November 24, 2020

DealBook Column: Relationship Science Plans Database of Names and Connections

It sounds like a Rolodex for the 1 percent: two million deal makers, power brokers and business executives — not only their names, but in many cases the names of their spouses and children and associates, their political donations, their charity work and more — all at a banker’s fingertips.

Such is the promise of a new company called Relationship Science.

Never heard of it? Until recently, neither had I. But a few months ago, whispers began that this young company was assembling a vast trove of information about big names in corporate America. What really piqued my interest was that bankrolling this start-up were some Wall Street heavyweights, including Henry R. Kravis, Ronald O. Perelman, Kenneth G. Langone, Joseph R. Perella, Stanley F. Druckenmiller and Andrew Tisch.

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It turns out that over the last two years, with a staff of more than 800 people, mostly in India, Relationship Science has been quietly building what it hopes will be the ultimate business Who’s Who. If it succeeds, it could radically change the way Wall Street does business.

That’s a big if, of course. There are plenty of other databases out there. And there’s always Google. Normally I wouldn’t write about a technology company, but I kept hearing chatter about it from people on Wall Street.

Then I got a glimpse of this new system. Forget six degrees of Kevin Bacon. This is six degrees of Henry Kravis.

Here’s how it works: Let’s say a banker wants to get in touch with Mr. Kravis, the private equity deal maker, but doesn’t know him personally. The banker can type Mr. Kravis’s name into a Relationship Science search bar, and the system will scan personal contacts for people the banker knows who also know Mr. Kravis, or perhaps secondary or tertiary connections.

The system shows how the searcher is connected — perhaps a friend, or a friend of a friend, is on a charitable board — and also grades the quality of those connections by identifying them as “strong,” “average” or “weak.” You will be surprised at the many ways the database finds connections.

The major innovation is that, unlike Facebook or LinkedIn, it doesn’t matter if people have signed up for the service. Many business leaders aren’t on Facebook or LinkedIn, but Relationship Science doesn’t rely on user-generated content. It just scrapes the Web.

Relationship Science is the brainchild of Neal Goldman, a co-founder of CapitalIQ, a financial database service that is used by many Wall Street firms. Mr. Goldman sold CapitalIQ, which has 4,200 clients worldwide, to McGraw-Hill in 2004 for more than $200 million. That may explain why he was able to easily round up about $60 million in funds for Relationship Science from many boldface names in finance. He raised the first $6 million in three days.

“I knew there had to be a better way,” Mr. Goldman said about the way people search out others. Most people use Google to learn about people and ask friends and colleagues if they or someone they know can provide an introduction.

Relationship Science essentially does this automatically. It will even show you every connection you have to a specific company or organization.

“We live in a service economy,” Mr. Goldman said. “Building relationships is the most important part for selling and growing.”

Kenneth Langone, a financier and co-founder in Home Depot, said that when he saw a demonstration of the system he nearly fell off his chair. He used an unprintable four-letter word.

“My life is all about networking,” said Mr. Langone, who was so enthusiastic he became an investor and recently joined the board of Relationship Science. “How many times do I say, ‘How do I get to this guy?’ It is scary how much it helps.”

Mr. Goldman’s version of networking isn’t for everyone. His company charges $3,000 a year for a person to have access to the site. (That might sound expensive, but by Wall Street standards, it’s not.)

Price aside, the possibility that this system could lead to a deal or to a new wealth management client means it just might pay for itself.

“If you get one extra deal, the price is irrelevant,” Mr. Goldman said.

Apparently, his sales pitch is working. Already, some big financial firms have signed up for the service, which is still in a test phase. Investment bankers, wealth managers, private equity and venture capital investors have been trying to arrange meetings to see it, egged on, no doubt, by many of Mr. Goldman’s well-heeled investors. Even some development offices of charities have taken an interest.

The system I had a peek at was still a bit buggy. In some cases, it was missing information; in other cases the information was outdated. In still other instances, the program missed connections. For example, it didn’t seem to notice that Lloyd C. Blankfein, the chief executive of Goldman Sachs, should obviously know a certain senior partner at Goldman.

But the promise is there, if the initial kinks are worked out. I discovered I had paths I never knew existed to certain people or companies. (Mr. Goldman should market his product to reporters, too.)

One of the most vexing and perhaps unusual choices Mr. Goldman seems to have made with Relationship Science is to omit what would be truly valuable information: phone numbers and e-mail addresses.

Mr. Goldman explained the decision. “This isn’t about spamming people.” He said supplying phone numbers wouldn’t offer any value because people don’t like being cold-called, which he said was the antithesis of the purpose of his database.

Ultimately, he said, as valuable as the technology can be in discovering the path to a relationship, an artful introduction is what really counts.

“We bring the science,” he said. “You bring the art.”

A version of this article appeared in print on 02/12/2013, on page B1 of the NewYork edition with the headline: A Database Of Names, And How They Connect.

Article source: http://dealbook.nytimes.com/2013/02/11/a-database-of-names-and-how-they-connect/?partner=rss&emc=rss

DealBook: UBS Described as Near Deal With U.S. and Britain on Rate Rigging

Protesters formed a giant fish during a rally last month in Zurich in front of the offices of UBS, center, and Credit Suisse, right.Walter Bieri/KEYSTONE, via Associated PressProtesters formed a giant fish during a rally last month in Zurich in front of the offices of UBS, center, and Credit Suisse, right.

UBS, the Swiss banking giant, is close to reaching settlements with American and British authorities over the manipulation of interest rates, the latest case in a multiyear investigation that has rattled the financial industry and spurred a public outcry for broad reform.

UBS is expected to pay more than $450 million to settle claims that some employees reported false rates to increase the bank’s profit, according to officials briefed on the matter who spoke on the condition of anonymity because the talks were private.

If the bank agrees to the deals with various authorities, the collective penalties would yield the largest total fines to date related to the rate-rigging inquiry and would increase the likelihood that other financial institutions would face stiff penalties. Authorities dealt their first blow in the rate-rigging case in June when the British bank Barclays agreed to a $450 million settlement.

A spokeswoman for UBS declined to comment. The agencies leading the UBS investigation, the Commodity Futures Trading Commission, the Justice Department and Britain’s Financial Services Authority, also declined to comment.

The UBS case will provide a window into systemic problems in the rate-setting process, which affects how consumers and companies borrow money around the world. After reviewing thousands of internal bank e-mails and interviewing dozens of employees, the authorities have uncovered patterns of abuse at the major banks that help set benchmark interest rates.

The sprawling investigation is focused on benchmarks like the London interbank offered rate, or Libor. The rate, a measure of how much banks charge each other for loans, is used to determine the costs of trillions of dollars of mortgages, credit card charges and student loans.

The authorities claim that UBS traders colluded with rival banks to influence rates in an effort to bolster their profits, according to officials briefed on the matter. Some traders at UBS were suspended this year over the matter.

Given the scope of the case, the UBS settlement is expected to heighten calls for a reform of the Libor system. Lawmakers are pushing to change the way banks report rates, providing more transparency to consumers, companies and investors that rely on the benchmark.

The reform movement gained momentum after global authorities secured the settlement with Barclays. Regulators had accused Barclays of reporting false rates, a scandal that prompted the resignation of the chief executive and other top officials at the bank.

Global authorities are now moving forward with civil and criminal cases, setting up the potential for major fines and regulatory sanctions. Some banks are in advanced settlement talks, including UBS and the Royal Bank of Scotland. The Royal Bank said it expected to disclose penalties before the firm’s next earnings release in February. Deutsche Bank said last month that it had set aside money to cover potential fines, although it was too early to predict the size.

American authorities are hoping to complete a deal with UBS by the middle of the month, according to officials briefed on the matter. The officials noted that the discussions could spill into next year. The talks could also break down, in which case the authorities would file a lawsuit against the bank.

It is unclear whether global authorities will act in tandem on the UBS case. The bank and the regulators would prefer to strike a deal together, but the agencies are proceeding at different speeds.

Investigators say the broader Libor case could go on for years.

Canadian, Swiss and Asian authorities as well as the Justice Department, the Commodity Futures Trading Commission and Britain’s Financial Services Authority are investigating the actions of more than a dozen banks. Along with UBS, the futures commission is focused on potential wrongdoing at two American banks, Citigroup and JPMorgan Chase, the officials said. HSBC is also under scrutiny.

Eric T. Schneiderman, New York’s attorney general, has been pressing banks like UBS over financial misconduct.Carolyn Kaster/Associated PressEric T. Schneiderman, New York’s attorney general, has been pressing banks like UBS over financial misconduct.

In addition to the regulatory cases, the Justice Department has identified potential criminal wrongdoing by traders at Barclays and other banks. The banks also face private lawsuits from large investors like local governments, which claim to have suffered losses as a result of interest rate manipulation. The New York attorney general has subpoenaed 16 banks over their role in the scandal, an action that could foreshadow civil lawsuits. Analysts predict the financial industry could face penalties of up to $20 billion.

“The evidence that comes out of any future settlement is likely to be enormously helpful for our claims,” said David E. Kovel, a partner at the law firm Kirby McInerney who is representing clients in a potential class-action suit related to Libor.

For UBS, the Libor case comes at a difficult time.

It has faced a series of legal problems since the financial crisis. In 2009, the bank agreed to pay $780 million to settle accusations by American authorities that it helped wealthy clients avoid taxes.

In 2011, it announced a $2.3 billion loss prompted by a rogue trader, Kweku M. Adoboli, who received a seven-year jail sentence for fraud last month. The firm agreed to pay a $47.5 million penalty to the British authorities in connection with the trading loss.

In the Libor case, UBS has been eager to cooperate. It has already reached a conditional immunity deal with the antitrust arm of the Justice Department, which could protect the bank from criminal prosecution under certain conditions. It is also cooperating with Canadian antitrust authorities by handing over e-mails and other documents implicating other banks.

But it did acknowledge publicly that such deals would not shield the bank from potential penalties from other regulators. The Justice Department’s criminal unit, for instance, could still take action against the bank.

UBS disclosed last year that it was the subject of investigations related to Libor, saying it had received subpoenas from American and Japanese authorities. Swiss and British regulators have joined the UBS investigation, which involves a number of currencies in the Libor system.

The timing of the Libor cases against UBS depends in large part on cooperation among regulators.

The Financial Services Authority in Britain has worked closely with its American counterparts. In total, the British regulator has about 160 people working on its various cases against banks, which are at different stages of development.

As the top watchdog of London’s financial services industry, the British regulator has positioned itself as a conduit for document requests from international regulators regarding Libor, which is set daily by banks in London. The agency also organizes interviews for its American counterparts with London-based bankers involved in the inquiries, according to an official with direct knowledge of the matter.

British regulators had been ready to move against UBS a month after officials announced a settlement with Barclays, the person added. The settlement has been delayed, however, as global authorities have tried to pursue a joint agreement with the bank.

“We’ve been going at the pace of the slowest regulator,” the official said.

Article source: http://dealbook.nytimes.com/2012/12/02/ubs-is-described-as-near-deal-on-rate-rigging/?partner=rss&emc=rss

DealBook: R.B.S. Expects Fine Over Libor Investigation

The Royal Bank of ScotlandJeff J. Mitchell/Getty ImagesThe Royal Bank of Scotland said that it expected to enter into negotiations with authorities soon about a potential settlement .

8:53 a.m. | Updated

LONDON — Royal Bank of Scotland said on Friday that it would probably face financial penalties connected to the broad rate-rigging inquiry, as the British bank reported a net loss in the third quarter of the year.

The bank, which is 81 percent owned by the British government after receiving a bailout during the recent financial crisis, is the latest British firm to unveil legal troubles this week.

On Wednesday, the U.S. Federal Energy Regulatory Commission recommended a $470 million fine against Barclays related to past energy trading activity in the firm’s North American operations. The bank said it would defend itself against the allegations. Barclays and local rival Lloyds Banking Group also disclosed that they had set aside additional money to compensate clients who had been inappropriately sold insurance.

R.B.S.’ legal woes relate to a broad industry investigation into potential rate rigging.

The Commodity Futures Trading Commission, the Department of Justice and other authorities around the world are looking into whether big banks tried to influence key benchmarks, including the London interbank offered rate, or Libor. In June, Barclays agreed to pay $450 million to settle charges that it attempted to manipulate Libor to improve profits and make its financial position look stronger.

R.B.S., which is based in Edinburgh, said on Friday that it expected to enter into negotiations with authorities about a potential settlement in the near future. The firm’s chief executive, Stephen Hester, declined to say when those talks might begin or how big the potential fine could be. Mr. Hester said the that bank would likely make an announcement over the matter before reporting its next earnings on Feb. 28.

“We have to dance to the tune of the relevant regulators,” Mr. Hester said on a conference call with journalists.

R.B.S. faces a broader set of troubles.

On Friday, the bank said it posted a net loss of £1.4 billion, or $2.3 billion, in the three months through Sept. 30 after setting aside more money to compensate customers who were inappropriately sold insurance and taking a charge on its own debt. The bank reported a £1.2 billion net profit in the same period last year after it benefited from a financial gain on its own debt.

Without the adjustments, its pretax profit in the third quarter rose to just over £1 billion, compared with £2 million in the same period last year.

Analysts said R.B.S. had made great strides to reduce its exposure to risky assets and pare back its balance sheet since the financial crisis began. Yet continued weak underlying performance, coupled with expected future losses in the fourth quarter of the year related to one-off charges like a potential Libor fine, remains a concern.

“The management has made good progress,” said Ian Gordon, a banking analyst at Investec Securities in London. “But for me, the bank’s earnings outlook hasn’t improved.”

Royal Bank of Scotland shares fell 1 percent in morning trading in London. Stock in the bank has risen almost 22 percent so far this year.

The British bank said it had made a new provision of £400 million to reimburse clients who were sold payment protection insurance, which covered customers if they were laid off or became ill. Many customers did not know they had been sold the insurance when they took out loans or mortgages. Others have found it difficult to make claims on the policies, which often paid out only small amounts.

In total, the bank said it had now set aside a combined £1.7 billion to compensate customers. Britain’s banks, including Barclays and HSBC, have made total provisions worth almost £11 billion to reimburse clients, and analysts say that figure may rise to £15 billion.

“All of the banks have been guilty of underestimating the response rate,” to payment protection insurance, Bruce Van Saun, chief financial officer of R.B.S., told reporters on Friday.

In an effort to repay the British government’s bailout, the bank has been trying to sell assets and raise additional cash. Last month, the firm earned £787 million through the initial public offering of its insurance unit Direct Line. The bank failed to sell a number of its branches in Britain for around £1.7 billion, however, after Banco Santander of Spain backed out of the deal.

Despite the tough economic conditions across Europe, the bank said pretax profit in its investment banking unit reached £295 million in the third quarter, compared with a £348 million net loss during the same period last year. The bank has been scaling bank its risky trading activities through actions like closing or selling its cash equities unit and spinning off of its advisory business.

The number of employees in the investment banking division fell 5 percent, to 11,900, during the three months through Sept. 30. Earlier this year, the bank said it planned to layoff around 3,500 people in the unit.

The bank’s retail and commercial banking unit continued to suffer from weak consumer confidence related to the European debt crisis. Pretax profit in the division fell 7 percent, to £1.1 billion, during the third quarter.


This post has been revised to reflect the following correction:

Correction: November 2, 2012

An earlier version of the story incorrectly state that Barclays settled over the rate-rigging investigation in July. It settled the matter in June.

Article source: http://dealbook.nytimes.com/2012/11/02/r-b-s-expects-libor-fine-amid-third-quarter-loss/?partner=rss&emc=rss

DealBook: Icahn Takes Stake and Netflix Shares Surge

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We have seen this movie before, though the ending this time is unclear.

The billionaire investor Carl Icahn announced late Wednesday that his hedge fund, Icahn Capital, had acquired a roughly 10 percent stake in Netflix. The news caused shares of the media company to soar as much as 22 percent. Toward the close, the stock was up 14.4 percent, at $79.60.

In a filing with the Securities and Exchange Commission, Mr. Icahn said that he thought Netflix was undervalued and suggested that it could make a strong acquisition candidate for a larger entertainment company.

“The reporting persons acquired the shares with the belief that the shares were undervalued due to the issuer’s dominant market position and international growth prospects,” said the filing. “The reporting persons believe Netflix may hold significant strategic value for a variety of significantly larger companies that are engaging in more direct competition with one another due to the evolution of the internet, mobile, and traditional industry.”

The filing by Mr. Icahn is the latest in a string of activist positions taken by the 76-year-old investor. His playbook consists of accumulating a large stake in a company and then agitating for change.

Mr. Icahn has recently had a mixed track record with his large activist positions. He won seats on the board of Blockbuster, only to see the movie-rental chain end up in bankruptcy in 2010. A more successful investment was in ImClone, accumulating stock in the low $40s, taking over as the biotechnology company’s chairman, and then selling it to Eli Lilly for $70 a share in 2008.

More recently, last year Mr. Icahn failed in his bid to force a sale of the consumer products giant Clorox. After he put the company in play with a $10 billion bid, Mr. Icahn acknowledged that he lacked the support of Clorox shareholders to get any deal done.

Mr. Icahn hopes to have better luck with Netflix, the Los Gatos, Calif.-based company started by the entrepreneur Reed Hastings. Netflix’s stock, before Wednesday’s news, had dropped about 75 percent from its 2011 peak. Even though the company recently reached a milestone, streaming video service into 25 million homes in the United States, investors have sold Netflix shares as its growth has slowed in recent quarters.

Article source: http://dealbook.nytimes.com/2012/10/31/icahn-takes-stake-and-netflix-shares-surge/?partner=rss&emc=rss

DealBook: Sprint Agrees to Sell Majority Stake to SoftBank

Daniel Hesse, left, the chief of Sprint Nextel, and Masayoshi Son, the president of SoftBank, announced the deal in Tokyo on Monday.Yoshikazu Tsuno/Agence France-Presse — Getty ImagesDaniel Hesse, left, the chief of Sprint Nextel, and Masayoshi Son, the president of SoftBank, announced the deal in Tokyo on Monday.

4:15 a.m. Monday | Updated

The struggling cellphone service provider Sprint Nextel has agreed to sell 70 percent of itself to SoftBank of Japan for $20.1 billion, its boldest move yet to revive its fortunes.

In a statement on Monday, SoftBank, a big Japanese telecommunications company, said it would pay $8 billion to buy newly issued Sprint stock worth about $5.25 a share. It will then pay $12.1 billion to buy existing stock from other investors at $7.30 a share, a premium to current levels.

The deal remains subject to approval by regulators and Sprint’s shareholders, but has been approved by the boards of both companies, SoftBank said in the statement. The transaction is expected to close in the middle of 2013.

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Shares in Sprint have risen 14 percent since the wireless company confirmed on Thursday that it was in negotiations with SoftBank, closing at $5.73 on Friday.

Sprint is also working to gain more control over Clearwire, a wireless broadband company in which it owns a large stake, people familiar with the matter said. But closing the transaction with SoftBank is the biggest priority for now.

Once completed, the deal would give Sprint some much-needed cash as it aims to compete against its bigger rivals, Verizon Wireless and ATT.

Sprint, which has long struggled to recover from its 2005 merger with Nextel, has been spending billions of dollars to build a next-generation data network to support the latest smartphones like the Apple iPhone 5.

It remains well behind Verizon and ATT in offering Long-Term Evolution, or LTE, data service, though the company is well ahead of T-Mobile USA, the country’s fourth-largest wireless service provider.

At the same time, Sprint is laboring under nearly $21 billion of debt, some of which is set to mature next year.

And if a proposed merger of T-Mobile and MetroPCS is completed, Sprint will face a tougher competitor in the world of lower-priced cellphone service. Both companies have pitched unlimited data plans to customers at lower costs than those for plans offered by the big two providers.

Sprint has often hinted that deal-making was in its future. Its chief executive, Daniel Hesse, has said that he expects to participate in the industry’s continuing consolidation.

But the deal with SoftBank came as a surprise to many analysts and investors. Until now, the Japanese company has been focused on gaining share in its home market, largely through acquisitions and building out an LTE high-speed data network. And until recently, it had been focused on reducing its enormous debt load, which stood at nearly $13 billion as of June 30.

Shares of SoftBank fell nearly 17 percent after it confirmed the talks last week and dropped another 5.3 percent, closing at 2,268 yen apiece, in trading in Tokyo on Monday.

Still, the Japanese company’s chief executive, Masayoshi Son, has harbored ambitions to move into the much bigger American market. Sprint has been one of the few significant players up for grabs, and may eventually serve as a vehicle for future deals — perhaps even one for the enlarged T-Mobile, several years from now.

The two sides are betting that American government regulators will favor any transaction that strengthens competition, avoiding the harsh opposition to ATT’s $39 billion bid for T-Mobile last year.

Mr. Son, an Internet entrepreneur, had already broken into an industry dominated by two established rivals when he bought Vodafone’s Japanese arm in 2006. He has steadily built the company into a major new competitor, one poised to become Japan’s second-biggest wireless service provider, after NTT DoCoMo, with the acquisition of a smaller rival, eAccess.

The Raine Group and Mizuho Securities were lead financial advisers to SoftBank. Deutsche Bank also provided legal advice. SoftBank’s legal advisers included Morrison Foerster as lead counsel, Mori Hamada Matsumoto as Japanese counsel, Dow Lohnes as regulatory counsel, Potter Anderson Corroon LLP as Delaware counsel, and Foulston Siefkin LLP as Kansas counsel.

Citigroup, Rothschild and UBS advised Sprint. Skadden, Arps, Slate, Meagher Flom was lead counsel to Sprint. Lawler, Metzger, Keeney Logan served as regulatory counsel, and Polsinelli Shughart served as Kansas counsel.

A version of this article appeared in print on 10/15/2012, on page B3 of the NewYork edition with the headline: Sprint Said to Be in Final Stages of Selling Most of Itself to SoftBank of Japan.

Article source: http://dealbook.nytimes.com/2012/10/14/sprint-gets-closer-to-a-deal-with-softbank/?partner=rss&emc=rss

DealBook: Sprint Gets Closer to Deal With SoftBank

A Sprint store on the Upper East Side of Manhattan.Tina Fineberg for The New York TimesA Sprint store on the Upper East Side of Manhattan.

11:13 p.m. | Updated

Sprint Nextel is putting the final touches on a deal to sell 70 percent of itself to SoftBank of Japan for $20 billion, according to people briefed on the matter, in the struggling cellphone service provider’s boldest move yet to revive its fortunes.

A deal could be announced as early as Monday, these people said, but they cautioned that talks were continuing and might still fall apart.

SoftBank, a big Japanese telecommunications company, is expected to pay $8 billion to buy newly issued Sprint stock, worth about $5.25 a share. It will then pay $12 billion to buy existing stock from other investors at $7.30 a share, a premium to current levels.

Shares in Sprint have risen 14 percent since the wireless company confirmed on Thursday that it was in negotiations with SoftBank, closing on Friday at $5.73.

Sprint is also working to gain more control over Clearwire, the wireless broadband company in which it owns a large stake, these people said. But closing the transaction with SoftBank is the biggest priority for now.

If completed, the deal would give Sprint some much-needed cash as it aims to compete against its bigger rivals, Verizon Wireless and ATT. Sprint, which has long struggled to recover from the 2005 merger with Nextel, has been spending billions of dollars to build a next-generation data network to support the latest smartphones like the Apple iPhone 5.

It remains well behind Verizon and ATT in offering Long-Term Evolution, or LTE, data service, though the company is well ahead of T-Mobile USA, the country’s fourth-largest wireless service provider.

At the same time, Sprint is laboring under nearly $21 billion of debt, some of which is set to mature next year.

And if a proposed merger of T-Mobile and MetroPCS is completed, Sprint will face a tougher competitor in the world of lower-priced cellphone service. Both companies have pitched unlimited data plans to customers at lower costs than those for plans offered by the big two providers.

Sprint has long hinted that deal-making was in its future; its chief executive, Daniel Hesse, has said that he expects to participate in the industry’s continuing consolidation.

But the proposed deal with SoftBank came as a surprise to many analysts and investors. Until now, the Japanese company has been focused on gaining share in its home market, largely through acquisitions and building out an LTE high-speed data network. And until recently, it had been focused on paying down its enormous debt load, which stood at nearly $13 billion as of June 30.

Shares of SoftBank fell nearly 17 percent after it confirmed the talks last week and dropped another 5 percent in trading in Tokyo on Monday.

Still, the Japanese company’s chief executive, Masayoshi Son, has harbored ambitions to move into the much bigger American market. Sprint is one of the few significant players up for grabs, and may eventually serve as a vehicle for future deals — perhaps even one for the enlarged T-Mobile, several years from now.

The two sides are betting that American government regulators would favor any transaction that strengthens competition, avoiding the harsh opposition to ATT’s $39 billion bid for T-Mobile last year.

Mr. Son, an Internet entrepreneur, had already broken into an industry dominated by two established rivals when he bought Vodafone’s Japanese arm in 2006. He has steadily built the company into a major new competitor, one poised to become Japan’s second-biggest wireless service provider, after NTT DoCoMo, with the acquisition of a smaller rival, eAccess.

News of the advanced status of Sprint’s talks was reported on Sunday by CNBC.

Article source: http://dealbook.nytimes.com/2012/10/14/sprint-gets-closer-to-a-deal-with-softbank/?partner=rss&emc=rss

DealBook: Julius Baer to Cut 1,000 Jobs After Deal for Bank of America Unit

The headquarters of Julius Baer in Zurich.Michael Buholzer/ReutersThe headquarters of Julius Baer in Zurich.

LONDON — The Swiss bank Julius Baer announced on Tuesday that it would eliminate about 1,000 jobs to reduce costs.

In August, Julius Baer reached a deal with Bank of America Merrill Lynch to buy its private banking operations outside the United States and Japan for around $880 million. As part of its plan to integrate the business, Julius Baer said it now expected to reduce the bank’s combined 5,700 work force by 15 to 18 percent.

The layoffs, which could total 1,026 staff members, are expected to begin after the deal closes early next year.

The deal for the Bank of America unit is part of Julius Baer’s expansion into new markets as it looks to keep pace with Swiss rivals including UBS and Credit Suisse.

The acquisition would give Julius Baer up to an additional $74 billion of assets, which primarily come from wealthy clients in developing economies.

Boris Collardi, chief of the Swiss bank Juluis Baer.Arnd Wiegmann/ReutersBoris Collardi, chief of the Swiss bank Juluis Baer.

“This acquisition brings us a major step forward in our growth strategy and will considerably strengthen Julius Baer’s leading position in global private banking by adding a new dimension not only to growth markets but also to Europe,” the company’s chief executive, Boris Collardi, said in August.

The expected job cuts are an effort to reduce costs at the new unit, which reported a $30 million net loss in the first half of the year, according to an investor presentation released on Tuesday.

Julius Baer also said on Tuesday that its total assets under management as of Aug. 31 had risen 8 percent, to 184 billion Swiss francs ($196 billion), since the end of 2011.

Shares in Julius Baer fell less than 1 percent in morning trading in Zurich on Tuesday.

Article source: http://dealbook.nytimes.com/2012/10/09/julius-baer-to-cut-1000-jobs-after-deal-for-bank-of-america-unit/?partner=rss&emc=rss

DealBook: T-Mobile Seals Deal With MetroPCS

A T-Mobile store in New York.Mark Lennihan/Associated PressA T-Mobile store in New York.

The parent company of T-Mobile USA agreed to buy MetroPCS on Wednesday, as the cellphone providers looked to compete with bigger rivals.

The merger is aimed at making T-Mobile a more robust competitor to Sprint Nextel, particularly in low-cost cellphone service. The deal will also help T-Mobile gain more customers and resources to build out a next-generation data network.

Under the terms of the complex transaction, MetroPCS will conduct a 1-for-2 reverse stock split and pay out $1.5 billion in cash to its existing shareholders, or about $4.09 a share. It will then issue new stock worth about 74 percent to T-Mobile’s parent, Deutsche Telekom, leaving existing MetroPCS investors with a 26 percent stake.

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“The T-Mobile and MetroPCS brands are a great strategic fit – both operationally and culturally,” René Obermann, the chief executive of Deutsche Telekom, said in a statement. “The new company will be the value leader in wireless with the scale, spectrum and financial and other resources to expand its geographic coverage, broaden choice among all types of customers and continue to innovate.”

The cellphone carrier is bulking up in the face of increased competition. The combined company, which will be named T-Mobile, will have nearly $25 billion in revenue and $6.3 billion in profit. T-Mobile expects to wring out $6 billion to $7 billion in cost savings.

CLOSING THE GAP If the parent company of T-Mobile USA buys MetroPCS, the combined unit would have the fourth most cellular subscribers.
Rene Obermann, chief of Deutsche Telekom.Oliver Berg/DPA, via Agence France-Presse — Getty ImagesRené Obermann, chief executive of Deutsche Telekom.

More important, T-Mobile will add to its customer base. With 42.5 million users, the combined company will close the gap significantly with Sprint, the No. 3 player with 56.4 million customers.

T-Mobile and MetroPCS will continue to operate as separate brands.

Throughout the morning, T-Mobile executives sought to allay one of the biggest concerns about the merger, the incompatibility of the company’s network with MetroPCS’ own. John Legere, who will become the chief executive of the combined network operator, argued that the company will slowly move MetroPCS’ customers to its own GSM standard — with the goal of moving the unified entity to the Long Term Evolution technology down the road.

The aim was to avoid comparisons to Sprint’s merger with Nextel, which failed at the same task and left that merged company in a far weaker position.

“This is not a replay of a debacle that we’ve seen in the past,” he said on a conference call with analysts. “We will not smash together two networks with differing technologies.”

Morgan Stanley and Lazard advised Deutsche Telekom. Legal advice was provided by Wachtell, Lipton, Rosen Katz; Cleary Gottlieb Steen Hamilton; KL Gates; and Wiley Rein.

MetroPCS was advised by JPMorgan Chase, Credit Suisse and the law firms Gibson, Dunn Crutcher; Paul Hastings; and Telecommunications Law Professionals. A special committee of its board was advised by Evercore Partners and the law firms Akin Gump Strauss Hauer Feld and Fulbright Jaworski.

Article source: http://dealbook.nytimes.com/2012/10/03/t-mobile-seals-deal-with-metropcs/?partner=rss&emc=rss

DealBook: Deutsche Telekom Nears a Deal to Buy MetroPCS

A branch of T-Mobile USA in Manhattan. The network operator is a unit of the German telecom giant Deutsche Telekom.Ozier Muhammad/The New York TimesA branch of T-Mobile USA in Manhattan. The network operator is a unit of the German telecom giant Deutsche Telekom.

12:54 p.m. | Updated

Deutsche Telekom said on Tuesday that it was in talks to buy MetroPCS and merge it with its T-Mobile USA unit, as the German telecom giant seeks to bolster its flagging business in the United States.

Under the terms of the proposed transaction, Deutsche Telekom would own the majority of shares in the newly combined American network operator.

Deutsche Telekom warned that “significant issues” had yet to be resolved. But people briefed on the negotiations said that a deal could be announced as soon as Wednesday.

If completed, a deal would come nearly a year after T-Mobile’s proposed $39 billion sale to ATT collapsed amid fierce opposition from antitrust regulators. And it would help shore up the Deutsche Telekom subsidiary’s position as a lower-cost alternative to Verizon Wireless and ATT.

Shares in MetroPCS shot up nearly 18 percent on Tuesday, to $13.60, after Bloomberg News reported talks between the two sides. That valued MetroPCS at about $4.9 billion.

Representatives for Deutsche Telekom and MetroPCS declined to comment or were not immediately available for comment.

Deutsche Telekom has been keen for years to find a way to strengthen its American subsidiary, which has lost customers to bigger rivals that offer faster data services and, perhaps more importantly, the iPhone. With 33,168 customers T-Mobile trails its bigger competitors, which also include Sprint Nextel, by considerable margins. And it lost 205,000 subscribers in its second quarter this year, quadruple what it reported a year ago.

Adding MetroPCS would give T-Mobile 9.3 million customers, though their phones operate on a different network technology.

Based in Richardson, Tex., MetroPCS has long been seen as a target for consolidation in the cellphone service industry. The company’s deal to sell itself to Sprint for stock and cash collapsed this year after the bigger network operator’s board vetoed the proposed transaction.

MetroPCS and another low-cost service provider, Leap Wireless, have considered merging several times over recent years, though those talks broke down repeatedly over price.

Article source: http://dealbook.nytimes.com/2012/10/02/deutsche-telekom-said-to-be-near-a-deal-to-buy-metropcs/?partner=rss&emc=rss

DealBook: Dole Food to Sell 2 Businesses to Itochu for $1.7 Billion

A vessel transporting containers with boxes of bananas is anchored in Guayaquil, Ecuador.Guillermo Granja/ReutersA vessel transporting containers with boxes of bananas is anchored in Guayaquil, Ecuador.

TOKYO — Dole Food will sell its packaged foods and Asian fresh fruit businesses to the Japanese trading house Itochu Corporation for $1.7 billion in cash.

Dole, the world’s largest fruit company, said in a news release on Monday that it would put the cash proceeds toward paring down its debt and the costs of reorganizing its struggling business.

Dole, which produces, markets and distributes fruit and vegetables, has been hit by volatile demand and lower earnings from bananas, its mainstay fruit.

The company, based in Westlake Village, Calif., said this year that it wanted to sell its packaged food business, which includes canned fruit and fruit drinks, as well as its fresh fruit operations in Asia, as part of a companywide overhaul. Last week, the company announced that it was in advanced talks with Itochu over a deal.

The Tokyo-based Itochu joins other Japanese trading houses that are taking advantage of the strong yen and record profits to snap up companies overseas.

Pineapples at a Dole plantation in the Philippines.Seongjoon Cho/Bloomberg NewsPineapples at a Dole plantation in the Philippines.

Dole’s Asia fresh fruit business, in particular, will allow Itochu to tap into new demand from the region’s growing middle class.

The deal gives Itochu, Japan’s third-largest trading company, control of Dole’s banana plantations and other fruit farms, canneries and processing centers in Asia, including China, the Philippines and Thailand. Itochu also will gain exclusive global rights to Dole’s trademark on packaged foods, as well as fresh produce in Asia and Oceania.

Shares in Dole slipped 0.72 percent in New York to $13.70. They have gained almost 60 percent this year on its reorganization plans; share buybacks by its chairman, David H. Murdock; and anticipation of the Itochu deal.

Article source: http://dealbook.nytimes.com/2012/09/18/dole-food-to-sell-2-businesses-to-itochu-for-1-7-billion/?partner=rss&emc=rss