AMC Prices Its I.P.O. at $18 a Share

AMC Entertainment Holdings priced its initial public offering at $18 a share on Tuesday as the movie theater chain prepares for its premiere on the stock market.

That price was at the low end of the company’s estimated price range and values AMC at roughly $1.7 billion. By contrast, its bigger rival, Regal Entertainment Group, is valued at $3 billion.

With its public offering, AMC â€" whose enormous theaters have long been familiar to the moviegoing public â€" will finally join the stock markets for the first time in nine years after a number of aborted attempts.

Tracing its history back to 1920, AMC helped pioneer the modern multiplex, opening a multiscreen theater in Kansas City, Mo., in 1963. It has since grown into one of the giants of the industry, owning or operating 343 theaters as of Sept. 30.

Like other theater operators, the company has sought ways to bolster revenue as more customers choose to watch movies at home. AMC has focused on improving the quality of its cinemas, like bolstering the quality of food and offering dine-in services at some of its theaters.

It is also adding more screens capable of showing giant-screen formats like IMAX, which can command higher ticket prices.

Last year, the company â€" then owned by a consortium of private investors â€" was sold to the Dalian Wanda Group, a Chinese conglomerate that is the biggest theater owner in that country, for $2.6 billion.

Even after the I.P.O., Wanda will keep an 80 percent stake in AMC.

Unusually, AMC reserved a small number of its shares to participants in its Stubs loyalty program. Members were able to buy $100 to $2,500 worth of stock through Loyal3 Holdings, a start-up brokerage firm focused on small investors. Another group of shares was reserved for company employees.

AMC will begin trading on the New York Stock Exchange on Wednesday under the ticker symbol AMC.

The offering was led by Citigroup, Bank of America Merrill Lynch, Barclays and Credit Suisse.

IQor to Buy Jabil’s Aftermarket Services Unit for $725 Million

IQor, a customer service outsourcing provider, agreed on Tuesday to buy Jabil Circuit’s aftermarket services business for $725 million to help round out its offerings.

Under the terms of the deal, iQor will pay $675 million in cash and $50 million in preferred shares that pay an 8 percent annual dividend. After the deal closes, the business will continue to provide support for its former parent.

The transaction â€" the biggest ever by iQor â€" is meant to combine the company’s own customer-support capabilities and the Jabil business’s services for electronics makers, retailers and services.

Behind the deal is the idea that clients can use the company to fill all their customer service needs, like help calls and aftermarket repairs.

“We have many of the pieces on the board now that we need to have,” Gary Crittenden, the chairman of both iQor and the company’s lead investor, the private equity firm HGGC, said in a statement. “We’ve added a full end-to-end solution in customer care.”

Mr. Crittenden added that his firm, which bought a majority stake in iQor three years ago, would most likely hang on to the company for several more years while it continues to grow.

The Jabil business is extremely familiar for its soon-to-be owner, whose chief executive, Hartmut Liebel, led the aftermarket unit for more than 10 years.

IQor was advised by Morgan Stanley, Credit Suisse and General Electric‘s GE Capital Markets. Jabil was advised by JPMorgan Chase and the law firm Holland & Knight.

This post has been revised to reflect the following correction:

Correction: December 17, 2013

A previous version of this post misspelled the surname of the chief executive of iQor, a customer service outsourcing provider. It is Hartmut Liebel, not Hartmut Liebl.

Sysco Deal Leaves Money on the Food Table

The Sysco Corporation’s deal to acquire its chief rival, US Foods, would put food on the table at a wide swath of restaurants, schools and hospitals. But it may have left money on the table as well.

The concern is the less-than-creative tax structure of the $3.5 billion deal, which would create the largest food distributor in North America with clients, including the celebrity chef Daniel Boulud and public schools.

Under the merger, Sysco would use $3 billion of its stock to acquire the bulk of US Foods’ shares and would pay $500 million in cash for the rest. Some tax experts say that the cash part of the deal is the Wall Street equivalent of throwing away perfectly good food â€" in this case, perhaps $200 million. That is because the steps that Sysco is taking in the merger do not allow it to use a lucrative tax benefit involving extra value, in the form of lower future tax bills, embedded in that cash.

The upshot of the steps, known in the tax world as a reverse triangular merger followed by a forward merger, is that for the cash portion of the deal, Sysco inherits the relatively low value, for tax purposes, of the assets of US Foods, which include machinery, equipment, vehicles and the like. That value, known as cost basis, reflects the fact that US Foods had to depreciate and amortize those assets over time. A lower cost basis typically translates into higher tax bills.

Had Sysco structured its deal differently, it could have increased its cost basis and created perhaps $200 million in future tax savings, said Robert Willens, a tax and accounting expert in New York. If Sysco had instead set up a structure known as a horizontal double dummy, it would have been able to include that $500 million in cash in its cost-basis calculations, in turn lowering the combined company’s tax bills.

Mr. Willens said that “$500 million in basis is worth 35 percent in tax savings somewhere along the line, so that’s nearly $200 million in value that’s being forfeited by the combined new company.”

That value is forfeited in part by the two private equity firms, Clayton, Dubilier & Rice and Kohlberg Kravis Roberts, that own US Foods. The firms will end up with about 13 percent in the combined company.

Charley Wilson, a spokesman for Sysco, did not respond to requests for comment. Lisa Lecas, a spokeswoman for US Foods, was not available for comment.

Horizontal double dummies may sound like two guys stretched out on sofas watching Sunday football, but they have played a starring role in some significant deals, including Kmart’s $11 billion purchase of Sears, Roebuck in 2004 and Oracle’s $5.8 billion acquisition of Siebel in 2005. The structure is legal under the tax code.

The tax structure involves two companies, an acquiring firm and a target firm, setting up a permanent holding company and below it two temporary subsidiaries â€" the “dummies.” The acquiring firm and the target firm merge separately into the subsidiaries. Stock in both subsidiaries is transferred to the holding company, and the dummies are dissolved. The holding company pays shareholders of the target firm for their equity, leaving the acquiring firm, through the holding company, in control.

Michael L. Schler, a tax lawyer at Cravath, Swaine & Moore in New York, said that one deterrent to using double dummies was the complexity of the structure and the need to reregister and list the merged entity as a public company. But “if it is done correctly, the tax rules are clear cut and there is no reason for the Internal Revenue Service to challenge it,” he said.

US Foods’ shareholders have to pay capital gains taxes on any cash they receive for their shares, regardless of the tax structure used in the merger. So there is no compelling reason to use any structure other than a horizontal double dummy, said Crawford Moorefield, an energy, oil and gas and corporate tax lawyer at Strasburger & Price in Houston who has done such deals.

Mr. Willens added that in any acquisition involving stock and cash, the horizontal double dummy structure “should be standard operating procedure.”

“It’s a mystery to me why they don’t get done more often,” he added.

Despite Doldrums in Deal Activity, a Few Highlights This Year

The deal world remained muted this year in terms of big transactions and activity. According to Dealogic, the number of announced takeovers in the United States so far this year was down about 22 percent, while volume was $1.1 trillion, up about 15 percent from last year but still below the level in the years before the financial crisis. . Despite the relative doldrums, there were still some highlights and lowlights. Here are some of them:

THOMA BRAVO FLIPS DIGITAL INSIGHT TO NCR The private equity firm Thoma Bravo receives an A for buying Digital Insight for $1.025 billion then selling it 124 days later to NCR for $1.65 billion. The real loser was the initial seller, Intuit, which lost out on $600 million in profit because it reportedly insisted on a quick sale timetable, which strategic buyers like NCR couldn’t meet. Sometimes it pays to take it slow. Intuit receives an F.

US AIRWAYS AND AMERICAN AIRLINES The merger of the two airlines left US Airways’ management in charge even though American was the larger airline. American’s creditors and shareholders still cheered as they received something almost as rare as a unicorn: a full recovery in bankruptcy. The two airlines’ biggest feat, though, and what warrants an A, was extracting a favorable settlement from the Justice Department, which clearly overreached in a lawsuit brought to halt the combination.

COMMONWEALTH REIT/CORVEX The father and son duo who head CommonWealth â€" Barry and Adam Portnoy â€" and CommonWealth’s counsel at Skadden Arps showed little regard for shareholder rights, doing everything in their power to prevent Corvex Management and the Related Companies from removing the Portnoys. The Portnoys banked on CommonWealth’s unique requirement that shareholders arbitrate all disputes with the company to stymie the two hedge funds. It didn’t work, and the arbitration panel ruled against CommonWealth, clearing the way for the funds to begin a campaign to unseat them. The Portnoys receive an F.

JOS. A. BANK’S BID FOR MEN’S WEARHOUSE Jos. A. Bank made a daring $2.3 billion bid for its bigger men’s clothing rival, teaming up with Golden Gate Capital for a significant equity infusion to make the bid credible. Jos. A. Bank’s management, including its chairman, Robert Wildrick, receive an A for cleverly inviting a counterbid from Men’s Wearhouse by saying a combination of the two made sense no matter the form. Men’s Wearhouse took the bait, dusting off the beloved but seldom-used Pac-Man defense. The only thing to sort out now is which set of shareholders receive a premium and who runs the combined company.

ELAN/ROYALTY/PERRIGO Irish takeover laws limited its defenses, but the Irish pharmaceutical company Elan still earned an A by fending off a $6.7 billion hostile bid from Royalty Pharma in time to put itself up for sale, ending with a much higher $8.6 billion bid from Perrigo. Elan showed that a good defense could be played off fundamentals and not simply a poison pill or other defenses that it could have used in the United States.

ADVANTAGE RENT A CAR/HERTZ GLOBAL HOLDINGS/FRANCHISE SERVICES OF NORTH AMERICA Less than a year after Hertz was forced by the Justice Department to sell Advantage to satisfy antitrust concerns stemming from its acquisition of Dollar Thrifty, Advantage filed for bankruptcy. So much for that remedy, which receives a big fat F.

HEDGE FUND ACTIVISM The hostile raiders of the 1980s have been reborn as hedge fund activists, with all the ego to boot. The successes are stunning and deserve A’s, including Third Point’s involvement with Yahoo and Pershing Square’s dealings with Canadian Pacific; the failures are real and clearly F’s, like Pershing Square and its involvement with J.C. Penney and Edward Lampert’s running of Sears. Still, there is no doubt that this is the biggest trend of the decade, one that is here to stay. It will continue to inspire even as it borders on the absurd, as Third Point and Carl C. Icahn’s machinations with Apple showed. TWITTER I.P.O. Call it the anti-Facebook. Twitter earned an A by simply doing what a company should do in an initial public offering. Don’t get tricky with pricing or numbers or try to push boundaries. Twitter simply sold shares to the public with great success.

RUE21/APAX Apax agreed to buy Rue21, the fashion retailer, including shares held by an older Apax fund. When Rue21 announced a sharp downturn in sales, the markets began to wonder whether the deal made sense and whether Apax would try to walk away. Faced with a tough contract and perhaps a different view of Rue21’s prospects, Apax completed the deal at the initial price. The lenders lost hundreds of millions of dollars while Apax’s old fund cashed out. It remains to be seen how Apax’s new investors will do. The deal highlighted the conflicts when a private equity firm buys a company that it already holds shares in. It’s not an F, but a warning for future private equity deals.

SOFTBANK/SPRINT/CLEARWIRE The boards of Clearwire and SoftBank did good jobs as after some initial hesitancy. Clearwire succeeded in pushing Sprint, a controlling shareholder, to raise its final bid while SoftBank was able to hold together its acquisition of Sprint itself. A’s to both companies.

HONG KONG STOCK EXCHANGE/ALIBABA The Chinese Internet giant Alibaba wants to be just like the technology giants in the United States, including having a share structure that preserves control with management after it completes its heavily anticipated I.P.O. Kudos and an A to the Hong Kong Stock Exchange for standing up to Alibaba and refusing to bend its one-share one-vote rule to accommodate Alibaba’s proposal. Alibaba is instead likely to go where the regulations are weaker: the United States.

NEW YORK STOCK EXCHANGE/INTERCONTINENTAL EXCHANGE An American institution is acquired by a company that didn’t exist 15 years ago and is a creation of technology, showing that technology almost always wins these days.

ATLANTIC COAST FINANCIAL/BOND STREET HOLDINGS The Atlantic Coast board receives an F for agreeing to an acquisition in which 40 percent of the merger consideration would be deposited into an escrow, but it neglected to negotiate an escrow agreement. Public shareholders protested and the escrow was eliminated, but shareholders still did the rare thing of rejecting the deal.

DELL MANAGEMENT BUYOUT A Dell special committee negotiated a model management buyout with all the bells and whistles intended to protect shareholders, even going so far as to reimburse the Blackstone Group $25 million to persuade it to bid. The committee stayed cool throughout a process in which shareholders, including Mr. Icahn, nudged and pushed the committee to consider alternatives. Many shareholders still complained that Dell would have been better off as a publicly traded company. We’re going to defer a complete grade on this deal as we wait to see whether Michael S. Dell can succeed in turning around his company outside of the scrutiny of the public markets, but Mr. Dell still gets an A for putting up more cash to buy out the public shareholders when his financial partner, Silver Lake, wouldn’t. A shake of the head also goes to Mr. Icahn for being his wily self and making what appeared to be a hocus-pocus nonoffer, then offering advice for shareholders to seek appraisal before orgoing the remedy himself.

DOLE MANAGEMENT BUYOUT Dole was taken private by its chief executive, David H. Murdock, for the second time in a turnstile management buyout. The $1.15 billion price was just about adequate and had the endorsement of Institutional Shareholder Services, the big proxy adviser, but one was left to wonder whether this wasn’t the case of a controlling shareholder clearing the field. Indeed, shareholder litigation remains because of Delaware’s penchant to avoid enjoining deals for substantive reasons. Meanwhile, shareholders barely approved the deal with a vote of 50.9 percent of the shares not held by Mr. Murdock, who receives an F.

Happy New Year! Pineapple for all!

William Morris Said to Have Won Auction for Sports and Talent Agency

William Morris Endeavor and its private equity backer, Silver Lake Partners, have won the auction for IMG, the sports and talent agency, according to people familiar with the matter.

WME is said to have won the bidding war with an offer of about $2.3 billion, beating out two other groups that had submit final round bids on Friday.

Peter Chernin, the former News Corporation executive, was working with CVC Capital, and the talent agency ICM was working with the Carlyle Group. Both of those groups are believed to have offered less than $2 billion.

An official announcement is expected on Wednesday.

IMG represents athletes including the Denver Broncos quarterback Peyton Manning and pop stars such as Justin Timberlake and Taylor Swift. But the company makes most of its money through a range of media licensing and distribution services.

All the parties declined to comment.

The sale for IMG was prompted by the 2011 death of Theodore J. Forstmann, a founder of the Forstmann Little private equity firm.

Forstmann Little acquired IMG for $750 million in 2004 and set about expanding it from primarily a talent agency into a broader sports and marketing agency.

But upon Mr. Forstmann’s passing, the firm decided to unwind and began seeking buyers for its various assets.

Earlier this year, Evercore Partners and Morgan Stanley were hired to sell IMG. Forstmann Little was hoping to fetch a price of at least $2 billion, according to people briefed on the matter, and the banks reached out to an unusually large pool of potential buyers.

The process initially drew in buyout firms including Bain Capital, Blackstone, Kohlberg Kravis Roberts, as well as sovereign wealth funds and even advertising groups. Buyers were emboldened by the attractive debt markets, and enticed by the prospect of owning a trophy asset.

At one point Creative Artists Agency, the main rival to WME, was considering a bid with its own private equity backer, TPG. But C.A.A. backed away from a bid in part because absorbing IMG would have upset the balance of its partnership structure, according to people briefed on the matter.

But many buyers balked at Forstmann Little’s price expectations, believing that despite the high-profile names on the company’s roster, taking costs out of the business while maintaining its profitability would make IMG a difficult asset to own.

From the start of the auction, WME, led by Ariel Emanuel, was always seen as a front-runner in the auction. Mr. Emanuel is said to see the benefit of expanding WME’s range of services into areas where IMG has excelled. And his private equity backer, Silver Lake, was in favor of the deal and prepared to write a sizable check.

Michael J. de la Merced contributed reporting.

Cantor Fitzgerald Settles 9/11 Suit Against American

Cantor Fitzgerald Settles 9/11 Suit Against American Airlines for $135 Million

More than a dozen years after the Sept. 11 attacks, a last major piece of litigation against the airline industry and other defendants moved toward an end on Tuesday, as the Wall Street firm Cantor Fitzgerald revealed that it would settle its lawsuit for $135 million.

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High-Security Wine Cellar Ordered to Liquidate

Time Is Up for High-Security Wine Cellar Hit by Hurricane, Judge Rules

Demetrius Freeman/The New York Times

The cellars at WineCare Storage, on West 28th Street, were damaged during Hurricane Sandy.

The wealthy clients of a troubled high-security wine storage cellar in West Chelsea will not be getting back their 27,000 cases of valuable wine in time for the holidays.

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McClendon’s New Venture Echoes Dealings at Chesapeake Energy

Aubrey McClendon’s new public offering plan is an echo of the bad old Chesapeake Energy. He lost his job as chief executive of the energy company over excessive spending and conflicts of interest. A new $2 billion venture would allow him to cherry-pick assets ahead of his investors and reward him generously. Despite Mr. McClendon’s knack for buying oil and gas properties, investor skepticism is in order.

The former Chesapeake chief executive is a talented entrepreneur who helped pioneer America’s shale revolution, transforming the company from a $61 million minnow in 1993 to a $37.5 billion giant by 2008. Those who buy into the new partnership, American Energy Capital Partners, could benefit from Mr. McClendon’s ability to spot emerging shale fields ahead of the crowd.

A big downside - as it also turned out at Chesapeake - is that they can’t rely on Mr. McClendon’s undivided attention or loyalty. In addition to selecting wells for American Energy, he will be at liberty to do so in other capacities, whether corporate or personal, without any need to give his venture first dibs. That recalls his personal dealings, often self-serving, at Chesapeake - and sometimes with Chesapeake. One obvious temptation might be take the best opportunities personally and leave American Energy with the rest.

For what may only be a part-time job, Mr. McClendon’s management company for American Energy will also be receiving a long list of fees - including an annual levy of up to 4 percent of the partnership’s capital - both equity and debt - plus 2 percent of any acquisitions and 0.5 percent of any disposals, among others.

Mr. McClendon is not the only tarnished energy patch boss to show such chutzpah. Ousted BP boss Tony Hayward runs Genel Energy, an acquisition vehicle backed by Nat Rothschild, which guarantees its key people a handsome share of rewards. But despite his clumsy handling of BP’s huge Gulf of Mexico oil spill in 2010, Mr. Hayward was never accused of McClendon-style conflicts of interest.

Investors’ cash will potentially be locked up for years and American Energy’s units may never be publicly traded, so that should keep widows and orphans away. But even for sophisticated investors, that’s a big risk given Mr. McClendon’s record and the venture’s small print. At least Chesapeake’s shareholders could sell.

Christopher Swann is a Reuters Breakingviews columnist in New York. For more independent commentary and analysis, visit breakingviews.com.

Former Trader Pleads Not Guilty in Rate-Rigging Case

LONDON â€" A former trader at UBS and Citigroup pleaded not guilty Tuesday to allegations that he manipulated a key benchmark interest rate known as Libor.

The trader, Tom Hayes, was the first person in Britain to be charged criminally in the scandal surrounding the London interbank offered rate, or Libor. He is separately facing criminal charges in the United States.

Mr. Hayes and two former traders at the brokerage firm RP Martin, Terry J. Farr and James A. Gilmour, entered not guilty pleas in Southwark Crown Court in London in charges brought by Britain’s Serious Fraud Office. Mr. Hayes is the first expected to go to trial in 2015.

Some of the world’s largest banks, including UBS, Barclays and Royal Bank of Scotland, have been caught up in the scandal and agreed to pay billions of dollars to settle allegations with regulators in Britain, the United States and elsewhere.

British prosecutors have previously said they have identified 22 individuals as potential co-conspirators in the matter.

Earlier this month, European Union antitrust regulators agree to settle with eight banks over alleged collusion to manipulate Libor related to the Japanese yen and the euro interbank offered rate, or Euribor. Six of the banks agreed to pay a combined 1.7 billion euros, or about $2.34 billion.

JPMorgan Chase and Citigroup were the first American banks to be fined in the scandal as part of the European Union settlement.

Five financial institutions, including Barclays, UBS and R.B.S., have paid a combined $3 billion to settle with American and British regulators.

Stiff Penalties Sought Against Ex-Goldman Trader

The government is taking a tough stance against Fabrice Tourre, the former Goldman Sachs executive found liable for civil fraud this year.

The Securities and Exchange Commission is seeking $910,000 in fines against Mr. Tourre for his role in packaging and selling a failed mortgage investment, DealBook’s Michael J. de la Merced reports. The agency is also looking for the forfeiture of $175,463 in ill-gotten gains and $62,858.03 in interest.

“Tourre’s conduct helped cause more than one billion dollars in losses. He was rewarded with the largest bonus he had ever received,” lawyers for the S.E.C. wrote in a court filing on Monday, arguing in favor of the stiff penalty. “Severe misconduct must have consequences, particularly when the consequent financial loss is of such great magnitude.”

Mr. Tourre’s lawyers are expected to respond next month, while the judge overseeing the case will ultimately determine how much he must pay.

BIG SHIFT IN WALL ST. BONUSES THIS YEAR As bank executives huddle to figure out how to divide this year’s spoils, an uncomfortable fact is emerging: M.&A. rainmakers and aggressive bond traders are unlikely to be the big winners this year.

Instead, as Andrew Ross Sorkin writes in the DealBook column, the money will flow toward those who have worked on initial public offerings, the beneficiaries of stock markets that kept rising. And the bonuses for many finance professionals who do not work at hedge funds or asset managers will be lower over all.

“It’s hard for some of my guys to accept, but the money is going to different people this year,” a senior executive of a large bank told Mr. Sorkin.

Another senior banker said: “Many of us went into this business in the late 1980s or early 1990s when it was the coolest job in the world. Now being a hedge fund manager or out in Silicon Valley is where the real money is being made.”

STEINBERG TRIAL GOES TO JURY The fate of Michael S. Steinberg, a former top official at SAC Capital Advisors accused of insider trading in technology stocks, now rests with the federal jury in his criminal case.

Whether he is found guilty will likely hinge on if the jury believes the government’s star witness, a former subordinate who has already pleaded guilty to his own insider trading charges, DealBook’s Alexandra Stevenson writes.

Wrapping up his defense on Monday, Mr. Steinberg’s lawyer, Barry H. Berke, called the analyst, Jon Horvath, a liar. “If you don’t believe something a witness says, you can reject his entire testimony,” Mr. Berke told the jury.

SURGE IN HERBALIFE SHARES AFTER RE-AUDIT Herbalife shares jumped by nearly 10 percent on Monday after the nutritional supplements maker said it had finished re-auditing its last three years’ worth of books with no major changes made, Mr. de la Merced writes.

The stock jump again put the hammer on William A. Ackman, who is betting that Herbalife would collapse, asserting that it is an illegal pyramid scheme. But investors have kept pushing up the stock price, making Mr. Ackman pay dearly.

Nevertheless, Mr. Ackman is undaunted, with his spokeswoman declaring in a statement: “Herbalife is a pyramid scheme that will be shut down by regulators.”

Mergers & Acquisitions »

Frontier to Buy AT&T’s Connecticut Wireline Network  |  The Frontier Communications Corporation has agreed to pay $2 billion in cash to acquire AT&T’s wireline business and fiber network in Connecticut. DealBook »

Cooper Tire Loses Bid to Force Apollo’s Hand in Merger  |  Cooper Tire & Rubber was dealt a setback by Delaware’s highest court on Monday, opening the door for Apollo Tyres to scrap their proposed $2.3 billion merger, Reuters reports. Reuters

Weinsteins to Reunite With Miramax in Disney Deal  |  The New York Times writes: “Bob and Harvey Weinstein, who founded Miramax but left in a split with its then-owner, Walt Disney, in 2005, will produce and distribute films and television shows based on the studio’s library.” New York Times

Comcast Said to Weigh Options for Time Warner Cable  |  Comcast is considering several potential deals with Time Warner Cable, including making an offer for a full takeover of the company or buying some of its markets, Reuters reports. Reuters

JPMorgan Chase Puts Asia Investment Unit Up For Sale  |  The Financial Times writes, “JPMorgan Chase has put up for sale its Global Special Opportunities Group, an Asia-based principal investment business, for a valuation likely to be more than $1 billion.” Financial Times

INVESTMENT BANKING »

Former Top Goldman Executive to Run Cushman & Wakefield  |  Edward C. Forst, a former co-head of Goldman’s investment management division, will be president and chief executive of the commercial real estate giant. DealBook »

R.B.S. Exits Government Guarantee Program  |  The Royal Bank of Scotland has exited a British government guarantee program that would have pumped as much as 8 billion pounds, or about $13 billion, into the bank if it faced further financial difficulty after its government bailout during the financial crisis. DealBook »

Regional Bank Says It Will Take a Charge Because of Volcker Rule  |  Zions Bancorporation says it is taking a charge of $387 million to rid itself of a sizable portfolio of trust-preferred collateralized debt obligations and other C.D.O.’s. DealBook »

Britain Passes ‘Ring Fence’ Bill  |  Britain’s House of Lords passed a banking reform bill on Monday that will require banks to separate, or “ring fence,” their retail operations from riskier trading by their investment banking operations, but the legislation’s backers say there is more to be done, The Financial Times writes. Financial Times

European Banks Shed $1.1 Trillion in Assets  |  Bloomberg News reports: “European Union banks have shed more than $1.1 trillion of assets since the end of 2011 in a shift away from risky investments such as asset-backed debt as regulators push lenders to shore up their balance sheets.” Bloomberg

PRIVATE EQUITY »

K.K.R. to Buy Debt-Trading Affiliate for $2.6 Billion  |  The transaction will allow the investment giant to simplify its corporate structure while expanding its balance sheet. DealBook »

Private Equity’s Lucrative Second Bite of a Chip Company  |  Silver Lake just about quintupled its money on its initial carve-out of Avago Technologies from Hewlett-Packard. Now it’s back, underwriting Avago’s $6.6 billion purchase of rival LSI, notes Robert Cyran of Reuters Breakingviews. DealBook »

BlackRock Quiet on Where It Stands in Telecom Italia Fight  |  BlackRock confirmed it was now the second largest investor in Telecom Italia, but did not say who it would side with ahead of a vote over control of the company’s board, Reuters reports. Reuters

HEDGE FUNDS »

Treasury Finds Less Risk-Taking in Hedge Funds  |  Hedge funds are less risky than previously thought, based on leverage levels, risk controls and their levels of illiquid assets, Reuters reports, citing a newly formed office in the Treasury Department created by the Dodd-Frank regulatory overhaul. REUTERS

I.P.O./OFFERINGS »

Diamond Raises $325 Million for African Investment Venture  |  Robert E. Diamond Jr., who was ousted as chief executive of Barclays nearly 18 months ago amid a rate-fixing scandal, has raised $325 million for a new venture, which will focus on potential acquisitions in the African financial sector. DealBook »

Rice Energy Files for $800 Million I.P.O.  |  Rice Energy, a natural gas exploration and production company, is seeking to raise as much as $800 million in an initial public offering, Reuters writes. Reuters

AMC’s Slowing Growth May Hobble I.P.O.  |  Analysts are bearish about the prospects of AMC’s initial public offering, as the movie theater chain trails rivals in revenue growth while laboring under a $2 billion debt load, according to Bloomberg News. BLOOMBERG

Nasdaq Must Face Lawsuits Over Facebook I.P.O.  |  The Nasdaq OMX Group must face a series of lawsuits contending that the stock exchange operator’s mishandling of Facebook’s market debut cost investors some $500 million, a judge ruled on Monday, according to Bloomberg News. Bloomberg

Boeing Unveils $10 Billion Share Buyback  |  Boeing is preparing to buy back up to $10 billion in shares over the next two to three years, Reuters writes. Reuters

VENTURE CAPITAL »

Uber Customers Fume Over Snowy Day’s Price Surge  |  Uber upset customers over the weekend when the taxi-like start-up raised its prices during a New York City snowstorm to as much as seven times the normal fare, charging customers $35 per mile, Nick Bilton writes in Bits. BITS

Atara Raises $38.5 Million in New Round  |  Atara Biotherapeutics, a start-up biotechnology company focused on debilitating diseases, has raised $38.5 million in a second round of financing. New investors include Amgen Ventures, Celgene and EcoR1 Capital, while returning investors include Alexandria Venture Investments, DAG Ventures, Domain Associates and Kleiner Perkins Caufield & Byers. NEWS RELEASE

LEGAL/REGULATORY »

Rakoff Takes Wall Street’s Watchdogs to Task  |  Judge Jed S. Rakoff argues in an essay for The New York Review of Books that when it comes to holding executives accountable for the practices that rattled the financial system in 2008, the Justice Department has failed in its responsibilities, Adam Liptak notes in the Sidebar column of The New York Times. DealBook »

Former Trader Pleads Not Guilty to Libor Charges  |  Tom Hayes, a former UBS and Citigroup trader, and two others pleaded not guilty in London on Tuesday to criminal charges that they tried to manipulate benchmark interest rates, Reuters reports. Reuters

U.S. Regulator Seeks to Enforce Swaps Rules Overseas  |  The Commodity Futures Trading Commission may try to require overseas financial companies to comply with its rules on swaps, creating a potential showdown among regulators over who should have the final say on regulating such transactions, The Wall Street Journal writes. Wall Street Journal

Inquiry Into JPMorgan’s Response to Madoff Investigation  |  Reuters reports: “A U.S. Treasury Department watchdog tried to examine whether JPMorgan Chase & Co. interfered with a regulatory probe into its relationship with convicted felon Bernard Madoff but the largest U.S. bank was able to nip the inquiry in the bud, a government official said on Monday.” Reuters

Swiss Banks Warn U.S. Clients to Declare Secret Assets  |  Politico writes: “Swiss banks are quietly warning wealthy U.S. clients with secret accounts to come clean with the tax man in the next two weeks â€" or risk jail time.” Politico

Accountant Taken Into Custody in China Investigation  |  The China National Petroleum Corporation’s chief accountant has been taken into custody and ordered to assist in an investigation into corruption at Asia’s largest energy company, The Financial Times reports. Financial Times

Former UBS Executive Gets $10.5 Million Bail in Tax Case  |  Raoul Weil, a former UBS executive, has been granted $10.5 million bail as he made his first appearance on charges that he helped Americans hide billions of dollars overseas from United States tax authorities, Bloomberg News writes. Bloomberg

Hedge Fund Presses Case for Breakup of Darden Restaurants

Hiroko Masuike/The New York Times A hedge fund is calling for the breakup of Darden Restaurants, saying that its core Olive Garden and Red Lobster restaurants are suffering.

The activist hedge fund pushing for change at Darden Restaurants has made it official: It wants the conglomerate to break up into three companies and cut more costs.

In an 85-page presentation on Tuesday, the fund, the Barington Capital Group, provided its most in-depth explanation yet about why its multipronged plan would create the most value for the laggard restaurant operator.

It comes days before Darden is scheduled to release its latest quarterly earnings, in what one analyst said “will be the most important call of C.E.O. Clarence Otis’s career.”

The public presentation of Barington’s plan is yet another escalation of the firm’s campaign. While it describes itself as a low-key, constructive activist, and people briefed on matter have maintained that relations between the two sides remain cordial, the hedge fund has hired outside advisers. Among them is a proxy soliciting firm often used in board fights.

Barington’s plan was reviewed by its bankers at Houlihan Lokey. But its basic recommendations have remained consistent for several months. According to the hedge fund, Darden should divide its eight brands into two companies and focus on the differing needs of each group. One should contain its mature restaurants, Olive Garden and Red Lobster; the other should hold smaller, faster-growing franchises like Capital Grille and LongHorn Steakhouse.

The mature-brand company would focus on paying high dividends, while the other entity would focus on higher stock growth.

In its presentation, Barington offered its most detailed examination yet of Darden’s performance, arguing that the company’s shares had meaningfully lagged behind those of its peers. And its plan to capture economies of scale by buying more restaurant brands has failed, while customer counts at its core Olive Garden and Red Lobster restaurants have fallen amid a tougher time for traditional casual dining establishments, the fund said.

“We believe that Darden’s corporate centralization has gone from providing well-intentioned shared services to being a stifling burden on the chain level managers that is hindering the company’s ability to compete with its more focused and nimble competitors,” Barington wrote in its presentation.

The company should also spin off its real estate, which Barington estimates is worth at least $4 billion, into a publicly traded investment trust. Darden owns the land and buildings for about 1,048 of its restaurants and the buildings for an additional 802 leased sites. Spinning them off â€" or selling them and leasing them back â€" would better reflect their value, according to Barington.

And the company should double or triple the goal of its existing cost-cutting effort, aiming for $100 million to $150 million.

By Barington’s projection, its plan would lift Darden’s stock price from $46 a share before speculation about the hedge fund’s campaign emerged to as much as $71 to $80.

“We are pleased with the results of Houlihan Lokey’s independent analysis of our recommendations,” James A. Mitarotonda, Barington’s chief executive, said in a statement. “Their work not only confirms the opportunities we identified to improve long-term shareholder value at Darden, it also adds practical strategies to execute our recommendations and mitigate implementation costs.”

Frontier to Buy AT&T’s Connecticut Wireline Network

• All-cash Transaction is Accretive to Free Cash Flow Per Share in the First Year
• No Change to Frontier's Annual Dividend; Improves Payout Ratio
• $200 Million in Annual Cost Synergies and Savings

STAMFORD, Conn.--(BUSINESS WIRE)-- Frontier Communications Corporation (NASDAQ:FTR) announced today that it has entered into a definitive agreement with AT&T, Inc. (NYSE:T) to acquire AT&T's wireline business and statewide fiber network that provides services to residential, commercial and wholesale customers in Connecticut. As part of the transaction, Frontier will also acquire AT&T's U-verse video and satellite TV customers in Connecticut. Frontier will pay AT&T $2 billion in cash for the business and related assets. Frontier's extensive experience operating local and national communications networks and providing communications services to residential and commercial customers throughout the country will contribute to the success of this transaction.

Frontier's shareholders, customers, local communities and employees will benefit substantially as a result of this transaction:

• The transaction is estimated to be accretive to Frontier's adjusted free cash flow per share in the first year.
• The transaction is estimated to improve Frontier's dividend payout ratio by more than 5 percentage points in the first year.
• The all-cash transaction means Frontier shareholders will receive the benefit of increased diversification of assets and operations without any dilution in ownership.
• Frontier will have greater scale to leverage its network, information technology, engineering, administrative services and procurement capabilities to realize cost synergies and savings of $200 million annually once integration is complete.
• Frontier will implement its proven local engagement community-oriented go-to-market strategy in Connecticut led by local General Managers and a State Leader.
• Connecticut customers will have the same products and services that they currently enjoy, including the U-verse suite of products.

Maggie Wilderotter, Frontier's Chairman and Chief Executive Officer said, "We are excited to be acquiring AT&T's wireline operating company in Connecticut, where our company has been headquartered since 1946. This is a great opportunity to bring to Connecticut Frontier's portfolio of products and services, such as Frontier Secure, our industry leading digital security offering that gives customers top-rated online computer protection and premium technical support. It also allows us to introduce our local engagement management model to Connecticut in which Frontier employees provide high-quality service to their friends and neighbors and become actively involved in their communities." Wilderotter added, "We see an opportunity to enhance broadband capabilities in Connecticut. This transaction demonstrates our continued commitment to enhancing shareholder value by improving the sustainability of our dividend, increasing our free cash flow and building on our core product and service strengths."

Randall Stephenson, AT&T's Chairman and Chief Executive Officer said, "We are very pleased to have Frontier Communications as the buyer of our Connecticut wireline properties. Frontier has proven both its ability to execute sizeable transactions and a commitment to the communications needs of urban, suburban and rural markets. Frontier has a strong track record of providing high quality service, and we look forward to them doing so in Connecticut after we close this transaction."

Dan McCarthy, Frontier's President and Chief Operating Officer, commented, "We welcome Connecticut to the Frontier family and look forward to bringing our high-touch local engagement management model to our home state. We have deep experience in acquiring and migrating large-scale operations onto our networks and systems, adapting them to our sales model, and extending our brand into new communities. AT&T's Connecticut business is substantial, well-defined and covers nearly the entire state. Based upon our track record, we are extremely confident that we will leverage this opportunity to deliver an excellent customer experience and shareholder value."

Additional Details on the Transaction

The transaction is subject to review and approval by the U.S. Department of Justice, the Federal Communications Commission, the Connecticut Public Utilities Regulatory Authority and other state regulatory authorities. Frontier expects the transaction to close in the second half of 2014. Following the close of this transaction, Frontier will operate in 28 states. Connecticut's urban, suburban and rural markets will complement Frontier's diverse mix of markets. Frontier will welcome approximately 2,700 employees to our company; the majority are represented by the Communications Workers of America. Frontier already has more than 200 employees at our headquarters based in Stamford, Connecticut. A full conversion of AT&T's Connecticut operations onto Frontier's existing systems and networks is planned at the time of close. Frontier has successfully completed numerous complex system and network migrations. Our most recent conversion covered operations across 14 states and was completed approximately one year ahead of schedule.

Frontier will acquire approximately 415,000 data, 900,000 voice, and 180,000 video residential connections of AT&T in Connecticut, as well as AT&T's local business connections and existing carrier wholesale relationships.

Frontier will pay $2 billion in cash for AT&T Connecticut. The business will be transferred on a debt-free basis. J.P. Morgan has committed the financing required to complete the transaction.

Advisors

J.P. Morgan acted as the financial advisor to Frontier. Lazard acted as the financial advisor to the independent members of the Board of Directors of Frontier. Skadden, Arps, Slate, Meagher & Flom LLP and Kilpatrick Townsend & Stockton acted as legal advisors to Frontier.

Conference Call Information

Frontier will host a conference call with financial analysts and investors at 9:00 a.m. Eastern Time today to discuss the announcement and answer questions. Financial analysts and investors are invited to participate by dialing 888-203-7337 (Conference ID: 6353322), or 719-457-2600 (access code 6353322). Media and other interested individuals are invited to listen to the live broadcast on Frontier's Investor Relations website at www.Frontier.com/IR. An investor presentation will be posted on Frontier's Investor Relations website at www.Frontier.com/IR.

About Frontier Communications

Frontier Communications Corporation (NASDAQ: FTR) offers broadband, voice, satellite video, wireless Internet data access, data security solutions, bundled offerings, specialized bundles for residential customers, small businesses and home offices and advanced communications for medium and large businesses in 27 states. Frontier's approximately 13,900 employees are based entirely in the United States. More information is available at www.frontier.com.

Forward-Looking Statements

This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. These statements are made on the basis of management's views and assumptions regarding future events and business performance. Words such as "believe," "anticipate," "expect" and similar expressions are intended to identify forward-looking statements. Forward-looking statements (including oral representations) involve risks and uncertainties that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. These risks and uncertainties include, but are not limited to: our ability to complete the acquisition of the Connecticut operations from AT&T the failure to obtain, delays in obtaining or adverse conditions contained in any required regulatory approvals for the AT&T transaction; the ability to successfully integrate the AT&T operations into Frontier's existing operations; the effects of increased expenses due to activities related to the AT&T transaction; the ability to migrate AT&T's Connecticut operations from AT&T owned and operated systems and processes to Frontier owned and operated systems and processes successfully; the risk that the growth opportunities and cost savings from the AT&T transaction may not be fully realized or may take longer to realize than expected; the sufficiency of the assets to be acquired from AT&T to enable us to operate the acquired business; disruption from the AT&T transaction making it more difficult to maintain relationships with existing customers or suppliers; the effects of greater than anticipated competition from cable, wireless and other wireline carriers that could require us to implement new pricing, marketing strategies or new product or service offerings and the risk that we will not respond on a timely or profitable basis; reductions in the number of our voice customers that we cannot offset with increases in broadband subscribers and sales of other products and services; our ability to maintain relationships with customers, employees or suppliers; the effects of ongoing changes in the regulation of the communications industry as a result of federal and state legislation and regulation, or changes in the enforcement or interpretation of such legislation and regulation; the effects of any unfavorable outcome with respect to any current or future legal, governmental or regulatory proceedings, audits or disputes; the effects of changes in the availability of federal and state universal service funding or other subsidies to us and our competitors; our ability to adjust successfully to changes in the communications industry and to implement strategies for growth; continued reductions in switched access revenues as a result of regulation, competition or technology substitutions; our ability to effectively manage service quality in our territories and meet mandated service quality metrics; our ability to successfully introduce new product offerings, including our ability to offer bundled service packages on terms that are both profitable to us and attractive to customers; the effects of changes in accounting policies or practices adopted voluntarily or as required by generally accepted accounting principles or regulations; our ability to effectively manage our operations, operating expenses and capital expenditures, and to repay, reduce or refinance our debt; the effects of changes in both general and local economic conditions on the markets that we serve, which can affect demand for our products and services, customer purchasing decisions, collectability of revenues and required levels of capital expenditures related to new construction of residences and businesses; the effects of technological changes and competition on our capital expenditures, products and service offerings, including the lack of assurance that our network improvements in speed and capacity will be sufficient to meet or exceed the capabilities and quality of competing networks; the effects of increased medical (including as a result of the impact of the Patient Protection and Affordable Care Act), pension and postemployment expenses, such as retiree medical and severance costs, and related funding requirements; the effects of changes in income tax rates, tax laws, regulations or rulings, or federal or state tax assessments; our ability to successfully renegotiate union contracts; changes in pension plan assumptions and/or the value of our pension plan assets, which could require us to make increased contributions to the pension plan in 2014 and beyond; the effects of economic downturns, including customer bankruptcies and home foreclosures, which could result in difficulty in collection of revenues and loss of customers; adverse changes in the credit markets or in the ratings given to our debt securities by nationally accredited ratings organizations, which could limit or restrict the availability, or increase the cost, of financing; our cash flow from operations, amount of capital expenditures, debt service requirements, cash paid for income taxes and liquidity may affect our payment of dividends on our common shares; the effects of state regulatory cash management practices that could limit our ability to transfer cash among our subsidiaries or dividend funds up to the parent company; and the effects of severe weather events such as hurricanes, tornadoes, ice storms or other natural or man-made disasters. These and other uncertainties related to our business are described in greater detail in our filings with the U.S. Securities and Exchange Commission, including our reports on Forms 10-K and 10-Q, and the foregoing information should be read in conjunction with these filings. We do not intend to update or revise these forward-looking statements to reflect the occurrence of future events or circumstances.

Frontier Communications Corporation
Investors:Luke Szymczak, 203-614-5044
Vice President, Investor Relations
luke.szymczak@ftr.com
or
Media:Steve Crosby, 916-206-8198
SVP, Govt. Affairs and PR
steven.crosby@ftr.com
orBrigid Smith, 203-614-5042
AVP, Corporate Communications
brigid.smith@ftr.com

Source: Frontier Communications Corporation

News Provided by Acquire Media

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R.B.S. Exits Government Guarantee Program

The Royal Bank of Scotland has exited a British government guarantee program that would have pumped as much as 8 billion pounds, or about $13 billion, into the bank if it faced further financial difficulty after its government bailout during the financial crisis.

R.B.S. Exits Government Guarantee Program

The Royal Bank of Scotland has exited a British government guarantee program that would have pumped as much as 8 billion pounds, or about $13 billion, into the bank if it faced further financial difficulty after its government bailout during the financial crisis.

Diamond Raises $325 Million for African Investment Venture

LONDON - Robert E. Diamond Jr., who was ousted as chief executive of Barclays nearly 18 months ago amid a rate-fixing scandal, is back.

Mr. Diamond has raised $325 million for a new venture, known as Atlas Mara, which will focus on potential acquisitions in the African financial sector, but will not be limited to that sector or region. The fund-raising was well above the target of $250 million and includes $20 million from the founders.

“The directors believe that there are significant gaps in the market today including the need for capital created by European financial institutions retreating to their home territories due to the sovereign debt crisis and the Basel III regulatory framework at a critical time for growth in Africa,” the company said.

In Atlas Mara, Mr. Diamond, 62, has partnered with Ashish J. Thakkar, 32, an entrepreneur whose Mara Group conglomerate has technology, manufacturing and real estate operations and interests in 19 African countries.

Mr. Thakkar began his career by setting up a technology business in Uganda at age 15. The name of the cash-shell vehicle reflects the conglomerate and Atlas Merchant Capital, a merchant bank Mr. Diamond has founded.

Atlas Mara expects to list on the London Stock Exchange on Friday, with conditional trading of the stock beginning on Tuesday.

Citigroup acted as the sole global co-coordinator and bookrunner on the deal.

The new venture is a return to the financial industry for Mr. Diamond, the once high-flying Wall Street executive.

He resigned from Barclays in July 2012 under pressure from government regulators. In June of that year, the bank agreed to pay $450 million to British and American authorities to settle charges that it had manipulated a global benchmark, the London interbank offered rate, or Libor.

A former bond trader at Morgan Stanley, he worked at Credit Suisse and BZW, which became the foundation of what became Barclays’ investment business, Barclays Capital. Mr. Diamond built that business into a global giant and became chief executive of the parent company Barclays in January 2011.

Diamond Raises $325 Million for African Investment Venture

LONDON - Robert E. Diamond Jr., who was ousted as chief executive of Barclays nearly 18 months ago amid a rate-fixing scandal, is back.

Mr. Diamond has raised $325 million for a new venture, known as Atlas Mara, which will focus on potential acquisitions in the African financial sector, but will not be limited to that sector or region. The fund-raising was well above the target of $250 million and includes $20 million from the founders.

“The directors believe that there are significant gaps in the market today including the need for capital created by European financial institutions retreating to their home territories due to the sovereign debt crisis and the Basel III regulatory framework at a critical time for growth in Africa,” the company said.

In Atlas Mara, Mr. Diamond, 62, has partnered with Ashish J. Thakkar, 32, an entrepreneur whose Mara Group conglomerate has technology, manufacturing and real estate operations and interests in 19 African countries.

Mr. Thakkar began his career by setting up a technology business in Uganda at age 15. The name of the cash-shell vehicle reflects the conglomerate and Atlas Merchant Capital, a merchant bank Mr. Diamond has founded.

Atlas Mara expects to list on the London Stock Exchange on Friday, with conditional trading of the stock beginning on Tuesday.

Citigroup acted as the sole global co-coordinator and bookrunner on the deal.

The new venture is a return to the financial industry for Mr. Diamond, the once high-flying Wall Street executive.

He resigned from Barclays in July 2012 under pressure from government regulators. In June of that year, the bank agreed to pay $450 million to British and American authorities to settle charges that it had manipulated a global benchmark, the London interbank offered rate, or Libor.

A former bond trader at Morgan Stanley, he worked at Credit Suisse and BZW, which became the foundation of what became Barclays’ investment business, Barclays Capital. Mr. Diamond built that business into a global giant and became chief executive of the parent company Barclays in January 2011.