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Growing Funds Fuel Buyout Boom (WSJ)
News about private equity has become something of a bore lately. Record buyouts? Check. New fund breaks record? Check. Record annual bonuses.... etc. So, yeah, just to make sure we're not leaving out anything important, some private equity players have been raising some really massive funds lately, which means that the size of vulnerable companies is growing, which means we're probably going to see a record buyout fairly soon... and the cycle continues. And while we're round up the PE news, Yankee Candle is being taken private by Madison Dearborn for $1.4 billion. The firm says no store closures or layoffs are expected. What kind of deal is that? Also, it was revealed yesterday that Clear Channel is in talks with all of the usual suspects about being taken private.
Daimler Minus Chrysler = Pure Speculation (NYT)
Are all of the big mergers of the 90s bound to get unwound. Almost since the day it was completed, there's been talk that Time Warner may one day bid adieu to AOL, a partner it should never have gotten together with. And in recent days there's been more talk that Daimler and Chrysler would go back to just friends. At this point, there's no substance backing up the rumors, but management won't publicly rule the possibility out, which apparently is enough to stoke the flames, even though they'd pretty much have to say that. We assume that if they broke up, in the divorce proceedings, Daimler would get to keep Dr. Z., which would be rough on Chrysler.
SEC seen investigating 27 mutual fund firms (Reuters)
Stories about mutual funds always feel pretty quaint, seeing as nobody invests in mutual funds anymore. Index funds and ETFs, sure, but not mutual funds. Contributing to their plummeting caché, the SEC may investigate 27 mutual funds for improperly using money from the fund for marketing purposes. Whether there's a legal defense or not, it sounds seedy. See when the SEC investigates mutual funds, it just makes them look bad, whereas the hedge fund industry only looks cooler when regulators try to do their best to bring down the hammer on them. Even cooler is that when the SEC comes knocking, hedge funds just flip 'em the bird, and get away with it. So you can see why the money flows the way it does.
Oil Trades Above $61 a Barrel on Unexpected Drop in U.S. Supply (Bloomberg)
Is the cartel getting its house in order? Oil has moved back above $60, the first solid gain for the brown stuff since it started falling. Supply numbers came in surprisingly light, which is being attributed to some combination of higher US demand and lower supply from the Mideast (duh). But weren't the cuts basically just announced this last week? Do they really work through the system that quickly? Maybe it's just speculators again, driving the price of oil up, as they always do.
South Korean condom sales, motel bookings surged after North's nuclear test (AP)
As people start to think about the prospects of the end of the world as they know it, there's always someone there to cash in on these thoughts. Apparently, South Koreans, pondering the spectre of imminent nuclear annihilation felt the only reasonable thing to do in such a moment was to shack up with a loved one, which caused a spike on condom sales and hotel bookings. Anyone know of a public South Korean motel chain, not that the effect would be significant of. The key is in finding place -- maybe South Korea, maybe not -- that was rapidly moving to a permanent state of mind such as this one. Is the US going in that direction? Cramer, what's the play?
Oracle CEO says Red Hat is in crosshairs (San Francisco Chronicle)
Software giant Oracle has been bulking up in the last few hears, having gone on a $20 billion acquisition spree to boost its presence in the business applications market. Then, earlier this year it hinted it wanted to go in the other direction, and offer its own operating system, a version of Linux. The company finally unveiled its plans yesterday at its OpenWorld conference, announcing that it would support Red Hat Linux but at half the price. Red Hat, offering the open source Linux, doesn't own or sell the software; it distributes it, and then makes its money by offering support and maintenance to users. So basically, Oracle wants to let Red Hat offer it, and then come in support it itself on the cheap. Pretty sly; classic Ellison.
Slabs Are Joining Scoops in Ice Cream Retailing (NYT)
Everybody wants to know what the next Starbucks is going to be. The Times looks at three companies that want to be the Starbucks of ice cream; basically high-end purveyors of the stuff with ubiquitous presence. But, we'll tell ya right now, if you're looking for the next Starbucks, look elsewhere. First, it's ice cream, not coffee. Ice Cream's great and all, but the idea of busy professionals standing in line for two ice creams a day is just ludicrous. The stuff will make you get seriously fat if you consume it at the same pace that you consume Starbucks coffee. The other thing is, it's always coffee weather, because when it gets hot outside, they can start churning out the iced coffee. Ice Cream, are they gonna sell hot melted ice cream during the winter? And then there's Starbucks itself, which if it got into serving ice cream might actually do really well, probably killing off any wannabees.
Altria Moves Closer to Spinoff of Kraft Foods Unit (NYT)
Philip Morris, ahem Altria is moving forward with its plans to spin off Kraft Foods. The move has been planned for some time but was put on hold recently, when a court gave the green light for fresh lawsuits against the tobacco industry over its marketing of 'light' cigarettes. But you can't stop a company from unlocking value if that's what it's determined to do. Sure, maybe Kraft will be seen as more valuable now that it's not associated with a tobacco company, but will the tobacco side suffer if it's not associated with a macaroni & cheese company?