Yahoo To Weigh Deals For Asian Assets: Sources (Reuters)
Yahoo Inc. is considering a plan to unload most of its prized Asian assets in a complex deal valued at roughly $17 billion, sources familiar with the matter said on Wednesday, winning nods of approval from Wall Street and driving its shares higher. The Asian split-off plan to be considered by the board follows previous proposals by private equity firms to buy a minority stake in Yahoo. Those proposals were fiercely opposed by some of Yahoo’s largest shareholders, including activist hedge fund manager Dan Loeb, of Third Point LLC. “It’s clear that Dan Loeb at Third Point is exerting some influence,” said Adam Seessel, director of research at Martin Capital Management, which added to its position in Yahoo a few weeks ago. He “is doing all Yahoo shareholders a favor by looking over the board and making sure they do the right thing.”
Quiznos Unwraps Debt Plan (WSJ)
Struggling amid slumping sales and a recent violation of debt terms, Quiznos has found a potential new owner in Avenue Capital Group, the hedge fund controlled by billionaire Marc Lasry, the people said. As part of Quiznos’s tentative deal with Avenue, the hedge fund plans to write a $150 million check, with the proceeds evenly split between paying down some senior Quiznos debt and providing the chain with more working capital, the people said. Quiznos would use some of the new money for a new marketing campaign, the people said.
Brevan Howard Paid $201 Million To Partners, 79% Down From A Year Earlier (Bloomberg)
Brevan Howard Asset Management LLP, the hedge fund founded by Alan Howard, paid its partners as much as 128.3 million pounds ($201.3 million) in the year ending in March, a 79 percent drop from a year earlier after fees plunged. Fees fell to 236.8 million pounds from 736.3 million pounds, according to a Brevan Howard filing posted today at the U.K.’s Companies House. The London-based company’s biggest hedge fund, the Brevan Howard Master Fund, had an investment gain of 1 percent in 2010, down from a 19 percent return in 2009, according to investors. Brevan Howard generates fees based on fund performance and assets under management. Hedge funds have had their second-worst year ever in 2011, falling 4.4 percent on average amid market volatility stemming from the European sovereign debt crisis, according to Chicago- based Hedge Fund Research Inc. The industry lost a record 19 percent in 2008.
Fortress Ceo Mudd Takes Leave Amid Sec’s Fannie Mae (Fnma) Lawsuit (Bloomberg)
Daniel Mudd will take a leave of absence as chief executive officer of Fortress Investment Group LLC (FIG) after he was sued by the U.S. Securities and Exchange Commission over his role as former CEO of Fannie Mae. Fortress co-founder Randal A. Nardone will take over as interim CEO effective immediately, the New York-based manager of buyout and hedge funds said yesterday in a statement. Mudd said in the statement that he requested the leave of absence “to ensure that any time or attention I need to focus on matters outside of Fortress will not affect the business or operations of the company.”
Sino-Forest Structure Leaves Bondholders Facing Wipeout (Reuters)
It’s tough enough for offshore creditors of Chinese firms to get their money back when businesses run into trouble. The complex corporate structure of Chinese timber firm Sino-Forest could make it tougher still for its bondholders. The saga is the most prominent of a series of accounting scandals to taint the image of Chinese companies listed in North America, prompting trading halts, delistings, lawsuits and regulatory probes. Sino-Forest’s market value has slumped 75 percent to below $1.2 billion and high-profile investors have fled, including billionaire hedge fund manager John Paulson.
Funds Sue Deutsche Over Deal On Claims (WSJ)
Two hedge funds filed a lawsuit accusing a Deutsche Bank AG unit of reneging on a $1 billion deal to buy their claims for losses in Bernard L. Madoff’s Ponzi scheme. The suit, filed in a New York federal court by Kingate Global Fund Ltd. and Kingate Euro Fund Ltd., is a sign of the negative consequences of recent court decisions against the trustee overseeing the bankruptcy of Mr. Madoff’s firm.
The Daily Docket: Hedge Funds Sue Delphi (WSJ)
A handful of hedge fund companies that specialize in buying up the distressed debt of bankrupt businesses are suing Delphi Automotive PLC and some of its biggest backers, claiming the newly public auto-parts supplier is shortchanging them on a potential recovery of up to $300 million. Read the Daily Bankruptcy Review article here. Real Mex Restaurants Inc. won permission to dole out up to nearly $3 million in bonuses as it works to engineer a sale of its Mexican restaurant chain. Click here to read the article in DBR Small Cap.
Expert NY Consultant Gets Prison For Inside Trades (WSJ)
A former hedge fund consultant was sentenced Wednesday to 2 1/2 years in prison for insider trading, a crime that a judge said seemed to be growing in prevalence despite a continual crackdown by authorities against it. U.S. District Judge Jed Rakoff noted the need for deterrence as he sentenced James Fleishman for his September conviction by a jury on insider trading charges. Fleishman, 42, was among those charged in a government probe of so-called expert consultants who connected powerful hedge fund managers with employees of public companies who were willing to divulge secrets about earnings.
Hedge Funds’ Top Auto Stocks (Market Watch)
The performances of automotive and automotive parts companies are good gauges of the economy – after all, how many people would buy a new car if they thought their job wasn’t secure, not to mention the issue of securing financing. Many of these stocks pay a dividend and they tend to either be less volatile than the market (beta less than 1.0) or much more volatile (as in beta of 2.0 or higher). The volatility may be distressing but it also means there is room for heavy gains.