pinnacle Entertainment.

Mr. Jacobs said that he expected mergers activity to continue rising, given continued improvements in global economies and, increasingly, more boldness within corporate boardrooms.

“The change in the last six to 12 months has generally been confidence,” he said. “That augurs well for deals.”

And Lazard’s asset management arm reported a 13 percent rise in revenue, to $248 million, as the firm’s assets under management rose to an all-time high of $176 billion thanks to rising values and new client money.

The investment bank also disclosed that it held its adjusted compensation ratio at 60 percent, compared with 62.7 percent in the same time last year. Its ratio of noncompensation expenses to operating revenue fell to 19.7 percent from 21.5 percent.

Private Equity Firm Permira to Buy Maker of Dr. Martens

LONDON â€" Adding to its stable of consumer brands, the private equity firm Permira agreed Thursday to acquire the British firm that owns the Dr. Martens footwear and clothing brand in a deal valued at £300 million, or $485.3 million.

The deal to acquire the R. Griggs Group, the family business that owns Dr. Martens, is expected to be completed in January.

The Griggs family had been making boots in Northampton in the English East Midlands since 1901, but created the Dr. Martens brand in 1960 when the family collaborated with two German inventors of a new type of air-cushioned sole. Their boots quickly became synonymous with British rock ’n’ roll and counterculture.

“The Permira funds respect that heritage, and want to support the management team in nurturing it,” David Suddens, chief executive of Dr. Martens, said in a statement.

The acquisition adds another strong consumer name to Permira’s portfolio. The private equity firm has investments in Hugo Boss, the Spanish clothier Cortefiel and the British apparel retailer New Look. Permira sold the Valentino luxury brand to a Qatar wealth fund last year.

“The Permira funds have extensive expertise in backing global brands, as demonstrated with Hugo Boss and Valentino, and we are looking forward to supporting the management team in this exciting next phase of the company’s development,” said Cheryl Potter, head of the Permira’s consumer team.

Barclays acted as Permira’s adviser, while Rothschild Group advised R. Griggs on the deal.

Madoff Case Looms Over JPMorgan

Federal authorities, suspecting that JPMorgan Chase turned a blind eye to Bernard L. Madoff’s huge Ponzi scheme, are preparing to take action in a criminal investigation of the bank, Ben Protess and Jessica Silver-Greenberg report in DealBook. Coming on the heels of a tentative $13 billion settlement over JPMorgan’s mortgage practices, the case poses another major threat to the bank’s reputation.

“Reflecting the magnitude of the investigation, prosecutors and JPMorgan have held preliminary discussions about a so-called deferred prosecution agreement, people briefed on the inquiry said,” according to the DealBook report. “Such an arrangement would suspend criminal charges against JPMorgan in exchange for a fine, certain other concessions and an acknowledgment that the bank will face charges if it fails to behave. Prosecutors may also require JPMorgan, which has repeatedly said that ‘all personnel acted in good faith’ in the Madoff matter, to hire an independent monitor.”

Deferred-prosecution agreements are the Justice Department’s preferred tool for punishing corporate giants, but they are typically used only when misconduct is severe and are nearly unheard-of for a large American bank. “But the government, the people added, has not ruled out a harsher punishment for JPMorgan Chase’s national banking subsidiary. Prosecutors could demand that the unit plead guilty to a criminal violation of the Bank Secrecy Act, a federal law requiring financial institutions to report suspicious activity to the government.”

BANK OF AMERICA FOUND LIABLE IN MORTGAGE CASE  | A jury found Bank of America liable on Wednesday of having sold defective mortgages, a decision that will be seen as a victory for the government in its effort to hold banks accountable for their role in the housing crisis, Landon Thomas Jr. reports in DealBook. The jury also found a top manager at the bank’s Countrywide Financial unit liable, pinning some, if not all, of the responsibility for the bad acts on an individual. Prosecutors had accused Rebecca Mairone, the former Countrywide manager, of having opted for quantity over quality in its mortgage-writing program.

“Federal lawyers claimed that Ms. Mairone, who now works at JPMorgan Chase, led a program nicknamed the ‘hustle,’ derived from the initialism HSSL, or the ‘high-speed swim lane.’ The program linked bonuses to how fast bankers could originate loans, and as a result, the credit quality of the borrower was given short shrift, the government contended. When the loans were sold to mortgage giants like Fannie Mae and Freddie Mac, they failed, generating more than $1 billion in losses,” Mr. Thomas writes. “Prosecutors have asked that Bank of America pay a fine of $848 million, although the judge presiding over the case, Jed S. Rakoff, will determine the penalty.”

MCKESSON IN $8.3 BILLION DEAL WITH GERMAN FIRM  |  The health care services firm McKesson Corporation, based in San Francisco, has agreed to acquire a controlling stake in Celesio of Germany, and it will initiate a tender offer for the remaining shares in a deal valued at $8.3 billion, Chad Bray reports in DealBook. The deal would create one of the world’s biggest pharmaceutical wholesalers and providers of logistics and services in the health care sector, with more than $150 billion in annual revenue.

ON THE AGENDA  | Kohlberg Kravis Roberts, Lazard, Dunkin’ Brands and Ford Motor report earnings before the market opens, while Amazon.com, Microsoft and Freescale Semiconductor report earnings this evening. Data on the international trade gap for August is released at 8:30 a.m. T. Boone Pickens is on CNBC at 2 p.m. and on Bloomberg TV at 4 p.m.

PINTEREST VALUATION JUMPS TO $3.8 BILLION  |  The buzzed about social network Pinterest confirmed on Wednesday that it had raised $225 million in a new round of financing that values the company at $3.8 billion, DealBook’s Michael J. de la Merced reports. The financing round was led by Fidelity, a new investor, and included existing backers Andreessen Horowitz, Bessemer Venture Partners, FirstMark Capital and Valiant Capital Partners.

The deal reflects how quickly the three-year-old social network is growing, at least in terms of its estimated worth. In its previous financing round, in February, Pinterest raised $200 million at a $2.5 billion valuation, according to AllThingsD, which first reported the latest round on Wednesday. Two years ago, the company raised $27 million at a $200 million valuation, according to AllThingsD.

ICAHN’S NEW WEB SITE  |  Carl C. Icahn, already versed in Twitter, is adding a new Web site to his online presence. On Wednesday, he announced the creation of Shareholders’ Square Table, as the site will be known. As some noted on Twitter, Mr. Icahn explained the meaning behind that name in a 2005 interview with The New York Times: “Just maybe shareholders will get a square deal.”

Mergers & Acquisitions »

Former Apple Chief Said to Consider Bid for BlackBerry  |  “John Sculley, the former Apple Inc. C.E.O. who famously clashed with Steve Jobs, is exploring a bid for beleaguered BlackBerry Ltd. with Canadian partners,” The Globe and Mail reports, citing unidentified people. GLOBE AND MAIL

Caterpillar’s Stock Drops, and 2 Big Deals May Be to Blame  |  Caterpillar’s woes in part are related to its bet on the mining sector, a bet that it bolstered in a big way through deal-making. Its third-quarter results reflected continued weakness in mining. DealBook »

As Competition Rises for AT&T, So Does Profit  |  AT&T, facing aggressive moves from T-Mobile US, reported profit of $3.8 billion in the third quarter, up from $3.6 billion in the period a year earlier, The New York Times reports. NEW YORK TIMES

2 Commercial Property Giants to Combine in $7.2 Billion Deal  |  The combination of American Realty Capital Properties and Cole Real Estate Investments would form one of the largest commercial landlords in the country. DealBook »

Branson Recalls an Emotional Deal  |  Richard Branson, the founder of the Virgin Group, said that selling Virgin Records for $1 billion in 1992 was “like selling your children,” Reuters reports. REUTERS

INVESTMENT BANKING »

Credit Suisse Profit Rises but Falls Short of Expectations  |  Credit Suisse posted net income of about $510 million for the three months ended Sept. 30, well short of the expectations of analysts surveyed by Reuters, as revenue in its investment banking division slid 20 percent from the period a year earlier. DealBook »

Santander Profit Rises as It Sets Aside Less to Cover Bad Loans  |  The Spanish lender Santander said profit rose to about $1.5 billion in the third quarter, as the bank continued to benefit from declines in charges for bad loans. DealBook »

A Moot Effort to Burnish the Reputation of Goldman Sachs  |  Since the financial crisis, Lloyd C. Blankfein, the chief executive of Goldman Sachs, has striven to build his name back up, but Goldman’s good name has collapsed, Jesse Eisinger writes in his column, The Trade. The Trade »

Goldman’s Cohn Says Firm Is Committed to Fixed Income  |  Gary D. Cohn, the president and chief operating officer of Goldman Sachs, addressed the firm’s disappointing results in its fixed-income trading department. “We’re very committed, we’re going to redouble or triple our efforts in fixed income. We believe ourselves to be a very powerful, very dominant, top-tier fixed-income shop,” he said on Bloomberg TV. BLOOMBERG NEWS

Cruz’s Wife Is a Study in Contrasts to Him  |  Senator Ted Cruz’s wife, Heidi Nelson Cruz, a managing director at Goldman Sachs, has maintained a low profile, Ashley Parker reports in The New York Times. And yet the fallout from her husband’s role in the Congressional fiscal showdown this month did not spare her. NEW YORK TIMES

Blankfein Offers Advice to N.B.A. Owners  |  Lloyd C. Blankfein, the chairman and chief executive of Goldman Sachs, spoke to National Basketball Association owners on domestic and international issues and how to run a business, Bloomberg News reports. BLOOMBERG NEWS

8 Questions for 3 Buffetts  |  In an interview with Jeffrey Goldfarb of Reuters Breakingviews, Warren E. Buffett, his son Howard Graham Buffett and grandson Howard Warren Buffett discuss the effects of inefficient markets, technology, tax policy and Berkshire Hathaway. REUTERS BREAKINGVIEWS

PRIVATE EQUITY »

Blackstone Emerges as a Giant Landlord  |  The Blackstone Group “has spent $7.5 billion acquiring 40,000 houses in the past two years to create the largest single-family rental business in the U.S.,” Bloomberg News reports. “The private equity firm is now planning to sell bonds backed by lease payments, the latest step in turning a small business into a mature industry.” BLOOMBERG NEWS

HEDGE FUNDS »

Hedge Funds Propose Deal to End Argentina Debt Stalemate  |  “Under the scheme, which illuminates the dog-eat-dog style of the hedge fund world, Argentine exchange bondholders, who hold $28 billion of restructured Argentine debt, would agree to pay so-called holdout creditors, who hold up to $8 billion of defaulted debt, to stop their legal attempts to get Argentina to pay them in full,” The Financial Times reports. FINANCIAL TIMES

Hedge Fund Executive Predicts Doom for Stocks  |  Mark Spitznagel, the founder of Universa Investments, said on CNBC on Wednesday that he thought the stock market was poised for a major sell-off. CNBC

I.P.O./OFFERINGS »

Twitter Discloses Compensation for Board Members  |  In a regulatory filing this week, Twitter set the value of initial stock grants for its five outside board members at up to $16 million each, Footnoted reports. FOOTNOTED

VENTURE CAPITAL »

Funding Circle, British Peer-to-Peer Lender, Expands to U.S.  |  The company has raised $37 million from investors led by Accel Partners and other prominent venture capital firms. Proponents of peer-to-peer lending believe it can distribute credit more efficiently than banks. DealBook »

London’s Tech Industry Looks for a Hit  |  If King.com, the maker of the popular Candy Crush game franchise, has a successful initial public offering, it could help cement London’s reputation as a top start-up community in Europe, Mark Scott writes in The New York Times. NEW YORK TIMES

LEGAL/REGULATORY »

Appeals Court Throws Out Confidential Arbitration in Delaware  |  The Delaware Chancery Court had tried to offer cost-effective options for resolving business disputes, Steven M. Davidoff writes in the Deal Professor column.
DealBook »

Merkel Called Obama Over Suspicions of Cellphone Tap  |  “Washington hastily pledged that the German chancellor, Angela Merkel, leader of Europe’s most powerful economy, was not the target of current surveillance and would not be in the future, while conspicuously saying nothing about the past,” The New York Times reports. NEW YORK TIMES

Glaxo Sales Fall in China Amid Bribery Inquiry  |  The drug maker GlaxoSmithKline reported on Wednesday that sales of its drugs and vaccines in China fell 61 percent in the third quarter, as it faced a continuing bribery investigation in the country. NEW YORK TIMES

Rabobank Nears Settlement on Interest Rate Inquiry  |  The Dutch lender Rabobank said various authorities had almost completed investigations of its role in setting two benchmark interbank rates, Libor and Euribor. DealBook »

Santander Profits Jump as Bank Set Aside Less to Cover Bad Debts

LONDONâ€"The Spanish lender Banco Santander reported on Thursday a surge in profits to 1.1 billion euros in the third quarter as it continued to benefit from declines in charges for bad loans.

Santandar, one of Europe’s largest banks, wrote down billions of dollars of mortgages last year amid a weak economy in Spain, its home market. Provisions for delinquent and defaulted loans fell 13 percent to 2.6 billion euros, or $3.6 billion, in the third quarter, down from 2.9 billion euros in the previous year.

The bank also was boosted by higher profits in Europe and in Britain amid an improving economic outlook. Spain exited a two-year recession in the third quarter, according to data released Wednesday by the Spanish central bank.

“After several years of high levels of write-offs and reinforcement of capital, Banco Santander is preparing for a new period of increased profitability,” said Emilio Botin, Santander’s chairman.

The bank’s net income of 1.1 billion euros far exceeded the 122 million euros earned in the same quarter a year ago.

For the first nine months of 2013, profits rose 76 percent to 3.3 billion euros, up from 1.9 billion euros in the prior-year period. That was in line with analyst estimates.

However, the lender’s Latin American operations continued to weigh on the bank, posting a 31-percent decline in profits to 733 million euros in the third quarter from the previous year.

Santander said the Spanish economy, while improving, remains weak and has been driven primarily by exports.

The bank’s profits in Spain declined 79 percent to 73 million euros down from 342 million euros in the prior year. Profits were down 15 percent from the second quarter, driven by a drop in lending volumes and the repricing of some mortgages.

Provisions for bad loans in Spain fell 11 percent to 56 million euros quarter-over-quarter.

The bank said its core Tier 1 capital ratio, a measure of a bank’s ability to weather financial disturbances, rose to 11.6 percent by the end of the third quarter under the industry regulations known as Basel II.

McKesson in $8.3 Billion Deal with German Firm to Create Global Leader in Drug Wholesaling

LONDONâ€"The San Francisco health care services firm McKesson Corporation said Thursday that it had agreed to acquire a controlling stake in Germany’s Celesio and will launch a tender offer for its remaining shares in a deal valued at $8.3 billion.

The deal would create one of the world’s largest pharmaceutical wholesalers and providers of logistics and services in the health care sector, with annual revenues of more than $150 billion and about 81,500 employees worldwide. The combined company would operate in 20 countries.

“The health care industry is evolving rapidly, marked by convergence between segments and increased globalization,” said John H. Hammergren, McKesson’s chairman and chief executive officer. “With today’s announcement, we will bring together the strengths and expertise of each company to address global health care challenges.”

After completing the transaction, McKesson and Celesio will maintain their own brands and continue to support customers through existing channels. Celesio’s operations will be incorporated into McKesson’s Distribution Solutions segment.

As part of the deal, McKesson will acquire a 50.01 percent stake in Celesio from Franz Haniel & Cie, the firm’s majority shareholder. The share purchase has been approved by McKesson’s board and Franz Haniel & Cie’s supervisory board.

It then intends to launch a tender offer to acquire Celesio’s remaining outstanding shares for 23 euros, or $31.76, a share, representing a 39 premium over the three-month average weighted price prior to Oct. 8, when market speculation began that Celesio might be acquired.

The company also will launch a simultaneous tender offer for Celesio’s outstanding convertible bonds. The offers are expected during McKesson’s fiscal third quarter, which ends Dec. 31.

“This transaction is about growth, it positions our operations for success and brings benefits for all Celesio stakeholders,” said Marion Helmes, speaker of Celesio’s management board and its chief financial officer.
“This combination allows two market leaders with complementary geographic footprints to work together in an increasingly global market segment.”

The deal is subject to regulatory approval and McKesson acquiring at least 75 percent of Celesio’s shares. McKesson expects to assume operational control of Celesio during its fiscal year 2015, which begins in April.

The transaction will be funded by cash and a bridge financing facility, McKesson said.

McKesson in $8.3 Billion Deal with German Firm to Create Global Leader in Drug Wholesaling

LONDONâ€"The San Francisco health care services firm McKesson Corporation said Thursday that it had agreed to acquire a controlling stake in Germany’s Celesio and will launch a tender offer for its remaining shares in a deal valued at $8.3 billion.

The deal would create one of the world’s largest pharmaceutical wholesalers and providers of logistics and services in the health care sector, with annual revenues of more than $150 billion and about 81,500 employees worldwide. The combined company would operate in 20 countries.

“The health care industry is evolving rapidly, marked by convergence between segments and increased globalization,” said John H. Hammergren, McKesson’s chairman and chief executive officer. “With today’s announcement, we will bring together the strengths and expertise of each company to address global health care challenges.”

After completing the transaction, McKesson and Celesio will maintain their own brands and continue to support customers through existing channels. Celesio’s operations will be incorporated into McKesson’s Distribution Solutions segment.

As part of the deal, McKesson will acquire a 50.01 percent stake in Celesio from Franz Haniel & Cie, the firm’s majority shareholder. The share purchase has been approved by McKesson’s board and Franz Haniel & Cie’s supervisory board.

It then intends to launch a tender offer to acquire Celesio’s remaining outstanding shares for 23 euros, or $31.76, a share, representing a 39 premium over the three-month average weighted price prior to Oct. 8, when market speculation began that Celesio might be acquired.

The company also will launch a simultaneous tender offer for Celesio’s outstanding convertible bonds. The offers are expected during McKesson’s fiscal third quarter, which ends Dec. 31.

“This transaction is about growth, it positions our operations for success and brings benefits for all Celesio stakeholders,” said Marion Helmes, speaker of Celesio’s management board and its chief financial officer.
“This combination allows two market leaders with complementary geographic footprints to work together in an increasingly global market segment.”

The deal is subject to regulatory approval and McKesson acquiring at least 75 percent of Celesio’s shares. McKesson expects to assume operational control of Celesio during its fiscal year 2015, which begins in April.

The transaction will be funded by cash and a bridge financing facility, McKesson said.

Credit Suisse Profits Rise, But Results Fall Short of Expectations

PARIS - Credit Suisse, the large Swiss bank, said its third-quarter profit jumped by nearly 79 percent from a year earlier, but the results still fell short of market expectations.

The bank reported net income of 454 million Swiss francs, or $509 million, for the July-September period, up from 254 million francs in the same three months of 2012.

Net income for the latest quarter was far short of the 705 million francs analysts surveyed by Reuters had been expecting, as revenue in the bank’s investment banking division slid 20 percent from a year earlier, weighed down by lower volume in its fixed-income business. Credit Suisse said it was “restructuring and simplifying our rates business in order to increase returns.”

The latest figures look even less impressive when considering that the results from the same period a year ago had been held back by a pretax charge of nearly 1.1 billion francs. The bank booked that charge because accounting rules required it to consider the cost of repurchasing its own debt as the value of that debt improved.

Credit Suisse nonetheless said the results reflected “resilient” profitability in its private banking and wealth management business, as well as “strong” revenue on equity trading and “continued progress on cost and capital.”

Based in Zurich like its larger rival UBS, Credit Suisse operates in more than 50 countries with 46,000 employees. The bank also reported in the latest quarter “core pretax income” of 685 million francs, up 97 percent, and said its return on equity rose to 4 percent, from 2.9 percent a year earlier.

It said the cost of compensation and benefits for its employees fell 24 percent from a year earlier, to 348 million francs, as it paid out less in bonuses.

Brady W. Dougan, the Credit Suisse chief executive, said in a statement that the latest results showed that the bank’s “continued expense discipline and effective capital management mitigated the impact of challenging market conditions, characterized by low levels of client activity across many of our businesses.”

Credit Suisse said it had reduced risk-weighted assets by $31 billion over the last year, bringing the total down to $169 billion, “thereby exceeding our 2013 year-end target ahead of schedule.”
The bank also said it had raised its Basel III core equity tier-1 ratio, a measure of its ability to weather financial shocks, to 10.2 percent, from 9.3 percent at the end of June.