bloggingbuyouts

There are still a lot of good things happening at private equity firms:

• You think buyouts are dead? Bain Capital just closed on a $20 billion fund raising for another global buyout fund.
• Invesco also just closed on a $4 Billion distressed fund.
• The Midwest Air Group (AMEX: MEH) is set to close today after all approvals have been met. TPG Capital is the acquirer.

There is still activity going on in pending deals and the earnings releases:

• MBIA Inc. (NYSE: MBI) is lucky. Even after their dismal earnings it still got funded at much higher prices than the current market prices.
• Alliance Data Systems Corp. (NYSE: ADS) received numerous upgrades after beating earnings last night, and that is after suing Blackstone Group (NYSE: BX) over the likely failed merger. What a rally!
  

As far as public investing and private equity in IPO's, there is more:

• SeaCastle Inc. has pulled its IPO due to market conditions. This one was supposed to be a $2.2 Billion company after the IPO, and Fortress Investment Group owns almost the entire company.
• After earnings today, Procter & Gamble Co. (NYSE: PG) confirmed that it is spinning off its Folgers Coffee Company operations.

Interesting trading activities abound:

• A hedge fund has sent notice to Countrywide Financial Corp. (NYSE: CFC) that it is selling too cheap and it aims to make the firm seek a higher price. I bet this fund loves Doug McIntyre's "Make Mozillo Take The Bonus" piece.
  
• We have noted some scared traders worrying about Clear Channel Communications (NYSE: CCU) on whether or not its buyout was coming. Yesterday we saw 32,315 options contracts trade in the April-2008 $30 Call options, which is 3.2 million shares on a fully leveraged basis.

This is interesting and definitely worth a quick read. DealBook, from The New York Times, asks "Could M&A Help Save The Economy?"

Jon Ogg is an editor of 247WallSt.com.

In a move that may represent a victory of hope over reason, Davis Selected Advisers has disclosed that it now owns 5.1% of MBIA, Inc. (NYSE: MBI).

On paper, the stock does look cheap, and Davis could claim to be something of an expert on financial shares having just put money into Merrill Lynch & Co., Inc. (NYSE: MER). But, Merrill is almost certainly the safer bet. Its business is spread across a number of sectors of the industry, from retail brokerage to mergers and acquisitions work. MBIA is a bond insurer in a dangerous bond market. And, it is a company which faces potentially ruinous downgrades from major credit agencies.

According to TheStreet.com, "Fitch said MBIA needed to shore up $1 billion in capital in the next four to six weeks to avoid a downgrade. That's on top of the $1 billion investment from the private-equity firm Warburg Pincus that MBIA secured earlier this month." If mortgage-related securities write-offs continue at big banks and investment houses that $1 billion may be hard to come by, or, it could represent significant dilution for MBIA's current shareholders. The firm's market cap is already below $3 billion.

The Davis investment looks like a loser, at least in the short term. MBIA shares are down by two-thirds from their 52-week high. A downgrade of its "AAA" rating by a bond agency would seem possible, if not probably.

Davis may have to sit on its MBIA shares for a very long time.

Douglas A. McIntyre is an editor at 247wallst.com.

Shares of MBIA Inc. (NYSE: MBI) soared almost 30% after the world's largest bond insurer got a $1 billion cash infusion from Warburg Pincus LLC, a private equity firm.

The money couldn't have come at a better time for Armonk, N.Y.-based MBIA, which faced a potentially crippling downgrade from the credit rating agencies As Bloomberg News notes, "MBIA's AAA ranking stands behind $652 billion of state, municipal and structured finance bonds, and losing the AAA credit rating would endanger MBIA's ability to guarantee debt, its main source of revenue."

Under the terms of the agreement, Warburg Pincus will make an initial investment of $500 million through the acquisition of 16.1 million shares at $31 per share, a slight premium over Friday's closing. The investor will also backstop a shareholder rights offering of up to $500 million that MBIA expects to make next year. In addition, Warburg will receive warrants to purchase 8.7 million shares of MBIA common stock at a price of $40, and "B" warrants, which, upon obtaining certain approvals, will become exercisable to purchase 7.4 million shares of stock at $40.