William Ackman and Drug Maker Prepare Bid for Botox Maker

The activist investor William A. Ackman plans to team up with Valeant Pharmaceuticals to make a bid for the maker of Botox cosmetic treatments, Allergan, the hedge fund manager disclosed in a regulatory filing on Monday.

A bid would be one of the biggest takeover offers announced so far this year. Allergan had a market value of about $42 billion as of Monday afternoon.

The union of Mr. Ackman and Valeant is an unusual pairing of activist hedge fund and hostile bidder, putting together one of the most prominent hedge fund managers with a drug maker known for its serial acquisitions.

Mr. Ackman said in the regulatory filing that he had acquired a stake of nearly 10 percent in Allergan and supports a merger of the two pharmaceutical companies. Should a deal be completed, his firm, Pershing Square Capital Management, would retain a big stake in the combined drug maker.

It isn’t clear how much Valeant, whose deals have included the $8.7 billion takeover of the eye care products maker Bausch & Lomb and the $2.6 billion purchase of Medicis, will pay.

In the regulatory filing, Pershing Square said that it expected the cash component of an offer to total $15 billion, with financing to be provided by Barclays and the Royal Bank of Canada.

Shares in Allergan were up more than 16 percent in after-hours trading after The Wall Street Journal reported the plans of Mr. Ackman and Valeant.

Valeant said in a statement: “We firmly believe that combining Valeant and Allergan would create an unrivaled platform for growth and value creation in healthcare, and we look forward to finalizing and announcing the terms of our proposal shortly.”

Mr. Ackman and representatives for Allergan declined to comment.

David Gelles contributed reporting.

Valeant’s History of Deal Making

Valeant Pharmaceuticals, which said on Monday that it was teaming up with the hedge fund manager William A. Ackman to bid for the maker of Botox, is no stranger to deal-making.

The Canadian company, which was forged from the 2010 merger of Valeant and Biovail, is known as a serial acquirer, having spent billions of dollars on companies. Its latest, and biggest, target, Allergan, has a market value of about $42 billion.

Acquisitions are common in the world of health care, as companies seek control of lucrative new drugs, but Valeant has been among the most active. It has struck 30 deals since the Biovail transaction in 2010, according to Standard & Poor’s Capital IQ.

The company has also engaged in prominent bids that have failed to result in deals. Below is a sampling of some of its deal-making activities.

Successes

Bausch & Lomb: Valeant agreed in May 2013 to buy the eye care company Bausch & Lomb for about $8.7 billion. The deal closed a few months later. Under its terms, Valeant paid $4.5 billion to the investors that owned Bausch & Lomb, led by the private equity firm Warburg Pincus, and spent about $4.2 billion to repay the company’s debt.

Medicis: In September 2012, Valeant agreed to spend $2.6 billion for the Medicis Pharmaceutical Corporation, a skin care business based in Arizona. The deal closed that December.

Natur Produkt: The Medicis deal came during a particularly active year for Valeant. Among its acquisitions in 2012, it struck a $180 million deal for Natur Produkt International of Russia, a cough and cold pharmaceuticals provider.

Failures

Actavis: Merger talks between Valeant and another drug maker, Actavis, fell through in April 2013, a person briefed on the matter said at the time. Valeant might have paid more than $13 billion in stock to acquire the company. But not long after the collapse of the talks, Actavis agreed to buy a smaller rival, Warner Chilcott, for about $5 billion in stock.

Cephalon: Valeant unveiled a $5.7 billion hostile bid for Cephalon, a biopharmaceutical company, in March 2011. Cephalon rebuffed the offer as too low and opportunistic and, in May, it agreed to sell itself to Teva Pharmaceutical Industries for $6.8 billion.

For Square, Making Money Remains a Challenge

The payments start-up Square has been considered one of the hottest young companies in Silicon Valley, with a multibillion-dollar valuation. But it now appears to be facing some growing pains.

The company is losing money and recently discussed a possible sale, according to a report on Monday in The Wall Street Journal. The predicament points to the broader challenges of making money in the highly competitive world of payments.

The chief difficulty for Square and similar companies is that margins in this business can be extremely thin or even nonexistent, said James Wester, a research director at IDC, a technology advisory firm. A number of parties, including banks and credit card companies, collect payments when a customer swipes a credit card, raising the question of how a company like Square makes itself into more than just another middleman.

Square has not publicly answered that question in detail, though its chief executive, Jack Dorsey, has said that it is expanding beyond payments to become more of a diversified commerce company.

“It’s just a stark reminder that in payments, you really have to have everything working exactly right,” Mr. Wester said. “Just disrupting payments isn’t necessarily enough.”

One important laboratory for Square is Starbucks, which struck a prominent partnership with the company in 2012. Starbucks invested $25 million in Square and now relies on the company to process all of its transactions on the back end.

Starbucks says that the arrangement saves it money, reducing its fees on debit and credit cards in the United States. But Starbucks has not disclosed the details of the arrangement.

A clue, according to The Journal report, is that Square actually loses money on the deal. Last year, the report said, Square lost at least $20 million through the arrangement, almost as much as Starbucks’ original investment.

A spokeswoman for Starbucks declined to comment on Monday.

Square says that it processes tens of billions of payments a year, not including the Starbucks arrangement. Customers using Square Cash, a money transfer service introduced in October, send millions of dollars to each other every week, according to the company.

The company also recently struck a partnership with Whole Foods, though it is significantly more limited than the Starbucks deal. Under the pact, customers at certain Whole Foods stores can use a Square app to pay for items at “in-store venues,” like sandwich counters and juice bars.

But questions remain about Square’s corporate strategy, including whether it will pursue an initial public offering. The company secured a line of credit this month from banks led by Goldman Sachs, according to a CNBC report, a move seen as a possible prelude to an I.P.O. or other transaction.

But with mounting losses, representatives of Square also considered a possible sale, The Journal reported. Google discussed the possibility of buying the company this year, the report said, citing three unidentified people familiar with the matter.

In a statement, a Square spokesman said: “We are not, nor have we ever been in acquisition talks with Google, and while we appreciate that Square may be an attractive target for some companies, we have never seriously considered selling to anyone or been in any talks to do so.”

A Google spokesman declined to comment.

Google has its own payments business, known as Google Wallet. But a sale would not necessarily resolve Square’s challenges.

“It’s not as if the problem goes away,” said Roger L. Kay, president of Endpoint Technologies Associates, a technology research firm. “It just becomes internal to Google.”

Be Wary of a Big Mining Merger

Barrick Gold’s interest in a $33 billion merger with rival Newmont Mining deserves a skeptical eye.

The world’s top gold miner by ounces produced is keen on a deal with the industry No. 2, according to news reports. Barrick’s outgoing founder and chairman, Peter Munk, admitted to “hubris” in past deals.  Former Goldman Sachs banker John Thornton, who takes over next month, faces a considerable challenge convincing shareholders this won’t be another value-destroyer.

Mr. Munk, who is set to yield the chairman’s title to Mr. Thornton on April 30, recently lamented Barrick’s $7.7 billion purchase in 2011 of Australian copper miner Equinox. That deal, which came at a 30 percent premium to the target’s stock price, added to Barrick’s debt load and led to a big write-down after copper prices declined.

A few things could make this deal different. Investors have long speculated about the merits of a Newmont-Barrick deal. And after a sharp correction in the gold price, Barrick is said to be offering Newmont a more modest premium - about 13 percent above the company’s 20-day average share price, according to Bloomberg News - all in shares.

And there’s a chance investors may value the combined company’s lower-cost U.S. assets more if they’re separated from the riskier overseas mines - an aspect of the merger talks that may or may not come to fruition. Meanwhile, potential synergies of $1 billion look ambitious.

Taxed and capitalized, these savings might be worth $6 billion to shareholders, based on a blend of the two companies’ tax rates - or just under a fifth of the combined group’s market cap. Capturing big synergies has proven difficult in past mining mergers. The close proximity of Newmont’s and Barrick’s flagship Nevada mines may make it easier for them to achieve.

The bigger issue is existential. Mr. Munk’s Equinox mea culpa seemed to suggest that Barrick was done with empire building. The worry now must be that Mr. Thornton will push for even more deals. Along with spelling out how the company plans to make a potential Newmont deal pay, Mr. Thornton needs to reassure that Barrick has learned something from past hubris.

Kevin Allison is a columnist at Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.

Spurning Merger Approaches, AstraZeneca Pursues Own Path

The British drug company AstraZeneca said no to a tie-up with Pfizer, turning down the possibility of one of the biggest drug mergers in recent history.

Whether such a deal would have made sense is another matter, since the British drug maker is trying to improve its fortunes on its own and Pfizer in the past has found that big acquisitions can sometimes prove more distracting than helpful.

In recent months, Pfizer made a number of informal takeover approaches to AstraZeneca, according to a person briefed on the matter who is not authorized to speak publicly about internal discussions. One of those tentative approaches valued the smaller pharmaceutical company at about £60 billion, or nearly $100 billion, according to The Sunday Times.

At that level, the deal would be one of the biggest ever in the pharmaceutical industry, surpassing Pfizer’s $90 billion takeover of Warner-Lambert.

Pfizer would probably have used some of the cash and short-term investments on its balance sheet â€" about $32.4 billion as of the end of the year â€" as part of the deal.

A takeover of its British competitor would also have made use of cash that Pfizer holds overseas, since buying an American rival like Bristol-Myers Squibb would incur a big tax bill. Pfizer said that it had about $69 billion in earnings from international subsidiaries as of Dec. 31.

But the board of AstraZeneca viewed the approaches as opportunistic and ill-timed, with too small a takeover premium, the person briefed on the matter said. As of Friday, the company’s market value stood at just under £48 billion.

The two aren’t currently in talks, according to people briefed on the state of the discussions. Representatives for both companies declined to comment.

To Pfizer, AstraZeneca may be attractive because of its portfolio of cancer drugs, an area that the American company has also made a priority as it seeks to restock its product pipeline. The company’s shares have fallen 1.4 percent over the past 12 months.

AstraZeneca hopes to begin late-stage clinical trials this year of at least one drug that works by unleashing the body’s immune system to attack tumors. This is one of the hottest areas in oncology, with doctors predicting a revolution in treatment and securities analysts predicting billions of dollars in sales for successful drugs.

The company is considered to be behind Bristol-Myers Squibb, Merck and Roche in the race to bring such drugs to market. But the market is expected to be big enough for several participants.

AstraZeneca hopes to win approval for olaparib, a new type of drug to treat ovarian and breast cancer.

Meanwhile, Pfizer is no stranger to big deals, having struck three enormous ones over the past decade: the takeover of Warner-Lambert in 2000, the $60 billion purchase of Pharmacia in 2002 and the $68 billion acquisition of Wyeth in 2009.

But rather than seek out a merger partner, AstraZeneca has been attempting to improve its fortunes on its own over the past few years. It has suffered declining revenues and profits because of the loss of patent protection on some of its best-selling drugs, while it has experienced setbacks in developing new drugs.

Its revenues in 2013 were $25.7 billion, down 8 percent, while what the company calls core earnings per share, which excludes restructuring and certain other costs, fell 26 percent to $5.05. The company is projecting further declines in 2014.

In 2012, the company named Pascal Soriot, formerly the head of pharmaceuticals at Roche, as its new chief executive. Mr. Soriot has been trying to cut costs, speed up decision making, and focus drug development on selected diseases.

AstraZeneca has made a number of small acquisitions to bolster its pipeline. Perhaps the most significant was its agreement to pay at least $2.7 billion to buy out Bristol-Myers’ share of a diabetes joint venture, leaving AstraZeneca with sole control of a portfolio of products.

One new product that AstraZeneca has been counting on for growth, the clot-busting drug Brilinta, has not gained much traction in the United States. Mr. Soriot has said that sales in the United States are being slowed by an investigation by the Department of Justice, which is believed to be looking into whether the results of a clinical trial were manipulated to make Brilinta look better than the comparison drug, Plavix, in preventing heart attacks and strokes.

Shares in AstraZeneca have risen 13 percent over the past 12 months.

Not all analysts and investors believe a deal for AstraZeneca makes sense. Timothy Anderson, a pharmaceutical analyst at Sanford C. Bernstein & Company, noted on Monday that the American drug maker has been working to split itself up into separate, smaller units.

“Acquiring AstraZeneca would take Prizer in a direction that is the polar opposite of what management has been discussing for about the past three years,’’ he wrote. “Many investors and industry observers alike feel that Pfizer is in its currently difficult position precisely because of prior mega-mergers.”

Mr. Anderson added: “Nearly every big drug company that has undergone large mergers now laments how disruptive transactions like these are to important business functions such as R.&D. Pfizer has said the same.”

In a quick survey of institutional investors conducted by Mark Schoenbaum, an analyst at the ISI Group, 51 percent said that the deal did not make sense from Pfizer’s point of view. Some 49 percent of the 194 respondents said the rumored price of $80 a share would be fair, 41 percent said it would be too high and 10 percent too low.

Mr. Schoenebaum himself concluded that such a deal would add shareholder value for Pfizer and would give it access to the important new type of cancer drug.

“Growing bigger (and, in PFE’s view, better) doesn’t at all mean PFE can’t split up,’’ he wrote in a note on Sunday, referring to Pfizer by its ticker symbol.

Katie Thomas contributed reporting.

Group Led by TPG Agrees to Buy Health Care Company for $461 Million

A United States health care company that does business in China has agreed to be sold to a group of investors for $461 million after the investors raised their bid in the face of a rival offer.

The company, Chindex International, said on Monday that it had agreed to the revised offer of $24 a share in cash. The buyers include the private equity firm TPG and a subsidiary of the Shanghai Fosun Pharmaceutical Group.

The group originally bid $19.50 a share, or $369 million, in February. But Chindex subsequently received a rival offer of $23 a share from a bidder whose identity was not disclosed.

Chindex said on Monday its board had decided that the new offer from the TPG group was “more favorable” and that the rival suitor had declined to raise its bid. The deal, subject to approval by regulators and by Chindex shareholders, is expected to close in the second half of the year.

Shareholders of Shanghai Fosun Pharmaceutical, however, will not be required to bless the transaction. The company, which is contributing equity to the deal, will ask its shareholders to approve a cash contribution, but if shareholders do not sign off, then TPG will contribute all the deal’s cash, the announcement said.

Shares of Chindex, listed on the Nasdaq, rose more than 3 percent on Monday, to about $23.70.

The company, which is based in Bethesda, Md., provides medical care in China through its hospitals unit, United Family Healthcare. It also supplies medical equipment.

Among the bidding group is Roberta Lipson, Chindex’s chief executive, who will contribute equity to the deal.

The transaction committee of the company’s board was advised by Morgan Stanley and the law firm Hughes Hubbard & Reed. TPG was advised by Goldman Sachs and Cleary Gottlieb Steen & Hamilton, while the subsidiary of Shanghai Fosun Pharmaceutical was advised by Baker & McKenzie.

K.K.R.’s Acquisition of an Affiliate Encounters Opposition

A plan by Kohlberg Kravis Roberts to acquire an affiliate has encountered opposition from a group that advises investors.

K.K.R., the giant private equity firm, agreed last year to acquire KKR Financial Holdings, an affiliated specialty finance company that invests in credit, for $2.6 billion in stock, saying the deal would help it expand its balance sheet. KKR Financial Holdings, known as KFN, is an independent, publicly traded company that is managed by a subsidiary of K.K.R.

But on Monday, the CtW Investment Group, an organization that advises union pension funds, is expected to oppose the deal, arguing that it would shortchange shareholders.

CtW contends that the acquisition process was flawed, leading to a price that was too low, according to a letter it plans to send to shareholders. The letter, which was obtained by DealBook, urges shareholders to vote against the deal at a meeting on April 30.

The views of CtW may not carry much weight, since the group advises investors that hold a little more than 0.1 percent of the shares of KKR Financial Holdings. Two influential shareholder advisory groups, Institutional Shareholder Services and Glass Lewis, have come out in support of the deal, though both groups expressed concerns about the apparent lack of a competitive sale process.

A spokeswoman for K.K.R. declined to comment on CtW’s letter.

In December, K.K.R. agreed to pay 0.51 of a K.K.R. share for each share of KKR Financial Holdings, valuing those shares at $12.79 each, a premium of about 35 percent.

In its letter, CtW argues that the board of KKR Financial has “close ties” to K.K.R., preventing it from reaching a fair deal. The chief executive of KKR Financial, Craig J. Farr, who is also the head of KKR Asset Management, a K.K.R. subsidiary, sits on the board, as does Scott C. Nuttall, the head of K.K.R.’s global capital and asset management group.

“This deal’s low valuation and lackluster negotiation process further demonstrate that KFN’s directors failed to discharge their fiduciary duties and adequately negotiate on behalf of KFN’s public shareholders,” the letter states. It is signed by Dieter Waizenegger, CtW’s executive director.

To support its contention that the shareholders received a bad deal, CtW notes that the acquisition was struck at a time when KKR Financial shares were near their lowest point for the year and shares of K.K.R. were at their high. Since the deal was announced, CtW notes, K.K.R. shares have fallen, diminishing the deal’s implied price.

In addition, the letter says that the “KFN board of directors appears to have made no effort to pursue alternatives or solicit competing bids,” and that any rivals would have faced significant obstacles.

“The board’s decision to forgo an auction process is a cause for concern because shareholders have little assurance that the offer price reflects the true, fair value of the company’s assets,” the letter states, adding later that the board is “acting as an agent of K.K.R. rather than its own shareholders.”

Those criticisms echo concerns voiced recently by I.S.S., which said in its report on the deal that K.K.R.’s management of KKR Financial created a possible conflict of interest. I.S.S. also pointed to the “unusually high” termination fee of 9.6 percent as a cause for concern.

Glass Lewis also said it was concerned that KKR Financial “does not appear to have solicited or engaged any alternative parties prior to executing the merger agreement.”

But both I.S.S. and Glass Lewis concluded that, in spite of these concerns, the deal’s price was adequate and that KKR Financial shareholders would benefit from owning part of K.K.R.

One large shareholder is enthusiastically in favor of the combination. Leon G. Cooperman, the head of Omega Advisors, which owns more than 7 percent of KKR Financial shares, said on a conference call in December that the merger made “eminent sense” and that the price was “fair.”

“I recommended this two years ago,” he said, according to a transcript. “But better late than never.”

Barclays Poised to Announce Exit From Commodities

Barclays will announce Tuesday that it plans to exit large parts of its commodities business, said a person briefed on the bank’s plans, following other major investment banks that are struggling with heightened regulatory scrutiny and falling profits.

The British bank is among the top five banks in the commodities business that control much of the global market.

Barclays will shed a number of jobs, adding to the tally of layoffs from a broad restructuring aimed at getting the bank back to solid footing.

Antony Jenkins, the chief executive, has said Barclays will get out of businesses that do not generate returns greater than the bank’s cost of capital. The investment bank, which includes the commodities business, fell short of this goal last year reporting a return on equity of 8.2 percent.

The bank will either shut down or sell much of its metals, energy and agricultural commodities business, said the person with knowledge of the plan, who spoke on the condition of anonymity because it was not yet public. Precious metals trading will be folded into foreign exchange trading, said the person.

JPMorgan is selling its physical commodities business for $3.5 billion to the Mercuria Energy Group of Switzerland, started by two Goldman Sachs traders. The business trades hard assets, as opposed to the financial instruments that are tied to commodities.

Deutsche Bank, Morgan Stanley and Bank of America Merrill Lynch have all sold or closed parts of their commodities operations in recent months.

Goldman Sachs is the only bank that has so far said it will remain in the business, saying it is too important to clients.

The United States Federal Reserve paved the way for banks to expand their commodities businesses when it enacted an exemption several years ago to allow them to own pipelines and storage facilities for oil and other commodities. It is considering restrictions on the activities of financial holding companies in the physical commodities markets.

The Financial Times first reported the Barclays announcement on Monday. It cited a report by Coalition, a market analytics firm, showing revenues from the top 10 banks in commodities fell to $4.5 billion last year from $14.1 billion in 2008.

Barclays website says that it has 160 people who work in commodities trading, sales and research. It is not clear how many of those jobs would be eliminated.

A spokesman for Barclays declined to comment.

Earlier this year, Barclays closed its power trading business in the United States and Europe. The Federal Energy Regulatory Commission, the government watchdog overseeing the oil, natural gas and electricity business, last year announced a $470 million fine against Barclays for suspected manipulation of energy markets in California and other Western states by some of its traders from 2006 to 2008. Barclays is fighting the charges in court.

Morning Agenda: Airbnb’s $10 Billion Valuation

Airbnb is said to have closed a $475 million round of financing from a group led by TPG Growth that values the home-sharing company at about $10 billion, Michael J. de la Merced writes in DealBook. At the value assigned by the investment, Airbnb â€" a website and app where homeowners and apartment dwellers rent their homes, spare rooms or couches to travelers â€" would be worth more than some established hotel chains like Wyndham Worldwide or Hyatt.

Airbnb is also set to meet New York State’s attorney general, Eric T. Schneiderman, in court this week related to a subpoena filed last fall “to identify bad actors and illegal activity on the platform,” according to TechCrunch. The state is looking to crack down on hosts operating multiple listings.

GOLDMAN, CITI … AND A GUY IN AN OFFICE  |  “Anyone looking at the mergers and acquisitions ‘league tables’ â€" the Wall Street equivalent of Major League Baseball’s standings â€" during this hot year for merger activity would find the usual suspects: Morgan Stanley and Goldman Sachs vying for the top spot, with other brand-name firms jockeying to fill the coveted top 10,” James B. Stewart writes in the Common Sense column. “And then, at No. 11, there’s Paul J. Taubman.”

“Mr. Taubman has single-handedly accounted for $175 billion in deals over the last year, which has had Wall Street bankers buzzing with a mix of admiration and envy,” Mr. Stewart writes, adding, “Although Mr. Taubman’s feat is unusual, he may be part of a fledgling trend toward merger and acquisition microfirms, or, as in his case, sole practitioners.” In Mr. Taubman’s case, his lofty ranking is based on two giant deals: Verizon’s $130 billion acquisition of Vodafone’s stake in Verizon Wireless â€" the biggest single deal of 2013 â€" and Comcast’s $45 billion attempt to take over Time Warner Cable.

SOTHEBY’S POISON PILL  |  The so-called poison pill was invented in the 1980s to fight off hostile raiders. But now, Sotheby’s â€" the auction house that has become a target for a number of hedge funds, including Daniel S. Loeb’s Third Point â€" has adopted a low-threshold poison pill “clearly aimed at the hedge funds, and Mr. Loeb in particular,” Steven M. Davidoff writes in the Deal Professor column. Third Point is running a proxy contest to replace three of Sotheby’s directors.

Sotheby’s poison pill sets two limits for ownership â€" a 20 percent limit for passive investors like mutual funds and a 10 percent threshold for activist shareholders. Third Point sued Sotheby’s in Delaware Chancery Court in March, challenging the poison pill as illegal because it limited the hedge fund’s ability to buy more shares and so have a greater likelihood of winning the proxy contest.

“The question now is whether the old cases upholding the poison pill will still apply in the case of activism. This is the fundamental question in the Sotheby’s case,” Mr. Davidoff writes. “In a hostile takeover, the company is about to undergo a change of control that will end its independence.” He adds: “But with shareholder activism, the issue is about steering the future direction of the company, not eliminating shareholders or the company itself. The company’s future independence or survival is not the primary question.”

ON THE AGENDA  |  The index of leading indicators for March is out at 10 a.m. Maria Bartiromo of Fox Business Network interviews Mayor Bill de Blasio at 9 a.m. Netflix reports first-quarter earnings.

LATEST FIGHT ON VOLCKER RULE  |  The fight over the Volcker Rule rages on. The latest battle involves an instrument known as the collateralized loan obligation, which big banks want to be allowed to own but which regulators say can be hazardous and may allow the banks to evade the Volcker Rule’s prohibition on risky trading. The rule was an attempt by lawmakers to reinstate taxpayer protections lost when Congress gutted the Glass-Steagall Act in 1999, but the big bank crowd contends that the regulators have overreached, Gretchen Morgenson writes in the Fair Game column.

Ms. Morgenson writes: “Under the rule, banks are not allowed to have ownership stakes or relationships with hedge funds or private equity firms. Many C.L.O.s are issued and overseen by hedge funds and private equity firms, though, making C.L.O.s just the kind of trading vehicles the Volcker Rule intended to exorcise from bank balance sheets.” Banks cannot own C.L.O.s if they contain bonds, equity interests or other assets, but can hold them if they contain only commercial loans throughout the holding period.

Some have called the Volcker Rule a job destroyer, arguing that it will cause small banks to make layoffs if they have to divest these riskier assets. Small banks, however, do not own large amounts of this paper, though their big bank brethren do, Ms. Morgenson writes. And the divestiture of these holdings would not cause immense losses, regulators say. “Clearly, large and interconnected banks like the status quo â€" a safety net that will rescue them if their bets go bad,” Ms. Morgenson adds. “What is equally clear, though, is that taxpayers deserve better.”

 

Mergers & Acquisitions »

Comcast’s Real Repairman  |  David L. Cohen, Comcast’s executive vice president, is the point man for moving deals like the one for Time Warner Cable past regulatory hurdles, The New York Times writes. NEW YORK TIMES

Comcast Said to Weigh Divestitures With Charter  |  Comcast is said to be in talks with Charter Communications over selling or spinning off about three million subscribers worth up to $20 billion as part of the divestitures related to its $45 billion takeover of Time Warner Cable, Reuters reports, citing an unidentified person familiar with the situation. REUTERS

Pfizer Considering $100 Billion Offer for AstraZeneca  |  Pfizer, the American pharmaceutical giant, has approached its British rival, AstraZeneca, to propose a takeover bid of more than $100 billion, Reuters writes, citing Britain’s Sunday Times. REUTERS

Square Explores Possible Sale  |  Representatives of the mobile payments start-up Square have been in talks with rivals, including Google and Apple, over a possible sale, The Wall Street Journal writes, citing unidentified people familiar with the situation. WALL STREET JOURNAL

INVESTMENT BANKING »

Goldman Says It Has No Plans to Exit Dark Pool Business  |  Harvey Schwartz, the chief financial officer of Goldman Sachs, told analysts that he had “no strategic plans” to close the bank’s dark pool trading business known as Sigma X. DealBook »

Italian Bank Increases Planned Share Sale to $6.9 Billion  |  Monte dei Paschi di Siena is fighting to avoid nationalization and bracing for stress tests of its balance sheet by European regulators. DealBook »

Morgan Stanley and Goldman Sachs Adjust to New Banking Climate  |  Morgan Stanley’s solid first quarter provides evidence that it has adapted better to a stricter regulatory environment than rivals like Goldman Sachs, which reported an earnings decline. DealBook »

Morgan Stanley Gets Most Relief From First-Quarter Earnings  |  Morgan Stanley’s chief executive, James P. Gorman, presided over a far better start to the year than in 2013, and momentum seems to be building toward increasing the bank’s return on equity, Antony Currie of Reuters Breakingviews writes. DealBook »

Barclays to Retreat From Commodities Trading  |  Barclays is expected to announce plans this week to wind down large parts of its metals, agriculture and energy business, The Financial Times reports. FINANCIAL TIMES

PRIVATE EQUITY »

American Securities Said to Be Seeking Buyer For Prison-Phone Operator  |  The private equity firm American Securities is said to be considering selling the Global Tel*Link Corporation, the biggest American operator of prison phones, The Wall Street Journal reports, citing unidentified people familiar with the situation. The company was sold to American Securities in late 2011 for about $1 billion. WALL STREET JOURNAL

Article on Carlyle’s Involvement With New Jersey Pension System Is Criticized  |  Dan Primack of Fortune’s Term Sheet countered an article published by the website Pando that questioned the New Jersey Investment Council’s decision to give $300 million of state pension money to the private equity firm Carlyle Group. Pando’s original article, which said that Robert Grady, the council’s chairman and one of the closest advisers of Gov. Chris Christie of New Jersey, is a longtime executive at Carlyle who still receives income from its investments, can be found here. FORTUNE

Spectrum Equity Investors Raising New Fund  |  The private equity firm Spectrum Equity Investors, based in Boston, is raising a new $800 million fund, Fortune writes. The firm last closed a fund in 2010. FORTUNE

HEDGE FUNDS »

In Hong Kong, Some Bankers Back an ‘Occupy’ Movement  |  A former hedge fund manager, Edward C.K. Chin, hopes to ignite a political awakening among the bankers, stockbrokers and financial traders whose livelihoods have become increasingly enmeshed in mainland China’s cash and influence, The New York Times reports. NEW YORK TIMES

Former Soros Team to Start Hong Kong Hedge Fund  |  A former Soros Fund Management team is set to start a hedge fund based in Hong Kong in the third quarter of 2014; it will have at least $150 million in initial capital, Reuters writes.
REUTERS

Hedge Funds Shying Away From I.P.O. Market  |  Hedge funds and large investors are retreating from the new-offering market, including the one for initial public offerings, for fear of being burned again by highflying growth stocks, The Wall Street Journal writes. But many investors remain optimistic about the overall market. WALL STREET JOURNAL

I.P.O./OFFERINGS »

Virtu Financial Said to Shelve I.P.O. Plans  |  The decision is said to have stemmed from recent negative attention on the high-frequency trading industry and the stock market performance of companies similar to Virtu. DealBook »

Protests Continue Against Dropbox After Appointment of Condoleezza Rice to Board  |  After Dropbox appointed Condoleezza Rice, the former secretary of state, to its board, some users have complained about her views on Internet surveillance, The New York Times writes. The company is expected to file for an initial public offering within two years. NEW YORK TIMES BITS

Shares of Twitter-Like Weibo Surge on as Chinese Initial Offerings Mount  |  The rise in shares in both Weibo, a Chinese microblogging service, and Sabre, a technology services provider, came after they scaled back the sizes of their initial public offerings. DealBook »

VENTURE CAPITAL »

In Silicon Valley Thriller, a Settlement May Preclude the Finale  |  Four leading technology companies are pushing to settle a class-action suit with several noteworthy angles, including questions over employee rights and the death of a programmer who helped set the case in motion, The New York Times reports. NEW YORK TIMES

From Andreessen, a Lesson in Corporate Finance  |  In a series of messages on Twitter on Thursday, the prominent venture capitalist Marc Andreessen offered a framework for thinking about technology company valuations. DealBook »

Venture Capitalist Shares Views on How the Sector Operates  |  Sean Jacobsohn, a venture partner at Emergence Capital Partners, writes on VentureBeat that, “to make 10 investments, the average venture capital firm reviews approximately 1,200 companies.” VENTUREBEAT

LEGAL/REGULATORY »

Charges Are Said to Be Near Over Exports of Luxury Cars to China  |  An investigation by the New York authorities is part of a broad national crackdown on businesses seeking to turn a quick profit by exporting luxury cars from the United States to China. DealBook »

Gupta to Surrender to Prison on June 17  |  Rajat K. Gupta, a former Goldman Sachs director who was convicted of insider trading, will serve a two-year sentence. DealBook »

Charges Upheld in Another Galleon Trading Case  |  Rengan Rajaratnam, a brother of the imprisoned hedge fund manager Raj Rajaratnam, lost a bid on Friday to dismiss some of the insider trading charges he is facing, Reuters reports. REUTERS

Chief of British Conglomerate Calls 2013 Results ‘Disastrous’  |  Some chief executives like to sugarcoat bad results, but the interim chief executive of the Co-operative Group felt no such need when reporting the firm’s results. DealBook »