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THURSDAY, JUNE 18, 2015TODAY'S TOP HEADLINES | ||||||||||||||||||||
M & A Qihoo 360 of China Announces C.E.O.-Led Takeover BidINVESTMENT BANKING Barney Frank Joins Signature Bank BoardPRIVATE EQUITY Private Equity Firms Look for Energy Deals Outside U.S.HEDGE FUNDS Elliott Says Samsung Units' Merger Would Cost Shareholders $7 BillionOFFERINGS Univar Prices Shares at $22 for $3 Billion ValuationVENTURE CAPITAL Airbnb Is Said to Seek $1 Billion More in FinancingLEGAL/REGULATORY Export-Import Bank Divides Once-Supportive Republicans | ||||||||||||||||||||
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BY DEALBOOK
WALL STREET LOSES 'A FORCE OF NATURE' With the death of James B. Lee Jr. on Wednesday, Wall Street lost one of its most colorful and influential deal makers, Andrew Ross Sorkin writes in DealBook. Mr. Lee, a vice chairman of JPMorgan Chase, was an early pioneer of syndicated loans and played a key role in the world of leveraged buyouts and private equity, financing deals for Henry Kravis of Kohlberg Kravis Roberts, Stephen A. Schwarzman of the Blackstone Group and the late Theodore J. Forstmann of Fortsmann Little.
"He was a throwback, part of a different generation of bankers on Wall Street who were trusted advisers to corporate America based on deep relationships and insights, even as much of investment banking had become commoditized," Mr. Sorkin writes. On Wednesday, Jamie Dimon, JPMorgan Chase's chief executive, called Mr. Lee "invaluable." He added, "Jimmy was a master of his craft, but he was so much more - he was anincomparable force of nature." Mr. Lee, who talked about how his father's early death might have driven him to create special bonds with people, was known for valuing loyalty and relationships. "Jimmy was my closest friend in finance," Mr. Schwarzman said. "He always gave someone the sense - and it was true - that he cared desperately about you." Daniel S. Loeb, the founder of Third Point, recalled his last note from Mr. Lee, in which he told Mr. Loeb that his"greatest accomplishment" was his children: his son, James, and his two daughters, Elizabeth and Alexandra. They survive him, as does his wife, also named Elizabeth.
FITBIT VALUED AT $4.1 BILLION BEFORE TRADING DEBUTThe fitness-tracking device maker Fitbit begins trading Thursday on the New York Stock Exchange after pricing its shares at $20 each, valuing the company at $4.1 billion, Michael J. de la Merced writes in DealBook. The price is above the top of already heightened price range of $17 to $19 a share. At $20 a share, the company will raise $732 million for itself and its selling stockholders after increasing the number of shares to be sold to 36.6 million from 34.5 million. The shares will trade under the symbol FIT.
Investors are keenly interested in Fitbit as the number of fitness wearable devices used by customers is expected to triple by 2018, to more than 70 million, according to a report by Juniper Research in November. Last year, Fitbit earned $131.8 million, reversing a nearly $52 million loss in the previous year. Its sales more than tripled during that same period, to $745.4 million.
GREEK EXIT FROM EURO APPEARS MORE LIKELY Greece and its creditors continue discussions over a bailout deal at a gathering of European finance ministers in Luxembourg on Thursday, but hopes for a compromise are waning as neither side shows any sign of softening its position. As a result, "the view is taking hold in Europe that its ambitious currency project would be better served if Greece just left," Landon Thomas Jr. writes in DealBook.
Thomas Mayer, a former economist at Deutsche Bank who now runs a research institute in Frankfurt, compares the situation to an elite country club with a longstanding member who refuses to follow the rules. The club faces two choices: 1) relax its principles at the risk of losing its select status or 2) eject the troublemaker and risk causing a big stink in doing so. Mr. Mayer told Mr. Thomas that many in Europe are starting tofavor the second option. "You just can't keep forcing this down people's throats," Mr. Mayer said. "Plus, if Greece left, it would show thatthere is life outside of the European monetary union." Both sides are bracing for a Greek exit. The Greek central bank warned on Wednesday that the country's economy would be devastated if the country left the euro. And bankers say that in the last week, Greeks have pulled more than 1.5 billion euros, or $1.7 billion, from their deposit accounts. Within the European Stability Mechanism, Europe's newly formed rescue vehicle, preparations are being made to support other weak countries in the event of a contagion panic, Mr. Thomas writes.
ON THE AGENDA Data on consumer prices in May, weekly jobless claims and the first-quarter current account are out at 8:30 a.m. The Federal Reserve Bank of Philadelphia's business outlook survey for June is out at 10 a.m. Companies reporting earnings today include Kroger, Red Hat and Rite Aid.
6 BANKS FACE NEW LIMITS ON MORTGAGE OPERATIONS The Office of the Comptroller of the Currency said Wednesday that JPMorgan Chase, Wells Fargo, Santander, HSBC, US Bank and EverBank will face new restrictions on their mortgage operations because they failed to do enough to fix problems in their foreclosure practices in the aftermath of the financial crisis, Nathaniel Popper writes in DealBook. The banks had promised in 2011 to change the way they handled foreclosures in a consent order with the O.C.C.
The regulator said the six banks will have new limitations on their ability toacquire mortgage servicing rights from other banks, but they will not have any limitations on servicing of mortgages that the banks issue themselves. The O.C.C. determined that three other banks - Bank of America, Citigroup and PNC Financial – had complied with the 2011 order and an amended version in 2013 and no longer faced restrictions. The O.C.C. also said that it was giving states about $280 million that it had received as part of a 2011 settlement related to the financial crisis. The regulator said it was not able to distribute the funds to affected homeowners so it was hoping the states would have more success. MERGERS & ACQUISITIONS »
Qihoo 360 of China Announces C.E.O.-Led Takeover Bid The $10 billion offer for the maker of mobile security software is the latest attempt by a Chinese company listed in the United States to go private.
Alibaba's Finance Affiliate Said to Raise Funds at $40 Billion Valuation Alibaba Group's finance affiliate, Ant Financial, which runs China's biggest online payments business, closed a private placement valuing the unit at more than $40 billion, Bloomberg News reports, citing two people familiar with the matter.
INVESTMENT BANKING »
Barney Frank Joins Signature Bank Board Barney Frank, the former Democratic representative who championed stronger banking regulations, said Wednesday that he was joining Signature Bank's board of directors, The Hill reports.
Goldman Sachs Tells Interns to Leave Office by MidnightGoldman Sachs has told its summer investment banking interns not to stay in the office overnight in a bid to improve working conditions for its junior staff, Reuters reports.
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PRIVATE EQUITY »
Private Equity Firms Look for Energy Deals Outside U.S. Private equity funds are looking to cheaply buy assets from overseas owners who have been hurt by the fall in oil prices, The Wall Street Journal reports.
TPG Says Former Spokesman Has Dropped Lawsuit TPG Capital said Wednesday that its former head of public affairs, Adam Levine, who had accused it of violating securities regulations and defrauding investors, had agreed to drop his lawsuit against the buyout firm, Reuters reports.
HEDGE FUNDS »
Elliott Says Samsung Units' Merger Would Cost Shareholders $7 Billion In a 27-page presentation, the hedge fund Elliott argued that a proposed merger of two Samsung Group units, Samsung C&T and Cheil Industries, would cause Samsung C&T shareholders to lose 7.8 trillion won, or about $7 billion, The Financial Times reports.
I.P.O./OFFERINGS »
Univar Prices Shares at $22 for $3 Billion Valuation Univar priced its initial public offering at $22 per share on Wednesday, raising $770 million and valuing the chemical distributor at about $3 billion, Reuters reports.
VENTURE CAPITAL »
Airbnb Is Said to Seek $1 Billion More in Financing If the financing round is completed, Airbnb, which helps arrange short-term housing rentals, will have a valuation of $24 billion.
California Says Uber Driver Is Employee, Not a Contractor The ride-hailing company has long positioned itself as a "logistics company" and says its drivers are contractors, not employees.
Ellen Pao Ordered to Pay Kleiner Perkins $276,000 for Legal Costs A judge said Kleiner Perkins Caufield & Byers should get nearly $276,000 instead of the $973,000 it sought from Ellen Pao to cover the cost of defending itself during her gender discrimination lawsuit, Reuters reports.
LEGAL/REGULATORY »
Export-Import Bank Divides Once-Supportive Republicans Many congressional leaders are siding with Tea Party conservatives against the 81-year-old bank, in the party's latest debate over government's role in the economy.
G.E. Chief Threatens to Move Jobs Overseas if Ex-Im Bank EndsJeffrey R. Immelt, General Electric's chief executive, said he would move jobs overseas if Congress doesn't reauthorize the Export-Import Bank's charter before it expires at the end of June, Bloomberg News reports.
Does It Really Matter Exactly When the Fed Raises Rates? Janet L. Yellen's comments expose the yawning gap between how economists think and how markets react.
Fed, in Shift, Expects Slower Increase in Interest Rates Officials also reduced their economic forecasts during the current year, anticipating growth between 1.8 and 2 percent.
U.S. Gets More Time to Consider Insider-Trading Appeal Federal prosecutors have another month to decide whether to ask the Supreme Court to review a ruling that narrowed the definition of insider trading.
Kenneth Feinberg to Oversee Cuts in Multiemployer Pension Plans The program signals an important break with federal pension law, which until now has allowed benefit cuts for active workers but not for retirees.
Will A.I.G. Decision Affect the Next Bailout? Don't Bet on ItAlthough a judge had harsh words in his ruling on the American International Group case, don't expect the government to do anything different in the next financial crisis, Peter J. Henning and Steven Davidoff Solomon write in the White Collar Watch column.
Woman's Portrait Will Appear on the $10 Bill The yet-to-be-named figure will appear on the note in 2020, the 100th anniversary of the 19th Amendment, which gave women the right to vote.
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