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Brazil Opens Inquiry Into Claims of Wrongdoing by Ex-President

April 6, 2013 by Leave a Comment

The inquiry, which was announced in the capital, Brasília, on Friday and comes after several months of analyzing testimony, opens a new phase in what has arguably been Brazil’s largest corruption scandal, already involving the conviction of Mr. da Silva’s powerful former chief of staff, José Dirceu de Oliveira e Silva, on conspiracy and bribery charges last year.

The move by the Public Ministry, which asked the federal police to carry out the investigation, is thought to be the first time that Mr. da Silva has been directly investigated in connection to the scheme, called the mensalão, or big monthly allowance, for the regular payments that some lawmakers received. The scandal emerged in 2005, during Mr. da Silva’s first term as president. At 67, he remains a towering figure in Brazilian politics.

Marcos Valério de Souza, a businessman who received a 40-year sentence last year after he was found to have operated much of the embezzlement scheme, said in testimony last September that Mr. da Silva and Antonio Palocci, a former finance minister, negotiated in 2005 a multimillion-dollar payment with the former president of a Portuguese telecommunications company.

The funds, according to Mr. de Souza, were channeled from a supplier of the company, Portugal Telecom, based in Macau, the former Portuguese colony that is now a special administrative region of China, to accounts of advertising executives in Brazil who worked on campaigns for the Workers’ Party. He also said that the funds were used to pay campaign-related debts.

A spokesman for Instituto Lula, the former president’s institute in São Paulo, said Saturday that Mr. da Silva had not been formally notified of the investigation. He declined to comment further. When Mr. de Souza’s testimony was made public last year, Mr. da Silva dismissed it, saying, “I cannot believe in lies.”

Portugal Telecom, which has large operations in Brazil, did not respond to requests for comment.

While several political figures, including José Genoino Guimarães Neto, the former president of the Workers’ Party, received sentences in November for their roles in the vote-buying scheme, none have gone to prison. Lawyers for the defendants have been maneuvering to delay the Supreme Court from formally publishing its findings from the trial, a step that is needed for those sentenced to go to jail.

Article source: http://www.nytimes.com/2013/04/07/world/americas/brazil-opens-inquiry-into-vote-buying-claims.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

DealBook: Malone’s Liberty Global Is in Talks to Buy Virgin Media

February 5, 2013 by Leave a Comment

John Malone, the chairman of Liberty Media, at a media and technology conference in Sun Valley, Idaho, in 2012.Paul Sakuma/Associated PressJohn Malone, the chairman of Liberty Media, at a media and technology conference in Sun Valley, Idaho, in 2012.

6:59 a.m. | Updated

LONDON – Liberty Global, the international cable company owned by the American billionaire John C. Malone, is in discussions to buy the British cable company Virgin Media.

In a brief statement on Tuesday, Virgin Media said it was in talks with Liberty Global, which serves almost 20 million customers worldwide.

“Any such transaction would be subject to regulatory and other conditions,” Virgin Media said in a statement. Spokesmen for both Virgin Media and Liberty Global declined to comment further.

Virgin Media, whose primary listing is on Nasdaq, is the second-largest pay-TV provider in Britain after BSkyB, which is partly owned by Rupert Murdoch’s News Corporation.

A potential deal for Virgin Media would put Mr. Malone head-to-head with Mr. Murdoch, his longtime rival.

In 2008, the Liberty Group, which has operations in 13 countries, completed its purchase of a controlling stake in DirecTV, the satellite television provider, from News Corporation in a cash-and-equity deal worth roughly $11 billion.

The deal came after Mr. Malone’s purchase of a 16 percent stake in News Corporation, which he then traded for the satellite television operator, a number of regional sports networks and around $550 million cash.

Liberty Global has been expanding its presence in Europe and has operations from Ireland to Romania, though it failed last month in its bid to acquire the Belgian telecommunications company Telenet Group for $2.7 billion. Liberty Global currently owns a 58 percent stake in Telenet.

Shares in Virgin Media, which was formed through several mergers of small British cable companies and a cellphone company in the 2000s, rose almost 16 percent in afternoon trading in London on Tuesday.

Its shares have jumped almost 60 percent in the last 12 months, as more consumers sign up for so-called bundled services, including Internet and cellphone contracts.

Virgin Media’s market capitalization stands at $10.4 billion. Including debt, its enterprise value is around $19.4 billion, according to data from Thomson Reuters.

To secure a deal, analysts at Espirito Santo said Liberty Global may have to pay as much as $24 billion, though they questioned whether the international cable company could afford to fund the acquisition because of its existing high levels of debt.

Analysts also said that it would be difficult for Liberty Global to make costs savings between its current European operations and those of Virgin Media, adding that Liberty had waited to make its move for Virgin Media until the British cable operator had carried out a series of upgrades to its network and restructured its debt.

“Unless another bidder comes out of the woodwork, it’s hard to see much more of a premium on the price,” said Patrick Yau, a media analyst at Peel Hunt in London.

The British billionaire Richard Branson, whose Virgin brand is now used for a variety of products and services, including airlines and banks, owns less than 3 percent of Virgin Media.

While the British cable operator has been picking up market share, the company currently has 4.9 million customers, or roughly half the number of subscribers as its larger rival, BSkyB, according to filings from the companies.

In August, Liberty Media, the media conglomerate also controlled by Mr. Malone, agreed to buy a stake in Barnes Noble for $204 million, but declined to buy the bookseller outright.

The move disappointed some investors after Liberty had earlier offered to buy a 70 percent stake of Barnes Noble for $17 a share if its chairman, Leonard S. Riggio, who owns around 30 percent of the company, agreed to the deal.

This post has been revised to reflect the following correction:

Correction: February 5, 2013

An earlier version of this article misidentified the leader of News Corporation because of an editing error. He is Rupert Murdoch, not Richard.

Article source: http://dealbook.nytimes.com/2013/02/05/liberty-global-in-talks-to-buy-virgin-media/?partner=rss&emc=rss

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DealBook: Sprint Offers $2.1 Billion for Clearwire and Its Spectrum

December 14, 2012 by Leave a Comment

Masayoshi Son, left, the founder of SoftBank, and Daniel Hesse, Sprint's head, announcing their deal in October.Yuriko Nakao/ReutersMasayoshi Son, left, the founder of SoftBank, and Daniel Hesse, Sprint’s head, announcing their deal in October.

9:19 p.m. | Updated

With the help of a deep-pocketed new partner, Sprint Nextel is ready to spend money to shore up the future of its wireless network.

The telecommunications company offered on Thursday to buy out the part of Clearwire, the wireless network operator, that it doesn’t already own for $2.1 billion. The bid values Clearwire at about $4 billion.

Sprint agreed less than two months ago to sell a majority stake in itself to SoftBank, a major Japanese cellphone service provider.

Under the terms of its proposal, Sprint will pay $2.90 a share for Clearwire, according to a regulatory filing. Sprint, which already owns 51.7 percent of Clearwire, needs the approval of both SoftBank and a substantial portion of Clearwire’s minority shareholders.

Clearwire said in a regulatory filing on Thursday that its board had formed a special committee to consider Sprint’s offer.

Shares in Clearwire have slumped more than 85 percent since they began trading over five years ago. But they leapt nearly 15 percent on Thursday, to $3.16. That suggests that investors believe a higher offer may be forthcoming.

The Sprint offer could benefit both companies. For Sprint, buying all of Clearwire would lock up spectrum that Sprint could use to build out its newest data network.

Long the No. 3 cellphone service provider in the country behind Verizon Wireless and ATT, Sprint has moved aggressively to bolster its position within a consolidating industry. Sprint’s deal with SoftBank gives it a well-heeled partner willing to infuse $20.1 billion into the company.

The Clearwire deal could also help fend off a newly revitalized T-Mobile USA, which has announced plans to merge with the smaller MetroPCS.

A deal would also give Clearwire, which has struggled for much of its existence, some much-needed cash — up to $800 million — after paying off some of its heavy debt obligations. The company reported having $1.2 billion in cash as of Sept. 30, which it expected to last about a year.

Formed with much promise as a next-generation wireless service provider, Clearwire has instead flailed after betting on WiMax, a high-speed wireless data standard that failed to gain traction.

A union of Sprint and Clearwire had long been expected. Soon after the SoftBank deal was announced, both Daniel R. Hesse, Sprint’s chief executive, and Masayoshi Son, SoftBank’s founder, intimated that acquisitions were in Sprint’s future.

“This is a scale game,” Mr. Hesse said in an interview in October.

Clearwire’s shares rose immediately after the SoftBank investment was announced, fueling speculation about a bid from Sprint. A few days later, Sprint increased its holdings in Clearwire, buying shares from Craig O. McCaw’s Eagle River Holdings. The transaction gave Sprint a majority stake in Clearwire.

Sprint is working to build out a Long Term Evolution, or LTE, network that can support the latest smartphones like the iPhone 5. Clearwire owns spectrum that is similar to the radio band that SoftBank uses, potentially creating a path for devices that can be used in both the United States and Japan.

And while Sprint has long been the biggest stakeholder in Clearwire, it hasn’t been able to exert full control over one of its most important partners.

Some of Clearwire’s smaller shareholders, including the investment firms Mount Kellett Capital Management and Crest Financial, have cautioned the company against selling out to Sprint for too low a price.

Mount Kellett has suggested that Clearwire consider selling a portion of its spare spectrum to other telecommunications companies, like ATT or T-Mobile. And Crest Financial said on Thursday that it was willing to take steps as drastic as petitioning government regulators to block Sprint’s deal with SoftBank, in an effort to win a higher price.

An analyst at BTIG Research, Walter Piecyk, estimated that Sprint would need to pay at least $5 a share to secure Clearwire.

But Sprint already has a fair amount of leverage over its smaller partner. It already controls a majority of Clearwire’s voting shares and is its biggest customer. And having posted a string of losses, Clearwire is running out of cash to keep itself afloat.

Sprint has already been in discussions with its major partners in Clearwire — a group that includes the cable operators Comcast and Bright House as well as the chip maker Intel — to convince them that its bid represents a big premium over Clearwire’s October trading position. It is also betting that those companies are eager to shed a losing investment.

Together, they control more than 12 percent of the total votes in Clearwire. Winning them over would put Sprint significantly closer to the roughly 75 percent of the vote it will need to buy control of the company.

A version of this article appeared in print on 12/14/2012, on page B6 of the NewYork edition with the headline: Sprint Offers $2.1 Billion for Clearwire and Its Spectrum.

Article source: http://dealbook.nytimes.com/2012/12/13/sprint-looks-to-buy-remaining-stake-in-clearwire-for-2-1-billion/?partner=rss&emc=rss

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DealBook: Sprint Gets Closer to Deal With SoftBank

October 15, 2012 by Leave a Comment

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

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