Goldman selling debt at deep discount. Goldman Sachs (NYSE:GS) is unloading €100M of LBO loans linked to Bain Capital's €1.4B buyout of Bavaria Yachtbau for an unprecedented 65 cents on the euro. Goldman will hold its €350M share of the remaining €900M in debt. "They’re prepared to crystallize losses just to get this stuff off their books," a banker said.
Lehman to invest in hedge fund fund. Lehman Brothers (LEH) is planning to invest up to $1B in a private equity-style fund, a move it hopes will give it more firepower. The fund will buy stakes in hedge fund managers ahead of possible takeovers.
Liberty looks at Virgin's TV stations. Liberty Global (LCAPA) is considering a bid for Virgin Media's (NASDAQ:VMED) television channels. Virgin CEO Neil Berkett hired GS to review its channels, which are thought to be worth £800M. Virgin owns seven digital channels and operates another nine.
What's next, bubble gum? McDonald's (NYSE:MCD) wants some franchise owners to cut large soda drinks to $1, a move it hopes will help it capture customers from convenience stores. "Times are tough, and this could be a beverage war," restaurant consultant Dennis Lombardi says.
Circuit City questions Blockbusters ability. In response to Blockbusters' (BBI) proposed $6/share acquisition of Circuit City (CC), the latter responded that "to date Blockbuster has been unable to satisfy Circuit City and its advisors that Blockbuster's proposal could be financed. In particular, Blockbuster's proposal appears to contemplate a rights offering of unprecedented size relative to the issuing company's market capitalization and at a price that is at a significant premium to Blockbuster's current market price." Most rights offerings, of which there have been very few in the U.S., occur at a discount, it says.
CNPC interested in Repsol assets. China National Petroleum [CNPC] has expressed interest in Repsol's (REP) Latin American assets, which could be worth $10B. CNPC and its listed subsidiary PetroChina (NYSE:PTR) operate equal-joint-venture CNPC Exploration for overseas acquisitions, although CNPC also makes acquisitions on its own. A source said the sale may include refineries and upstream assets.
Memory chip rally? For the first time in eight months, prices of 8GB multi-level cell NAND flash memory, the most traded NAND product, rose. 16GB units also rose. Hynix president Kim Jong-kap says memory chip prices finally bottomed in February. The market is stabilizing, he says, and prices should continue to rise.
Kiss or be kissed. Analysts say Cadbury (CSG) needs to merge with Hershey (NYSE:HSY), or risk becoming an acquisition target. A merger would give CSG a presence in the U.S. chocolate market, while Hershey is looking to expand overseas. "Cadbury's management has made clear that they are interested in a deal with Hershey in order to consolidate the confectionery industry," Numis analyst Ian Kellett says. One complication is that the trust that controls Hershey seems intent on retaining control. If Cadbury fails to join forces with Hershey, it could come under the radar screens of Kraft Foods (KFT), Wrigley (WWY), or even Hershey.
Union rejects middle man. The UAW rejected a federal mediator's offer to help broker a deal that would end a strike against GM (NYSE:GM) parts supplier American Axle (NYSE:AXL). AXL said a mediator "could add little to the process."
Powerful win. Siemens (SI) won a 850 megawatt power plant order worth $1.31B from Welsh Power. The order includes a long-term service agreement.
Foreclosures jump. Lenders repossessed nearly 3 of every 1,000 U.S. households in Q1, up 70.6% from 1.7 of every 1,000 a year ago and from 2.7 per 1,000 in Q4. Already this year, 210,280 homeowners have lost their home. 7.2 of every 1,000 households entered pre-foreclosure in Q1 (515,411), up from 3.7 a year ago. In 2007 almost 1.32M homeowners nationwide faced pre-foreclosure, up 59.65%.
UBS CEO: The worst is over. UBS is over the worst of its problems, and is strong enough to manage its risks and positions, CEO Marcel Rohner says. "There are certain factors that we cannot influence, however, such as the U.S. real-estate market... Now it is about winning back the destroyed trust on the customer side." After about $37B in writedowns and firing most of its senior management, one hopes Rohner's right.
Soft start bodes downside. An awful start to Q1 earnings season is a "harbinger of things to come" that will push markets lower, Goldman analysts say. "We expect generally disappointing results and a swath of lowered profit guidance that will drive the Standard & Poor's 500 Index lower in coming weeks." J&J (NYSE:JNJ) reports tomorrow, IBM (NYSE:IBM) on Wednesday, Merrill Lynch (MER) on Thursday and Citigroup (NYSE:C) on Friday.
Saks not for sale. Saks (NYSE:SKS) CEO Steven Sadove said on CNBC the company is not for sale. Saks is committed to increasing shareholder value and to running the business for the long-term, he said.
Carbon cap: Winners and losers. Federal regulators are likely to limit companies' carbon emissions over the next few years. Winners may include operators of nuclear power plants, which don't emit carbon. Losers may include coal-burning power companies. Of course, until we know exactly what regulations entail, it's hard to say for sure, but analysts say companies like Exelon (NYSE:EXC), Constellation (NYSE:CEG) and Entergy (NYSE:ETR) would benefit from cap-and-trade plans under consideration, while NRG Energy (NYSE:NRG), Reliant Resources (RRI) and Dynegy (NYSE:DYN) could be negatively impacted.