In the rarefied world of private equity, there is a well-known PR operator: Kekst & Co Inc. Founded in 1970, the firm has a sterling client list, which includes biggies like KKR. No doubt, it's a complex specialty, which requires a strong understanding of securities regulation and shareholder relations.
Well, Kekst is selling out to Publicis Group, which is a global advertising and marketing firm. The price tag was not disclosed.
Kekst has a storied past. For example, the firm was involved in the leveraged buyout of RJR (back in the late 1980s). Kekst is also advising Anheuser-Busch Companies Inc. (NYSE: BUD) on its fight against InBev.
Carl Icahn, biggest of the big swinging activists, finally switched on his new blog. Unfortunately, his initial posts for TheIcahnReport center not on his loathing for Yahoo! Inc. (NASDAQ: YHOO), but on the more abstract fear of crummy corporate governance. The fear and loathing are linked, of course. But it appears Icahn will resist the urge to vivisect Jerry Yang in print -- at least until he has liquidated his holdings in the Internet company.
If so, that's too bad. And Carl, just think of the fun you could have!
Yahoodlums smashing innocent SHers! posted on June 19, 2008 - 2:37 p.m.
Testing, testing. We live? Hi everyone, Carl here. Let me begin by saying what a pleasure it is to be here. But let me tell ya, that Jerry Yang. He made a killing in the stock market on this Microsoft business--he shot his broker. Yeah, I wish that nudnik would learn a trade so I'd know what kind of work he's gonna be out of. Can this guy get off my planet, already? Why, all this schmuck does is keep running his mouth--if he keeps talking maybe he'll say something intelligent.
That's it from me, folks. I'm here everyday. Try the prime rib. -- Carl Icahn
Huntsman Corp. (NYSE: HUN) is seeing the value of its stock destroyed in after-hours trading. This was one of those pending mergers that was old enough that many had forgotten it was even on the docket. Hexion Specialty Chemicals has announced that it has filed suit in Delaware to exit its contractual obligations to acquire the company.
The Hexion-led filed to terminate its proposed $10.6 Billion acquisition of Huntsman Corp. Hexion has said in this suit filed that it believes that the capital structure agreed to by both Huntsman and by Hexion for the combined company is no longer viable.
The reasons noted are because of Huntsman's increased net debt and its lower than expected earnings. Hexion notes that both companies are individually solvent but it believes that the merger's capital structure previously agreed to would render the combined company insolvent.
If you are Sam Zell right now, you are probably sitting there wondering why on earth as an old billionaire that you thought an old world media property with very little in new media that you'd have to shrink and break apart to profitability was such a good idea. Tonight, that looks even more so the case.
According to MLB.com Tribune Co. rejected a no-tax proposal in the sale of Wrigley Field to the Illinois Sports facilities Authority, which also owns and operates the Chicago White Sox U.S. Cellular Field as well.
If you read the full article you'll see how this may also impact the sale of the Chicago Cubs as well. Zell announced in April 2007 that the Cubbies were to be sold. Interestingly enough, the Cubs are also in first place in the NL Central division.
Samuel Israel III founded the Bayou Hedge Fund Group in 1996. Within a few years, the hedge fund was deep in the red, and Israel and some of his associates came up with a novel way to deal with their problem: they created their own auditing firm and promptly gave themselves a clean bill of health. Making profits is easy when you cook the books, and Bayou cooked with the best of them, long and well enough to keep the criminal enterprise going for many more years.
Eventually, Israel was caught and Bayou went belly up. Some estimates put the total investor loss at more than $450 million. Last April, Israel was sentenced to 20 years in prison, and he was to begin serving that time today. But ABC News is reporting that Israel failed to show up at prison. His SUV was found near a bridge that spans the Hudson River, with the words "suicide is painless" written in the dust on the hood. But no body has been found and no one saw him jump.
Somehow, I have trouble imagining a thief of such epic proportions killing himself. Escape at all cost seems a more likely pursuit. I suspect that a careful review of all passengers getting onto planes to Buenos Aires or Bangkok today might just yield a former hedge fund manager trying to pull off one more scam.
Harris Corp.(NYSE: HRS) is recently trading around $55, down from $65.78 last week. Harris said "that from time to time it is approached by other companies with expressions of interest in various types of transactions, including a potential sale of the company. Harris stated today that it is not pursuing a merger or a sale."
HRS June option implied volatility is at 42, July at 37, near its 26-week average of 37 according to Track Data, suggesting non-directional price risk.
M&A Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
The company's market cap is almost $1.9 billion, so it would seem within the realm of deal sizes even in an environment where private equity types have not been able to do many deals. Whether or not the deal is made, that is yet to be seen.
Chemtura products are used in flame retardants, polymer additives, PVC additives, agriculture, plastics, and more.
Even on a deal this size, do we need club deals in a private equity environment in need of simplification? Either way, until we have an announcement. this should be treated as just a rumor.
Private equity firm Behrman Capital has announced that General Peter Pace, retired USMC and former Joint Chiefs of Staff Chairman, took the role as Operating Partner with the firm. General Pace was also named as Chairman of the Board to Pelican Products, an advanced lighting systems and valuable equipment case manufacturer. He will also direct ILC Industries, Inc., a company that provides defense electronics (of course the defense angle).
Grant Behrman of the firm noted that General Pace has forty years tenure in the Marines and then as Chairman of the Joint Chiefs of Staff. Pace graduated from the U.S. Naval Academy and has an MBA from George Washington University.
Behrman Capital is a private equity investment firm with more than $2 billion of capital under management and it invests in management buyouts, leveraged "buildups" and recapitalizations of established growth companies. If you look through the private equity firm's portfolio companies, you can see why having a former general and Joint Chiefs of Staff Chairman would be a good thing.
That loud cracking sound you hear is the sound of The Blackstone's Group's (NYSE: BX) Steve Schwarzman's wallet opening to the tune of a $100 million donation to the New York Public Library, according to The New York Times.
That's what it takes, apparently, to rename the main Fifth Avenue landmark building, which will be called the Stephen A. Schwartzman Building when its renovation is completed in 2014. That's pending approval of the landmark commission and the ability to withstand the roar of the chattering classes, which the Times politely referred to as the inevitable "spirited commentary."
Schwarzman has come under scrutiny because though his high-spending habits have been commensurate with the the size of his personal fortune, his charitable giving has not. While he has given more than most people could ever dream of, as chronicled in James Stewart's article in The New Yorker, this major donation to the New York Public Library is his biggest yet.
Stewart notes that Schwarzman's alma mater, Yale, balked at renaming a dining hall after him for an oddly-structured $17 million donation, and the offer was withdrawn. So for any Yalies out there with only $20 million or so to give, that naming opportunity remains -- it will take five times as much to get your name etched at 42nd and Fifth.
Carl Icahn is one of the top billionaire activist investors that traders actively watch (and follow with real money trades). On Thursday, an Icahn Enterprises (NYSE: IEP) subsidiary announced the closing of its sale of four Nevada casinos to a Goldman Sachs (NYSE: GS) managed real estate fund called Whitehall Funds.
Valued at $1.2 billion, the sale includes the Vegas-strip Stratosphere, two off-strip Arizona Charlie's casinos and Aquarius Casino in Laughlin.
Last month the transaction was approved by the Nevada Gaming Commission, so Icahn is definitely getting the funds. Here is a full list of Icahn's most current top holdings, and Mr. Icahn is buried in some of these positions. He may want to average down rather than go after new targets.
Yesterday after the market close, we got to see the full reporting of Warren Buffett and his Berkshire Hathaway (NYSE: BRK-A) holdings. Interestingly enough, the Oracle of Omaha disclosed that he had had bought two European pharmaceutical giants.
His stake in GlaxoSmithKline (NYSE: GSK) was 1.51 million shares (other holdings), or some $76.1 million listed as of December 31, 2007. His stake in Sanofi-Aventis (NSE: SNY) was 3.569 million shares, or some $162.5 million listed as of December 31, 2007. (Click here for Buffett's other holdings.) GlaxoSmithKline shares are up 1.8% at $44.10 today, and Sanofi-Aventis shares are actually down 0.4%.
But when you start looking through the entire holdings lists, you'll notice that these are quite small stakes for Mr. Buffett. What is possible is that this is one of his smaller test-buys or that one of his three underlings in the race for "who will replace Buffett as chief" made the purchases. The holding and insurance giant has gradually been diversifying overseas with acquisitions and dealings in Israel and South Korea.
It looks like the market is taking a wait and see attitude. Both of these stocks have market capitalizations of over $100 billion, so you can tell that these stakes are too small to even make a dent so far. If he starts buying more shares on the local markets rather than the US ADRs, then that might start to be a different story.
Stephen Schwarzman managed to make the Fortune "Man of the Moment " feature and end up on the Time100. Last year he threw himself a famously excessive birthday bash as he turned 60 on Valentine's Day.
What a difference a year makes. Over the twelve months since his little party, Schwarzman has been the target of vicious attacks in the press. He recently toldThe New Yorker, "How does it feel? Unattractive. No thinking person wants to be reduced to a caricature."
But, Schwarzman has not been reduced. He has been "super-sized" in the way that people who brag about how much dough they have almost always are. The very wealthy in the US rarely talk about being filthy rich. They simply give their money away a la Bill Gates or Warren Buffett. No one knows the names of the great majority of people on the Forbes 400.
Schwarzman will have a more modest birthday party this year, according to press accounts. He may be saving money to give back to shareholders who invested in Blackstone (NYSE:BX) last year. The shares hit $38 after the IPO and now trade at under $18. About $4.5 billion in shareholder value has gone down the drain. He has also been a bit hard on shareholders at other companies. Blackstone backed out of a deal to buy Alliance Data (NYSE:ADS). Those shares moved from $81 to under $56. That's another $3 billion in shareholder money gone.
Instead of whining to the press about being stomped on by people who have lost money investing in Blackstone or Blackstone-related deals, perhaps he should get a wig and sunglasses so that he can walk around unnoticed, like Greta Garbo did.
Douglas A. McIntyre is an editor at 247wallst.com.
He made hundreds of millions of dollars running Bain Capital, but Mitt Romney won't be running the U.S. He announced this afternoon that he is ending his run for the presidency. No doubt, countless Mormons and private equity lobbyists have gone into mourning.
Technically, Romney is "suspending" his campaign. This means that he will keep the delegates he won in his primary victories in Massachusetts, Michigan and Utah. This will give him some influence in the process of selecting the eventual Republican nominee.
Although Romney was a great success in the world of private equity, it didn't seem to help him in the national campaign. Mike Huckabee's line about the essential coldness of private equity investors -- "I believe most Americans want their next president to remind them of the guy they work with, not the guy who laid them off" -- was pretty devastating. I don't know if that background was Romney's greatest weakness -- his Mormonism didn't help, nor did his salesman's tendency to say just about anything to please a given audience -- but you can bet there are some disappointed Democrats out there. I'm sure they were looking forward to exposing the layoffs that Romney initiated through his equity investments.
When activist investor William Ackman comes to town and starts buying your shares, you can bet he'll be hounding the board for changes soon. That's the case with discount retailer Target Corp. (NYSE: TGT), as Ackman now owns just under 10% of the retailer's shares. What does he have in store? Quite a few changes that should boost the retailer's stock price in the next three years and give Ackman a handsome return on his investment.
First up was Ackman's suggestion that Target sell off its credit card operations -- something that management said would be considered. Just under three weeks ago, Target officials cited "market conditions" as the reason a decision to spin its credit card business had been delayed. In other words, Target probably had not found a buyer for the debt portfolio due to consumer credit having been tightened like a noose in the last calendar quarter of 2007.
What else did Ackman have in mind? He believes the company's shares could be worth $120 each within 36 months, based on an investor letter he wrote on December 27. On tap was Target's need to complete its $10 billion stock buyback and start ramping up cash flows based on all the real estate the company holds -- which Ackman pegs at $42 billion in worth. That's roughly Target's entire market capitalization, so the question becomes one of how Target is going to make money outside of selling diapers, pretzels and spring apparel. Expect those questions to be answered on Target's next quarterly results conference call on February 26.
Since its IPO in March, the shares of private equity firm Fortress Investment Group LLC (NYSE: FIG) have plunged from $33 to $18 But, the team is trying to reverse things. In fact, this week Fortress filed an IPO for one of its portfolio holdings: Seacastle.
Basically, the company is one of the largest lessors of intermodal equipment (such as chassis, containers, and containerships). It's an important business because it allows for multiple transportation modes like ships, rail, and trucks.
In fact, according to a report from Clarkson Research, the containerized market should grow at about 10% per year (through 2008). Key drivers include: lower trade barriers, the growth of manufacturing in areas like China and India, and strong global economic activity.
Because of the long-term lease arrangements, the cash flows are fairly predictable. Last year, revenues were about $138.4 million and net income was $3.6 million.
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In the rarefied world of private equity, there is a well-known PR operator: Kekst & Co Inc. Founded in 1970, the firm has a sterling client list, which includes biggies like KKR. No doubt, it's a complex specialty, which requires a strong understanding of securities regulation and shareholder relations.
Carl Icahn, biggest of the big swinging activists, finally switched on his new blog. Unfortunately, his initial posts for 
Harris Corp.
He made hundreds of millions of dollars running 
When activist investor William Ackman comes to town and starts buying your shares, you can bet he'll be hounding the board for changes soon. That's the case with discount retailer 
and 
