Awkward Conversations: Remember the most expensive house in the world? "A Russian billionaire is desperately trying to claw back his £39million deposit after a deal to buy the most expensive house in the world fell through," The Daily Mail reports. Yikes. The Rest Of the World: People outside the econoblogosphere, even high school students have issues with the stimulus plan. Here's what a few of them think. (East Valley Tribune) You Asked: You get it. Caroline Baum responds to criticism that it's easy to tear down the stimulus package without offering a solution. Here are five steps. (Bloomberg) Get Smart: How to make your own shoe phone. (Engadget) CNBC: W.L . Ross discusses what the stimulus plan will do for the markets. (CNBC)
1 min read · 19 February 2009
Our Reuters colleague Mike Flaherty today reported that several buyout firms are circling South Korean beermaker Oriental Brewery, which is hoping to garner more than $2 billion. There are lots of interested suitors -- including Blackstone, Bain, KKR, MBK and Affinity Partners -- but this deal seems like it should be a real longshot. There’s only one way this type of deal would make sense, and that’s if it looks like last year's Weather Channel transaction. In that case, two buyout firms (Blackstone Group and Bain Capital) teamed up with a strategic buyer (NBC) to purchase the Landmark Communication divestiture. Part of the reason PE buyers of the second largest South Korean brewery would/should need to team up with strategic buyers
2 min read · 19 February 2009
Portly Johns: Can overweight people help the economy? Writes Slate, "We're gaining weight and taking up more space. And that means the entire industry of things designed to fit, hold, transport, and dispose of us has to upsize. Starting with toilets." (Human Nature) Uh-Oh: Facebook has been honored or cursed (depending on how you see it) with the cover of Fortune magazine. Valleywag explains why it's the latter. (Valleywag) More: On the VC is dead argument from Mark to Market. "People speaking out against VC are only shooting themselves in the foot, not to mention missing the bigger picture at hand." (Mark to Market) Movin On (And Now Hiring): Meredith Whitney, the "Dollar Dominatrix," is leaving Oppenheimer to start her own firm. (CNBC)
1 min read · 18 February 2009
KKR today announced that it saved $16.4 million in less than a year through its partnership with Environmental Defense Fund. The partnership reduced fuel and emission costs at U.S. Foodservice, Primedia and Sealy Corp. The firm plans to implement its plan at four more portfolio companies: Accellent, Biomet, Dollar General and HCA. I spoke with Ken Mehlman, KKR's head of global public affairs, about where the money will go, the program's total cost saving potential and KKR's interest in green investing. Our Q&A is after the jump...
4 min read · 18 February 2009
Last week, the Private Equity Council released a list of United Nations Principles for Responsible Investment that is specific to private equity. It’s a smattering of carefully worded suggestions that PEC members have pledged to follow when investing. Don’t pollute. Prohibit bribery. Communicate with your LPs. You get the idea... Simple enough, but I’ve got four questions and the PEC has four answers. Get all of it after the jump.
4 min read · 18 February 2009
Dow to Vows: They have a lotta time on their hands at the Big Money, apparently. They've figured out that the NY Times Wedding sections is a "handy economic indicator." Cute (The Big Money) Smash-A-Madoff: You can buy a Smash-Me Bernie toy, featuring Madoff in a devil's suit, for just $99.95 at Minimemodelworks.com. (Dealscape) So That's Why: "The economic crisis prompts an outbreak of politeness in business." According to the Economist, "Manners maketh the businessman." The Bank CEOs: Do indeed need a little lesson in PR. (Slate)
1 min read · 17 February 2009
The World Economic Forum today released a new study that concludes that private equity-backed companies are more productive than their public, privately managed and government-backed counterparts. For proponents of the “leverage creates discipline” school of thought, this news should come as no surprise. Companies with a heavy debt load are quicker to close inefficient plants or abandon a money-losing strategy. But in the world of public relations, this doesn’t necessarily make PE pros out to be heroes, especially since the study found that greater productivity doesn’t translate to higher wages for employees. I think it’s more important to determine whether private equity creates greater productivity and better discipline, and therefore, better companies, in the long term. No one studies what happens to PE-backed companies two or five years after their PE backers exit. I asked Josh Lerner, a Harvard Business School professor and co-editor of the report: Did the study address whether this productivity is sustainable?
2 min read · 17 February 2009
Reading a recent issue of weekly newsletter SPAC Wire, one gets a distinct sense that the wave of blank check companies raised or announced last year are in hot water: One SPAC was voted down. Another is seeking early liquidation. One SPAC withdrew registration and another cancelled its planned merger. Three SPACs received warnings from the NYSE for failing to hold shareholder meetings, yet others are using puts and bridges to try to complete their deals. It's all quite gloomy, but there is one ray of hope for the asset class. Polaris Acquisition Corp., once the largest-ever SPAC, has set a date for its shareholder vote to approve its acquisition of Apollo Management-backed Hughes Telematic. This is significant because the deal's leader, Marc Byron, had said Polaris would not hold its shareholder vote until he was confident he had the support of enough "yes-voting" shareholders to approve the deal.
2 min read · 17 February 2009
Feb 12: It was a tough day for Law firms--lots of layoffs, as Law Blog explains. (Law Blog) Doom and Glee: Bankruptcy professionals have feelings, too. (Dealzone) Did you guys send gifts? It's Steve Schwarzman's birthday! (Cityfile) Maybe THAT's why they're counter-cyclical: TV stations have loosened their standards on ads from alcohol companies and strip clubs due to the recession. (LA Times) A Good IPO is a Fast IPO. (Deal Journal) Jon Stewart: On the bailout (hulu)
1 min read · 13 February 2009
On Monday we posted a beefed-up version of the LBO-backed bankruptcy list for 2009. (There have been three more since then, by the way.) Today I’ve got a week’s worth of Moody’s and S&P downgrades on PE-backed companies. There are eight of 'em to date.
4 min read · 13 February 2009
