Investors Bet on Live-Streamed Spinning Classes in the Home

At first blush, Peloton’s spinning classes appear little different from those at better-known outfits like SoulCycle: enthusiastic exercise buffs pedaling under pounding loud music and energetic instructor exhortations. But a session last Friday revealed something different: video cameras recording the instructor, Marion Roaman, for the benefit of customers following along at home on their Peloton bikes.

The two-year-old start-up is betting that the key to success lies not in creating a sprawling empire of studios, but in persuading customers to spend nearly $2,000 for a cycle plus pay $39 a month to pedal along to live-streamed or recorded classes from one’s home.

The cost for consumers may seem high, but a few prominent investors are betting that the business model can shake up the fitness industry.

The class and the Chelsea studio where it was held â€" made possible by a new $10.5 million fund-raising round that Peloton plans to announce on Thursday â€" represent the latest milestones by the start-up in its quest to become the next big exercise lifestyle brand.

Though it has the trappings of a SoulCycle or Flywheel, Peloton wants to be in its customers’ homes, using its fancy new facility to film workout classes throughout the day, as well as offer live classes. The studio has held classes this week, but plans to officially open for business on May 1.

“This has never been done in the fitness world before,” John Foley, the company’s co-founder, said. “In fitness, people don’t think about content.”

The company was born two years ago when Mr. Foley, a former head of e-commerce at Barnes & Noble, pondered how to create an exercise brand for the modern age. Instead of trying to create an empire of studios, he instead hit on the idea of creating a high-end bike paired with a tablet, connected via the Internet to a broadcast-quality production studio.

As an added benefit, the instructors would also interact with users spinning at home, calling them out during live classes. And bike owners could compete with their friends over social media.

Mr. Foley hired the man who designed SoulCycle’s signature bright-yellow bikes to conjure up something similar. Peloton’s units are sleek black affairs, using quiet belts instead of chains for the pedal mechanism and magnets as brake pads for the metal flywheels. The cycles come with high-end headphones and can plug into heart-rate monitors.

Its displays are customized, waterproof Android tablets that let users video chat with friends and compete on Facebook. The next software update, the latest in a regular series, will stream in Netflix.

“It’s an Apple-esque product,” he said. “We needed to control every piece of what we do.”

For the content side of the business, Mr. Foley brought on as a co-founder Ms. Roaman, a veteran of the spinning industry who has sold studios to Flywheel. They began to recruit top instructors with an intriguing pitch: Teaching Peloton classes, which would be broadcast in multiple countries, could make them fitness celebrities. So far, they have hired a dozen.

Getting investors on board was tougher, Mr. Foley said. Many institutional investors were hesitant to commit. He instead turned to an array of angel investors, including Greg Blatt, a former colleague at IAC who is now the media conglomerate’s chief executive; Michael E. Novogratz, a principal of the investment firm Fortress Investment Group; and Amar Lalvani, the managing partner of the Standard International boutique hotel chain.

Then a little over two months ago, Mr. Foley met with Lee Fixel, a partner at the investment firm Tiger Global Management and an enthusiastic backer of growing consumer brands like the glasses retailer Warby Parker and the shaving company Harry’s. After asking just six or seven questions, Mr. Fixel committed to leading the new fund-raising effort.

In a statement, Mr. Fixel praised Peloton for shaking up the indoor-fitness industry, one he said hadn’t innovated in decades.

The key to the business lies in its focus on subscriptions, content and technology. The bikes are sold at cost (albeit at $1,995 each) and shipped free, with the company banking on the steady fees from customers who, for various reasons, want instead to exercise from home. Mr. Foley pointed to his wife, who doesn’t have to get a babysitter for their two young children when she wants to work out, while Ms. Roaman noted the frequent battles just to get into often-filled spinning classes at gyms.

Even the new studio, which has a plush lounge and a coffee bar staffed by the boutique Jack’s Stir Brew, is meant to be a sideline to the home-based clientele. The start-up expects the establishment, whose on-site classes will cost $30 each, to not only be profitable, but cover content production costs. The studio’s front houses a store, with Peloton-branded sportswear and, of course, bikes. And bike owners automatically become V.I.P.s, with their choice of in-studio bikes and concierge services.

Peloton unashamedly aspires to draw high-end customers. Its handful of stores are in upscale locations like the Mall at Short Hills in New Jersey and, soon, a former Tiffany’s storefront in East Hampton. (Mr. Foley boasted that the company outbid Apple and J. Crew for the location.)

Peloton has sold more than 1,000 bikes and has purchases on back-order until June.

Peloton has set its eyes on bigger goals, however, including expansion both here and abroad. One of its instructors will conduct her classes in Spanish, while Ms. Roaman said the company planned to hire another who speaks Mandarin. Mr. Foley also recently went on a scouting trip to South Korea.

And the company hopes to eventually produce as much as 12 hours of content a day.

“We can be like a cable platform,” Mr. Foley said.

A version of this article appears in print on 04/24/2014, on page B3 of the NewYork edition with the headline: Investors Bet on Live-Streamed Spinning Classes in the Home .

Investors Bet on Live-Streamed Spinning Classes in the Home

At first blush, Peloton’s spinning classes appear little different from those at better-known outfits like SoulCycle: enthusiastic exercise buffs pedaling under pounding loud music and energetic instructor exhortations. But a session last Friday revealed something different: video cameras recording the instructor, Marion Roaman, for the benefit of customers following along at home on their Peloton bikes.

The two-year-old start-up is betting that the key to success lies not in creating a sprawling empire of studios, but in persuading customers to spend nearly $2,000 for a cycle plus pay $39 a month to pedal along to live-streamed or recorded classes from one’s home.

The cost for consumers may seem high, but a few prominent investors are betting that the business model can shake up the fitness industry.

The class and the Chelsea studio where it was held â€" made possible by a new $10.5 million fund-raising round that Peloton plans to announce on Thursday â€" represent the latest milestones by the start-up in its quest to become the next big exercise lifestyle brand.

Though it has the trappings of a SoulCycle or Flywheel, Peloton wants to be in its customers’ homes, using its fancy new facility to film workout classes throughout the day, as well as offer live classes. The studio has held classes this week, but plans to officially open for business on May 1.

“This has never been done in the fitness world before,” John Foley, the company’s co-founder, said. “In fitness, people don’t think about content.”

The company was born two years ago when Mr. Foley, a former head of e-commerce at Barnes & Noble, pondered how to create an exercise brand for the modern age. Instead of trying to create an empire of studios, he instead hit on the idea of creating a high-end bike paired with a tablet, connected via the Internet to a broadcast-quality production studio.

As an added benefit, the instructors would also interact with users spinning at home, calling them out during live classes. And bike owners could compete with their friends over social media.

Mr. Foley hired the man who designed SoulCycle’s signature bright-yellow bikes to conjure up something similar. Peloton’s units are sleek black affairs, using quiet belts instead of chains for the pedal mechanism and magnets as brake pads for the metal flywheels. The cycles come with high-end headphones and can plug into heart-rate monitors.

Its displays are customized, waterproof Android tablets that let users video chat with friends and compete on Facebook. The next software update, the latest in a regular series, will stream in Netflix.

“It’s an Apple-esque product,” he said. “We needed to control every piece of what we do.”

For the content side of the business, Mr. Foley brought on as a co-founder Ms. Roaman, a veteran of the spinning industry who has sold studios to Flywheel. They began to recruit top instructors with an intriguing pitch: Teaching Peloton classes, which would be broadcast in multiple countries, could make them fitness celebrities. So far, they have hired a dozen.

Getting investors on board was tougher, Mr. Foley said. Many institutional investors were hesitant to commit. He instead turned to an array of angel investors, including Greg Blatt, a former colleague at IAC who is now the media conglomerate’s chief executive; Michael E. Novogratz, a principal of the investment firm Fortress Investment Group; and Amar Lalvani, the managing partner of the Standard International boutique hotel chain.

Then a little over two months ago, Mr. Foley met with Lee Fixel, a partner at the investment firm Tiger Global Management and an enthusiastic backer of growing consumer brands like the glasses retailer Warby Parker and the shaving company Harry’s. After asking just six or seven questions, Mr. Fixel committed to leading the new fund-raising effort.

In a statement, Mr. Fixel praised Peloton for shaking up the indoor-fitness industry, one he said hadn’t innovated in decades.

The key to the business lies in its focus on subscriptions, content and technology. The bikes are sold at cost (albeit at $1,995 each) and shipped free, with the company banking on the steady fees from customers who, for various reasons, want instead to exercise from home. Mr. Foley pointed to his wife, who doesn’t have to get a babysitter for their two young children when she wants to work out, while Ms. Roaman noted the frequent battles just to get into often-filled spinning classes at gyms.

Even the new studio, which has a plush lounge and a coffee bar staffed by the boutique Jack’s Stir Brew, is meant to be a sideline to the home-based clientele. The start-up expects the establishment, whose on-site classes will cost $30 each, to not only be profitable, but cover content production costs. The studio’s front houses a store, with Peloton-branded sportswear and, of course, bikes. And bike owners automatically become V.I.P.s, with their choice of in-studio bikes and concierge services.

Peloton unashamedly aspires to draw high-end customers. Its handful of stores are in upscale locations like the Mall at Short Hills in New Jersey and, soon, a former Tiffany’s storefront in East Hampton. (Mr. Foley boasted that the company outbid Apple and J. Crew for the location.)

Peloton has sold more than 1,000 bikes and has purchases on back-order until June.

Peloton has set its eyes on bigger goals, however, including expansion both here and abroad. One of its instructors will conduct her classes in Spanish, while Ms. Roaman said the company planned to hire another who speaks Mandarin. Mr. Foley also recently went on a scouting trip to South Korea.

And the company hopes to eventually produce as much as 12 hours of content a day.

“We can be like a cable platform,” Mr. Foley said.

A version of this article appears in print on 04/24/2014, on page B3 of the NewYork edition with the headline: Investors Bet on Live-Streamed Spinning Classes in the Home .

Strict Cost-Cutters Who Want to Spend $45 Billion on a Takeover

Visitors to the New Jersey offices of Valeant, the ambitious pharmaceuticals company, are confronted with an unusual sight when they walk through the front door: a basketball court.

The building was previously home to a Y.M.C.A, which deemed it too run-down to host community activities. So when the Y.M.C.A. moved to a new building, Valeant moved in, setting up rows of cubicles on one-half of the basketball court and using the rest as a lobby.

Most other companies of Valeant’s stature â€" with its $44 billion market capitalization and rising profile â€" indulge in luxurious offices becoming of a major corporation. But Valeant, led by J. Michael Pearson, its chief executive, and Howard B. Schiller, its chief financial officer, prides itself on cutting costs anywhere it can.

“It’s an expression of their personality,” said Stephen F. Arcano, a lawyer at Skadden, Arps, Slate, Meagher & Flom who has worked with both men for years. “They walk the walk.”

Today, as Valeant pursues its unconventional $45 billion hostile takeover of the Botox maker Allergan with its newfound ally, the activist William A. Ackman, Valeant’s unusual corporate culture and iconoclastic leaders are coming into focus.

Mr. Pearson got to know Valeant in 2007, when he was still at McKinsey & Company, the secretive consulting firm where he had spent 23 years working with health care companies. Valeant was then a struggling California drug maker with less than $1 billion in annual revenue, and Mr. Pearson was brought in to give the company direction.

During his time at McKinsey, Mr. Pearson had peeked under the hood of most every pharmaceutical company, learning what worked and what didn’t.

“He saw where companies were locked in, and where they were missing,” said Chris Coughlin, the former chief financial officer of Pharmacia, which had hired Mr. Pearson. “That gave him an opportunity to quickly get a leg up.”

As a consultant to Valeant, Mr. Pearson told the board they were hopelessly misguided â€" investing too much in research and development, and competing in crowded markets where they would never win.

Mr. Pearson is known for his blunt assessments. “Mike was a very unusual consultant,” Mr. Coughlin said. “He’s very direct and not the kind who tells you what you want you hear. He can be an intimidating character.”

Nor is he a sleek dresser or smooth operator. Onstage with Mr. Ackman on Tuesday to discuss the Allergan bid, the two men were a study in contrasts. Mr. Ackman, lithe and energetic in a crisp suit, sat near Mr. Pearson, slouching in a baggy jacket.

“He’s not this polished consultant,” Mr. Coughlin said. “He sort of has this gruff exterior and this cost-cutter image.”

But after a few months of consulting, Mr. Pearson had the Valeant board’s attention. He was brought in as chief executive in 2008 and given free rein.

His first order of business was slimming down the company, slashing its research budget, selling emerging market businesses where competition was stiff, and refocusing on cosmetic and dermatologic treatments, lucrative areas that the big drug makers mostly ignored.

He then moved to lower Valeant’s tax rate. By merging with Biovail, a Canadian company, in 2010, Mr. Pearson nearly doubled the size of the company. He also, critically, secured a single-digit tax rate thanks to Canada’s lower taxation of corporations.

The Biovail corporate entity endured, but the company changed its name to Valeant. And though Valeant has its headquarters outside Montreal, Mr. Pearson and his team work out of the former Y.M.C.A. near his home in suburban Madison, N.J.

Another major move was hiring a chief financial officer who could serve as Valeant’s in-house investment banker.

In 2011, Mr. Schiller had just left Goldman Sachs, where he was most recently chief operating officer of the investment bank, and before that a deals specialist. Before he made his next move, Mr. Schiller got a call from Mr. Coughlin, whom he had advised on the $60 billion sale of Pharmacia to Pfizer in 2002.

Mr. Coughlin knew that Mr. Pearson was looking for a partner, and thought Mr. Schiller would be the right fit. The men met, and soon Mr. Schiller had joined Valeant. “If you know Mike, you’ll know there is no such thing as a long courtship,” Mr. Schiller said in an interview on Wednesday.

Buying Biovail was just the beginning of a relentless acquisitions spree. Since Mr. Pearson took over, Valeant has spent more than $19 billion buying more than 100 companies. Most have been small, giving Valeant a stable of products it can sell through its expanding distribution and marketing operation.

Since Mr. Schiller joined, Valeant’s appetite for deals has only grown. In 2012, it acquired Medicis for $2.6 billion, and last year it acquired Bausch & Lomb for $8.7 billion.

But in assessing targets, the Valeant executives eschew conventional Wall Street wisdom.

“Most companies are just trying to do what they teach you in business school with deals, which is just earn a slight premium above the cost of capital,” Mr. Pearson said in an interview. “We dismiss that notion at Valeant. We’re only going to do deals that create disproportionate value for our shareholders.”

Tactically, Mr. Pearson said the corporate largess and lethargy he witnessed as a consultant left him impatient with the plodding pace of most corporations.

“Most companies waste a lot of time waiting for a deal, as opposed to doing deals quickly,” he said.

Companies are too worried about making a mistake, he said, and spend too much time fretting over small parts of a business that ultimately aren’t going to make an impact. The lawyers hired to conduct due diligence, though, earn high hourly rates to be completely thorough.

The same is true after a deal, as many businesses labor to blend corporate cultures, rather than making tough choices quickly. “Some of the most lucrative business for McKinsey was doing integrations that took a year,” he said.

At Valeant, Mr. Pearson has tried to avoid these pitfalls. Valeant does not use investment bankers to find deals, though it has turned to Barclays and RBC to finance its bid for Allergan.

And the company is known to conduct due diligence on a target in a matter of days, and bring acquired companies into the fold with similar speed.

“The speed of integrations that we do is what matters,” Mr. Pearson said. “We move very quickly and make decisions on people right away.”

He said his biggest mistake had been not firing people as fast as he should have. “Sometimes you don’t make the people decisions quickly enough,” he said.

Another of Mr. Pearson’s pet peeves is waiting too long to pull the trigger.

One of his clients at McKinsey considered buying the same company for eight years before finally going ahead with it. What would have initially been a $100 million purchase ultimately cost the client $1.2 billion. And while the deal worked out in the end, Mr. Pearson said it was a missed opportunity.

Since Mr. Pearson took over, Valeant’s stock has soared more than 850 percent, to $133 a share from about $14, with most of that growth coming during Mr. Schiller’s tenure.

But Valeant’s trajectory could be hard to sustain. As Valeant expands through acquisitions, it will need to find ever-larger targets to fuel its growth.

That is one reason Valeant is now pursuing its largest deal yet, in Allergan. Combining the companies would help Mr. Pearson achieve his goal of making Valeant one of the five largest drug companies in the world within three years.

But the deal for Allergan is no sure thing. Allergan adopted a poison pill to prevent Mr. Ackman from accumulating more shares, and hired Goldman Sachs to defend itself, pitting Mr. Schiller against his former colleagues.

Even if the deal for Allergan does not succeed, Mr. Pearson’s strategy has already made him extremely wealthy. He owns or has the rights to $1.4 billion in Valeant stock. Mr. Schiller owns or has rights to a more modest $50 million in stock.

Yet the Valeant culture remains a frugal one. All employees have a $50 limit on dinner expenses.

And the Valeant board holds its meetings at Courtyard Marriott or Sheraton hotels at airports, rather than at exclusive resorts.

Mr. Pearson gets there in style, however. He, and at times his family, travel on the company’s private jet.

S.E.C. Settles With Ex-Nvidia Employee in Insider Trading Case

The former Nvidia employee who the authorities contend supplied inside information about the chip maker’s earnings to a group of hedge fund traders and analysts has reached a settlement with securities regulators, the regulators said on Wednesday.

The information about Nvidia’s corporate earnings that the employee, Chris Choi, provided was ultimately shared among a group of analysts and traders, including several who did not personally know Mr. Choi. Federal authorities contend the inside information about Nvidia and another technology company, Dell, enabled the ring of traders and analysts to generate nearly $70 million in illicit profits. As part of the settlement, Mr. Choi will be required to pay a $30,000 penalty.

The settlement between Mr. Choi and the Securities and Exchange Commission was announced a day after a federal appellate court considered an appeal filed by two former hedge fund traders who were convicted in 2012 of making trades on some of the inside information provided by Mr. Choi.

Lawyers for the traders, Anthony Chiasson and Todd Newman, had pointed out to the appellate court that the men were convicted of insider trading even though the former technology company employees who the authorities say provided the inside information were never charged with any wrongdoing. The lawyers for the two men also argued the trial judge erred in failing to instruct jurors to decide whether they knew that Mr. Choi and the other tipper, Rob Ray, from Dell, had received a personal benefit for passing on the information.

A 30-year-old United States Supreme Court case held that a person could be guilty of insider trading if he knew that the corporate insider leaking the information received some kind of benefit for passing it on.

The appellate court, which reserved judgment on the appeal, indicated that it was receptive to the argument posed by the former hedge fund traders.

The S.E.C., in settling with Mr. Choi, had charged the former accounting manager at Nvidia with tipping a friend with inside information about the company’s earnings in 2009 and 2010. The friend, Hyung Lim, shared that information with another friend, a trader, who then shared that information with analysts at other hedge funds including the ones Mr. Chiasson and Mr. Newman worked at.

Mr. Choi settled with the S.E.C. without admitting or denying the allegations The S.E.C. charges are civil. Federal prosecutors have not filed any charges against Mr. Choi. His lawyer, Douglas Schneider, declined to comment on the settlement, which still requires court approval.

To date, neither the S.E.C. nor federal prosecutors have charged Mr. Ray with passing on inside information about earnings at Dell, the computer company.

S.E.C. Settles With Ex-Nvidia Employee in Insider Trading Case

The former Nvidia employee who the authorities contend supplied inside information about the chip maker’s earnings to a group of hedge fund traders and analysts has reached a settlement with securities regulators, the regulators said on Wednesday.

The information about Nvidia’s corporate earnings that the employee, Chris Choi, provided was ultimately shared among a group of analysts and traders, including several who did not personally know Mr. Choi. Federal authorities contend the inside information about Nvidia and another technology company, Dell, enabled the ring of traders and analysts to generate nearly $70 million in illicit profits. As part of the settlement, Mr. Choi will be required to pay a $30,000 penalty.

The settlement between Mr. Choi and the Securities and Exchange Commission was announced a day after a federal appellate court considered an appeal filed by two former hedge fund traders who were convicted in 2012 of making trades on some of the inside information provided by Mr. Choi.

Lawyers for the traders, Anthony Chiasson and Todd Newman, had pointed out to the appellate court that the men were convicted of insider trading even though the former technology company employees who the authorities say provided the inside information were never charged with any wrongdoing. The lawyers for the two men also argued the trial judge erred in failing to instruct jurors to decide whether they knew that Mr. Choi and the other tipper, Rob Ray, from Dell, had received a personal benefit for passing on the information.

A 30-year-old United States Supreme Court case held that a person could be guilty of insider trading if he knew that the corporate insider leaking the information received some kind of benefit for passing it on.

The appellate court, which reserved judgment on the appeal, indicated that it was receptive to the argument posed by the former hedge fund traders.

The S.E.C., in settling with Mr. Choi, had charged the former accounting manager at Nvidia with tipping a friend with inside information about the company’s earnings in 2009 and 2010. The friend, Hyung Lim, shared that information with another friend, a trader, who then shared that information with analysts at other hedge funds including the ones Mr. Chiasson and Mr. Newman worked at.

Mr. Choi settled with the S.E.C. without admitting or denying the allegations The S.E.C. charges are civil. Federal prosecutors have not filed any charges against Mr. Choi. His lawyer, Douglas Schneider, declined to comment on the settlement, which still requires court approval.

To date, neither the S.E.C. nor federal prosecutors have charged Mr. Ray with passing on inside information about earnings at Dell, the computer company.

Chobani Raises $750 Million in Debt From TPG

The yogurt maker Chobani has struck a deal with private equity.

Chobani, a fast-growing company in upstate New York, said on Wednesday that it had secured a $750 million loan from TPG, a big private equity firm. The fresh capital, coming after a competitive process in recent weeks, is intended to help Chobani expand overseas.

Though the money is in the form of a loan, TPG is also receiving warrants that may allow it to obtain an equity stake in Chobani of as much as 35 percent, people with direct knowledge of the deal said. The warrants convert to equity if Chobani achieves certain goals â€" the most important of which being an initial public offering or other sale, the people said. Chobani is hoping to go public as early as 2015.

“Chobani has experienced tremendous growth and leads one of the most exciting aisles in the supermarket,” the chairman and chief executive, Hamdi Ulukaya, said in a statement. “This investment gives us additional resources to build on our momentum, fund our exciting new innovations and reach new people.”

The new capital represents a new phase in the growth of Chobani, which Mr. Ulukaya founded in 2005. Last year, the company recorded revenue of more than $1 billion. It now plans to introduce new products, including a dessert and a yogurt mixed with steel-cut oats, which go beyond its flagship Greek yogurt offerings.

The financing round was not based on a particular valuation, but the company believes it is worth around $5 billion, according to the people with knowledge of the deal. Mr. Ulukaya owns 100 percent of the equity. A major reason the company pushed for a loan, rather than a straight equity investment, was to prevent dilution, the people said.

TPG is making the investment through its private equity arm, known as TPG Capital, and its credit platform, TPG Opportunities Partners. A representative of TPG is expected to join Chobani’s board.

Six potential investors had shown interest in doing a deal with Chobani. But TPG emerged as the leader in late March.

“Hamdi and the team at Chobani have in seven years turned the vision of bringing a quality, nutritious Greek yogurt to America into a highly successful business,” Jim Coulter, a co-founder of TPG, said in a statement. “We look forward to Chobani’s future growth and expansion of the brand.”

Chobani was advised by Bank of America Merrill Lynch and the law firm Kirkland & Ellis. TPG was advised by the law firm Ropes & Gray.

Chobani Raises $750 Million in Debt From TPG

The yogurt maker Chobani has struck a deal with private equity.

Chobani, a fast-growing company in upstate New York, said on Wednesday that it had secured a $750 million loan from TPG, a big private equity firm. The fresh capital, coming after a competitive process in recent weeks, is intended to help Chobani expand overseas.

Though the money is in the form of a loan, TPG is also receiving warrants that may allow it to obtain an equity stake in Chobani of as much as 35 percent, people with direct knowledge of the deal said. The warrants convert to equity if Chobani achieves certain goals â€" the most important of which being an initial public offering or other sale, the people said. Chobani is hoping to go public as early as 2015.

“Chobani has experienced tremendous growth and leads one of the most exciting aisles in the supermarket,” the chairman and chief executive, Hamdi Ulukaya, said in a statement. “This investment gives us additional resources to build on our momentum, fund our exciting new innovations and reach new people.”

The new capital represents a new phase in the growth of Chobani, which Mr. Ulukaya founded in 2005. Last year, the company recorded revenue of more than $1 billion. It now plans to introduce new products, including a dessert and a yogurt mixed with steel-cut oats, which go beyond its flagship Greek yogurt offerings.

The financing round was not based on a particular valuation, but the company believes it is worth around $5 billion, according to the people with knowledge of the deal. Mr. Ulukaya owns 100 percent of the equity. A major reason the company pushed for a loan, rather than a straight equity investment, was to prevent dilution, the people said.

TPG is making the investment through its private equity arm, known as TPG Capital, and its credit platform, TPG Opportunities Partners. A representative of TPG is expected to join Chobani’s board.

Six potential investors had shown interest in doing a deal with Chobani. But TPG emerged as the leader in late March.

“Hamdi and the team at Chobani have in seven years turned the vision of bringing a quality, nutritious Greek yogurt to America into a highly successful business,” Jim Coulter, a co-founder of TPG, said in a statement. “We look forward to Chobani’s future growth and expansion of the brand.”

Chobani was advised by Bank of America Merrill Lynch and the law firm Kirkland & Ellis. TPG was advised by the law firm Ropes & Gray.

In Allergan Bid, a Question of Insider Trading

One trading day after announcing the news that the huge hedge fund he runs, Pershing Square Capital Management, had partnered with Valeant Pharmaceuticals International to make an unsolicited $45.6 billion cash and stock takeover bid for Allergan, William A. Ackman is sitting on a paper profit of more than $1 billion on the Allergan shares and options he had been secretly buying over the past two months.

But the question arises: Is this a just reward for a clever takeover strategy devised in February by Mr. Ackman and Valeant’s chief executive, J. Michael Pearson? Or does Mr. Ackman’s extraordinary windfall come as result of what feels like insider trading: Using material, nonpublic information - knowing that Mr. Pearson wanted to buy Allergan and would make an offer for it at a substantial premium to the market price â€" to scoop up 28.9 million Allergan shares from selling shareholders not privy to the plan?

What constitutes the legal definition of insider trading is a messy, murky business, and always has been. There is no law that defines “insider trading” per se, only a few rules promulgated by the Securities and Exchange Commission (and that only a securities lawyer could love) that define insider trading as the buying or selling of securities knowing you have “material nonpublic information” about them, obtained from someone who breached a duty of confidentiality or trust. Then it is left to prosecutors, like the undefeated Preet Bharara, the United States attorney in Manhattan, to bring cases before juries based, simplistically, on the old saw about pornography: You know it when you see it.

Mr. Ackman is no fool. Rather, he is brazenly intelligent â€" he once volunteered to me, unsolicited, his breathtaking SAT scores - and before leaping into this particular abyss he consulted, deliberately, with Robert Khuzami, the former head of enforcement at the S.E.C., who is now a $5 million-a-year-man at Kirkland & Ellis, the Wall Street law firm. Mr. Khuzami assured Mr. Ackman that buying nearly $4 billion of Allergan’s shares knowing that Valeant intended to start a hostile takeover at a premium to market did not violate the S.E.C.’s rule 10b5-1 about insider trading.

Indeed, the onetime regulator told Mr. Ackman that he was so sure of his legal advice that he would welcome his former S.E.C. colleagues to call him and discuss it with him. (For its part, Valeant obtained legal advice from two other Wall Street heavyweights, Sullivan & Cromwell and Skadden Arps.)

Needless to say, Mr. Ackman does not think his deal with Valeant crossed any lines. “The way the rules work is, you’re actually permitted to trade on inside information as long as you didn’t receive the information from someone who breached a fiduciary duty or a duty of confidentiality, et cetera,” he told CNBC on Wednesday morning. (He told me virtually the same thing Tuesday afternoon but then thought better of being quoted. “I want to focus the discussion on the fundamental merits of the transaction,” he wrote in an email to me.)

He likened his buying Allergan options â€" while armed with the nonpublic knowledge of Valeant’s desire to own Allergan and that its previous entreaties had been rebuffed â€" to the decision of his hero Warren E. Buffett to take a 10 percent stake in Coca-Cola without telling anyone. Mr. Buffett does not, of course, have any obligation to tell the world that he intends to buy shares in a company before he buys them.

Mr. Ackman allows that the investors who sold stock to him before his announcement of the deal lost out after the deal was announced, but he is not particularly sympathetic to them. They are mere short-term investors and the spoils of this particular battle belong to the long-term investors who are willing to stick with him while he does the hard activist-type work of changing a company’s chief executive, its strategy or its mix of business lines. Shareholders are of course allowed to go along for the ride - free of charge - while the Bill Ackmans of the world perform their magic.

What makes the alchemy appealing is that the high-profile activist investors - who seem to be able to get on TV on a moment’s notice â€" are allowed to buy stakes in companies in advance of doing the things that make the target companies more valuable. In the case of Mr. Ackman and Valeant, the value that the investor added was to give Valeant’s management the backbone to go after Allergan after its earlier bids had been rebuffed. Taking up Mr. Ackman’s cause, Matt Levine at BloombergView wrote on Tuesday that these shareholders “will be sad” about selling too early to Mr. Ackman “but that’s how markets work.”

In fact, they are likely to be considerably more than sad and just may initiate a lawsuit against Mr. Ackman and Valeant, claiming they had been harmed financially. Allergan’s lawyers are probably getting ready to file a lawsuit, too.

So if the duped Allergan shareholders are supposedly not the victims here â€" although I believe that they are â€" who then has paid a price? Valeant shareholders are the ones who are probably scratching their heads this morning, wondering why the company’s chief executive agreed to pay Mr. Ackman $1 billion in nearly risk-free vig to rent his capital, to get his expertise in accumulating stock on the sly and for adding some legitimacy to Valeant’s bid for Allergan. Mr. Pearson, the chief executive, also won Mr. Ackman’s pledge to vote his 9.7 percent stake in Allergan for the Valeant takeover. But Mr. Pearson did not need to pay this windfall to Mr. Ackman; he could have started the takeover on his own after accumulating a stake in Allergan and then tossed out a so-called bear hug letter as many chief executives have done before him in pursuit of hostile takeovers. The $1 billion that went to Mr. Ackman could have gone to Valeant’s shareholders instead. (As it is, Valeant stock is up about 11 percent â€" adding some $4 billion in market cap - in the last week. Mr. Pearson told CNBC on Wednesday that teaming up with Mr. Ackman would help Valeant get the deal done. “Bill never gives up and either do we,” he said.)

The S.E.C. itself appears to be sending mixed signals about all this. In January, according to The Wall Street Journal, the agency’s exam manager, Ashish Ward, told attendees at an annual seminar for compliance officers, “We understand common practice in the hedge fund business is to share investment ideas about companies but you want to make sure those conversations don’t go so far as to actually discuss what you are actually doing right now…that would be information that’s nonpublic,” and presumably a violation of the insider trading rules.

So if it’s not kosher for hedge funds to share material, nonpublic information privately with one another about their investment ideas - and that seems intuitively correct - how can it be acceptable for Mr. Pearson to tell Mr. Ackman that he intends to make a takeover bid for Allergan before Mr. Ackman does his buying and then makes $1 billion in profit?

If the two have exploited a loophole in the rules, more power to them. But it’s a loophole that Mary Jo White, the S.E.C. chairwoman, may want to look very seriously at closing, and fast, before what Mr. Ackman has cleverly hatched becomes the new way of doing business on Wall Street.

G.M.’s Bankruptcy Will Probably Shield It From Most New Claims

General Motors’ liability for defective ignition switches in its cars is complicated by its bankruptcy in 2009. The federal bankruptcy judge in New York approved a sale order that shielded the “new” company from liability for incidents that took place before July 10, 2009, the day the sale became effective.

Trying to sort it all out has created a storm of confusion.

First, it is important to realize that plaintiffs can sue two potential defendants: the old G.M. or the new G.M. The two, legally speaking, are as separate as Apple and Exxon.

The easier party to sue is the old G.M., particularly because most of the cars with the problem switches were built before 2009. But suing new G.M. is surely much more attractive.

But the normal rule of law is that an asset purchaser does not take on the liabilities of the prior owner. When I sell my car, the new buyer is not responsible for all the “Dukes of Hazard” stuff I did before.

But there is an exception â€" especially strong in California and New Jersey â€" for product liability claims. This exception creates “successor liability,” meaning that new G.M. may be labile under state law for old G.M.’s product liability claims.

But the order from by the bankruptcy court in the G.M. case expressly strips the assets of successor liability claims. And the court’s ability to do so is pretty clear under case law from the Court of Appeals for the Second Circuit, which oversees the G.M. bankruptcy court. And a federal court’s ruling in that regard should trump state law.

So that leaves old G.M. It is clearly liable for its acts, just as I’m still liable for things I did in my old car â€" at least until the statute of limitations runs out.

But claims against the old G.M. are just like any other claim: They get paid as part of the bankruptcy process, and the claims are then discharged as part of that process.

So for people who had an accident in a G.M. car before the company’s bankruptcy, it seems pretty clear that their claim will be paid, if at all, as part of the bankruptcy process. They may have to ask the court for permission to file a late claim, but that would seem to be that. Assuming they would be able to file the late claim, they would get paid the same partial amount as all the other unsecured creditors.

For people who bought a G.M. car before the bankruptcy, but were injured after the bankruptcy was filed, the law is a bit more murky. They probably have a decent argument that their right to due process, protected by the Fifth Amendment in the Bill of Rights, trumps Congress’s power to discharge their claim under the bankruptcy clause of the Constitution. After all, it would seem to violate due process to discharge a claim you couldn’t have known you had.

But even if that analysis is right, these people still have a claim against old G.M. Their claim was not discharged as part of the bankruptcy process, so they retain the right to a full recovery â€" against old G.M.

Given that old G.M. is essentially gone, though, that is not apt to be an attractive option.

So we can expect these plaintiffs to argue that the court should let them file their claims against the new G.M., despite the terms of the bankruptcy court’s order. That is essentially asking the new court to modify the old (bankruptcy) court’s order, and that can’t happen.

Only the bankruptcy court can change its order once the appeals are over. And the bankruptcy court previously found that excluding successor liability claims from the assets was an essential part of the sale.

It would seem that such an exclusion would be even more essential if it turns out that the amount of such claims is even larger than thought at the time of the bankruptcy. In short, it’s hard to see how the court can allow these claims without altering the basic terms of the deal with the United States and Canadian governments and the United Automobile Workers union, and that seems unlikely. These parties are all paid off now, but they sold their shares in the initial public offering on the basis of that deal, and you can be sure that the buyers in the I.P.O. will complain if the terms change.

Over all, it seems that the bankruptcy case will probably mean that G.M. has no legal obligation to pay a good chunk of these claims. Whether it faces political pressure to pay nonetheless is another story.

Stephen J. Lubben is the Harvey Washington Wiley Chair in corporate governance and business ethics at Seton Hall Law School and an expert on bankruptcy.

Ackman’s Pershing Square Subsidiaries Hint at Future Moves

The hedge fund billionaire William A. Ackman may be plotting his next big stock move, even as he is on the media circuit explaining his decision to partner with Valeant Pharmaceuticals to make a $45.6 billion hostile bid for the Botox manufacturer Allergan.

In amassing its 9.7 percent stake in Allergan, Mr. Ackman’s Pershing Square Capital Management used a corporate entity that his $15 billion hedge fund formed in Delaware on Feb. 11 to buy shares and call options â€" a financial contract that gives the hedge fund the right to buy shares at predetermined price. Over a two-month period, the entity, PS Fund 1, used a combination of cash contributed by Pershing Square and Valeant, to build an equity position in Allergan that’s valued at about $4 billion.

But corporate records in Delaware reveal that on the same day that Pershing Square organized PS Fund 1, four other entities bearing the names PS Fund 2, PS Fund 3, PS Fund 4 and PS Fund 5 were also created.

Pershing Square, which was up nearly 11 percent for the year at the end of March, has not filed any regulatory statements disclosing any stock or options purchases with those other corporate entities.

Mr. Ackman said in an email that the corporate subsidiaries would not be used to purchase any more shares or options of Allergan but might be used to build equity stakes in other publicly traded companies. At a news conference on Tuesday to discuss the Allergan bid, Mr. Ackman said he was looking forward to partnering with Valeant again in another transaction but declined to discuss specifics.

Since at least 2010, Mr. Ackman’s hedge fund, which specializes in taking large ownership stakes in companies to agitate for either stock buybacks or strategic changes, has used similar corporate subsidiaries to acquire shares or options in companies that were targets of his firm. A review of Delaware corporate filings reveals at least three dozen subsidiaries created by his firm to be used in stock acquisitions over the past four years, most of them with some variation of the name: Pershing Square Holdco.

In 2013, to quickly build a 9.8 percent equity position in shares of Air Products and Chemicals, an industrial gas company, Mr. Ackman’s firm used seven of those Delaware holding companies, most of which were incorporated in June. And in 2010, he employed a similar strategy to build a large stock position in Fortune Brands, a conglomerate that manufactured liquor and home products, which Mr. Ackman successfully pushed to be broken up to maximize shareholder returns.

It’s not clear why Mr. Ackman’s firm has used subsidiary companies to buy shares in some of the companies it intends to take an aggressive activist stance in. Over the years, he has declined to discuss the strategy.

In amassing the nearly 10 percent equity stake in Allergan, Mr. Ackman’s hedge fund moved quickly to fall within the 10-day regulatory deadline for disclosing a 5 percent or greater ownership stake. Some lawyers and financial commentators have argued that the 10-day period is obsolete, given how fast shares can be bought and sold in today’s computer-driven marketplace. But for now, the rule remains in effect.

The Pershing Square subsidiaries do appear to be generally limited use investment vehicles. The various subsidiaries have been used to buy either shares or options in specific companies. So far, Pershing Square has not used a subsidiary to make purchases in multiple companies.

One subsidiary, Pershing Square Holdco C, which was used in connection with the hedge fund’s acquisition of shares in Fortune Brands, ran afoul of the tax man. In June 2013, the Internal Revenue Service filed a tax lien against the subsidiary, claiming it owed the federal government $96,987.34 in unpaid taxes from 2011. In January, the I.R.S. filed a second lien for an additional $4,680 in unpaid taxes.

Mr. Ackman’s hedge fund contends that the lien was filed in error and should be removed. The fund said that on the advice of its accountants at Ernst & Young, it filed amended tax returns with the I.R.S. last summer in hopes of resolving the matter. But as of this week, the lien was still in place and Mr. Ackman’s fund said it had been unable to get more information from the I.R.S. about the disputed amount.

“Apparently the IRS is a government-run bureaucracy,” Mr. Ackman said in an emailed response.

Michael J. de la Merced contributed reporting.

New York’s Top Regulator Sues Subprime Auto Lender

New York’s top financial regulator is taking advantage of a rarely used provision in the Dodd-Frank Act that gives the state authorities power to enforce federal consumer protection law.

Benjamin M. Lawsky, New York State’s superintendent of financial services, filed a lawsuit on Wednesday against the Condor Capital Corporation, a subprime auto lender that he accused of siphoning millions of dollars away from the accounts of unwitting borrowers.

The complaint, which also names Condor’s owner, Stephen Baron, contends that Condor deliberately avoided issuing refunds by deceiving customers about positive balances in their accounts. To do this, the company would shut down borrowers’ access to online accounts after a loan had been repaid, leaving them unable to see whether an insurance payoff, overpayment or other transaction had left excess money behind, according to the suit.

Condor is also accused of having little or no standards for safeguarding its customers’ personal information. In one instance, examiners found “stacks of hundreds of hard-copy customer loan files lying around the common areas of Condor’s offices.”

The company’s executive vice president, Todd Baron, also stored “backup” tapes that contained confidential customer information without encryption at his home, according to the suit.

“Simply put, Condor cannot be trusted to service its customers’ loans or handle their funds and data in a safe and lawful manner,” according to court documents.

Soon after the lawsuit was filed, a judge granted Mr. Lawsky’s office a temporary restraining order to freeze Condor’s accounts and operations, a spokesman at the department said. The company, which is in Long Island, held more than 3,000 loans to New York State residents worth more than $55 million at the end of 2013, according to the complaint.

A receptionist at Condor, who declined to give her name, said the company had no comment on the lawsuit, which was filed in Federal District Court in Manhattan.

Dodd-Frank, the financial overhaul law put into place after the financial crisis, contains provisions that prohibit deceptive, abusive or unfair practices by financial companies. It also allows state regulators to enforce those provisions and grants them broader authority than they would have under state law.

But few state regulators have taken advantage of this ability to cast a wider net.

In March, Lisa Madigan, the Illinois attorney general, used authority granted under the Dodd-Frank Act to file a lawsuit against a payday lender she accused of intentionally deceiving borrowers. Mr. Lawsky may be the first bank superintendent to enforce Dodd-Frank, and legal experts say the move could encourage other state regulators to exercise such powers.

“The authority is clearly there, but it’s never been used by a state regulator before,” said Alan S. Kaplinsky, a lawyer who leads the consumer financial services group at Ballard Spahr. “Once Lawsky does it, other state regulators are going to look at it.”

Federal Prosecutor to Help Lead Justice Dept.’s Criminal Division

The Justice Department’s criminal division, which oversees some of the biggest investigations into Wall Street and corporate crime, is adding to its ranks.

Marshall L. Miller, a longtime federal prosecutor in Brooklyn, was named to the criminal division’s No. 2 spot. As principal deputy and chief of staff to the criminal division’s leader, Mr. Miller will help oversee a broad caseload and about 600 prosecutors.

His arrival coincides with a number of personnel changes in the division. After Mythili Raman left her role as the division’s leader last month, David O’Neil took over the spot on an interim basis.

The changes have laid the groundwork for Leslie Caldwell, the White House’s choice to lead the criminal division, to eventually take over the operation. Ms. Caldwell, a former federal prosecutor turned defense lawyer, cleared the Senate Judiciary Committee but has yet to receive full Senate approval.

Ms. Caldwell, if approved, will inherit a number of Wall Street cases. The criminal division under Ms. Raman and her predecessor, Lanny Breuer, opened investigations into banks like UBS that tried to rig a major benchmark interest rate, known as the London interbank offered rate, or Libor. The Libor cases, some of which have yet to be filed, led to similar investigations into the potential manipulation of foreign currencies.

Mr. Miller, as head of the criminal division at the United States attorney’s office in Brooklyn, oversaw a number of prominent white-collar cases. For one, the office is currently investigating JPMorgan Chase’s hiring practices in China.

Mr. Miller also focused on violent crime and terrorism. He handled several of the office’s prominent terrorism prosecutions, including a case in which five defendants were convicted of plotting to blow up the jet-fuel supply tanks at Kennedy International Airport.

“As an AUSA in Brooklyn, Marshall was a leader in the prosecution of violent crime,” Mr. O’Neil said in a memo to staff.

Loretta E. Lynch, the United States attorney in Brooklyn, remarked in a memo on Wednesday to her own staff that “Marshall’s departure will be a loss for the office” but that “his appointment to the second-ranking position in the criminal division is a demonstration of the great esteem in which the office is held throughout the department.”

Ms. Lynch announced that Mr. Miller’s deputy, Jim McGovern, will take over for Mr. Miller in the Brooklyn office.

A Fresh Setback for VW in Its Bid for Full Control of the Truck Maker Scania

LONDON - The German automaker Volkswagen faced a fresh setback on Wednesday in its bid to take full control of the Swedish truck maker Scania.

The Swedish pension fund Alecta, which holds about 2 percent of Scania’s capital, became the latest shareholder to reject Volkswagen’s offer, which runs through Friday.

“Scania’s long-term value has not been fully included in the bid,” Ramsey Brufer, the Alecta head of corporate governance, said in an interview on Wednesday. “That is why we said no to this.”

In February, Volkswagen offered to buy the shares of Scania that it did not already own for 6.7 billion euros, or about $9.3 billion, in an all-cash deal.

Volkswagen, which controls 62.6 percent of the capital of the Swedish company, is seeking to control at least 90 percent of Scania in order to enact so-called squeeze-out provisions, which would allow it to force the remaining shareholders to sell their shares. Volkswagen has been an investor in Scania since 2000 and controls 89.2 percent of the voting rights.

But a committee of Scania’s independent directors urged shareholders last month to reject the offer, saying it undervalued the company. Three other Swedish pension funds that collectively hold more than 2 percent of Scania’s capital also have publicly rejected the deal.

Despite Volkswagen’s large ownership stake, Scania remains an independently managed company. Its board of directors includes several members with ties to Volkswagen, including its chairman, Martin Winterkorn, who is also the chairman of Volkswagen. As a result, a committee of independent directors without ties to Volkswagen was appointed to evaluate the offer.

Volkswagen has offered to pay 200 Swedish kronor, or $30.46, a share for each of its two classes of Scania stock, representing a 53.3 percent premium on its so-called B shares for the 90-day period that ended Feb. 21.

Scania’s B shares were down 4.4 percent, at 175 kronor, in trading in Stockholm on Wednesday afternoon.

Despite the decision by the independent directors, Volkswagen has declined to increase its offer. Volkswagen has said its offer far exceeds “the fundamental stand-alone value of Scania and includes a fair share of the incremental long-term synergy value potential based on a full integration of Scania into the Volkswagen Group.”

The company wants full control so it can combine Scania with its Volkswagen Commercial Vehicles business and the German truck maker MAN, in which Volkswagen gained full control last year after taking a majority stake in 2011.

Volkswagen has said full integration would eliminate restrictions that have limited its ability to cooperate and engage in joint projects, allowing it to better compete against European rivals like Volvo and Daimler.

Tough Sell for Chinese Pork Producer I.P.O.

WH Group’s chopped initial public offering still looks unappetizing.

The Chinese pork producer is slashing the size of its Hong Kong fund-raising to as little as $1.3 billion, down from a previous target of at least $3 billion. But WH Group’s reluctance to accept a lower price means the I.P.O. remains a tough sell.

The company formerly known as Shuanghui is sticking with its original plan to offer new shares at the indicated range of 8 to 11.75 Hong Kong dollars each. Even at the low end, that values its American business Smithfield at 21 percent more than the $7.1 billion the Chinese group paid barely eight months ago, according to an analysis by Reuters Breakingviews.

That full-fat price is on top of the 31 percent premium that WH Group paid to take control of Smithfield. The enlarged company claims that it can add value to Smithfield by selling more low-cost United States pork to Chinese consumers. Yet large institutional investors appear unwilling to pay for value that they can’t yet see.

A better plan would be for WH Group to press ahead with the original offering but at a lower share price. That would allow the group to raise more cash to pay down some of the hefty $7.1 billion of net debt left over from the Smithfield deal.

Yet adjusting the price range is highly unusual for companies listing in Hong Kong, and would have delayed the I.P.O. Another option would be to postpone the offering until synergies from the Smithfield deal materialize, though that would leave WH Group saddled with more debt for longer.

A scaled-back offering at the original price range doesn’t address concerns about WH Group’s valuation, and does little to reduce its leverage. It also creates a potential stock overhang: Chinese private equity firms CDH Investments and New Horizon, which together own 40.5 percent of the company, will no longer sell any shares in the offering. That is bound to will weigh on WH Group’s shares after the listing. The decision to stick to its valuation could leave WH Group in the pigsty.

Una Galani is the Asia corporate finance columnist for Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.

Anglo-Irish Retailer Primark to Make U.S. Landfall in Boston

LONDON - Seeing the recent success of Topshop, Uniqlo and other overseas low-cost retailers among United States consumers, the Anglo-Irish retailer Primark said on Wednesday that it planned to open its first store in the country next year.

Primark plans to occupy a 70,000-square-foot space in the Burnham Building at Downtown Crossing in Boston near the end of 2015. The location was previously home to Filene’s Department Store.

The retailer, which offers basic and affordable clothing, is looking to open additional stores in the Northeast by the middle of 2016.

Primark opened its first store in Dublin in 1969 and operates more than 250 stores in Britain, Ireland and Europe.

It is a unit of the food and retail company Associated British Foods, which posted revenue of 13.3 billion pounds, or about $22 billion, last year. It employs more than 106,000 people in 47 countries.

British Financial Regulator Adds 2 Senior Advisers

LONDON - The Financial Conduct Authority of Britain has added a former head of Britain’s Competition Commission and a former executive at Goldman Sachs and Lehman Brothers Holdings to its ranks as it looks to increase its expertise.

The agency said on Wednesday that it had appointed two senior advisers: David Saunders, who retired from the Competition Commission in March, and Gunner Burkhart, a former executive at Goldman Sachs, Deutsche Bank’s asset management arm and Lehman.

“Both David and Gunner come with impressive experience in their respective areas, which will be a valuable resource for the teams as they look at competition and wholesale issues,” Martin Wheatley, the agency’s chief executive, said in a statement.

The Financial Conduct Authority, which began operation in 2013 after an overhaul of Britain’s financial regulatory system, has hired several former industry executives in the last year.

Mr. Saunders worked for more than 35 years in the British government’s Department for Business, Innovation and Skills and its predecessors. He became chief executive of the Competition Commission in 2009.

In addition to advising the Financial Conduct Authority in its new role as regulator of the payment services sector, he is expected to advise the agency’s competition department.

Mr. Burkhart, who most recently was a managing director at the Nomura Group, has more than 30 years experience in investment banking and asset management.

He worked for 15 years at Goldman Sachs and was the co-leader of its European equities business. He joined Deutsche Asset Management in 2001 as global head of trading and broker relationship management and joined Lehman in 2004 as managing director of senior relationship management in Europe.

British Financial Regulator Adds 2 Senior Advisers

LONDON - The Financial Conduct Authority of Britain has added a former head of Britain’s Competition Commission and a former executive at Goldman Sachs and Lehman Brothers Holdings to its ranks as it looks to increase its expertise.

The agency said on Wednesday that it had appointed two senior advisers: David Saunders, who retired from the Competition Commission in March, and Gunner Burkhart, a former executive at Goldman Sachs, Deutsche Bank’s asset management arm and Lehman.

“Both David and Gunner come with impressive experience in their respective areas, which will be a valuable resource for the teams as they look at competition and wholesale issues,” Martin Wheatley, the agency’s chief executive, said in a statement.

The Financial Conduct Authority, which began operation in 2013 after an overhaul of Britain’s financial regulatory system, has hired several former industry executives in the last year.

Mr. Saunders worked for more than 35 years in the British government’s Department for Business, Innovation and Skills and its predecessors. He became chief executive of the Competition Commission in 2009.

In addition to advising the Financial Conduct Authority in its new role as regulator of the payment services sector, he is expected to advise the agency’s competition department.

Mr. Burkhart, who most recently was a managing director at the Nomura Group, has more than 30 years experience in investment banking and asset management.

He worked for 15 years at Goldman Sachs and was the co-leader of its European equities business. He joined Deutsche Asset Management in 2001 as global head of trading and broker relationship management and joined Lehman in 2004 as managing director of senior relationship management in Europe.

Morning Agenda: Big Pharma’s Deal Bonanza

The pharmaceutical industry is regaining its swagger, Michael J. de la Merced, David Gelles and Rachel Abrams write in DealBook. On Tuesday alone, pharmaceutical companies announced $74 billion worth of potential deals, including an unconventional $45.6 billion bid for Allergan, the maker of Botox, and a flurry of swaps and sales between Novartis of Switzerland and GlaxoSmithKline of Britain. More deals in the cash-rich industry are expected.

The wave of deals underscores the most extensive effort yet by drug makers to bolster their businesses, in many cases pursuing growth as onetime blockbuster products lose patent protection. Instead of spending money researching new products, several companies are instead looking to buy likely winners. Indeed, some drug makers see deal-making as a normal course of business. Among them is Valeant, a Canadian pharmaceutical company known as a serial acquirer, which on Tuesday unveiled its unsolicited takeover bid for Allergan.

Valeant’s current approach has raised eyebrows, since it has teamed up with William A. Ackman, a brash hedge fund mogul known to fight loudly for change at corporations. Combined, Allergan and Valeant would have annual sales of more than $15 billion, with $2.7 billion in cost savings. At Valeant’s single-digit tax rate, that could be worth $25 billion. Both Mr. Ackman and J. Michael Pearson, Valeant’s chief executive, estimated that a combined company would be valued at more than $200 a share.

Robert Cyran and Richard Beales of Reuters Breakingviews write: “Remember the dawn raid, when a would-be acquirer built up a stake before the target realized it was under attack?” Mr. Ackman “has come up with a kind of drone strike version.” By teaming up with Valeant, Mr. Ackman and his hedge fund, Pershing Square Capital Management, can skip the step in which, after buying a stake in a company he thinks is ripe for a shake-up, he then tries to make something happen. Instead, they write, he already has a ready-made buyer.

NEW TERRITORY FOR TAKEOVERS?  |  “The $45.6 billion unsolicited offer for Allergan by Valeant Pharmaceuticals and William A. Ackman’s hedge fund is many things including bold, novel and mega in all ways,” Steven M. Davidoff writes in the Deal Professor column. “It is a new twist in the struggle between companies and shareholder activists and could ignite a furious battle not just for Allergan but over the laws governing takeovers and activism.”

By teaming up with Mr. Ackman’s hedge fund, “Valeant may have unleashed a monster,” Mr. Davidoff writes. “Activists and corporations may team up on hostile takeovers, but the companies that join with activists may soon discover they are targets themselves.” And, he adds, the pairing will also increase pressure on private equity firms to become more like activist hedge funds.

DOUBTS RAISED IN INSIDER CASE  |  Preet Bharara’s perfect record is in jeopardy, Ben Protess and Matthew Goldstein write in DealBook. Mr. Bharara, the United States attorney in Manhattan, has won 80 insider trading convictions without a single defeat, but on Tuesday, a federal appeals court in Manhattan raised doubts about the government’s case against two former hedge fund traders, Todd Newman and Anthony Chiasson.

During the hearing, the judges implied that Mr. Bharara’s office steered insider trading trials to Judge Richard J. Sullivan, who oversaw Mr. Chiasson’s and Mr. Newman’s trial and a subsequent case against another trader. And the defense lawyers contended that Judge Sullivan’s instructions ran afoul of a 30-year United States Supreme Court ruling that helped define insider trading. The lawyers have argued that the flawed instruction warrants a new trial, if not having the convictions thrown out all together.

“A victory for Mr. Chiasson and Mr. Newman would offer a blueprint for traders to defend future cases and imperil at least one other milestone conviction: Michael Steinberg, of SAC Capital Advisors, the once-mighty hedge fund that Mr. Bharara indicted last year,” Mr. Protess and Mr. Goldstein write. But the appeal, they add, is hardly a slam dunk. For one, the United States Court of Appeals for the Second Circuit is known for siding with the government and has rejected every other insider trading appeal filed during Mr. Bharara’s tenure.

ON THE AGENDA  |  The Purchasing Managers’ Manufacturing Index is out at 9:45 a.m. New home sales for March are released at 10 a.m. Facebook and Apple report earnings after the market closes. Mohamed A. El-Erian, formerly chief executive and co-chief investment officer of Pimco, is on Bloomberg TV at 9:30 a.m.

COMCAST LOOKS TO DIVESTITURES  |  Comcast is seeking to divest nearly four million subscribers as part of its efforts to appease antitrust regulators scrutinizing the proposed acquisition of Time Warner Cable, David Gelles writes in DealBook. In one likely situation, Charter Communications would buy about 1.5 million subscribers from Comcast. Charter would also swap some subscribers with Comcast, including those in the Los Angeles area, allowing Comcast to consolidate its footprint there. In addition, Comcast would spin off a new public company with about 2.5 million subscribers.

Together, the sale of subscribers and a spinoff is expected to deliver $18 billion to $20 billion to Comcast, which it could use to buy back shares and pay down the debt it will take on to complete the deal for Time Warner Cable. Even without its planned acquisition, Comcast is growing. The cable operator reported strong first-quarter earnings on Tuesday, including revenue that was up 13.7 percent from the period a year earlier, to $17.4 billion. It also added 24,000 television subscribers.

 

Mergers & Acquisitions »

Chernin Teams With AT&T in Online Video Investment Venture  |  Peter Chernin, a former News Corporation president, has joined with AT&T to commit more than $500 million to a new investment vehicle focused on online video. DealBook »

Permira to Acquire German Chemical Maker CABB International  |  Funds advised by Permira will acquire the German specialty chemical company CABB International from the private equity firm Bridgepoint Capital for an undisclosed amount. DealBook »

WhatsApp Hits 500 Million Users  |  WhatsApp, the messaging application recently scooped up by Facebook for up to $19 billion, now has 500 million active monthly users, with 48 million active users in India alone, ReCode reports. RECODE

INVESTMENT BANKING »

Investors Back Citigroup Pay  |  Big shareholders voted in favor of Citigroup’s executive pay plans for 2013 at the bank’s annual meeting in St. Louis on Tuesday, The Financial Times writes. Some investors voiced their displeasure at the bank’s failure to pass the Federal Reserve’s annual stress test. FINANCIAL TIMES

Is Citigroup Too Complex?  |  Michael E. O’Neill, the chairman of Citigroup, and Michael L. Corbat, the bank’s chief executive, acknowledged on Tuesday at the annual meeting that the company must do more to simplify itself, Reuters writes. REUTERS

Report Hints at More Job Cuts at Barclays  |  The British bank Barclays could eliminate 7,500 jobs at its investment bank to improve returns at its securities unit, according to a report by Sanford C. Bernstein, Bloomberg News writes. BLOOMBERG NEWS

PRIVATE EQUITY »

Ardian Raises $10 Billion, Mostly to Invest in Buyout Funds  |  In its latest round of fund-raising, the private equity firm Ardian, formerly AXA Private Equity, outpaced the $8 billion it raised in 2012. Ardian was spun off from the French insurer AXA Group last year. DealBook »

Bain Goes Off Script for Its Latest Deal  |  With Viewpoint Construction Software, Bain Capital is demonstrating its willingness to make investments that are smaller than the leveraged buyouts for which it is better known. DealBook »

Top Italian Banks Tap Private Equity for Help With Troubled Loans  |  UniCredit and Intesa Sanpaolo have signed a memorandum of understanding “to optimize the performance and maximize the value” of a portfolio of corporate loans facing restructuring. DealBook »

HEDGE FUNDS »

Einhorn Betting Against Tech  |  Greenlight Capital, the hedge fund run by David Einhorn, said in its quarterly letter to clients on Tuesday that it was shorting a group of technology stocks as evidence of a bubble mounted, Bloomberg News writes. BLOOMBERG NEWS

Corporate Governance in Silicon Valley Under Fire  |  Jeff Ubben, whose hedge fund ValueAct is a leading investor in Microsoft, eBay and Adobe Systems, criticized what he said was excessive compensation for Eric Schmidt, the chairman of Google, The Financial Times writes. FINANCIAL TIMES

Darden Shareholders Said to Consent to Special Meeting  |  The hedge fund Starboard Value won consent on Tuesday from shareholders of Darden Restaurants to hold a special meeting on Darden’s proposal to spin off its Red Lobster chain, CNBC reports, citing unidentified people familiar with the situation. CNBC

I.P.O./OFFERINGS »

Numericable Set to Price Largest Ever Junk Bond Offering  |  Numericable, the French cable unit of Altice, is expected on Wednesday to price a junk bond offering worth about 8.4 billion euros, or almost $12 billion, to help finance the acquisition of Vivendi’s mobile unit, SFR. DealBook »

Ares I.P.O. Likely to Raise Up to $419 Million  |  The investment firm Ares Management said on Tuesday that it expected to raise up to $419 million in its initial public offering, Reuters writes. REUTERS

VENTURE CAPITAL »

If a Bubble Bursts in Palo Alto, Does It Make a Sound?  |  Silicon Valley’s isolation from the rest of the economy guarantees it can’t hurt us (or help us) much, Annie Lowrey writes in The New York Times Magazine. NEW YORK TIMES MAGAZINE

Weebly Raises $35 Million  |  Weebly, which helps people and companies build websites, has raised $35 million from Tencent and Sequoia Capital, giving it a valuation of $455 million, ReCode reports. RECODE

Dorian Nakamoto Appears to Thank Bitcoin Community  |  Dorian Nakamoto, the man Newsweek identified last month as the creator of Bitcoin, thanked the Bitcoin community and again denied being behind the virtual currency in a video posted on YouTube on Tuesday, TechCrunch reports. TECHCRUNCH

LEGAL/REGULATORY »

Justices Skeptical of Aereo’s Business  |  The Supreme Court signaled on Tuesday that it was struggling with two conflicting impulses in considering a request from television broadcasters to shut down Aereo, an Internet start-up that uses arrays of small antennas to stream over-the-air signals to subscribers. Most of the justices suggested that the service was set up to circumvent the law, but they were also clearly concerned about stifling innovation, The New York Times writes. NEW YORK TIMES

At Stake in the Aereo Case Is How We Watch TV  |  The case has a little bit of everything, including the first big test at the Supreme Court of who owns and has rights to things stored in the cloud, David Carr writes in the Media Equation column. NEW YORK TIMES

New York’s Case Against Airbnb Is Argued in Albany  |  Eric T. Schneiderman, the New York State attorney general, has issued a subpoena for Airbnb’s list of hosts in New York City because he thinks some of them are breaking the law. It is illegal in New York to rent an apartment for less than 30 days, The New York Times writes. NEW YORK TIMES

Testing the Limits of Inside Information Cases  |  The question is how far down the chain of information prosecutors can go in bringing insider trading charges, Peter J. Henning writes in his White Collar Watch column. DealBook »

Numericable Set to Price Largest Ever Junk Bond

LONDON â€" Numericable, the French cable unit of Altice, is preparing what could be the largest junk bond offering ever to help fund the acquisition of Vivendi’s mobile unit, SFR.

Earlier this month, Altice, a cable and mobile services provider based in Luxembourg, prevailed in a bidding war for SFR in a deal worth up to 17 billion euros, or about $23.5 billion. Altice plans to merge SFR and Numericable after the acquisition.

Numericable was expected on Wednesday to price a high-yield bond offering worth up to €8.5 billion, which would be about €2 billion more than originally expected, according to people familiar with the matter.

High-yield bond offerings are known as junk bonds because they are considered risky corporate debt that pays high interest rates.

The offering is being managed by JPMorgan Chase, Deutsche Bank and Goldman Sachs. It is expected to far outpace a $6.5 billion junk bond sale by the mobile provider Sprint Nextel last year, the largest high-yield offering on record, according to Dealogic.

The Numericable offering will be broken up into several tranches and issued in both euros and dollars.

Earlier this month, the supervisory board of the French media conglomerate Vivendi voted unanimously to sell SFR to Altice, choosing the Luxembourg company over Bouygues, the owner of Bouygues Telecom, the third-largest mobile service provider in France, after Orange and SFR.

Bouygues had hoped to reshape the French telecommunications market by combining two of the country’s largest mobile providers.

The battle for SFR pitted two French billionaires against each other: Martin Bouygues, who runs the diversified industrial group that bears his name, and the French entrepreneur Patrick Drahi, who since 2002 has built Altice into a global operation with cable and cellphone assets in Europe and the Caribbean.

As Vivendi was considering the bids, Arnaud Montebourg, the French minister of the economy, said he would prefer a deal with Bouygues and that he questioned the amount of debt that Altice might use to acquire SFR.

The deal comes amid a series of consolidation moves by Europe’s cable and telecommunications providers. To attract and retain customers, mobile providers are also expanding their offerings into cable and traditional landline services. Cable companies have responded by offering exclusive content and partnering with mobile carriers to offer additional services.