Sony Said to Hire Morgan Stanley, Citigroup for Loeb Plan (Bloomberg)
Sony Corp. is working with Morgan Stanley and Citigroup Inc. as it considers adopting billionaire Daniel Loeb’s proposal for an initial public offering of its entertainment unit, people familiar with the matter said. Third Point LLC’s Loeb, which acquired more than 6 percent of Sony, is pushing Chief Executive Officer Kazuo Hirai to sell as much as 20 percent of the entertainment assets in an initial public offering.
Cerberus Capital Battles With Japan's Seibu (WSJ)
To Mr. Feinberg, the strife with Seibu helps explain why private-equity firms still don't do much business in Japan. In a recent interview, he cited Seibu's refusal to speak to Cerberus executives as the "kind of secretive, mysterious behavior that frightens shareholders by reminding them of the troubles in the past in investing in Japan." Former U.S. Vice President Dan Quayle, now head of Cerberus's global investments, also faulted Seibu's approach. "When you stop communicating with your largest shareholder, it's not good corporate governance," he said in an interview.
Goldman attracts 17,000 intern applicants (FT)
Goldman Sachs has hired 350 investment banking summer interns out of 17,000 applications, claiming it has “no problem” attracting talent six years after the financial crisis sparked a series of deep cuts to Wall Street jobs and bonuses. Gary Cohn, the bank’s president and chief operating officer, gave the rough figures at a New York conference on Thursday. ... Mr Cohn said that Goldman is receiving about 50,000 to 70,000 applications for full-time jobs a year. More than 80 per cent of those offered positions – full-time and for the summer internship programme – accepted Goldman’s offer, he said. “That’s pretty typical to where we have been as a firm over the entire [compensation] cycle,” Mr Cohn added. “We are having no problem attracting people.”
Morgan Stanley Exec Says Boutiques May Be Hurting Recruiting (WSJ/Moneybeat)
Mark Eichorn, Morgan Stanley’s co-head of investment banking, told Bernstein analyst Brad Hintz, that he was somewhat worried boutique investment banks are hurting his bank “from a recruiting perspective” than he is about them stealing deals or clients, according to a note from Hintz Wednesday. The smaller investment banks “compete for the same talent,” Hintz wrote in his note. Eichorn added that and Morgan Stanley “needs to invest in compensation, since the sacrifices involved in an investment banking career are significant and the way to win new recruits is to provide a medium-term financial payoff.”
God’s new banker brings Teutonic thoroughness to Vatican (FT)
“I got a rosary. [Pope Benedict XVI] wished me strength,” recalls Ernst von Freyberg, who two weeks earlier had been named head of the Vatican bank in the Pope’s last major appointment before his historic abdication in February. ... His mission, Mr Von Freyberg says, is to “get IOR super-compliant and a respected member of the financial system, and out of the newspapers”. To do that he must appease Moneyval – Council of Europe experts who examine measures to counter money laundering – and which last year passed the Vatican in only nine out of 16 core recommendations.
Ex-Microsoft Exec to Create First National Marijuana Brand (Reuters)
A former corporate strategy manager at Microsoft plans to create the first national marijuana brand, and said he is kicking off his Seattle-based business by acquiring medical cannabis dispensaries in three states. Jamen Shively, 45, envisions his enterprise becoming the leader in both recreational and medical cannabis—much like Starbucks is in coffee, he said.
Arvind Mahankali, 13, wins National Spelling Bee with 'knaidel' (NBC)
The seven-letter word "knaidel" crowned Arvind Mahankali, 13, of Bayside Hills, N.Y., champion of the 86th Scripps National Spelling Bee, breaking his streak of bad luck in past years with spelling words of German origin. "I thought a German curse has turned into a German blessing," Arvind said as he cradled the trophy Thursday. The word "knaidel" refers to a type of dumpling.
Goldman: This US Treasury Sell-Off Is For Real (CNBC)
"The bond sell-off: It's for real," Goldman's fixed income analysts said in a research note released on Friday. "Our end-2013 forecast for 10-year U.S. Treasurys remains 2.5 percent, above the forwards, and we will be looking for other opportunities to trade the market from the short side."
Dell Begins Campaign to Support Leveraged Buyout (DealBook)
The computer company filed its definitive proxy materials after receiving final approval from the Securities and Exchange Commission. And it set July 18 as the date for a shareholder vote on the transaction. In a letter to shareholders, Dell stressed that its special committee carefully reviewed all possible alternatives to the $13.65-a-share offer by Mr. Dell and Silver Lake and fought hard to get to that price.
Morgan Stanley Cutting Correlation Unit Added $50 Billion (Bloomberg)
Morgan Stanley was shrinking its derivatives business to cut risk under new banking rules when three deals came along that it couldn’t resist. The bank bought credit-correlation positions with a notional value of more than $50 billion over the past three years, including a portfolio sold by Credit Suisse Group AG in 2012, four people with knowledge of the transactions said. The trades helped boost Morgan Stanley (MS)’s fixed-income revenue, the lowest among the biggest Wall Street firms, at the same time they swelled the balance sheet with risky assets. Such large acquisitions have since been halted, two other people said.
Lloyds to Sell $5 Billion in Mortgage Securities to Increase Reserves (DealBook)
On Friday, the bank announced that it had agreed to sell a portfolio of United States real estate-backed securities for £3.3 billion ($5 billion) to a number of American investors, including Goldman Sachs. The British firm said it expected to generate a pretax income of £540 million from the deal. The disposal is part of Lloyds’ mounting efforts to increase it capital reserves after British regulators demanded that the country’s banking sector raise a combined £25 billion to fill a capital shortfall by the end of the year.
How Treasury's tax loophole mistake saves companies billions each year (Reuters)
In 1996 the Treasury Department moved to simplify matters with a rule that enabled companies to "check the box" on a tax form to describe a given corporate entity - including whether it was, for tax purposes, irrelevant, a so-called "disregarded entity." For a company and its subsidiaries that all operate in the United States, the rule streamlined tax filing by allowing the subsidiaries' income to be reported on the same forms as the parent company's income. When applied to U.S.-based multinational companies, however, the "disregarded entities" status could be used to set up high-volume subsidiaries in low-tax jurisdictions such as Luxembourg or Ireland. ... Treasury officials realized they had created a massive loophole when they noticed a spike in cross-border financing shortly after the rule took effect. "The mistake was extending it to foreign entities," Donald Lubick, Treasury's top tax official at the time, told Reuters. "That was apparent pretty quickly."
Ex-shareholders of Lyondell, Tribune face novel clawback threat (Reuters)
If successful, the Lyondell lawsuit and a nearly identical one stemming from the failed buyout of Tribune Co could circumvent the legal protections that have generally shielded individual investors when a leveraged buyout goes bust. ... The cases pit sophisticated creditor plaintiffs such as a notoriously litigious hedge fund, Aurelius Capital Management, against retirees such as Leshner, money managers, pension funds and family foundations.
2 US diplomats shot outside Venezuelan strip club, pair 'were fighting with each other' (AP)
Police said the two US officials were shot following a brawl inside the club, which is in the basement of a shopping center in the upper-middle-class Chacao neighborhood. A woman who works at the club said the two men got into a fight with each other. ... Deisy Ron, who identified herself as the club's artistic director, told The Associated Press that she wasn't at work when the shooting happened, but said employees she supervises told her that the men got into an argument and started throwing punches inside the club. "They were fighting with each other," she said. "One of them pulled out a gun and shot the other in the stomach and the leg."