Archive for June 2008

  • 30 Jun 2008 at 5:18 PM

Write-Offs: 06.30.08

$$$ Deals: Trash Is on Top of the Heap
In our M&A Roundup for the week ended June 29, big Allied Waste sale to Republic Services leads to a doubling of deal volume, although private equity recedes. []
$$$ Merrill concerns reignite Bloomberg speculation [MarketWatch]
$$$ Daniel James [WallStrip]

  • 30 Jun 2008 at 5:06 PM

Yahoo Strikes Back

Yahoo filed its preliminary proxy statement today in an effort to win over its shareholders for the upcoming August 1st board meeting,
Within its 32 pages, the presentation outlines: 1) the failed Microsoft acquisition and why Microsoft was inconsistent, 2) the downside of a partial search agreement with Microsoft, 3) the benefits of the Google partnership, 4) Yahoo’s plan for the future, and 5) also makes a case that Carl Icahn hurts the performances of companies he has recently been involved with and that his board slate is not the answer.
Yahoo cites two separate occasions (May 17 and June 8), where they asked Microsoft if they wanted a full company acquisition, and Microsoft said no. Additionally, Yahoo believes that the partial search agreement does not benefit the company “financially or strategically and is based on flawed assumptions.”
The claim that Microsoft was “unresponsive and inconsistent,” with regards to making a deal is rather accurate. We are well aware of the see-sawing of Ballmer and Co. as they kept switching positions on the deal. The presentation gives a nice overview of the timeline of events on page 8.
Yahoo addresses each aspect of the hybrid search deal with Microsoft, concluding that it does not improve cash flow and cedes too much control. The $1 billion upfront is taxable and Yahoo believes that Microsoft’s cost savings and revenue benefits are far too optimistic and unrealistic. They also make the claim that they are unprotected competitively at the end of the ten year search agreement.
The plan for the future is discussed starting on page 17 of the presentation. Yahoo believes that its unique assets, like its content properties, Yahoo! News, Sports, and Finance, make it a “must buy” for advertisers. They want to better position themselves to link search and display together, and the presentation also mentions cloud computing, the next step towards “Web 3.0.”
The recent reorganization within Yahoo’s management ranks is their effort to support these core strategies.
By far the most interesting part of the presentation is Yahoo’s attack on Carl Icahn, charted out on page 28. Take a look; there are a lot more red arrows than green ones. Yahoo makes the case that Icahn has hurt shareholders of companies he has been involved with in the past year, as stock prices have plunged. At the same time, is it Carl who is hurting the price or is it the company that is battling him and underperforming?
It will be interesting to see Icahn’s response to Yahoo playing offense here. On Friday, he indicated he would comment on Yahoo and its management. So far, the only update on his blog today is his responses to a few commenters’ remarks regarding his previous rants on corporate America.
You can take a look at the full presentation here.
Yacrosoft correspondent Travis

August Busch IV, the 43-year-old CEO of Anheuser-Busch, announced his counterattack against InBev’s now-hostile offer during a Friday conference call with investors and analysts. Kaiser August pitched an expansion of Anheuser’s cost-cutting program, Blue Ocean, to make $1 billion in cuts by 2010, twice its original target and including job buyouts or layoffs for up to 1300 employees, or 15% of Anheuser’s workforce. “We need to break from a conservative culture,” the young Kaiser reported, but gave no word on whether shareholders also needed to break from conservative management.
Busch argued that Anheuser’s current management “can achieve independently” the value of InBev’s bid and has planned the cuts for some time. Setting aside skepticism about the timing and originality of the plan, he has his work cut out for him in convincing shareholders that Anheuser can trim its fat more efficiently than InBev. Busch contends that an already-entrenched management team can deliver better results because of their familiarity with the terrain; previous attempts by conservative, family-controlled enterprises in similar situations have had mixed results at best. Carlos Brito, by contrast, speaks of “unleashing that to the world” when he refers to Budweiser, capturing the hyper-aggressive national spirit of the Belgians.
August IV initially said that InBev could remove all the directors at will, but asked at the end of the call, “Can we correct my statement” before announcing that Anheuser would challenge this point in Delaware’s Chancery Court. Chances for peace look slim; one beverage consultant remarked “InBev is a very aggressive company. They don’t take no for an answer.”
-senior Anheuser-Habsburg-Busch correspondent Andrew

Whether you’re looking for employment or just ass in the vicinity of Grand Central, take note: a male temp’ing tipster informs us that “there are high grade women to be found in Barclays’ investment bank.” And no, we did not send one of our interns to a temp agency so that he might sample the offerings at the various banks around town for your benefit, though now that I mention it, that’s not such a bad idea.

  • 30 Jun 2008 at 3:57 PM


I don’t know how many of you had signed up to hear Erin Callan’s “insights on both the mitigation of risk during volatile market conditions as well as the outlook for Lehman and the industry” tonight at 6:15 but FYI, the event has been cancelled.

  • 30 Jun 2008 at 3:39 PM

And We’re Back

What transpired in the 4 hours since Count Vikula hacked into our system and shut this place down?
— Massage enthusiast Jeffrey Epstein pleaded guilty to paying underage girls to awkwardly stand by while he jerked off into a towel. He was sentenced to 18 months in prison, plus a year of house arrest, and will be given the official title of sex offender. Adding insult to injury is the news that he will definitely not have the scratch to take up with the prosts, at least not with the same vigor, following the hard time. Epstein lost $57 million as “Major Investor No.1″ in the Bear Stearns hedge funds.
Vanity Fair/Bear blamed CNBC, where “there is simply no adult supervision,” for BSC going down, and also claimed that a group of hedge fund managers celebrated the collapse at a breakfast the following Sunday morning during which they “planned a similar assault on Lehman” for the following week BUT FAILED TO TELL US WHAT THEY ATE.
— We received cloak and dagger emails from a few of you about “something happening at Lehman.”
— Carney, as one of you guessed, staged a Free Epstein rally, topless, while I watched one of the best “It’s Always Sunny In Philadelphia” episodes ever, “Charlie Wants An Abortion.” If you haven’t seen it, stop what you’re doing and rectify that now. My favorite part is this little bit of dialogue (looking for a clip) between Mac and Meg, a pro-lifer he’s trying to bed, at an abortion clinic protest:

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  • 30 Jun 2008 at 10:48 AM

Who Tried (And Failed) To Save Bear Stearns?

We’re still going through the Vanity Fair article on Bear which blames, among others, Citadel, SAC Capital, and Goldman Sachs for bringing down the 85 year-old firm. But before we start pointing fingers, let’s take a second to note the one party writer Bryan Burrough doesn’t think had a hand in blowing the place to smithereens. And in fact, if I may be so bold as to read between the lines, seems to applaud for coming to BSC’s rescue, albeit too late.

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  • 30 Jun 2008 at 10:23 AM

Where Wall Street Summers

So where do Wall Street’s movers and shakers spend their summers? Everyone knows that the Hamptons is a favorite. Private equity billionaires Henry Kravis and Pete Peterson have places on the east end of Long Island, as do George Soros and oil heir David Koch. Other bold-face names (at least, Wall Street bold-face names) include Mary Meeker, the Morgan Stanley stock analyst, short-seller Jim Chanos and Citigroup executive Sallie Krawcheck.
But what about other summer getaways popular with Wall Street executives? Forbes has a rundown today of who summers in Aspen, Sun Valley, Connecticut’s Litchfield and Nantucket.