Third Point Funds Boost Stake in Sony as Daniel Loeb Seeks Talks (Bloomberg)
Funds controlled by Third Point now own 70 million shares through director ownership and cash-settled swaps, according to a June 17 letter from the investor to Sony Chief Executive Officer Kazuo Hirai that was obtained by Bloomberg News. That is equivalent to about 6.9 percent of the Tokyo-based company’s shares on issue. Sony Corp.’s board is discussing a proposal by Loeb to sell as much as 20 percent of its music and movie assets in an initial public offering to focus on reviving earnings from consumer electronics. Loeb met last month with Hirai to deliver his initial proposal. “Sony appears to be regaining its competitive edge,” Loeb said in the letter. “Given our large stake, we reiterate our offer to serve on Sony’s board of directors.”
Britain Charges Former Trader in Libor Inquiry (DealBook)
Britain’s Serious Fraud Office said on Tuesday that it had filed eight fraud charges against a former UBS trader, Tom Hayes, in connection with the manipulation of the London interbank offered rate, or Libor. ... “He attended Bishopsgate police station this morning where he was charged by City of London Police with eight counts of fraud,” the fraud office said in a statement.
Obama Says Bernanke Has Stayed at Fed ‘Longer Than He Wanted’ (Bloomberg)
“Ben Bernanke’s done an outstanding job,” Obama said in an interview with Charlie Rose that aired yesterday, when asked about nominating him for another term subject to Senate approval. “He’s already stayed a lot longer than he wanted or he was supposed to.”
China Wrestles With Banks' Pleas for Cash (WSJ)
The Chinese interbank funding market has seen rates soar since early this month amid slowing foreign-capital inflows and banks' needs to fulfill investor obligations, among other factors. The squeeze is pushing up banks' funding costs and could impede a key source of funds for growth even as the economy slows. ... The tight liquidity situation is leading to some calls from Chinese banks for the People's Bank of China to inject more cash into the market by lowering the share of deposits banks are required to set aside against financial trouble.
Commerzbank to shed more than 5,000 jobs (Reuters)
German lender Commerzbank will shed more than 5,000 jobs, 10 percent of its workforce, under a preliminary deal with staff representatives to cut costs, a person close to the company told Reuters on Tuesday. While two people familiar with the negotiations said the two sides have in principle agreed the extent of the cutbacks, a labor source dismissed the number of more than 5,000 jobs as "clearly too high". Commerzbank declined to comment while a spokeswoman for trade union Verdi described the number of jobs affected as "inexplicable".
Washington DUI suspect hands cops a beer, claims to be government assassin (KATU)
A suspected drunk driver handed police a can of beer when they asked for his driver's license and then claimed to be an assassin for the U.S. government after officers stopped him last week in Kent. ... "When you ask somebody for a driver's license, you're not expecting a can of beer, that's for sure," [an officer] said. But that's not all. The suspected drunk driver then went on to make several claims that he was a paid assassin for the U.S. government and that he had killed several people on behalf of the government.
Swiss Parliament Pushes Back on U.S. Banks Deal (WSJ)
The lower house of Switzerland's parliament voted against adopting a plan for banks to step around the Alpine nation's banking secrecy laws and hand information about their dealings with suspected American tax evaders to U.S. authorities in an attempt to reach a sweeping resolution. ... Critics have called the plan a violation of Swiss sovereignty, which unfairly exposes local bankers, advisers and attorneys to legal prosecution in the U.S. Critics have also said the plan lacks important details on the potential size of fines for the banks that opt to participate.
EU-US trade talks launched amid French fury with Brussels (FT)
Monday’s launch of the talks, at a Group of Eight summit in Northern Ireland, was overshadowed by the row over “reactionary” French protectionism. The head of the EU’s executive laid bare his frustration – shared by the US, Britain and Germany – in an interview with the International Herald Tribune. “Some say they belong to the left, but in fact they are culturally extremely reactionary,” José Manuel Barroso said, in what appeared to be a clear swipe at French President François Hollande. Although he did not specifically name France, Mr Barroso said critics of liberalised trade in films and music had “no understanding of the benefits that globalisation brings also from a cultural point of view”.
Sprint sues Dish, Clearwire to block tender offer (Reuters)
Sprint Nextel Corp on Monday said it has sued Dish Network Corp to block its tender offer for Clearwire Corp, escalating a takeover battle that also includes Japanese mobile carrier SoftBank Corp. Sprint, the third-largest U.S. phone company, in a statement said Dish's offer violated Delaware law, and was part of an effort to "fool" Clearwire shareholders and block Sprint's competing effort to obtain Clearwire spectrum. It said it sued in Delaware Chancery Court to block the tender offer. The lawsuit comes amid a battle in which SoftBank and Dish are bidding for Sprint, while Dish and Sprint are bidding for Clearwire, a wireless broadband provider.
How Clearwire Became the Darling of Telecom (WSJ)
More than a month ago, before Dish boosted its bid for Clearwire, Dish Chairman Charles Ergen hinted to Wall Street on an earnings conference call that the small wireless company was behind the dramatic merger brawl between himself and fellow billionaire Masayoshi Son, the CEO of Japanese telecom and Internet company SoftBank. "If you look at the synergies that we're talking about and look at the synergies that SoftBank talks about, a lot of those synergies are in Clearwire," Mr. Ergen said. "It was considered swampland spectrum and now it's kind of beachfront property."
Directors Refuse to Go Naked for Chinese IPOs (Bloomberg)
[T]he cost of insurance to cover directors and officers of Chinese companies against lawsuits has skyrocketed, with premiums reaching as high as $100,000 per $1 million of coverage in some cases, up from a range of $10,000 to $15,000 a few years ago. Now, as Chinese firms start listing in the U.S. again and the pace of lawsuits slows, insurance carriers are still charging higher rates and have imposed stricter policy terms, according to brokers, underwriters and directors.
Buyers of the coverage are “really getting socked,” said Brendan Dolan, an Irvine, California-based senior vice president at Willis Group Holdings Plc (WSH)’s North America unit, who has brokered policies for Chinese companies since 2005. Insurers are “being opportunistic, because they know they can.”
Rising rates carry different risks for US banks (FT)
Warnings of rising interest rates have abounded ever since the Fed moved them to their current exceptionally low levels. But no matter how much today’s jittery credit markets may be anticipating rising rates, they will still catch out at least one bank. Given that there are 7,000 banks in the US, the betting is that one of them has lent or invested at yields too low to weather an increase in funding costs.
Montreal mayor arrested in latest Canadian scandal (Reuters)
Montreal's new mayor, who pledged to stamp out corruption when he took office last November, was arrested and charged with fraud on Monday in another blow to the reputation of Canada's biggest cities.
Day care worker accused of drugging snacks for nap-time (AP)
Tammy Eppley was charged in Franklin County Municipal Court with six counts of child endangering after police in suburban Westerville say they obtained text messages in which she admits giving children the allergy drug Benadryl and Melatonin, a hormone and sleep aid. "Tammy was bragging about how they were all perfectly still and being quiet or asleep," said a police report describing a video Eppley allegedly recorded on her cellphone and sent a friend. "Tammy jokes about one of the children almost discovering her actions by remarking that the sprinkles on some cupcakes tasted funny," according to the report obtained by The Associated Press through a records request.