June 24, 2017

The Payday at Twitter Many Were Waiting For

He had already signed up a number of well-known Silicon Valley financiers, but he also dashed off a note to his old friend Dick Costolo, who had just sold his company to Google, asking if he would like to put in $25,000 or $100,000.

“I’m on the $25k bus,” Mr. Costolo replied three minutes after receiving the e-mail. “Thanks Ev, this will be a lot of fun.”

Mr. Costolo, who is now the chief executive of Twitter, is one of a handful of individual investors who stand to reap the rewards of a potential initial public offering of stock in the social network. The company said on Thursday that it had filed early paperwork with regulators to conduct such a sale, which will probably occur late this year or early next year.

Although many details are still unclear — most of all the offering price of Twitter’s stock — Mr. Costolo’s initial investment is probably worth more than $10 million, with additional shares he has received as an executive worth many millions more, according to people knowledgeable about the company’s finances.

Twitter declined to comment on its finances, citing the confidential nature of its I.P.O. filings at this stage in the process.

Mr. Williams, who provided crucial early financing for Twitter and remains its largest shareholder, will almost certainly become a billionaire. The venture investor Chris Sacca and at least two venture capital firms, Union Square Ventures and Spark Capital, will also most likely end up with stakes exceeding $1 billion each, according to an analysis of financial documents and interviews with people who know about Twitter’s finances. Others could make tens of millions or even hundreds of millions of dollars.

Not everyone will be so lucky.

Twitter struggled in its early days, even laying off employees as it tried to conserve its cash. Just two years ago, there were questions about its viability as it tried to figure out how to wring revenue from the endless stream of 140-character messages generated by its users. Many early investors and employees sold hundreds of millions of dollars of stock in 2011 to a Russian investment firm, DST Global, that was eager to buy in.

“To see it come to life and have it taken away, I was devastated,” said Dom Sagolla, an early employee of Twitter who was laid off in May 2006 and never received stock. While Mr. Sagolla has made some money by proxy from Twitter — he wrote a book that tells newcomers how to use the service and is doing some paid public speaking — he does not stand to benefit as Twitter heads to Wall Street.

Twitter’s I.P.O. will not be nearly as large as Facebook’s $16 billion offering last year, but it will still create a multimillionaires club of dozens of early believers.

“For me personally, this is a once-in-a-decade or once-in-a-career kind of investment,” said Bijan Sabet, a partner at Spark Capital, one of the earliest investors in Twitter.

If history is a guide, the money generated by the Twitter offering will also provide the seed money for the next generation of scrappy tech companies that could grow to compete with Twitter.

“When you have a successful I.P.O., it gives people confidence both in the public and private markets and they are directly correlated,” said James A. Moore, a senior executive at Columbia Business School’s entrepreneurship program and founder of J. Moore Partners, a technology mergers and acquisitions consulting firm.

Indeed, Mr. Williams and his other two co-founders, Jack Dorsey and Biz Stone, are no longer involved with daily operations at the company and have moved on to new ventures. Dozens of other very early employees have also left, although many still hold stock worth millions.

How many millions will depend on the final valuation placed on the company for the stock offering. Investment bankers will gauge investors’ interest in the stock and work with the company to set a price.

In March, Twitter set off a frenzy of interest after it said it was valuing the stock it was offering to employees at $17 a share, according to VC Experts, a private company data provider. That price implied that the company was worth more than the $8 billion valuation it had when it raised money in 2011.

Since then, interested parties have been willing to pay as much as $30 a share for a piece of the company in private transactions, according to Michael Pachter, an analyst at Wedbush Securities.

On the public stock exchanges, Internet companies have been surging. This week, investors have plowed money into companies like Facebook, Netflix and Pandora, sending their stock prices to record highs.

“Internet valuations are crazy right now and investors are willing to pay a lot for equity in Internet stocks,” Mr. Pachter said. “Twitter is taking advantage of this.”

In hindsight, some Twitter shareholders who cashed out early have expressed regrets. But “in our case, we are early-stage people, and we had had a remarkable run,” said one early investor who sold millions of dollars of stock in 2011, when the Russian investment firm was buying.

And then there were those who never got any stock at all, like Florian Weber, one of the earliest programmers at the company. He worked on the project before it was even fully separate from Odeo, the now-defunct company where it was hatched.

Mr. Weber, a German citizen, said he was hired as a contractor, not an employee, so he never received any stock options.

“Coming from Germany, it’s not something that I pushed terribly hard for,” said Mr. Weber, who often worked remotely from Hamburg and eventually tired of telecommuting.

“As far as I know, I’m the only one who does not have stock options,” he said. But he has no regrets. He eventually started his own company, Amen, in Germany, which was just sold to a bigger firm, Tape.tv. “I’m very happy with my life.”

Alexandra Stevenson contributed reporting from New York.

Article source: http://www.nytimes.com/2013/09/14/technology/the-payday-at-twitter-many-were-waiting-for.html?partner=rss&emc=rss

Networks Get a Victory in Court Over Streaming Service

For the first time in nearly a year, the nation’s major television broadcasters have won a round in their legal battle against start-up firms that stream programs from local stations over the Internet without their consent.

The Federal District Court for the District of Columbia issued a preliminary injunction on Thursday against one such start-up, FilmOn X. The broadcasters that sued FilmOn, claiming copyright infringement, cheered the news. It was not immediately clear how the ruling might affect Aereo, a better-known streaming service backed by the head of IAC/InterActiveCorp, Barry Diller.

“We are pleased, but not surprised, that the court recognized that the commercial retransmission of our broadcast signal without permission or compensation is a clear violation of the law,” the Fox network said in a statement. The network said the preliminary injunction would apply across the country, with the exception of New York, Connecticut and Vermont, where the United States Court of Appeals for the Second Circuit has upheld Aereo’s business model in the face of lawsuits from the broadcasters.

Fox, which was joined in the suit by CBS, NBC and ABC, added, “This decision should finally put the matter to rest, and will hopefully discourage other illegal services from attempting to steal our content.”

FilmOn said the ruling was “just a temporary setback.” The service, previously named Aereokiller in a jab of sorts at Mr. Diller’s start-up, is the brainchild of the billionaire Alkiviades David. One of its features lets users live-stream programs from the local TV stations that are beamed over public airwaves in New York and elsewhere.

Both FilmOn and Aereo operate antennas that pick up the signals of local stations and send them over the Internet to viewers. This tactic has frustrated station owners because it bypasses the system of retransmission fees — paid by cable and satellite companies for the privilege of carrying those signals — which broadcasters have become increasingly dependent upon. Analysts have predicted that services like Aereo could seriously compromise retransmission fees.

Aereo has consistently said that it is operating within the law, and the Court of Appeals for the Second Circuit in New York has agreed. In July, Aereo won its third consecutive victory there when the court declined to hear the broadcasters’ appeal. Aereo, heartened by the court’s support, has expanded to markets like Boston and Atlanta, and the company says other market will follow.

The broadcasters have sought to stop companies like Aereo by seeking more favorable settings for lawsuits. In December, a federal court in California concluded that FilmOn had violated the copyrights of the broadcasters; the broadcasters pointed to that ruling when they filed suit in Washington.

In the ruling on Thursday, Judge Rosemary M. Collyer said she had considered the court decisions in both New York and California and had found the latter “to be more persuasive.”

“Because there is no dispute of fact between the parties — indeed, each has won and each has lost in a different forum on these same facts — the court will grant plaintiffs’ motion for a preliminary injunction,” she wrote.

The injunction bars FilmOn from streaming the stations’ programs until a trial concludes.

In an e-mail, Mr. David iobjected to the ruling.

“We will win on appeal,” he said.

He said he would keep the service partly functioning in the meantime by streaming from independent stations that were not parties to the suit. Aereo was not part of the lawsuit, either, so the ruling does not automatically affect it. Other courts could cite Thursday’s ruling in the future, however — and the Supreme Court may eventually be asked to hear the case.

Article source: http://www.nytimes.com/2013/09/06/business/media/networks-get-a-victory-in-court-over-streaming-service.html?partner=rss&emc=rss

DealBook: Buffett Gives $2 Billion to Gates Foundation

Warren Buffett, the billionaire investor and chief of Berkshire Hathaway.Cliff Owen/Associated PressWarren E. Buffett, the billionaire investor and chief of Berkshire Hathaway.
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Warren E. Buffett has strengthened his bond with his friend and fellow billionaire Bill Gates, with a $2 billion charitable donation.

Mr. Buffett on Monday distributed 17.5 million Class B shares of Berkshire Hathaway to the Bill and Melinda Gates Foundation, a gift valued at about $2 billion based on Friday’s closing price.

The donation was part of Mr. Buffett’s annual charitable contributions, which also included gifts to the Susan Thompson Buffett Foundation, the charity named for Mr. Buffett’s late wife, and the Howard G. Buffett Foundation, which is named for Mr. Buffett’s son. In total, Mr. Buffett donated 22.9 million Class B shares of Berkshire Hathaway on Monday.

Seven years ago, Mr. Buffett pledged to give about $31 billion to the Gates Foundation, which aims to improve health and education in poor nations. He said at the time that he would give the bulk of his fortune to the foundation and four other philanthropies.

Mr. Buffett’s net worth is estimated by Forbes to be $53.5 billion as of March, making him one of the richest men in the world.

The billionaire has been active in deal-making recently, even amid a somewhat lackluster period for mergers and acquisitions. Mr. Buffett teamed up with 3G Capital in February in a $23 billion deal for the H.J. Heinz Company and said in his annual investor letter that he continued to hunt for “elephants.”

Mr. Buffett and Mr. Gates have also worked to persuade other wealthy Americans to give away much of their fortunes, through a commitment known as the Giving Pledge. The effort has attracted many prominent adherents.

Article source: http://dealbook.nytimes.com/2013/07/08/buffett-gives-2-billion-to-gates-foundation/?partner=rss&emc=rss

New Law Makes Suing for Libel Harder in England

A new law enacted Thursday strengthens the position of people sued for libel here and puts an end to most cases of so-called libel tourism, the practice by which powerful foreigners — Russian oligarchs, Arab oil magnates and large corporations, among others — have brought libel cases against authors, journalists, academics, scientists and bloggers, often on the most tenuous of connections to England.

Under the new law, claimants wanting to sue defendants who do not live in Europe will have to prove that England is the most appropriate place for the case. This is intended to stop foreigners from suing other foreigners in English courts over, for instance, books or magazines that have sold just a handful of copies here, or Web sites that have been viewed few or even no times.

The new law applies only to England and Wales; Scotland and Northern Ireland have different systems.

In one of the most notorious cases, the American academic Rachel Ehrenfeld lost a suit in the High Court here filed by a Saudi billionaire, Khalid bin Mahfouz, whom she accused him of funneling money to Al Qaeda in her book “Funding Evil.” The book was published in the United States and sold just 23 copies in England, mostly through the Internet.

After a judge ruled that she had indeed libeled Mr. Mahfouz, Ms. Ehrenfeld — who had declined to participate in the case — was ordered to pay more than $225,000.

The case caused several American states and the federal government to enact laws saying, essentially, that English libel laws are inconsistent with the American constitutional right to free speech and generally unenforceable in American courts.

The law passed here on Thursday does not upend the basic premise of English libel cases, that the burden of proof rests with the defendant, or the person being sued, rather than the plaintiff. But it strengthens a defendant’s position in a number of ways, making it harder for aggrieved parties to sue and easier for people being sued to defend themselves.

For instance, individuals who sue will now have to prove that the speech at issue has caused, or is likely to cause, serious harm to their reputations. Corporations and other entities that sue will have to prove that they have suffered, or are likely to suffer, serious financial loss. The law also makes it harder for them to sue intermediaries like Internet service providers, search engines and hosts of Internet forums, focusing instead on the individuals who made the comments.

To bolster their cases, defendants in libel suits will now be able to rely on a so-called public interest defense, making the case that they published their statements in good faith, in what they believed to be the “public interest” — whether or not the statements were true. And statements are to be judged defamatory only if they lead to actual damage to the aggrieved party.

The old laws have had a chilling effect, with publishers, newspapers and other purveyors of speech proving reluctant to risk offending anyone likely to sue. A variety of people have been sued for libel here in recent years in cases verging on the preposterous; some defendants have spent hundreds of thousands of dollars to defend themselves.

They include the science writer Simon Singh, who was pursued by the British Chiropractic Association after writing in The Guardian that chiropractors promoted “bogus treatments”; a British cardiologist who was sued by a Boston company after he criticized one of its products on an American medical news site; and a professor at the University of Iceland, who was sued by an Icelandic businessman over comments he had made on the university’s Web site.

Article source: http://www.nytimes.com/2013/04/26/world/europe/new-law-makes-suing-for-libel-harder-in-england.html?partner=rss&emc=rss

DealBook: Brazilian Billionaire Confirms Talks to Sell Stake in Energy Firm

Eike Batista, chairman and chief executive of EBX Group, has vowed to become the richest man in the world.Mario Anzuoni/ReutersEike Batista, chairman and chief executive of EBX Group, has vowed to become the richest man in the world.

SÃO PAULO, Brazil — The Brazilian billionaire Eike Batista confirmed Tuesday that he was negotiating to sell part of his stake in MPX, his natural gas and electricity generation company that has over $3 billion in debt and several generation projects running behind schedule.

Mr. Batista is in negotiations “about the potential sale of a certain number of MPX shares that belong to him” but “at the moment, no document of any kind has been signed,” according to the filing with the Comissão de Valores Mobiliários, Brazil’s securities and exchange commission.

Brazilian newspapers reported last Friday that the German utility E.On would purchase 27 percent of MPX’s shares — half of Mr. Batista’s stake — for 1.8 billion reais ($910 million). E.On had previously bought a 10 percent stake in MPX for $456 million in 2012. According to the newspaper O Estado de São Paulo, an equity issuance would follow in order to reduce E.On’s participation to below 35 percent.

Mr. Batista is one of Brazil’s most public and colorful billionaires, who has vowed to become the richest man in the world. He has built a small empire of companies that all end in the letter X, which he says represents the multiplication of wealth that shareholders can expect.

But several of his ventures have failed to meet expectations and have seen debt levels rise faster than profits. Since March 2012, his five “X” firms have lost 54 billion reais ($27.3 billion) in market value on the São Paulo stock exchange.

In the 2013 Forbes list of the richest people in the world, Mr. Batista fell to 100th place, from the seventh place he had had the year before. Forbes estimated that his net worth fell by $19.4 billion to $10.6 billion.

EBX Group, Mr. Batista’s holding company for his five firms, signed a strategic cooperation agreement on March 6 with the Brazilian investment bank BTG Pactual, which reportedly is closely involved in the negotiations over MPX.

Rumors in the Brazilian financial press are that Mr. Batista’s troubled petroleum company OGX may be next on the block, with BTG Pactual once again involved in the deal-making.

Article source: http://dealbook.nytimes.com/2013/03/19/brazilian-billionaire-confirms-talks-to-sell-stake-in-energy-firm/?partner=rss&emc=rss

DealBook: David Martinez in Spotlight in Battle With Billionaire

High above Columbus Circle, atop the Time Warner Center, is one of the most expensive apartments in Manhattan, a sleek aerie of steel and stone, high windows and soaring views.

It is the home of David Martinez, a Mexican financier who has minted a fortune buying and selling the debt of troubled countries and companies from Argentina to Pakistan. He paid about $42 million for the 12,000-square-foot duplex in 2003, then spent even more on additions and renovations, covering the space in stone and stainless steel.

The apartment has a private art collection that is said to include a $140 million Jackson Pollock. But for all his extravagant spending, Mr. Martinez is, even to his associates, something of a mystery.

Now a legal battle with another powerful investor is drawing back a curtain on Mr. Martinez’s secretive world. While investors often have disputes that end up in court, this cross-border fight is with one of the giants in global distressed debt — Paul E. Singer, a major Republican donor. The dispute, and its eventual victor, could have implications for other companies in the world’s fastest-growing economies.

The fight is over the bankruptcy of Mexico’s largest glassmaker, Vitro, a 103-year-old company run by the Sada family, one of the wealthiest in Monterrey. Allegations abound of covert meetings, fraudulent debts and crooked courts in a bankruptcy that ended up leaving control of the company in the hands of its shareholders, while costing bondholders as much as 60 percent of their investment, according to some estimates.

That runs counter to what typically happens in an American bankruptcy, and Mr. Singer and other Vitro creditors have argued that if Vitro and Mr. Martinez prevail, other Mexican companies could have trouble raising money in the United States.

Both men are known as “vulture investors,” a term applied to those who buy up cheap debt that no one wants. The strategy has made Mr. Singer’s company, Elliott Management, one of the most successful hedge funds in the world. Mr. Singer, 68, cut his teeth wrangling payments on defaulted debt from countries like Peru and Congo, and has earned a reputation for bare-knuckled doggedness unparalleled on Wall Street. Just last week, Elliott Management persuaded a court in Ghana to seize an Argentine naval ship in a dispute over the South American country’s bonds.

Yet he may have met his match in Mr. Martinez. Over the last 20 years, the 55-year-old financier has plowed billions of dollars into troubled corners of the global economy, often aligning himself with the management of bankrupt companies.

“If you don’t know who the sucker is in a particular deal, it’s probably you,” a top investor in distressed debt said. “When David is involved, you know he isn’t the sucker.”

He and others interviewed for this article declined to be identified speaking about Mr. Martinez, citing the continuing litigation or fear of angering him. Through a spokesman, Mr. Martinez declined to comment.

Little is known about the financier, who splits his time between New York and London, where he runs an obscure investment company called Fintech Advisory Ltd. In life as in business, Mr. Martinez treads lightly. He is fond of shell companies, whether to buy artwork or to pay household expenses. Those he hires often know him only as “the client.”

But Mr. Martinez and Mr. Singer are not strangers. They have clashed before, most notably during Argentina’s debt restructuring in 2005. While Elliott is still holding out for a more lucrative settlement with the nation over its defaulted bonds, Fintech sided with Argentina in 2005, a move that some bondholders felt undermined efforts to force the country to pay what it owed.

In the case of Vitro, Elliott and allied investors contend that Mr. Martinez helped the Mexican company muscle investors out of hundreds of millions of dollars through financial sleight of hand. Mr. Singer and his counterparts, who own about $700 million worth of the company’s old debt, have called Vitro’s efforts “a testament to audacity, brazen manipulation and greed.”

Vitro says that it has done nothing illegal. The maneuvers, it says, are standard practice under Mexican law and have been used in many other bankruptcies there. Fintech noted that a United States bankruptcy court, which is handling the bankruptcy of Vitro’s United States subsidiaries, found no wrongdoing this summer. “Such McCarthy-like allegations were unsupported,” lawyers for Fintech wrote in court documents.

The conflict has its roots in 2009, when Vitro found itself mired in trouble after the financial crisis. Bad derivatives bets had dried up its cash, and it began defaulting on its debt. The company called on Mr. Martinez for help.

To get some much-needed cash, the company struck a deal with the investor: a $75 million loan in exchange for the title to several of its properties. As part of the arrangement, Mr. Martinez was given an option to return the properties to Vitro, once it emerged from bankruptcy, in exchange for a 24 percent stake in the company — effectively aligning his interests with management as it negotiated with other creditors.

In mid-2010, he went to the different banks that Vitro owed money to and bought the claims. In the process, Mr. Martinez became the biggest individual outside creditor, owning about $600 million worth of claims.

The company began taking big loans from its subsidiaries, in effect creating a fresh class of creditors outside of the hedge funds — a group under its control, with the rights to approve any bankruptcy plan. Subsidiaries went from owing the parent company about $1.2 billion to being owed $1.5 billion.

With the help of Mr. Martinez, the company outvoted many other bondholders to approve a reorganization plan.

That maneuver was upheld by a court in Monterrey, allowing Vitro to proceed with a plan that pays creditors an estimated 40 to 60 percent of what they are owed and keeps the Sada family in control.

Mr. Singer and the hedge funds have taken the fight to the United States, suing Vitro and Fintech. This summer, the hedge funds won a round, as a federal judge in Dallas declined to uphold the Mexican court’s ruling. Arguments in the appeal were heard earlier this month.

The outcome of this case, experts say, could have implications for other companies in fast-growing economies. A country that appears to be undermining protections that are typically granted to creditors in a bankruptcy might scare investors away. “This is a precedent-setting case, no matter how it turns out,” said Arturo Porzecanski, economist in residence at American University’s School of International Service. “It has highlighted apparent loopholes in the bankruptcy law of Mexico, through which Vitro ran an 18-wheel truck.”

In suing Fintech, the hedge funds encountered one obstacle early on: they couldn’t find Mr. Martinez.

When servers went to Fintech’s Park Avenue offices to deliver the summons, they could not reach him. They stood outside the Time Warner Center for weeks hoping to catch him, to no avail.

Eventually, the lawsuit found its way to the investment company in London.

Mr. Martinez was born in 1957 and grew up in Monterrey, which is home to some of Mexico’s largest industrial companies. Power there is heavily concentrated among businessmen in the so-called Group of 10, a club that includes the Sada family, which controls Vitro.

Though Mr. Martinez was not a part of that circle, he has cultivated deep connections to it. The Sadas relied on Mr. Martinez to help them maintain control of another of their companies that went bankrupt in 2004.

As a young man, Mr. Martinez was a member of Regnum Christi, an evangelical group related to the Legionaries of Christ, an influential Roman Catholic order in Mexico that includes among its benefactors the billionaire Carlos Slim. After earning an engineering degree from the Tecnológico de Monterrey, Mr. Martinez moved to Rome to study philosophy at the Pontifical Gregorian University and considered becoming a priest.

But he was drawn to Wall Street instead, and earned a third degree from Harvard Business School before taking a job at Citigroup on the emerging-markets desk in New York. There, he began his long affair with distressed debt in far-flung places. In 1985, he left the bank and eventually founded Fintech.

While it is unclear how much money the company controls, or even how many employees work there, bits and pieces have emerged about Mr. Martinez over the years. Often it relates to his art collection, which includes the works of Damien Hirst and Mark Rothko.

In his lavish redoubt overlooking the city and Central Park from the penthouse of the Time Warner Center’s South Tower, Mr. Martinez has fashioned a gallery for his art. The apartment has a two-story living room and a reflecting pool, according to public records and interviews with people familiar with the unit. A special system has been rigged to support one exceptionally heavy piece of art.

Even before the costly renovations by the architect Peter Marino, the home was among the city’s most expensive residences.

But Mr. Martinez still had spending to do. In the fall of 2006, word spread that Jackson Pollock’s “No. 5, 1948” had been sold for $140 million, a record at the time. The buyer was said to be Mr. Martinez — a rumor that lawyers for Mr. Martinez denied, sending the art world into a state of confusion as to the whereabouts of the painting.

Through a spokesman, Mr. Martinez still denies that he owns the work. But according to several people with knowledge of the collection, the painting currently hangs in his New York home.
Charles V. Bagli contributed reporting.

Article source: http://dealbook.nytimes.com/2012/10/11/in-a-clash-of-two-billionaires-a-peek-at-a-mexican-financier/?partner=rss&emc=rss

DealBook: Thai Billionaire Tries to Edge Out Heineken for Singaporean Brewery

Heineken and Thai Beverage are both attempting to buy Fraser  Neave's beer unit, whose brands include Tiger Beer.Wong Maye-E/Associated PressHeineken and Thai Beverage are both attempting to buy Fraser Neave’s beer unit, whose brands include Tiger Beer.

8:38 p.m. | Updated

A Thai billionaire’s takeover offer for a Singaporean conglomerate, Fraser Neave, could scuttle plans by the Dutch brewer Heineken to buy its beer unit.

The billionaire, Charoen Sirivadhanabhakdi, offered $7.3 billion in cash for the 70 percent stake in Fraser Neave that he did not already own — a 4.3 percent premium to Fraser Neave’s closing stock price on Wednesday. Heineken and Thai Beverage, which is controlled by Mr. Charoen, have been battling for control of Asia Pacific Breweries, the beer business jointly owned by Heineken and Fraser Neave. Last month, Heineken moved a step closer to gaining control of Asia Pacific Breweries after it raised its offer to $4.3 billion to buy Fraser Neave’s interest in the company.

Fraser Neave, whose brands include Tiger Beer, has recommended the offer to its shareholders, who are to vote on the deal at the end of the month.

By starting a multibillion-dollar takeover bid for Fraser Neave, Mr. Charoen may be able to overturn the deal with Heineken. Mr. Charoen already holds a 30 percent stake in Fraser Neave through Thai Beverage and TCC Assets, an investment vehicle he controls.

Through TCC Assets, Mr. Charoen offered 8.88 Singapore dollars ($7.22) on Thursday for each share in Fraser Neave, which also operates a large global real estate portfolio. The deal values the company at $10.2 billion. The offer is supported by loans from two Singaporean banks and Morgan Stanley.

Charoen Sirivadhanabhakdi, the chairman of Thai Beverage.Tim Chong/ReutersCharoen Sirivadhanabhakdi, the chairman of Thai Beverage.

“We believe the offer represents an opportunity for F.N. shareholders to realize the value of their investment in cash and to make a complete exit,” Mr. Charoen said in a statement.

For months, Mr. Charoen has been positioning himself to decide the future of Asia Pacific Breweries. In August, Thai Beverage increased its stake to 26.2 percent, making it the company’s largest shareholder and allowing Mr. Charoen to dictate whether Fraser Neave shareholders would support Heineken’s takeover. Thai Beverage has subsequently increased its holding to 29 percent.

Kindest Place, a separate company controlled by the son-in-law of Mr. Charoen, also bought an 8.6 percent stake in Asia Pacific. The Japanese brewer Kirin is the second-largest shareholder in Fraser Neave, with a 15 percent stake. Heineken said it would review the $7.3 billion offer for Fraser Neave. A Heineken spokesman declined to comment on whether it would increase its offer.

Shares in Fraser Neave closed up 4.8 percent in trading in Singapore, while stock in Heineken fell less than 1 percent in Amsterdam.

The battle for Asia Pacific Breweries comes as many of the world’s beer companies are turning to emerging markets in search of growth. With fast-expanding middle classes and economic growth running counter to the global slowdown, developing countries offer new sources of revenue compared with Western countries, which continue to struggle from the European debt crisis and volatility in the financial markets.

This year, Anheuser-Busch InBev, whose brands include Budweiser and Stella Artois, agreed to pay $20.1 billion for the half of the Mexican brewer Grupo Modelo that it did not already own.

And SABMiller bought the Foster’s Group, the biggest beer company in Australia, for $10.2 billion last year. With the acquisition, SABMiller gained exposure to a developed market that offered high profit margins but lacked the growth seen in emerging markets.

Article source: http://dealbook.nytimes.com/2012/09/13/thai-billionaire-in-7-3-billion-bid-for-fraser-neave/?partner=rss&emc=rss

DealBook: Opening Arguments Set for Perelman Trial

Ronald O. Perelman, the chairman of MacAndrews  Forbes, was once one of the country's most successful corporate raiders.Yana Paskova for The New York TimesRonald O. Perelman, the chairman of MacAndrews Forbes, was once one of the country’s most successful corporate raiders.

Opening arguments are set to begin Tuesday afternoon in trial covering the dispute between the billionaire financier Ronald O. Perelman and his former business partner.

Lawyers representing both Mr. Perelman and Donald Drapkin, the former business partner, were in court on Tuesday morning to settle some last-minute issues and select a jury for the trial, which is expected to last roughly five days. The two men are in court fighting over whether Mr. Drapkin violated a separation agreement he signed in 2007 when he left MacAndrews Forbes, Mr. Perelman’s company.

The dispute has created a lot of buzz on Wall Street, in large part because Mr. Drapkin and Mr. Perelman are haggling over roughly $20 million. While the sum is hefty by most standards, it’s not a big amount for the likes of Mr. Perelman, who is estimated to worth more than $12 billion. Mr. Drapkin’s net worth is not known but he too is very wealthy and now runs a Wall Street hedge fund.

Tuesday morning, the love life of Mr. Perelman — who has been married five times, including once to the actress Ellen Barkin — provided some levity for the 21 prospective jurors, who were questioned by a federal judge, Paul G. Gardephe, for roughly two hours.

“Is this the Ronald Perelman who was married to Ellen Barkin,” one juror asked the judge, eliciting laughter in the courtroom. “I have met him a few times through Ellen when they were together.”

Judge Gardephe asked whether that would prevent the juror from being impartial. “Yes, probably,” the juror responded, laughing. He was immediately excused from the jury pool.

“He is all over the news,” another juror said of Mr. Perelman. Only four jurors had heard of Mr. Perelman – and none had heard of Mr. Drapkin.

Jurors in the case will have to decide whether Mr. Drapkin violated the terms of the separation agreement he signed when he left MacAndrews Forbes. At issue is whether Mr. Drapkin hung on to work product he had agreed to return and whether he tried to persuade a MacAndrews Forbes employee to leave the firm.

Mr. Perelman was not in court Tuesday morning, but he was represented by more than half a dozen lawyers and his public relations chief. Mr. Drapkin, wearing cufflinks and a deep blue tie, was there and was scheduled to testify this afternoon. He was also accompanied by several lawyers.

In the end, an eight-person jury was selected. The judge peppered prospective jurors with questions, including their hobbies, what they did for a living and what publications they liked to read. Three of the prospective jurors said they liked the show “NCIS,” a police drama on CBS. One was a fan of the show “American Greed.”

The jury that will hear the trial includes an unemployed actor, a college professor, a nurse who is a fan of Rachael Ray and a 59-year-old woman getting her associates degree in criminal justice.

Some of the more colorful juror candidates didn’t make the final cut. Juror 22, a bus operator, who was excused, was asked what he did in his spare time. His answer: “drink.”

Another had been at medical school with one of the crucial witnesses in the trial. When asked whether this would compromise her ability to be a juror, she said she wasn’t sure whether she remembered him. “It’s possible he could walk in and I’d recognize who he is and say, ‘Oh, he yelled at me when I was a resident,’ or something,” she said.

At one point the judge made reference to the vast wealth of the two parties involved.

“Both the rich and the poor are entitled to justice in our system,” Judge Gardephe told jurors, asking them not to be influenced by the size of their bank accounts.

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Debt Crisis in Europe Fuels Debate Over Bonds

President Nicolas Sarkozy of France and Chancellor Angela Merkel of Germany are scheduled to meet in Paris on Tuesday but have vowed to avoid the issue of euro bonds altogether. Nonetheless, a number of analysts say that eventually they may have no choice if they want to keep Europe’s currency union from falling apart.

The euro bond concept is gaining traction among economists and other outside experts like George Soros, the billionaire investor, as a way of preventing borrowing costs for Italy and Spain from rising so much that the countries become insolvent, an event that could destroy the common currency.

Debt issued and backed by all 17 members of the euro zone, euro bond proponents say, would be regarded as ultrasafe by investors and could rival the market for United States Treasury securities.

The weaker euro members would benefit from the good standing of countries like Germany or Finland and pay lower interest rates to borrow than if left to face investors on their own.

“It may well be in order to calm markets right now,” said Jakob von Weizsäcker, an economist for the German state of Thuringia who has proposed a way to structure euro bonds so that countries would be encouraged to reduce their debt.

Data released Monday by the European Central Bank underlined how costly it would be to keep Italian and Spanish borrowing costs under control, and added urgency to the euro bond debate. Bond yields on Italian and Spanish debt, which recently rose above 6 percent, have fallen sharply since the central bank said it would start buying the bonds. The yield on Spanish 10-year bonds fell to 4.942 percent Monday, the lowest level in months. Italy’s benchmark yield was just below 5 percent.

But the central bank disclosed that it had spent 22 billion euros($31.8 billion) intervening in bond markets just last week to hold down Spanish and Italian bond yields. That compared with 74 billion euros the bank had spent in the previous 15 months, when it focused on the smaller markets for Greek, Portuguese and Irish bonds.

Euro bonds are a deeply controversial idea among both economists and ordinary Europeans. Critics said they would not solve the financial crisis and might create unbearable political tension instead. Voters in stronger countries would balk at assuming the obligations of less prudent members. Some critics argued that euro bonds would unfairly raise borrowing costs for countries like Germany, and, rather than protecting the euro, could lead to the breakup of the currency union.

“Euro bonds could trigger very strong anti-European movements,” said Clemens Fuest, a professor at Oxford. “It would be very hard to sell in Germany.”

The euro bonds debate reflects what is perhaps the central existential question facing Europeans: how much more central government and integration are they willing to accept to save the euro?

In Germany, the answer so far is that euro bonds go too far toward a so-called transfer union where the rich and solvent subsidize the poor. Asked about the issue, Mrs. Merkel’s office said she endorsed a statement by the finance minister, Wolfgang Schäuble, who told the newsmagazine Der Spiegel that he ruled out euro bonds as long as countries pursued their own fiscal policies.

Different interest rates are needed to provide “incentives and sanctions, in order to enforce solid fiscal policy,” Mr. Schäuble told Der Spiegel. “Without such solidity there is no foundation for a common currency.”

Steffen Seibert, a German government spokesman, said Monday that euro bonds were not on the agenda for the meeting between Mr. Sarkozy and Mrs. Merkel. “The German government has said on numerous occasions that it does not believe euro bonds make sense, and that’s why they will not play any role at tomorrow’s meeting,” Mr. Seibert said, according to Reuters.

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DealBook: Icahn Bids for Clorox, but Urges It to Seek Higher Offers

Clorox bleachJustin Sullivan/Getty ImagesBottles of Clorox bleach in a San Francisco grocery store.Carl C. Icahn's net worth was estimated by Forbes at  $10.5 billion in 2010.Mark Lennihan/Associated PressCarl C. Icahn’s net worth was estimated by Forbes at  $10.5 billion in 2010.

8:03 p.m. | Updated

The billionaire investor Carl C. Icahn sought to put Clorox on the auction block on Friday, offering to buy the households goods maker in a deal that would value it at $10.2 billion, while at the same time encouraging the company to actively seek higher bids.

Mr. Icahn, who already owns 9.4 percent of Clorox, told its chief executive, Donald R. Knauss, that he was willing to buy all the remaining shares in the company at a premium price.

But, Mr. Icahn said in a letter to Mr. Knauss, “While we stand ready and able to buy Clorox, we encourage you to hold an open and friendly ‘go-shop’ sale process.” He added, “We are confident the process will result in numerous superior bids for this company.”

Citing low interest rates, corporate cash piles and Clorox’s potential to add to other companies’ earnings, Mr. Icahn went on in his letter to say, “It seems clear to us that there are potentially multiple substantially larger strategic bidders with robust balance sheets who are in a position to make a bid.” Among those he cited were Procter Gamble, Unilever, Colgate-Palmolive, Reckitt Benckiser , Kimberly-Clark, Henkel and SC Johnson.

“Now is the right time for Clorox to be aggressive in pursuing a strategic transaction,” Mr. Icahn wrote in his letter, dated Thursday, which was disclosed in a regulatory filing on Friday morning.

And although Mr. Icahn assured Mr. Knauss that he was serious about his unsolicited offer, he made the case that Clorox would be better off finding a buyer from its own industry. “We understand that we are a financial buyer that lacks inherent synergies and therefore strongly suggest that the board aggressively pursue a transaction with a strategic buyer, which should attract a higher price,” he wrote, suggesting that a possible suitor could bid as much as $100 a share.

In contrast, Mr. Icahn is offering $76.50 a share. That price does represents a 12 percent premium over Clorox’s closing price on Thursday. Mr. Icahn noted in his letter that his bid was 21 percent higher than where Clorox shares closed on Dec. 20, the day before he began building his stake in the company.

Clorox’s shares jumped $6.12, or 8.9 percent, to close at $74.55 on Friday on the New York Stock Exchange. But they did not trade above Mr. Icahn’s offer during the day, indicating that least some investors failed to share Mr. Icahn’s confidence that a superior bid would emerge.

The offer, Mr. Icahn’s filing states, is backed by a “highly confident” letter from the investment bank Jefferies Company that it would be able to arrange $7.8 billion in financing for the deal, which would come in addition to equity contributed by Mr. Icahn’s affiliates.

Clorox, which makes bleach, Kingsford charcoal and Glad bags among other brands, said that its board would review the proposal. The company has hired Goldman Sachs and J.P. Morgan Securities as its financial advisers, and Wachtell, Lipton, Rosen Katz as legal counsel.

The unsolicited offer is a strategy that Mr. Icahn has employed before; in fact, 15 times since 1997, according to the data provider FactSet Shark Repellent. Earlier this year, he bid $1.9 billion for Mentor Graphics, with the aim of flushing out a potential bidder.

But some of his efforts have not worked out. For example, Mr. Icahn bid $665 million for Dynegy last year, and as he did with Clorox, he invited the independent power company to look for an alternative offer. But after approaching “more than 50” potential suitors, Dynegy’s advisers failed to find a buyer. In February, Dynegy’s shareholders rejected Mr. Icahn’s bid.

Michael J. de la Merced contributed reporting.

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