Meditor, a London-based hedge fund that managed $3.1 billion as of July, is liquidating its main funds, according to a letter obtained by CNBC.com» Read More
What a strange love affair it's been between TPG Capital and J. Crew.
This morning the news broke that TPG Capital, with help from a Los Angeles private equity firm called Leonard Green & Partners, is close to a deal to acquire the preppy-clothing company for about $3 billion in cash, or around $43.50 per share. This news comes just 18 months after TPG Capital sold off the last of its previous stake in J.Crew at an average price of $14 .
The turnabout, while continuing a convoluted TPG/J.Crew affair, also may speak volumes about the state of private money today.
TPG first acquired a stake in J.Crew way back in 1997. It was one of the private equity firm’s first and most notable deals. Back then J.Crew was a huge brand, with a highly recognizable name and look, but with sales of just $600 million per year. In the catalogue business, Eddie Bauer and Land’s End have sales more than twice J. Crew’s. Banana Republic dwarfed it in brick-and-mortar retail.
Perhaps even more importantly, J. Crew’s management—primarily the founder Arthur Cinader and his daughter Emily Woods—had an uppity reputation that had reportedly already scared off one buyer, Bahrain’s Investcorp.
The original deal was messy. TPG and J. Crew had agreed to a sale price of $560 million, financed with $175 million in senior subordinated notes with a 10 percent yield and $140 million in zero-coupon junk bond notes offered at 54 cents on the dollar. Chase would finance about $30 million in receivables.
It appears Blackstone will not succeed in its buyout attempt of Dynegy, the Houston energy company specializing in power plant operations.
In reference to a meeting discussing the proposed takeover, The Journal writes:
"The meeting was recessed a week ago to give shareholders time to consider a revised offer Blackstone made. Facing intense opposition from Carl Icahn and hedge-fund operator Seneca Capital, Blackstone raised its bid to $5.00, a 50-cent increase over the August merger agreement, in an attempt to sweeten shareholder sentiment. "
But to no avail.
And the opposition of Icahn, as well as Seneca Capital, was indeed the rub.
Over the weekend, we learned that the federal government has gone into panic mode over insider trading. It is using the kind of tactics developed to fight mobsters, and later, terrorists, to root out and punish the use of non-public information by hedge fund traders. It's the equivalent of TSA Rapiscan body scanners or invasive pat-downs at airports.
Does this make sense? Mobsters and terrorists have genuine victims, often easily detectable by their corpses; while the victims of insider trading are far harder to detect. That should be the starting place in any story about government enforcement; who is the victim? When it comes to insider trading, the victim is so hard to detect that it's far easier to suspect that it may not exist. The victim of insider trading is a Snuffleupagus, someone visible only to the Big Birds behind government desks.
During this time of year, we'll read and hear lots of stories on the pulse of the consumer with interviews from retail CEOs as well as analysts. But another indicator on the overall health of the retail sector is the REITS that acquire, own, develop, redevelop, manage or lease regional and community shopping centers.
The occupancy of these REITs tell you just how robust the industry is performing—is it contracting or expanding? One of companies in this space is The Macerich Company \(MAC\) which owns approximately 73 million square feet of gross leasable space with primarily interests in 71 regional malls throughout the United States. Art Coppola, Chairman and CEO of the company tells me this holiday season could be a very merry one for the retail industry.
World markets are sharply lower this morning. The selloff appears to have been triggered by two principal factors: Worries about a worsening debt crisis in Europe, and North Korean shelling of a South Korean island.
Here are the raw data: (From Yahoo Finance via AP) "In Europe, the FTSE 100 index of leading British shares was down 35.77 points, or 0.6 percent at 5,645.06 while Germany's DAX fell 16.76 points, or 0.3 percent, to 6,805.29. The CAC-40 in France was 30.16 points, or 0.8 percent, lower at 3,788.73."
"Wall Street was also poised to open lower—Dow futures were down 61 points, or 0.6 percent, at 11,104 while the broader Standard & Poor's 500 futures fell 9.2 points, or 0.8 percent, at 1,188.70."
North and South Korea Fire Artillery in Anger
North Korea and South Korea have exchanged artillery fire after the North shelled a South Korean island with artillery rockets near the two countries disputed maritime border. This is an international incident of a serious magnitude, with ramifications for both the regional markets in Asia, as well as for the broader global financial markets.
The New York Times provides a timeline, as well as a context for the hair-trigger potential for escalation on the Korean Peninsula:
Are Fannie Mae and Freddie Mac, the enormous Government Sponsored Enterprises (GSEs) that purchased about three quarters of the total single-family mortgages in the United States, about to step into the repurchase litigation fray ?
If so, it might be very frightening news indeed for the lenders potentially on the hook to repurchase the securities they sold to the GSE's.
First, a little background.
From the RealtyTrac article, a primer on Fannie May and Freddie Mac:
Don’t be so sure that the European Union’s emergency aid package for Ireland will stop the spread of debt concerns to other euro zone countries. In fact, it may accelerate it.
After Greece was bailed out of its own debt troubles this year, the various European government officials all voiced confidence that the stabilization programs put in place would probably not need to be drawn down. Just the existence of the programs—the expression of the will of European government’s to stabilize the markets—would be enough to stabilize markets. Indeed, the Eurocrats insisted that the point of constructing the bailout programs was to avoid ever having to use them.
John Carney is a senior editor for CNBC.com, covering Wall Street and finance and running the NetNet blog.
Jeff Cox is finance editor for CNBC.com.
Lawrence Delevingne is the ‘Big Money’ enterprise reporter for CNBC.com and NetNet.
Stephanie Landsman is one of the producers of CNBC's 5pm ET show "Fast Money."
The unofficial odds are rising that the Fed will announce taper plans at its December meeting.
Three Wall Street trade groups sued the Commodities Futures Trading Commission to stop tough overseas trading guidelines they fear.
Paid in the form of assistance programs, the funds are in effect a subsidy to the banking industry, The Washington Post reported.