China Pork Company’s Listing Could Raise More Than $5 Billion

HONG KONG â€" WH Group, a Chinese company that is the world’s biggest pork producer, plans to raise more than $5 billion in a Hong Kong share sale that would be the largest initial public offering in a year.

WH is the new name for the combined businesses of China’s Shuanghui International, which paid $4.7 billion in cash last year for Smithfield Foods, the biggest pork producer in the United States. That deal was the biggest Chinese acquisition of an American company.

On Thursday, WH began formally marketing its I.P.O. to investors as it sought to raise between 29.3 billion Hong Kong dollars and 41.2 billion dollars, or between $3.8 billion and $5.3 billion, according to a copy of a term sheet for the offering seen by DealBook. The I.P.O. will value the company at $15.1 billion to $21.2 billion.

China is the world’s biggest producer and consumer of pork, but production costs there are high because of relatively higher prices for grain and feed and less efficient farming practices. With its recently acquired American unit, WH is seeking to meet growing Chinese demand by increasing imports of chilled and frozen American pork.

If priced at the top of the range, at $5.3 billion, WH’s I.P.O. would be the world’s biggest since April 2013, when the Brazilian insurer BB Seguridade Participacoes raised $5.7 billion in its listing on the São Paulo, Brazil, stock exchange, according to data from Dealogic.

WH is selling 3.66 billion shares to be priced between 8 Hong Kong dollars and 11.25 dollars, according to the term sheet. Approximately 80 percent of the deal will be new shares, with 20 percent of the offering coming from existing shareholders who are selling down.

The term sheet was unclear on which shareholders were selling. WH’s biggest shareholders include CDH Investments, a large Chinese private equity group, and the company’s management. Goldman Sachs and the Singapore state, investor Temasek Holdings, also have stakes.

The plans include an option for WH to enlarge its share sale by 20 percent of the base deal, all of which would come from existing shareholders. Another provision for a further over-allotment option would allow the underwriters to sell additional existing shares representing 15 percent of the base deal in the first few weeks after trading in the stock begins.

The I.P.O. values WH at 15 to 20.8 times the company’s estimated earnings for 2014. That is a richer valuation than the 14 times earnings that Shuanghui paid last year for Smithfield, a transaction worth $7 billion, if Smithfield’s debt is taken into account.

WH’s offering includes an unprecedented 28 underwriters, compared with the previous record of 21 banks hired by China Galaxy Securities for its I.P.O. in May 2013. Morgan Stanley, Bank of China International, Citic, UBS, Standard Chartered, Goldman Sachs and DBS are the leading underwriters of the I.P.O.

Morgan Stanley, Bank of China and Citic advised Shuanghui on the Smithfield acquisition last year, while Bank of China provided financing for that deal.

Banks Ease Hours for Junior Staff, but Workload Stays Same

The biggest investment banks recently signaled a sea change in their corporate culture, telling their most junior employees to ease up a bit on their hard-charging work schedules.

Like other practices on Wall Street, however, the more things change, the more they remain the same.

A number of young bankers say that while they can now enjoy a leisurely brunch or a binge of television watching on Saturdays, their overall workload has not changed noticeably. It just gets pushed to a different day.

“If you have 80 hours of work to do in a week, you’re going to have 80 hours of work to do in a week, regardless of whether you’re working Saturdays or not,” said a junior banker at Deutsche Bank, who, like the others interviewed for this article, spoke on the condition of anonymity because he risked his job by talking to a reporter. “That work is going to be pushed to Sundays or Friday nights.”

“It’s well intentioned,” he added, “but I don’t know if it’s actually practical.”

Young people on Wall Street have long been accustomed to working through weekends and into the wee hours. But in the last six months, many of the major banks have instituted what amounts to a radically new policy: Take a few days off a month, on the weekends.

They are responding in part to fears across the industry that finance is losing its appeal for bright, ambitious college graduates. Silicon Valley beckons, with generous employee perks at companies like Google and Facebook and the promise of wealth and prestige at hot technology start-ups.

At the Wharton School of the University of Pennsylvania, traditionally a magnet for aspiring financiers, 25 percent of the undergraduate class of 2013 entered jobs in investment banking, according to school’s career services office. That is big decline from the halcyon days before the financial crisis. Of the class of 2007, 48 percent took jobs in finance.

The changes also were spurred by concerns that rippled through the industry after a 21-year-old intern at Bank of America Merrill Lynch in London died last summer. The cause of death was determined to be epilepsy. Unconfirmed reports on online forums said that he had worked through three consecutive nights as part of his internship.

Still, some junior bankers, known as analysts and associates, are skeptical about the new policies. With Saturday designated a day of rest at some banks, several bankers said that other days, including Sunday, have become more intense.

At Goldman Sachs, which last fall instructed junior bankers to stay out of the office on Saturdays, one analyst said he recently had to work until 4 a.m. on Monday to complete a project on time. He also said he now felt more pressure to get his work done during the week, since he no longer has a full weekend to complete assignments.

The banks’ approaches to their weekend policies vary. In February, Barclays introduced rules that forbid analysts to work more than 12 consecutive days.

One analyst at the firm said recently that he had worked every day from Thanksgiving to the end of February, including Christmas and New Year’s Day.

“I don’t know if my life improved at all,” he said. “There’s not going to be a change in work just because we say one day has to be protected.”

JPMorgan Chase has given its analysts the option of taking a “protected weekend” â€" Saturday and Sunday â€" each month. While several analysts spoke positively about the change, one, who recently left the bank, complained that the weekends had to be scheduled four weeks in advance, requiring the kind of planning that can be incompatible with a young person’s evolving schedule.

To ensure that he could see a preview of “All the Way” on Broadway in February, the former JPMorgan analyst said, he had to submit a request in January. During the show, he was expected to monitor his email and respond to any urgent requests.

Representatives of JPMorgan, Barclays and Goldman declined to comment.

The new programs are still in their early days. At Deutsche Bank, where the policy includes taking some weekend days off, one of the goals was to make weekends more predictable, said a person briefed on the policy who was not authorized to speak publicly about it. The bank also invites analysts to give management feedback, the person said. But not all banks have gone this route. Morgan Stanley, though it has formed a committee to study the issue, has stopped short of establishing a weekend rule, and its chief executive said this year that requiring junior bankers to stay away from the office might not be wise.

“I’m not sure that’s the right answer because I’m not sure how you stop work if there’s a deal on,” the chief executive, James P. Gorman, said on Bloomberg Television in January.

Many in finance say that hard work is to be expected. David M. Rubenstein, a co-founder of the giant private equity firm Carlyle, said in a recent podcast that what he looked for in an employee was “somebody who recognizes that things that are great generally aren’t accomplished 9-to-5, five days a week.”

The banks do appear to be keeping a close eye on whether the new rules are being followed. Credit Suisse, for example, keeps track of any exceptions granted to analysts who come to the office on Saturday, making sure that no one group is working its analysts too hard.

A second analyst at Goldman said that he and others in his team were considering coming to the office this past Saturday to work on an important project, but that their managing director turned down their request, telling them to wait until Sunday.

It does not always work out that way.

“If there’s a huge opportunity for the group, like to build a new relationship with the company, then they won’t have enough sway to push back on the client,” the Goldman analyst said. “But in this situation, I think the M.D. felt that he had a little more power to kind of push back and tell the client, ‘Hey, it’s going to take us more time.’ ”

Former S.E.C. Official to Join K.K.R. as Compliance Chief

Bruce Karpati, a former Securities and Exchange Commission official, is joining the giant private equity firm Kohlberg Kravis Roberts & Company as its chief compliance officer, a person briefed on the matter said on Wednesday.

Mr. Karpati, who left the S.E.C. last year for Prudential Investments, is expected to start his new job later this month, said the person, who was not authorized to discuss the matter publicly.

As head of the asset management unit of the enforcement division of the S.E.C., Mr. Karpati sued Philip A. Falcone, the hedge fund manager. He then served as Prudential Investments’s chief compliance officer, a role he held for less than a year.

At K.K.R., he succeeds H.J. Willcox, who left the firm last year for Clifford Asness’s hedge fund, AQR Capital Management. As a registered investment adviser, K.K.R. interacts regularly with the government.

The Wall Street Journal earlier reported Mr. Karpati’s new role.

Ally Prices Its I.P.O. at $25 a Share, Raising $2.4 Billion for U.S.

Ally Financial, the onetime financing arm of General Motors, priced its initial public offering at $25 a share on Wednesday, in the lender’s latest effort to shed its status as a ward of the federal government.

The offering price was at the bottom of its range and raised $2.4 billion for the principal selling investor, the Treasury Department. At that level, the firm will be valued at $12 billion.

By finally going public â€" a process that Ally began more than three years ago â€" the lender is close to shedding the remaining vestiges of its bailout during the financial crisis. Its troubles arose from heavy losses tied to risky mortgage lending from a onetime unit known as Residential Capital, which was later split off and put into bankruptcy.

The government invested more than $17 billion in the company, once known as GMAC Financial, in an effort to stabilize both the financial system and the then-ailing G.M. and Chrysler.

Since then, Ally has clambered back to health. It reported $8.1 billion in total financing revenue last year, up 11 percent from the same time a year ago. Its net income from continuing operations fell 70 percent during the same period, to $416 million, as the company exited a number of mortgage businesses.

After the I.P.O., the Treasury Department will still maintain a roughly 17 percent stake. Other major investors include the hedge fund Third Point and the private equity firm Cerberus Capital Management, which owned a majority of Ally until its government bailout and now controls a roughly 8.6 percent stake.

Ally is expected to begin trading on the New York Stock Exchange on Thursday under the ticker symbol “ALLY.”

Its I.P.O. was led by Citigroup, Goldman Sachs, Morgan Stanley and Barclays.

Jamie Dimon Writes of ‘Nerve-Racking’ 2013

Jamie Dimon, the chief executive of JPMorgan Chase, has reflected in his annual shareholder letter on a year that was marked by the bank pulling out its checkbook to mend frayed relationships with the federal government â€" a reconciliation that has already cost around $20 billion.

In his letter on Wednesday, Mr. Dimon emphasized that despite those payouts â€" in fact, because of the “constant and intense pressure” â€" he was proud of JPMorgan and its “enduring resolve and resiliency.”

He pointed to the $17.9 billion in annual profit, along with “strong performance” throughout the bank even though legal costs weighed on the bank’s bottom line.

Hashing out those settlements while trying to reduce risks throughout JPMorgan, Mr. Dimon said, proved to be a kind-of high-wire act. He said the balance was “the most painful, and nerve-racking experience that I have ever dealt with professionally.”

Mr. Dimon took on a critical role in negotiating both the bank’s $13 billion settlement with a range of government authorities over its sale of mortgage-backed securities in the run up to the financial crisis. He also played an instrumental role in reaching a $2 billion pact over accusations that the bank failed to sound sufficient alarms about fraud surrounding Bernard L. Madoff’s Ponzi scheme.

Just hours before the Justice Department intended to announce civil charges against JPMorgan in its sale of mortgage investments in September, Mr. Dimon personally reached out to Attorney General Eric. H. Holder Jr., a move that helped avert a lawsuit and eventually led to the deal.

Still, in his letter, Mr. Dimon drew a stark distinction between the legal problems that buffeted JPMorgan and the continued strength of the bank. In fact, he said the last year was “A Tale of Two Cities,” referring to the novel by Charles Dickens.

Looking back on the year, Mr. Dimon said: “We came through it scarred but strengthened â€" steadfast in our commitment to do the best we can.”

Among the highlights that were omitted from the headlines, Mr. Dimon said, were the bank’s ability to raise “$2.1 trillion for our clients” and its ability to provide $19 billion in credit to small businesses. Mr. Dimon also discussed the bank’s consumer businesses and its deposit growth.

Reiterating his commitment to bolstering the controls, Mr. Dimon said that since 2012, JPMorgan has hired an additional 13,000 employees to handle regulatory issues and compliance. In addition to the broader controls, Mr. Dimon noted that JPMorgan plans to dedicate around 8,000 staff to strengthen the bank’s fortifications against money laundering.

Mr. Dimon, received $20 million in compensation for 2013, a paycheck that signaled the board’s steadfast support of the 58-year-old executive and his leadership of the bank.

European Official Urges ‘Say on Pay’ Requirement for Boards

BRUSSELS â€" A European Union official renewed his efforts to curb excessive pay by introducing a plan on Wednesday that would require a shareholder vote on salaries for directors of publicly traded companies.

The proposal by Michel Barnier, the European Union commissioner for financial affairs, reflects a trend on both sides of the Atlantic driven partly by concern over outsize pay packages for corporate bosses. Concern has persisted over excessive corporate pay as wages and benefits for most employees have stagnated.

“I cannot explain this enormous gap between this level of pay and corporate governance, and it does leave you with a pretty bitter taste in your mouth when you see the excessive levels of pay in certain cases,” Mr. Barnier said during a news conference here.

Mr. Barnier successfully pushed the European Union to cap bankers’ bonuses, though firms are trying creative approaches to sidestep new rules.

Under Mr. Barnier’s new proposal, shareholders would have the right to vote every three years on company plans that outline the maximum remuneration levels for board members. The plan would affect about 10,000 companies listed on European stock exchanges.

Mr. Barnier’s plan would leave it to European Union member states to write additional rules outlining how companies should respond if shareholders reject the director pay plans.

In addition, shareholders would be able to express their opinion in an annual vote on whether they were satisfied with how a company’s remuneration policy was being applied.

In case of a negative vote by shareholders, the company would need to justify its pay policy as part of the following year’s report.

The European proposal would overhaul existing shareholder rights requirements and introduce a “say on pay” principle that goes further than many of those already announced by national governments in Europe.

Such rules were also part of the financial overhaul in the United States in the wake of the financial crisis. But some critics question the effectiveness of these rules.

One concern is that shareholders may have little incentive to rein in pay when company share prices are rising.

The European proposals could meet substantial opposition from business lobbies during a lengthy approval process involving national governments and the European Parliament that seems likely to stretch into next year.

Mr. Barnier’s draft rules are ‘‘more onerous in some respects’’ than similar rules introduced in Britain last year, according to Alexandra Beidas, a lawyer at the firm Linklaters in London.

Mr. Barnier insisted that he was not proposing strict limits on salaries for company directors.

‘‘We’re not there to set salaries for companies in general’’ because ‘‘we’re no longer in a command economy, fortunately,’’ he said.

But Mr. Barnier emphasized that Europe needed a ‘‘means of ensuring that the individual interests of directors were consistent with the long-term interests of the company.’’

‘‘It’s good governance that we’re talking about,’’ Mr. Barnier said.

The European Union agreed to cap bankers’ bonuses â€" as proposed by Mr. Barnier in 2011 â€" as part of a hard-fought deal agreed to by the Parliament and national governments last year.

Those limits restrict bonus payments to one year’s base salary, though that figure can be doubled if a majority of shareholders approve.

The legislation applies to all banks active in Europe, as well as the international subsidiaries of European banks with their headquarters in the union.

What Awaits Banks After the Leverage Ratio

Mayra Rodríguez Valladares is managing principal at MRV Associates, a capital markets and financial regulatory consulting and training firm based in New York. She is also a faculty member at Financial Markets World and the New York Institute of Finance.

The stronger leverage ratio approved by United States regulators on Tuesday is an essential component to the international banking rules of Basel III, which currently allow large banks a lot of flexibility and potential for data manipulation.

Yet it is not the last buffer for the world’s systemically important banks.

There are still quite a number of Basel guidelines, which the Basel Committee on Banking Supervision is expected to finalize later this year, at which point they would then probably be introduced by American bank regulators. The combination of all of these pending rules will affect banks’ business strategies significantly and will continue to influence how they strengthen their auditing and compliance teams for years to come.

Two sets of guidelines are still outstanding: the liquidity standard and the significant financial institutions surcharge. The liquidity standard is divided into short- and long-term buffers to insure that banks are liquid.

The financial crisis started off as a credit crisis, but when panic ensued, it quickly became an illiquidity crisis. The main purpose of the liquidity standard â€" the liquidity coverage ratio â€" is to demonstrate to bank regulators and the market that large banks can survive for at least one month in a period of stress without government support.

In the United States, the proposed ratio is stricter than the Basel one finalized in January 2013 because banks can count fewer assets as high-quality liquid assets. For example, in the United States, unlike in Europe, banks cannot count municipal bonds as high-quality liquid assets. Large American banks will have to rely on cash, high credit quality bonds and gold to satisfy the stricter requirements.

The long term-part of the liquidity standard, the net stability funding ratio was proposed only this January by the Basel Committee, so it probably will not be introduced in the United States until the fall. This purpose of this ratio is to make sure that banks rely less on short-term funding for their longer-term liabilities. The comment period for this rule ends on April 11.

Already, numerous banks in Europe and the United States have stated their concern that the net stability funding ratio may make it more difficult for them to participate in the repo market, an important bank borrowing market. But there is currently no regulatory appetite in the United States to weaken the ratio. Daniel Tarullo, a Federal Reserve governor and the leading regulatory voice at the Fed, for one, has long been a vocal advocate for reducing banks’ reliance on short-term funding.

Large global banks also face another capital buffer â€" the systemically important financial institution surcharge. Basel guidelines were introduced last summer, but have not been finalized. As it stands, this buffer would range from 1 to 2.5 percent of risk-weighted assets, depending on a bank’s size, interconnectedness to the financial sector and the complexity of its transactions. In the United States, the charge would apply to JPMorgan Chase, Bank of America, Citigroup, Goldman Sachs, Morgan Stanley, Wells Fargo, State Street and Bank of New York Mellon.

As if the different capital buffers were not enough of a challenge for banks’ risk managers and compliance officers, there are numerous guidelines remaining that will directly affect banks’ securities and derivatives portfolios. Last summer, the Basel Committee proposed that banks improve the way that they measure the credit risk of derivatives’ counterparties. Depending on whether banks trade derivatives directly with a counterparty over the counter or through a central counterparty, banks will have to allocate capital for the level of counterparty risk. The global financial crisis demonstrated banks’ need for more capital and collateral in derivative transactions.

Unfortunately, derivatives participants learned the hard way that sometimes it was the counterparty, like the giant insurer American International Group, that can suffer in credit quality before the asset underlying the derivative. Given other derivatives regulations, like the Dodd-Frank Act in the United States or the European Market Infrastructure Regulation, the Basel rules are making banks think twice about what derivatives are worth the risk.

Another guideline that will also significantly affect American banks will be one proposed in December to measure the risks posed by securitizations, no matter whether they are booked in the banking or trading book. When banks book transactions in the trading book, the capital for credit risk is less, since banks claim that they intend to sell those instruments. Given that American banks have increasingly re-entered the securitization market in the last two years, the proposed new rule would require banks to allocate capital for their securitization portfolio based on the level of credit, market and operational risks that the different instruments pose.

One of the most important and least talked parts of Basel III is Pillar III, which sets disclosure guidelines for banks with the goal of strengthening market discipline. Both Sheila Bair, the former chairwoman of the Federal Deposit Insurance Corporation, and the F.D.I.C.’s current vice chairman, Thomas Hoenig, emphasized the importance of bank transparency at a symposium in Boston last week. The Basel Committee is expected to announce guidelines that would strengthen Pillar III sometime early this summer.

Unless banks are really compelled to be transparent about their risk exposures, especially about those that are off-balance sheet, like derivatives or repos, no amount of Basel rules will really help the public identify the level of banks’ credit, market, liquidity and exposure to risk.

Latin American E-Commerce Giant to Acquire 2 Real Estate Sites

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Sotheby’s Responds to Loeb, With Visual Aids

In his battle for control of the auction house Sotheby’s, the activist investor Daniel S. Loeb has focused much of his attention on what he calls the inadequacy of its board members.

Late Tuesday, Sotheby’s fired back with its most comprehensive rebuttal yet, and this time, it’s personal. In a 53-page deck filed with the Securities and Exchange Commission, the company gives a glimpse of how the battle turned bitter, highlights its plan to return money to shareholders and defends its so-called poison pill. It also includes a number of slides attacking Mr. Loeb’s record and raises questions about whether he has shareholders’ best interests in mind.

Sotheby’s focuses on Mr. Loeb’s campaign at Yahoo, calling his decision to step down from the board and sell his stake for $1.2 billion motivated by self-interest.

These points are part of the case Sotheby’s will make to Institutional Shareholder Services, the proxy advisory firm that will pick a side and make a recommendation to shareholders in the next few weeks. It will set the tone for the company’s annual meeting, scheduled for May 6, when shareholders will vote for the board or Mr. Loeb.

There’s a long history of back and forth between Sotheby’s and Mr. Loeb’s hedge fund, Third Point, but both sides have dug in their heels in recent weeks. Mr. Loeb, who started a proxy contest in January and is seeking three seats on the board, has sued Sotheby’s over its poison pill, which blocks him from building up much more than his current 9.6 percent stake.

And as things heat up, Mr. Loeb has created his own website, valuesothebys.com, complete with an image of a Damien Hirst sculpture of a medicine cabinet with multicolored pills called The Void.

A quick run through the deck reveals that Sotheby’s has provided shareholders with a report card of Mr. Loeb, who is seeking a seat on the board, and his two other nominees, Harry J. Wilson and Oliver Reza.

And the auction house has weighed in on Mr. Loeb’s experience with previous activist campaigns, arguing that he stays on the board of a company for only two years on average (see pages 37 and 38).

Go Daddy Said to Pick Morgan Stanley and JPMorgan for I.P.O.

The Go Daddy Group, the Internet registrar best known for cheeky, controversial ads, is moving full speed ahead with plans for an initial public offering.

The company has hired Morgan Stanley and JPMorgan Chase to coordinate a stock sale that could take place later this year, a person briefed on the matter said on Wednesday.

It isn’t clear yet how much money Go Daddy plans to raise in an I.P.O. or how much stock its owners, including the investment firms Silver Lake and Kohlberg Kravis Roberts, plan to sell. The private equity shops, along with Technolgy Crossover Ventures, bought the Internet company for $2.25 billion nearly three years ago.

Since its leveraged buyout, the domain name registrar â€" the biggest in the world â€" has moved away from its image as a rabble-rouser best known for featuring scantily clad spokeswomen in its commercials. Under Blake Irving, a former Yahoo executive who took over as chief executive in 2012, the company has refocused on expanding its work with businesses.

News of the banks’ hiring was reported earlier by Bloomberg News.

$800 Million Penalty for Bank of America Credit Card Practices

Bank of America has been ordered to pay roughly $800 million in refunds to customers and fines to federal regulators to settle allegations that the bank used deceptive marketing and billing practices involving credit card products.

The Consumer Financial Protection Bureau said that Bank of America “illegally charged” its customers for credit monitoring and credit reporting services that were not received.

As part of a consent order with the agency announced on Wednesday, the bank was ordered to refund more than a million customers who purchased these add-on products for their credit cards.

The bank must also pay a $20 million fine to the Consumer Financial Protection Bureau and $25 million to the Office of the Comptroller of the Currency.

Some of the misleading practices, according to regulators, included the bank’s telemarketers telling customers that the first 30 days of were free when, it fact, customers were charged.

The bank also misled customers to believe that they were merely agreeing to receive additional information about the add-on services. But the bank was actually enrolling these consumers in the products during these calls, the consumer protection agency said.

“Bank of America both deceived consumers and unfairly billed consumers for services not performed,” said Richard Cordray, the director of the consumer agency. “We will not tolerate such practices and will continue to be vigilant in our pursuit of companies who wrong consumers in this market.”

The products allowed customers to request that Bank of America cancel some amount of credit card debt in case they lost their job or became disabled.

The Consumer Financial Protection Bureau also cited Bank of America for billing consumers for credit protection services that they never fully received.

In some cases, these practices caused customers to exceed their monthly credit limits, resulting in additional costs, the agency said.

The agency said Bank or America engaged in these billing practices from 2000 to 2011, affecting 1.9 million customers.

In a statement, the bank said it had already refunded the “majority” of the affected customers.

The action against Bank of America on Wednesday is the latest by the Consumer Financial Protection Bureau, which has taken aim at a number of banks for selling credit card products to consumers that they never wanted and could not use. In fact, the agency’s first enforcement action against the financial industry centered on this issue, when the federal regulator in 2012 demanded that Capital One reimburse $150 million to more than two million consumers.

American Express struck a similar settlement with the agency last year. Its rival Discover brokered a deal with the regulator in 2012.

Most recently, JPMorgan Chase, in settling with the Consumer Financial Protection Bureau and the comptroller’s office, agreed to refund 2.1 million customers, although the bank, the nation’s largest, did not admit or deny wrongdoing.

Together, the regulatory actions aim at one of lenders most questionable profit generators. The products, promoted as a way of shielding borrowers from identify theft or other hardships, including unemployment or disability, have come under fire from state attorneys general, too. In 2012, for example, the Hawaii attorney general, accused some of the nation’s biggest banks of improperly selling similar add-on products.
Part of the problem with the add-ons, according to consumer advocates, is that they are expensive and ineffective.

The regulatory action comes as the bureau flexes its enforcement muscle â€" heft that the agency received as part of the Dodd-Frank regulatory overhaul, passed in the aftermath of the 2008 financial crisis. The add-on products can lure consumers, still trying to dig out from the depths of the recession because the products promised to protect them from unforeseen economic hardship.

Alibaba’s Deal-Making Raises a Red Flag

Powerful insiders are the norm at Internet companies. Alibaba’s tie-up with a digital-TV company adds an extra twist. The Chinese e-commerce group, which is planning a  listing in the United States, has signed a three-step deal with  Wasu Media of China that looks a little too clever for comfort.

The agreement to make and distribute content, announced on Wednesday, has logic. The two companies, both based in the city of Hangzhou, already make television set-top boxes together. Jack Ma, Alibaba’s colorful founder and chairman, has long talked of creating culture for China’s masses.

The financing of the deal is less logical. Alibaba will lend 6.5 billion yuan ($1.05 billion) to its co-founder, Simon Xie, at an 8 percent interest rate. He is investing the cash in a new vehicle, co-owned by Mr. Ma and another Internet mogul, Shi Yuzhu. That vehicle in turn is investing in Wasu, in return for a 20 percent stake.

Alibaba hasn’t commented on the financial aspects of the deal. Nevertheless, there are two problems. First, it seems unnecessarily complex. If Wasu is a worthy partner, why doesn’t Alibaba invest directly? Twitchy Chinese regulators who closely monitor ownership of media companies may explain the need for such maneuvers. But circumventing the spirit of the rules would hardly be encouraging.

Second, the spoils don’t appear to be evenly divided. If Wasu’s shares sink, Alibaba’s loan may be at risk, depending on the value of the collateral that Mr. Xie has pledged. If the shares rise, Mr. Ma, Mr. Xie and Mr. Shi apparently pocket the gains. They are already $245 million better off after Wasu shares rose 10 percent on April 9.

The privately held Alibaba doesn’t have to answer to public markets. And the transaction may include other terms that somehow share the trio’s gains with the rest of the company.

But the triangular deal shows how hard valuing Alibaba will be. One of the biggest questions for future investors is what will happen if insiders’ interests differ from their own. Mr. Ma and his cohort have already proposed that top individuals retain the right to nominate board directors, a requirement that scuppered Alibaba’s chances of a Hong Kong listing. The Wasu deal demonstrates how blurred the line between public and private can become.

John Foley is Reuters Breakingviews China editor. For more independent commentary and analysis, visit breakingviews.com.

Alibaba’s Deal-Making Raises a Red Flag

Powerful insiders are the norm at Internet companies. Alibaba’s tie-up with a digital-TV company adds an extra twist. The Chinese e-commerce group, which is planning a  listing in the United States, has signed a three-step deal with  Wasu Media of China that looks a little too clever for comfort.

The agreement to make and distribute content, announced on Wednesday, has logic. The two companies, both based in the city of Hangzhou, already make television set-top boxes together. Jack Ma, Alibaba’s colorful founder and chairman, has long talked of creating culture for China’s masses.

The financing of the deal is less logical. Alibaba will lend 6.5 billion yuan ($1.05 billion) to its co-founder, Simon Xie, at an 8 percent interest rate. He is investing the cash in a new vehicle, co-owned by Mr. Ma and another Internet mogul, Shi Yuzhu. That vehicle in turn is investing in Wasu, in return for a 20 percent stake.

Alibaba hasn’t commented on the financial aspects of the deal. Nevertheless, there are two problems. First, it seems unnecessarily complex. If Wasu is a worthy partner, why doesn’t Alibaba invest directly? Twitchy Chinese regulators who closely monitor ownership of media companies may explain the need for such maneuvers. But circumventing the spirit of the rules would hardly be encouraging.

Second, the spoils don’t appear to be evenly divided. If Wasu’s shares sink, Alibaba’s loan may be at risk, depending on the value of the collateral that Mr. Xie has pledged. If the shares rise, Mr. Ma, Mr. Xie and Mr. Shi apparently pocket the gains. They are already $245 million better off after Wasu shares rose 10 percent on April 9.

The privately held Alibaba doesn’t have to answer to public markets. And the transaction may include other terms that somehow share the trio’s gains with the rest of the company.

But the triangular deal shows how hard valuing Alibaba will be. One of the biggest questions for future investors is what will happen if insiders’ interests differ from their own. Mr. Ma and his cohort have already proposed that top individuals retain the right to nominate board directors, a requirement that scuppered Alibaba’s chances of a Hong Kong listing. The Wasu deal demonstrates how blurred the line between public and private can become.

John Foley is Reuters Breakingviews China editor. For more independent commentary and analysis, visit breakingviews.com.

Detroit Reaches Deal With Some Bondholders

DETROIT â€" Insurers of about $400 million of Detroit’s general-obligation bonds have agreed to settle their bankruptcy claims in a deal that would also help protect the city’s retired workers, federal mediators said on Wednesday.

Although the bonds represent a relatively narrow slice of Detroit’s $18 billion in outstanding debts, the deal could add momentum to the city’s efforts to resolve its bankruptcy in record time, by this fall. City and state officials are hoping to finish the case by then because the state law that puts Detroit under control of an emergency manager will expire then.

The new agreement calls for Detroit to honor the existing terms of about 78 percent of the affected bonds, according to one of the insurers, Assured Guaranty. Counting the payments skipped by Detroit since it declared bankruptcy last July, the overall recovery rate will be about 74 percent, the insurer said. The other insurers involved are the National Public Finance Guarantee Corporation and Ambac.

The remaining 26 percent of the scheduled debt service will be used to establish an “income stabilization fund” to keep retired city workers from falling below the federal poverty line. Detroit’s plan of adjustment calls for their pensions and retiree health benefits to be reduced because it does not have enough money set aside to pay the benefits they were promised.

Some retirees would be affected more adversely than others, and the mediators said the new fund was intended to help the most vulnerable ones.

The new settlement could shed light on how a particular type of general-obligation bonds could be treated in municipal bankruptcy, something of great interest to the municipal bond market as a whole. The bonds that are part of the deal are known as “unlimited tax general obligation bonds,” and the settlement would confirm that the bonds have a valid lien on property taxes that Detroit had pledged as security when it first issued them.

The settlement would also confirm that the pledged property taxes constitute “special revenues” under the United States Bankruptcy Code. Special revenues were designated in the 1980s as a type of bond security that would help distressed cities borrow, but the concept has not yet been subjected to a court challenge.

Detroit Reaches Deal With Some Bondholders

DETROIT â€" Insurers of about $400 million of Detroit’s general-obligation bonds have agreed to settle their bankruptcy claims in a deal that would also help protect the city’s retired workers, federal mediators said on Wednesday.

Although the bonds represent a relatively narrow slice of Detroit’s $18 billion in outstanding debts, the deal could add momentum to the city’s efforts to resolve its bankruptcy in record time, by this fall. City and state officials are hoping to finish the case by then because the state law that puts Detroit under control of an emergency manager will expire then.

The new agreement calls for Detroit to honor the existing terms of about 78 percent of the affected bonds, according to one of the insurers, Assured Guaranty. Counting the payments skipped by Detroit since it declared bankruptcy last July, the overall recovery rate will be about 74 percent, the insurer said. The other insurers involved are the National Public Finance Guarantee Corporation and Ambac.

The remaining 26 percent of the scheduled debt service will be used to establish an “income stabilization fund” to keep retired city workers from falling below the federal poverty line. Detroit’s plan of adjustment calls for their pensions and retiree health benefits to be reduced because it does not have enough money set aside to pay the benefits they were promised.

Some retirees would be affected more adversely than others, and the mediators said the new fund was intended to help the most vulnerable ones.

The new settlement could shed light on how a particular type of general-obligation bonds could be treated in municipal bankruptcy, something of great interest to the municipal bond market as a whole. The bonds that are part of the deal are known as “unlimited tax general obligation bonds,” and the settlement would confirm that the bonds have a valid lien on property taxes that Detroit had pledged as security when it first issued them.

The settlement would also confirm that the pledged property taxes constitute “special revenues” under the United States Bankruptcy Code. Special revenues were designated in the 1980s as a type of bond security that would help distressed cities borrow, but the concept has not yet been subjected to a court challenge.

Mars to Buy Pet Food Brands from P.&G. for $2.9 Billion

Mars, the maker of both M&M’s and cat food, announced on Wednesday that it was significantly expanding its pet food business by buying brands including Iams and Natura from Procter & Gamble for $2.9 billion in cash.

With the deal, which is expected to close this year, Mars will bring those brands together with its existing pet food products, which include Whiskas cat food and the Pedigree and Royal Canin dog food lines.

For Procter & Gamble, the sale represents another step toward streamlining the company, a cause championed by the activist investor William A. Ackman, who took a stake in the company in 2012.

Last year, Mr Ackman pressed for the ouster of the chief executive, Bob McDonald, who was ultimately replaced by A.G. Lafley, Mr. McDonald’s predecessor.

“Exiting Pet Care is an important step in our strategy to focus P&G’s portfolio on the core businesses where we can create the most value for consumers and shareowners,” Mr. Lafley said in a statement. “The transaction creates value for P.&G. shareowners, and we are confident that the business will thrive at Mars, a leading company in pet care.”

Mars, one of the largest private companies in the country, has net sales of $33 billion annually, and makes a range of consumer goods, including popular chocolates like Snickers and Twix and chewing gums like Extra and Orbit.

Procter & Gamble said that as a result of the sale, it would restate its most recent quarterly earnings. Its earnings per share guidance for the year was unchanged, however. Proceeds from the sale will be used for general corporate purposes, the company said.

 

Question-and-Answer Site Quora Raises $80 Million

Quora, the question-and-answer website, has raised $80 million in a new venture capital round meant to spur its growth and protect its independence.

The Series C round is being led by Tiger Global Management, and four existing Quora investors are also participating - Benchmark Capital, Matrix Partners, North Bridge Venture Partners and Peter Thiel.

Quora would not reveal what valuation the new round placed on the company. But people familiar with the investment said it was higher than the $400 million Quora was valued at after a $60 million Series B round in 2012.

Though Quora said it was not looking to raise another round of venture capital, the company was receptive when Tiger Global approached it about investing.

Marc Bodnick, who leads Quora’s business and community teams, said that while Quora did not need the cash, it was taking on the additional funding as an insurance policy of sorts.

“Having this money allows us to keep running Quora no matter what happens in the world,” he said. “We raised money because we think it helps us ensure our independence and permanence.”

Mr. Bodnick said Quora had no interest in selling to a big company like Google or Facebook. “We’re not interested in being acquired, ever,” he said.

While he did not rule out going public, Mr. Bodnick said the company had no plans for an initial public offering anytime soon, saying, “We have no idea what the future capital structure of the company might be.”

Indeed, Quora might have a hard time going public now, despite the robust market for I.P.O.’s. The company has no revenue right now, although Mr. Bodnick said it expected to introduce advertising at some point.

Having the extra cash will allow Quora to spend more money on technology infrastructure and hiring, knowing it will still have a large cash cushion.

Mr. Bodnick said Quora would soon be expanding into other languages. “In may ways, Wikipedia inspires our mission,” he said. “Wikipedia is in every language people speak. If we want to fulfill our mission, we’re going to need to be, too.”

Some funds will also be used to improve Quora’s technical infrastructure, Mr. Bodnick said.

No Quora employees or former employees are selling stock as part of the fund-raising. Mr. Bodnick would not comment on whether Quora has allowed so-called secondaries as part of past funding rounds.

“Building a great consumer technology company requires a very long-term orientation,” Mr. Bodnick said. “Having a comfortable amount of funds in our bank account allows us to be very long-term oriented in our strategy.”

An Order for Banks to Hold More Capital

“Federal regulators on Tuesday approved a simple rule that could do more to rein in Wall Street than most other parts of a sweeping overhaul that has descended on the biggest banks since the financial crisis,” Peter Eavis writes in DealBook. The rule increases to 5 percent, from roughly 3 percent, a threshold called the leverage ratio, which measures the amount of capital that a bank holds against its assets. The rule is scheduled to take effect at the start of 2018.

As regulators approved the rule, they also proposed an adjustment that would probably make the rule tougher for firms with large Wall Street businesses. The adjustment increases the assets that get counted in the leverage ratio calculation, most likely requiring banks to hold more capital than they expected. On Tuesday, regulators estimated that the eight biggest banks in the United States might have to find a combined $68 billion in capital to put their operations on firmer financial footing. In response, Wall Street titans are expected to cut back on some of their riskiest activities, including trading in credit-default swaps.

SIX DEGREES OF STEVEN COHEN  |  “The degree of separation between Steven A. Cohen and Bart M. Schwartz, the consultant selected last week to monitor the operations of the former SAC Capital Advisors, is closer than previously known,” Matthew Goldstein writes in DealBook. The son of an executive at Mr. Schwartz’s consulting firm is a portfolio manager at Point72 Asset Management, which will now manage much of Mr. Cohen’s personal fortune.

Mr. Schwartz said the potential conflict was disclosed to Mr. Cohen and his legal team as well as the government and that all sides were comfortable with it. The appointment of Mr. Schwartz, a former federal prosecutor who has a long history of serving as an independent monitor in government investigations, is part of the deal â€" still subject to a judge’s approval â€" that SAC struck with federal prosecutors in November to plead guilty to insider trading charges.

On Thursday, Judge Laura Taylor Swain of the United States District Court for the Southern District of New York is scheduled to decide whether to accept SAC’s plea and its deal with prosecutors to pay a $1.2 billion penalty. The judge is also expected to decide whether to allow Mr. Schwartz to serve as the outside consultant, whose job is to report periodically to prosecutors about the adequacy of Point72’s procedures for detecting improper trading. Judge Swain issued an order on Tuesday directing prosecutors and Mr. Cohen’s lawyers to be prepared at the hearing to discuss Mr. Schwartz’s qualifications.

ARE INVESTORS SOURING ON I.P.O.’S?  |  This week is expected to be the busiest for initial public offerings in more than seven years, but there are signs that investors are beginning to sour on the fresh arrivals, William Alden writes in DealBook. With 16 companies expected to price their share offerings, the week could provide a barometer for just how many new stocks investors will receive enthusiastically.

Investor appetite already seems to be waning. An exchange-traded fund that tracks the performance of recent offerings is down 2 percent so far this year, while the Standard & Poor’s 500-stock index has ended roughly flat. Just a month ago, the fund, created by Renaissance Capital, was up 8 percent for the year. Still, some companies are betting that a long-term market rally will resume.

One big company making its debut, the hotel chain La Quinta Holdings, took a cautious approach in its pricing on Tuesday evening. La Quinta, which is being taken public by the Blackstone Group, a giant private equity firm, priced its shares at $17 each, below an expected range of $18 to $21. At that level, La Quinta raised $650 million, achieving a valuation of roughly $2 billion going into its trading debut. The conservative pricing may help La Quinta achieve a more impressive performance in its first day of trading.

ON THE AGENDA  |  The Mortgage Bankers’ Association purchase applications index is out at 7 a.m. The Federal Reserve publishes the minutes of its March meeting at 2 p.m. Charles L. Evans, president of the Chicago Fed, gives a speech at 3:30 p.m. in Washington. The House Committee on Financial Services holds a hearing at 10 a.m. entitled “Legislative Proposals to Enhance Capital Formation for Small and Emerging Growth Companies.” Kevyn Orr, Detroit’s emergency manager, is on Bloomberg TV at 2 p.m. Sheryl Sandberg, the chief operating officer of Facebook, is on Fox News Channel at 9 p.m.

COMCAST MAKES CASE FOR MERGER  |  “Comcast presented regulators on Tuesday with 650 pages of reasons to approve its takeover of Time Warner Cable, saying a merger of the two largest cable television companies would spur rather than inhibit competition by encouraging rivals to improve their cable and high-speed Internet service,” Edward Wyatt and Eric Lipton write in The New York Times. But Comcast is not relying on financial filings alone to try to win what is expected to be a bruising battle with the deal’s opponents.

The company has already been busy briefing lawmakers and their staffs, particularly from the Senate Judiciary Committee, which will hold hearings on Wednesday to examine the proposed merger’s antitrust implications. The company has also added to its small army of lobbyists two former legislative aides who advised the Judiciary Committee on antitrust matters. The Comcast executive who oversees the company’s government affairs operations, David L. Cohen, made his case in favor of the $45 billion deal on a conference call with reporters on Tuesday.

Opponents, too, have been gearing up for a fight. A group of more than 50 consumer advocacy organizations sent a letter on Tuesday to Tom Wheeler, chairman of the Federal Communications Commission, and Attorney General Eric H. Holder Jr. asking them to block the merger because of its “complete lack of any tangible benefits.”

 

Mergers & Acquisitions »

Alibaba’s Founders Make a Bet on Video  |  An investment firm controlled by the founders of the Alibaba Group, the Chinese Internet giant, has agreed to acquire a 20 percent stake in the Wasu Media Holding Company, a Chinese Internet TV company, for more than $1 billion, The Wall Street Journal reports. WALL STREET JOURNAL

McClatchy to Sell Anchorage Daily News to Alaska Dispatch Publishing  |  Alaska Dispatch, a six-year-old website, is buying the 68-year-old Anchorage Daily News from the McClatchy Company for $34 million, the two companies announced Tuesday afternoon. NEW YORK TIMES

South Africa’s Woolworths to Acquire Australia’s David Jones  |  The South African retailer Woolworths Holdings is set to buy Australia’s second-largest department store, David Jones, for $2 billion, Reuters writes. REUTERS

Comcast Gives a Nod to a Future Apple Set-Top Box  |  In papers related to its proposed merger with Time Warner Cable, Comcast gives a nod to a future Apple set-top box, even though Apple has yet to introduce one, the Bits blog writes. NEW YORK TIMES BITS

INVESTMENT BANKING »

Goldman Sachs May Close Its Dark Pool  |  Goldman Sachs is said to be considering shutting down its so-called dark pool trading operation, known as Sigma X, The Wall Street Journal reports, citing unidentified people familiar with the situation. The bank’s executives are weighing whether the revenue that the firm generates from operating Sigma X is worth the risk amid growing scrutiny of dark pools. WALL STREET JOURNAL

More Progress Needed to Get Women in Senior Positions on Wall Street  |  Critics say that Wall Street will not see a woman lead a major investment bank anytime soon, MarketWatch reports. Only a small number of the executive roles at the major banks are currently held by women, and the financial industry, which is typically dominated by men, will continue to be so for the foreseeable future, one critic says. MARKETWATCH

Bank of America and Allstate End Mortgage Securities Suit  |  Bank of America’s Countrywide unit and the insurer Allstate have settled a 2010 lawsuit over $700 million in devalued mortgage-backed securities, Bloomberg News reports. The terms of the settlement were not disclosed. BLOOMBERG NEWS

London Banks See Exit From European Union as Threat to Business  |  If Britain votes to leave the European Union, some bankers fear that parts of London’s banking business could drift to other European cities, Bloomberg News writes. BLOOMBERG NEWS

PRIVATE EQUITY »

Private Equity’s New Kind of Club Deal  |  Blackstone is enlisting some of its fund investors to help buy the auto parts maker Gates for $5.4 billion. Returns from such so-called co-investing, though, could make it a passing fad, Jeffrey Goldfarb of Reuters Breakingviews writes. DealBook »

Sycamore Partners Returns to Fund-Raising  |  The private equity firm Sycamore Partners has raised nearly $2 billion for the follow-up fund to its 2012 vintage fund, The Wall Street Journal reports. WALL STREET JOURNAL

Why the S.E.C. Is Investigating Private Equity  |  “I’ve got reason to think that regulators have found some incidents of hidden fees and, if so, it could destroy all of that trust that private equity firms appear to have built with their limited partners,” Dan Primack writes in Fortune’s Term Sheet. FORTUNE

HEDGE FUNDS »

Tech-Focused Hedge Fund to Return $2 Billion to Investors  |  Coatue Management, a $7 billion hedge fund founded by Philippe Laffont, will turn its focus to venture investing in Silicon Valley start-ups. DealBook »

Powerful, Disruptive Shareholders  |  Activist investors “typically not only tolerate a fight â€" they relish it. While that may provide amusement to them, it can leave a company distracted, vulnerable to a takeover and subject to losing its people to more stable employers,” Joseph Perella and Peter Weinberg write in a New York Times Op-Ed column. NEW YORK TIMES

Sotheby’s Steps Up Defense Against Loeb  |  Sotheby’s, the auction house that has been targeted by activist investors including Daniel S. Loeb, published a 53-page slide deck on Tuesday refuting Mr. Loeb’s claims of poor management, The Financial Times writes. FINANCIAL TIMES

I.P.O./OFFERINGS »

Imax Selling 20 Percent of Its Chinese Business  |  After making an $80 million investment, China Media Capital and FountainVest Partners will help the unit, China Imax, complete a public offering, The New York Times reports. NEW YORK TIMES

Nigeria’s Seplat Raises $500 Million in I.P.O.  |  The oil company became the first Nigerian firm to have a dual listing in London and Nigeria, with a market capitalization based on its pricing of 1.14 billion pounds, or about $1.9 billion. DealBook »

Box Chief Invests in Supply Chain Software Company  |  With ambitions of changing supply chain management, a start-up called Elementum has raised $5 million from technology entrepreneurs. DealBook »

VENTURE CAPITAL »

Why ‘the Next Silicon Valley’ Is Always Silicon Valley  |  Cities across the country, including New York, Chicago and Los Angeles, have all “professed their silicon dreams,” Derek Thompson of The Atlantic writes. But, he adds, “if the best advertisement for talent is talent, then all things equal, the area most likely to be the next generation’s Silicon Valley is … well, probably Silicon Valley.” THE ATLANTIC

Andreessen Warns on High-Valuation Offers  |  Marc Andreessen and his venture capital firm Andreessen Horowitz are advising their portfolio companies to be skeptical of high-valuation offers from growth-stage investors from outside Silicon Valley, The Wall Street Journal reports. The issue, he said, involves term sheets, the framework for deals between investors and entrepreneurs. WALL STREET JOURNAL

Atlassian Raises $150 Million  |  Atlassian, a developer of online collaboration tools for businesses, said on Tuesday that it had raised $150 million in a secondary offering led by T. Rowe Price, ReCode reports. RECODE

LEGAL/REGULATORY »

Your Homework Assignment: Sue the Federal Government  |  Students at the University of Virginia Law School have challenged the Justice Department to unseal settlements with big banks and corporations. DealBook »

Official’s Remarks Attacking S.E.C.’s Timidness Causes Stir  |  James Kidney, a trial lawyer at the Securities and Exchange Commission, criticized colleagues for being “tentative and fearful.” His frank remarks, made during his retirement speech, are drawing attention. DealBook »

Deutsche Bank Economist to Join China’s Central Bank  |  Jun Ma, a 13-year veteran of the German bank, is known as one of the most bullish of the economists who follow China. DealBook »

Senate Panel Approves Nominees to Futures Trading Commission  |  The Agriculture Committee approved the nomination of Timothy G. Massad as chairman of the Commodity Futures Trading Commission, and the nominations of Sharon Y. Bowen and J. Christopher Giancarlo as commissioners. But a senator later said he would place a hold on Ms. Bowen’s nomination. DealBook »

Obama Signs Measures to Help Close Gender Gap in Pay  |  President Obama signed two executive measures on Tuesday intended to help close longstanding pay disparities between men and women as Democrats seek to capitalize on their gender-gap advantage at the ballot box in a midterm election year, The New York Times writes. NEW YORK TIMES

After Slide, Rich Nations Now Lifting Growth, I.M.F. Reports  |  The International Monetary Fund expects about 3 percent growth in the United States in 2014 after 1.9 percent growth in 2013, The New York Times writes. NEW YORK TIMES

U.S. Fines General Motors $28,000 for Not Cooperating With Ignition Flaw Inquiry  |  The automaker missed an April 3 deadline to answer questions from the National Highway Traffic Safety Administration about why it did not recall cars until years after learning of safety problems, The New York Times reports. NEW YORK TIMES

Nigeria’s Seplat Raises $500 Million in I.P.O.

LONDON - Seplat, the Nigerian independent oil and gas company, said Wednesday that it raised 300.9 million pounds, or about $500 million, in its initial public offering, a dual listing in London and in Nigeria.

The company priced its offering at 210 pence a share on the London Stock Exchange and 576 Nigerian naira, or about $3.51, a share on the Nigerian Stock Exchange, giving it a market capitalization of £1.14 billion, or about $1.9 billion.

Shares were down about 2.4 percent to 205 pence in conditional trading in London on Wednesday morning.

Unconditional trading of its shares in London and trading in Nigeria is expected to begin on Monday.

Seplat is the first Nigerian company to have a dual listing in London and in Nigeria. It listed 26.4 percent of its share capital as part of the offering.

Austin Avuru, the Seplat chief executive, said the money from the offering will put the company in a strong position to make further acquisitions as international oil companies divest their onshore assets in the Niger Delta.

“We are already a leading indigenous independent in our home market but the opportunities opening up in Nigeria for companies like ours are significant,” he said in a statement.

The proceeds will also be used to reduce the company’s debt.

Seplat was formed in 2009 by the combination of two smaller oil companies.

BNP Paribas, Standard Bank, Renaissance Securities, Citigroup and the Royal Bank of Scotland served as joint bookrunners on the public float.