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FRIDAY, JUNE 12, 2015TODAY'S TOP HEADLINES | ||||||||||||||||||||
M & A Fiat Chrysler C.E.O. Said to Set Sights on Other AutomakersINVESTMENT BANKING Dish Said to Seek Up to $15 Billion in Bank FinancingHEDGE FUNDS Elliott Management Pushes Citrix Systems for ChangeVENTURE CAPITAL Uber Plans $1.1 Billion Investment in China in 2015LEGAL/REGULATORY Mary Schapiro to Join London Stock Exchange Board | ||||||||||||||||||||
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BY DEALBOOK
TWITTER CHIEF'S EXIT SPARKS DEAL SPECULATION To Twitter board members and friends of Dick Costolo, his plans to resign as Twitter's chief executive was not a surprise, Vindu Goel and Mike Isaac report in The New York Times. But Michael J. de la Merced notes in DealBook that whenever a chief executive departs, it always raises the question of whether the company is now for sale – and Twitter is no exception. In fact, Twitter was the subject of takeover rumors as recently as last month, and a longtime Twitter investor, Chris Sacca, has mused over the last two weeks that Google might make a logical buyer.
Mr. de la Merced writes that Twitter could be an attractive acquisition for a technology giant because it's not prohibitively expensive, with a market value of $23.5 billion as of Thursday's market close, before Mr. Costolo's plans to depart were announced. (Twitter's shares rose more than 7 percent in after-hours trading after the change in leadership was made public.) Also, Twitter has only one tier of stock, unlike other big technology companies like Facebook and Google, whose founders have a special class of stock that give them the power to block a takeover attempt. People are also speculating about Mr. Costolo's successor. The interim chief executive, Jack Dorsey, Twitter's co-founder and former chief,has wanted to return as Twitter's chief ever since he was pushed out in 2008, according to two people with knowledge of his thinking, Mr. Goel and Mr. Isaac write. They list other possible candidates, who includeAdam Bain, who oversees global revenue and partnerships and is a favorite among Twitter employees, and Anthony Noto, a former technology banker at Goldman Sachs and Twitter's current chief financial officer.
I.M.F. PULLS TEAM OUT OF GREECE BAILOUT TALKS A bailout deal for Greece appeared to slip further out of reach on Thursday after the International Monetary Fund withdrew its negotiators from discussions with Greece in Brussels, Liz Alderman and Landon Thomas Jr. write in The New York Times. A document that European Commission President Jean-Claude Juncker submitted to Greece in recent days appears to have led to the talks' breaking point, Ms. Alderman and Mr. Thomas write. One top Greek official told them that the document was full of "maximalist I.M.F. proposals" that they could not agree to. When it became clear to I.M.F. officials that Greece was adopting this stance, they decided to return to Washington, people involved in the talks said.
The I.M.F. has publicly blamed Greece for its decision to walk away, but senior officials at the fund said that they were just as frustrated with Europe's refusal to consider a write-down of Greek debt, Ms. Alderman and Mr. Thomas write. Greece's debt, which is 180 percent of the overall economy, remains at an unsustainable level, I.M.F. economists say. I.M.F. executives are now privately saying that Greece's problems cannot be solved with pension and labor reforms alone. Europe must offer significant debt relief, said one official involved in the negotiations. Though both sides seem to have hardened their positions, Peter Doyle, a former economist at the fund who specialized in Europe, said the I.M.F.'s withdrawal shouldn't be seen as the end of discussions. He recalled many occasions when he was called home at a sensitive time in debt talks, only to resume discussions and even get a deal done.
MURDOCH TO HAND OVER MEDIA EMPIRE TO SONS Rupert Murdoch is expected to name his son James to succeed him as chief executive of 21st Century Fox and elevate his son Lachlan to the role of co-executive chairman of the company, multiple people briefed on the plans told Emily Steel and Ravi Somaiya of The New York Times on Thursday. Lachlan, 43, is moving from Australia to Los Angeles and will work in partnership with James, 42, these people said. Their 84-year-old father will remain at the company as executive chairman. It is unclear when the changes will take place, but they are likely to be discussed at a board meeting next week, two people said. The changes will only affect Fox; the hierarchy at News Corporation will remain the same.
Even after he hands over control of 21st Century Fox, Rupert Murdoch is expected to continue to provide broad strategic oversight and will retain ultimate control of the company, said the two people. Rich Greenfield, a media analyst with BTIG Research, said, "This is still Murdoch's company at the end of the day." For James Murdoch, his ascension to the top spot at Fox represents a remarkable turnaround, Sarah Lyall writes in The New York Times. After the News Corp. tabloid The News of the World was implicated in a phone hacking scandal in Britain, he soon departed for New York to distance himself from the fallout and rebuild his reputation. "His repatriation to the U.S. was a wise move because he became, in effect, a nonentity here, and he went off and did some very intelligent things," said Claire Enders, chief executive of the media research firm Enders Analysis in London.
ON THE AGENDA The Labor Department releases the producer price index for May at 8:30 a.m. The University of Michigan's preliminary survey of consumer sentiment for June is out at 10 a.m.
AXOVANT'S MARKET DEBUT RENEWS BIOTECH BUBBLE WORRIES During its trading debut on Thursday, Axovant Sciences saw its market value approach $3 billion on the basis of its unproved Alzheimer's drug – which renewed concerns among biotechnology observers that the sector's stocks are now in a bubble, Andrew Pollack writes in DealBook. Axovant raised $315 million in its offering Wednesday, selling 21 million shares at $15 each. That was 3.1 million more shares than it had expected to sell and at the high end of the expected price range. In Axovant's first day of trading on Thursday, shares nearly doubled to close at $29.90.
What piques investors' interest is the potential of an Alzheimer's disease drug that GlaxoSmithKline had abandoned after testing it in numerous trials, Mr. Pollack writes. In December, Axovant paid $5 million to buy the rights to that drug, which it calls RVT-101. In Glaxo's clinical trials, the drug did not work when used by itself but in one trial, patients taking the drug in combination with the widely used drug Aricepthad a slower decline in certain measures of cognition and daily functioning than those getting Aricept alone. Axovant said that later this year it would start another trial testing RVT-101 with donepezil, the generic version of Aricept. "Given the fact that GlaxoSmithKline had a chance to take a look at this drug in the clinic, and concluded that they couldn't do better than selling it for lunch money, the I.P.O. terms illustrate the kind of overnight riches a select few can find on Wall Street," John Carroll, the editor in chief of the online news service Fierce Biotech, wrote on Thursday. MERGERS & ACQUISITIONS »
Fiat Chrysler C.E.O. Said to Set Sights on Other Automakers Fiat Chrysler's chief executive, Sergio Marchionne, is looking at other automakers like Peugeot Citroën as possible merger partners as it appears less likely he will be able to strike a friendly deal with General Motors, Bloomberg News reports, citing people familiar with the matter.
Lululemon's Founder to Sell His Stake in CompanyThe yoga wear maker's founder, Dennis Wilson, held 14 percent of the company's outstanding shares, valued at about $1.2 billion.
Mylan's Dutch Takeover Defense Is in Nasdaq's Hands Mylan is taking advantage of Dutch takeover defenses to block a hostile bid by Teva Pharmaceuticals, but United States market rules may hamper its efforts, Steven Davidoff Solomon writes in the Deal Professor column.
INVESTMENT BANKING »
Dish Said to Seek Up to $15 Billion in Bank Financing Dish Network is talking with banks as it considers borrowing $10 billion to $15 billion for the cash portion of its bid for T-Mobile, The Wall Street Journal reports, citing people familiar with the matter.
JPMorgan Shakes Up a Banking Team The head of the bank's technology, media and telecommunications team, Kurt Simon, will become global chairman of mergers and acquisitions.
Wall Street Chiefs' Summer Reading List Bloomberg News asked prominent Wall Street figures, including William A. Ackman of Pershing Square Capital Management and Lloyd C. Blankfein of Goldman Sachs, which books were on their reading list.
After Financial Crisis, Fates of Lender and Borrower Diverge David Miller and his team at Credit Suisse made one of their most aggressive loans to Timothy Blixseth, a land and timber baron who now sits in jail, William D. Cohan writes in the Street Scene column.
In Brazil, Investors Pay a Premium for TraditionBrazilians rely on their banks, which dominate the asset-management business and charge mutual fund fees that would shock American investors.
Investment Banks Missing From Indian Tech Deals In India, start-ups seeking money or partners are bypassing investment banks even more than they are in the United States or China, The Wall Street Journal reports.
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HEDGE FUNDS »
Elliott Management Pushes Citrix Systems for ChangeThe activist hedge fund, which has made a lucrative practice out of shaking up tech firms, is urging Citrix to take steps to bolster its stock.
VENTURE CAPITAL »
Uber Plans $1.1 Billion Investment in China in 2015 Uber is planning to invest 7 billion renminbi, or $1.1 billion, in China this year alone and will be raising money later this month specifically for its Chinese business, according to a letter Uber's chief executive sent to investors, The Financial Times reports.
Greylock Hires 1st Female Investment Partner Greylock said it has hired Sarah Tavel, the product manager who oversaw Pinterest's search tool, making her the firm's first female investment partner, ReCode reports.
Chris Sacca Says Downturn in Silicon Valley 'Inevitable' Chris Sacca, an investor in tech companies including Twitter and Uber, told Bloomberg Television that a downturn in Silicon Valley was "inevitable" because too much money was flowing to technology start-ups that would fail.
Cuba's Web Entrepreneurs Search for U.S. Clients, and Reliable Wi-Fi As the United States opens up to Cuba, a little-advertised circle of software developers, web designers and translators are selling their skills long-distance.
Top Executive at Kleiner Perkins to Make Rare Silicon Valley Shift, to Menlo Ventures Matt Murphy, who had close connections to Google and other prominent tech investments, is joining Menlo Ventures as a managing director.
LEGAL/REGULATORY »
Mary Schapiro to Join London Stock Exchange Board The former chairwoman of the S.E.C. will become a nonexecutive director at a time when the exchange is expanding its business in the United States.
Breakingviews: Rupert Murdoch's Step Back Will Propel Dynasty Forward But without Chase Carey, there is a risk that the Murdochs could lose their newfound discipline.
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