At the Geneva auto show, General Motors is getting down to the business of convincing European governments to pump state funds into its Opel/Vauxhall arm. Europe has long been considered one of the more profitable corners of the globe for GM. The company is talking about closing three plants there and warning officials that there will be liquidity problems at Opel/Vauxhall early in the second quarter if they don’t pony up.

Leveraging similar tactics it used in the U.S., GM is telling European leaders that the aid it needs — whatever the final price tag — will cost less than an Opel/Vauxhall failure. This is an argument likely to find more traction in Geneva than it did in Washington, where socialism is not a word used in polite company.

Meanwhile, the great race for global funding is picking up speed. Toyota, the world’s biggest auto company, is looking for dollars to keep its loan business competitive in the shrinking global auto market. Ford is again reported to be shopping Volvo in China. At speeds like these, avoiding a huge smash-up before the next big turn would be a miracle.

Deals News:

* Air France-KLM will launch a tentative bid for Czech Airlines (CSA) within weeks as European carriers regroup in the face of a downturn that so far shows no signs of easing, its chief executive said.

* Royal Dutch Shell said it plans to accept BG Group’s improved offer for its stake in Australian coal seam gas firm Pure Energy in the absence of a higher bid, helping the British firm move closer to a takeover.

* Bespoke furniture maker Smallbone said it is considering a sale of the company as its shares were suspended pending clarification on its funding.

* China Life has withdrawn from bidding for the Asian unit of embattled U.S. insurer American International Group over worries about its quality, chairman of the Chinese insurer said.

* First Solar said it would pay rival OptiSolar $400 million in stock for its pipeline of solar projects, including a major installation for California utility PG&E Corp and other nascent deals that will rapidly expand the company’s presence in the U.S. utility market.

* BCE Inc, Canada’s biggest telecom company, is moving to vastly expand its retail presence by buying electronics chain The Source from Circuit City Stores Inc for an undisclosed sum.

* Danish insurer TrygVesta A/S said it would buy Swedish peer Moderna Forsakringar for 810 million Danish crowns ($137.1 million).

(PHOTO: A worker cleans a Insignia type car at the exhibition stand of General Motors Corp’s (GM) German unit Opel during a preview day of the 79th Geneva Car Show at the Palexpo in Geneva March 2, 2009. REUTERS/Arnd Wiegmann)

Potential buyers of a large AIG business could be the latest to get some “relief” under the $700 billion Troubled Asset Relief Program (TARP).

In approving a revised AIG rescue package, the government has also agreed to give potential bidders of the insurer’s assets at least a bit of what some of them have been clamouring for – access to capital.

AIG has received significant interest from buyers for its aircraft leasing unit, International Lease Finance Corp, Chief Restructuring Officer Paula Reynolds said.

But despite the interest, the process is taking time as bidders look for the funds to pull off a deal. The company has $33 billion of debt, some of which starts to mature in October. It had a book value of about $7.5 billion as of Sept. 30.

Before AIG tanked in September, ILFC had it good, with access to the insurer’s blue-chip credit ratings. Now, the loss of those ratings along with the upheaval in capital markets would force any bidders for the unit to think carefully not only about how to finance the acquisition but also how to run it on an ongoing basis, not an easy task as the financial crisis persists.

But to potential bidders’ relief, AIG will consider using some of its new $30 billion equity commitment from TARP to help with ILFC debt that comes due this year, if – as a source with direct knowledge of the matter pointed out – that becomes an impediment to the unit’s sale.

(Photo: REUTERS/Eric Thayer)

When presented with stupefying numbers, it’s sometimes fun, and usually cathartic, to boil them down into more tangible figures, give them household values and nod our heads in wonder. Late last week, when word that AIG’s quarterly loss would come in at $60 billion or thereabouts, we started hitting the division key just to make ourselves feel better. Turns out, AIG lost $61.7 billion, but what’s another $1.7 billion when taxpayers are working up a $1 trillion borrowing spree?

AIG’s loss per day in the fourth quarter was $670.2 million. That’s a $27.9 million hourly loss. Divide again and again and you get $465,000 per minute and $7,750 a second. Though not really a GAAP measurement, assume for a moment that at rest a standard human breath takes about two seconds. So AIG’s quarterly loss was about $15,000 per life-giving gulp of air.

The heart of a Ruby-throated Hummingbird, the most common species of Hummingbird in the eastern half of North America, beats 250 times per minute at rest, so that’d be $1,860 per Hummingbird heartbeat of quarterly losses for AIG. When it’s feeding, the hummingbird’s heart beat races up towards 1,200 or more beats per second, deflating the value of each itty bitty beat down to around $274.

The $30.9 billion net loss GM reported for all of 2008 comes out to $84.7 million per day, or 1,085 top-end Hybrid Cadillac Escalades at today’s low low price of $77,000. It would have paid to be green, though, because the loss would only have bought 21.2 million gallons of gasoline at the $4 per gallon, or about 5.6 percent of what American’s consume in a day.

And one more for the record books, the 1.87 billion shares of Citigroup traded on the NYSE on Friday, a day when the stock fell 39 percent, appears to have set a new record for number of shares traded on a single stock in one day, beating out WorldCom’s 1.51 billion on a bleak day for that long-gone company back in 2002.

Deals News:
* IPC Holdings said it agreed to acquire Max Capital Group for about $912 million in stock to create a stronger capitalized insurance company.

* Japan’s Fujitsu said it agreed to buy Telstra Corp’s IT services unit KAZ Group for A$200 million ($128 million).

* Warren Buffett’s Berkshire Hathaway said it increased its stake in POSCO, the South Korean steelmaker, to 5.2 percent as of end-2008 from 4.5 percent a year earlier.

* Abu Dhabi’s Aabar Investments PJSC said it had bought 49.8 million euros ($63.12 million) of convertible bonds in UniCredit SpA as Italian banks seek capital to face the global crisis.

* Turkey’s top mobile phone operator Turkcell will begin work on a binding bid for 100 percent of Macedonian peer Cosmofon, Turkcell said.

*  U.S. industrial group Emerson Electric bid around $179 million or 5.20 Norwegian crowns per share for Norwegian oilfield technology firm Roxar ASA, the companies said.

* Investment group Evolve Capital agreed to sell its majority stake in Blue Oar to rival WH Ireland, potentially creating the leading stockbroker on London’s junior AIM market.

* A Thai brokerage unit of Singapore’s UOB Kay Hian Holdings Ltd and a bigger Thai rival, BFIT Securities, said they had called off talks about a merger, sending their shares tumbling.

* UK-based NeutraHealth confirmed that the unsolicited offer approach from India’s Elder Pharmaceuticals at an indicative price of 5.5 pence per share was likely to be solely in cash.

* Canada’s Bank of Nova Scotia is among three or four foreign banks interested in buying a 48 percent stake in Thailand’s Siam City Bank, the Thai bank said.

* South African bourse operator JSE is in talks to buy a stake in the Mauritius Stock Exchange, its deputy chief executive said.

* Hutchison Telecommunications said it was in “advance discussions” with its advisers concerning a possible spin-off of its Hong Kong and Macau businesses but that no decision had yet been made.

* India’s Reliance Industries decided to absorb its Reliance Petroleum unit through a share swap, a strategy which will boost its earnings potential without diluting its capital greatly.

* Fidelity has raised its stake in embattled Indian outsourcer Satyam Computer Services by 0.27 percent to 10.17 percent through open market purchases, it said in a regulatory filing to the stock exchange.

(PHOTO: A call centre personnel uses a calculator as she answers a call from a investor at an online brokerage company in Tokyo October 23, 2008. REUTERS/Yuriko Nakao)

There have been a lot of analogies to describe the financial pain of the current economic recession, but CCMP Capital Chairman Gregory Brenneman evoked a more holy view.

“A prolonged recession feels a little Biblical to me. It’s like the story of Joseph — seven years of feast, seven years of famine. It feels like we’re in year two to me,” Brenneman said.

He said he expects U.S. unemployment to hit 10-11 percent before the recession ends, and real GDP (gross domestic product) will be down 2 percent.

“Recovery won’t happen until the back half of 2010. That means nobody really knows, but it’s going to be a long time from now,” Brenneman told the Wharton Restructuring and Turnaround Conference in Philadelphia on Friday.

Despite his view that the U.S. was mired in economic famine, Brenneman said it was a great time for private equity firms to buy good assets for low valuations.

“Really good companies are priced the same as so-so or bad companies. It’s a great time to buy things you couldn’t otherwise buy,” he said.  ”The best P/E times have been in times like these,” Brenneman said.

With less than one week to go until the Dow-Rohm and Haas trial starts in Delaware, the companies have delivered their lists of witnesses to the court. So who’s on the list? Dow CEO Andrew Liveris as well as Rohm and Haas CEO Raj Gupta, for starters.

Rohm lists 10 potential witnesses including Gupta, COO Pierre Brondeau, Perella Weinberg partner Gary Barancik, and Greg Jarrell, a professor of economics and finance at the University of Rochester’s Simon School of Management. Dow lists 16 potential witnesses.

The full pre-trial stipulation is posted below. The witness lists begin on page 6.

Rohm Dow Stipulation

With some deals, such as Pfizer-Wyeth, already sealed this year, all other drugmakers appear to be on the hunt for their own partner. That could create a “perfect storm” for an uptick in partnerships and acquisitions through the rest of 2009, according to Leerink Swann Healthcare Equity Research.
    
“In biopharma, we see an unprecedented confluence of highly motivated buyers (large- and mid-cap biopharma companies with substantial portfolio gaps but a surplus of cash) and sellers (biotechnology companies holding valuable assets but desperate for cash),” Leerink Swann analysts said in a research report.
 
The potential buyer with the greatest combination of urgency and therefore investor mandate and available cash is Bristol-Myers. The company could go for a series of smaller acquisitions for less money, however, than pursuing one mega-deal.
 
On the acquisition side, Leerink Swann sees 10 likely targets with attractive assets, identified by a value and/or analyst screen, including Alexion Pharmaceuticals, Biodel Inc, Elan Corp, and Inspire Pharma.

On the partnership side, Leerink Swann said it expects deals could be imminent for Cardiome Pharma Corp’s oral vernakalant and Inspire Pharam’s denufosol. 

Meanwhile, much investor attention focuses on companies such as Schering Plough, Bristol-Myers and Sanofi-Aventis purusing deals.

It seems that regardless of the name in pharam these days, there seems to some storm of rumors brewing on the horizon.

They say that if you want to find an outlaw, you hire an outlaw. This may be the thinking behind UBS’s move to put some political muscle into the chairman’s office. The bank, facing a U.S. inquisition over providing sanctuary for wealthy U.S. tax dodgers, says former Swiss Finance Minister Kaspar Villiger will succeed Peter Kurer as chairman. Later this morning, a U.S. Senate panel holds a hearing on offshore tax havens and IRS attempts to get names of U.S. clients from UBS. Mark Branson, chief financial officer of UBS Global Wealth Management, is scheduled to testify.

On Monday, legislators took aim at offshore tax havens in Switzerland, the Cayman Islands and other nations, targeting them for shutdown with bills introduced by Democrats in both chambers of Congress. The whole sordid business has become very public, and very un-Swiss-bankish.

Villiger will have to deal with the scandalous allegation that USB kept its clients’ financial information secret. Given that secrecy is perhaps the biggest marketing plank of Swiss banking, he may find it hard to distance UBS from the political fallout. Perhaps the best he can do is keep secret the details of any deal the bank makes with U.S. authorities.

On Monday, Switzerland’s top justice official met with her U.S. counterparts and said the Obama administration is not interested in escalating a dispute with Switzerland over bank secrecy laws. So a more private sort of arrangement may yet be agreed over coffee and chocolate. But the bill may be steep for UBS, as there appears to be little incentive for Washington to play ball.

Deals of the Day:

* General Motors’ Saab brand has received interest from several potential bidders including China’s Geely Automobile and Dongfeng Motor Group, sources with direct knowledge of the sales process said. But a senior Geely executive said the company is not interested in foreign brands.

* Rio Tinto shareholders are warming to the miner’s proposed $19.5 billion tie up with China’s top aluminium maker Chinalco, Chief Executive Tom Albanese said.

* Royal Bank of Scotland said it plans to sell the retail and commercial banking businesses of newly acquired ABN AMRO China, part of efforts to exit from these operations in Asia.

* U.S. Hartford Financial Services Group is in talks to sell most of its life insurance unit to Canadian Sun Life Financial Inc, Bloomberg reported, citing three people with knowledge of the matter.

* J Sainsbury, Britain’s third-biggest supermarket group, said it has bought 24 stores from smaller rival the Co-operative Group for 83 million pounds ($117 million).

* Private Greek carrier Aegean Airlines submitted a surprise offer to buy ailing state carrier Olympic Airlines, to rival a previous bid from Marfin Investment Group (MIG).

* Israeli flavors and fine ingredients maker Frutarom Industries Ltd said it agreed to acquire the U.S. company Flavors Specialties Inc (FSI) for $17.2 million.

* South Africa’s fourth-biggest bank Nedbank said it is in talks to buy Old Mutual Group’s interests in certain joint ventures in exchange for its shares.

* Australian coal seam gas firm Arrow Energy is considering its position in relation to its stake in and bid for rival Pure Energy Resources Ltd after Pure shareholder Royal Dutch Shell decided to sell to a rival bidder.

(PHOTO: Former Swiss finance minister Kaspar Villiger talks to the media after a briefing in Zurich March 4, 2009. REUTERS/Miro Kuzmanovic)

It wasn’t quite the market response Genentech CEO Arthur Levinson was looking for.

Levinson and his team worked hard to make the bull case for the biotech group by providing long-term forecasts to prove it is worth far more than Roche is willing to pay. Yet Genentech shares still ended down 4.6 percent, or nearly $4, in line with a grim market on March 2.

Roche investors, by contrast, were in distinctly chipper mood on March 3, marking up the Swiss group’s stock by more than 5 percent. 

Why the skewed response? JP Morgan analysts put it down to the fact that positive news for Genentech is also good for Roche (after all, it already owns 56 percent of the U.S. business) and such news could actually have a bigger impact on the Swiss group because it trades on a much lower multiple.

“Most factors cited by Genentech to highlight the value of the business represent an even greater upside to Roche shareholders, as that upside could be leveraged outside the U.S. and should boost what is currently a much lower Roche valuation,” the brokerage’s analysts adds.

Ironically, one reason Roche lost some of its previous lustre was worry over its multibillion play for Genentech.  

Roche is attempting to acquire the 44 percent of Genentech it does not already own for about $42 billion, or $86.50 per share. Most analysts expect it to end up sweetening the offer to clinch the deal.

At the Geneva auto show, General Motors is getting down to the business of convincing European governments to pump state funds into its Opel/Vauxhall arm. Europe has long been considered one of the more profitable corners of the globe for GM. The company is talking about closing three plants there and warning officials that there will be liquidity problems at Opel/Vauxhall early in the second quarter if they don’t pony up.

Leveraging similar tactics it used in the U.S., GM is telling European leaders that the aid it needs — whatever the final price tag — will cost less than an Opel/Vauxhall failure. This is an argument likely to find more traction in Geneva than it did in Washington, where socialism is not a word used in polite company.

Meanwhile, the great race for global funding is picking up speed. Toyota, the world’s biggest auto company, is looking for dollars to keep its loan business competitive in the shrinking global auto market. Ford is again reported to be shopping Volvo in China. At speeds like these, avoiding a huge smash-up before the next big turn would be a miracle.

Deals News:

* Air France-KLM will launch a tentative bid for Czech Airlines (CSA) within weeks as European carriers regroup in the face of a downturn that so far shows no signs of easing, its chief executive said.

* Royal Dutch Shell said it plans to accept BG Group’s improved offer for its stake in Australian coal seam gas firm Pure Energy in the absence of a higher bid, helping the British firm move closer to a takeover.

* Bespoke furniture maker Smallbone said it is considering a sale of the company as its shares were suspended pending clarification on its funding.

* China Life has withdrawn from bidding for the Asian unit of embattled U.S. insurer American International Group over worries about its quality, chairman of the Chinese insurer said.

* First Solar said it would pay rival OptiSolar $400 million in stock for its pipeline of solar projects, including a major installation for California utility PG&E Corp and other nascent deals that will rapidly expand the company’s presence in the U.S. utility market.

* BCE Inc, Canada’s biggest telecom company, is moving to vastly expand its retail presence by buying electronics chain The Source from Circuit City Stores Inc for an undisclosed sum.

* Danish insurer TrygVesta A/S said it would buy Swedish peer Moderna Forsakringar for 810 million Danish crowns ($137.1 million).

(PHOTO: A worker cleans a Insignia type car at the exhibition stand of General Motors Corp’s (GM) German unit Opel during a preview day of the 79th Geneva Car Show at the Palexpo in Geneva March 2, 2009. REUTERS/Arnd Wiegmann)

Potential buyers of a large AIG business could be the latest to get some “relief” under the $700 billion Troubled Asset Relief Program (TARP).

In approving a revised AIG rescue package, the government has also agreed to give potential bidders of the insurer’s assets at least a bit of what some of them have been clamouring for – access to capital.

AIG has received significant interest from buyers for its aircraft leasing unit, International Lease Finance Corp, Chief Restructuring Officer Paula Reynolds said.

But despite the interest, the process is taking time as bidders look for the funds to pull off a deal. The company has $33 billion of debt, some of which starts to mature in October. It had a book value of about $7.5 billion as of Sept. 30.

Before AIG tanked in September, ILFC had it good, with access to the insurer’s blue-chip credit ratings. Now, the loss of those ratings along with the upheaval in capital markets would force any bidders for the unit to think carefully not only about how to finance the acquisition but also how to run it on an ongoing basis, not an easy task as the financial crisis persists.

But to potential bidders’ relief, AIG will consider using some of its new $30 billion equity commitment from TARP to help with ILFC debt that comes due this year, if – as a source with direct knowledge of the matter pointed out – that becomes an impediment to the unit’s sale.

(Photo: REUTERS/Eric Thayer)

When presented with stupefying numbers, it’s sometimes fun, and usually cathartic, to boil them down into more tangible figures, give them household values and nod our heads in wonder. Late last week, when word that AIG’s quarterly loss would come in at $60 billion or thereabouts, we started hitting the division key just to make ourselves feel better. Turns out, AIG lost $61.7 billion, but what’s another $1.7 billion when taxpayers are working up a $1 trillion borrowing spree?

AIG’s loss per day in the fourth quarter was $670.2 million. That’s a $27.9 million hourly loss. Divide again and again and you get $465,000 per minute and $7,750 a second. Though not really a GAAP measurement, assume for a moment that at rest a standard human breath takes about two seconds. So AIG’s quarterly loss was about $15,000 per life-giving gulp of air.

The heart of a Ruby-throated Hummingbird, the most common species of Hummingbird in the eastern half of North America, beats 250 times per minute at rest, so that’d be $1,860 per Hummingbird heartbeat of quarterly losses for AIG. When it’s feeding, the hummingbird’s heart beat races up towards 1,200 or more beats per second, deflating the value of each itty bitty beat down to around $274.

The $30.9 billion net loss GM reported for all of 2008 comes out to $84.7 million per day, or 1,085 top-end Hybrid Cadillac Escalades at today’s low low price of $77,000. It would have paid to be green, though, because the loss would only have bought 21.2 million gallons of gasoline at the $4 per gallon, or about 5.6 percent of what American’s consume in a day.

And one more for the record books, the 1.87 billion shares of Citigroup traded on the NYSE on Friday, a day when the stock fell 39 percent, appears to have set a new record for number of shares traded on a single stock in one day, beating out WorldCom’s 1.51 billion on a bleak day for that long-gone company back in 2002.

Deals News:
* IPC Holdings said it agreed to acquire Max Capital Group for about $912 million in stock to create a stronger capitalized insurance company.

* Japan’s Fujitsu said it agreed to buy Telstra Corp’s IT services unit KAZ Group for A$200 million ($128 million).

* Warren Buffett’s Berkshire Hathaway said it increased its stake in POSCO, the South Korean steelmaker, to 5.2 percent as of end-2008 from 4.5 percent a year earlier.

* Abu Dhabi’s Aabar Investments PJSC said it had bought 49.8 million euros ($63.12 million) of convertible bonds in UniCredit SpA as Italian banks seek capital to face the global crisis.

* Turkey’s top mobile phone operator Turkcell will begin work on a binding bid for 100 percent of Macedonian peer Cosmofon, Turkcell said.

*  U.S. industrial group Emerson Electric bid around $179 million or 5.20 Norwegian crowns per share for Norwegian oilfield technology firm Roxar ASA, the companies said.

* Investment group Evolve Capital agreed to sell its majority stake in Blue Oar to rival WH Ireland, potentially creating the leading stockbroker on London’s junior AIM market.

* A Thai brokerage unit of Singapore’s UOB Kay Hian Holdings Ltd and a bigger Thai rival, BFIT Securities, said they had called off talks about a merger, sending their shares tumbling.

* UK-based NeutraHealth confirmed that the unsolicited offer approach from India’s Elder Pharmaceuticals at an indicative price of 5.5 pence per share was likely to be solely in cash.

* Canada’s Bank of Nova Scotia is among three or four foreign banks interested in buying a 48 percent stake in Thailand’s Siam City Bank, the Thai bank said.

* South African bourse operator JSE is in talks to buy a stake in the Mauritius Stock Exchange, its deputy chief executive said.

* Hutchison Telecommunications said it was in “advance discussions” with its advisers concerning a possible spin-off of its Hong Kong and Macau businesses but that no decision had yet been made.

* India’s Reliance Industries decided to absorb its Reliance Petroleum unit through a share swap, a strategy which will boost its earnings potential without diluting its capital greatly.

* Fidelity has raised its stake in embattled Indian outsourcer Satyam Computer Services by 0.27 percent to 10.17 percent through open market purchases, it said in a regulatory filing to the stock exchange.

(PHOTO: A call centre personnel uses a calculator as she answers a call from a investor at an online brokerage company in Tokyo October 23, 2008. REUTERS/Yuriko Nakao)

There have been a lot of analogies to describe the financial pain of the current economic recession, but CCMP Capital Chairman Gregory Brenneman evoked a more holy view.

“A prolonged recession feels a little Biblical to me. It’s like the story of Joseph — seven years of feast, seven years of famine. It feels like we’re in year two to me,” Brenneman said.

He said he expects U.S. unemployment to hit 10-11 percent before the recession ends, and real GDP (gross domestic product) will be down 2 percent.

“Recovery won’t happen until the back half of 2010. That means nobody really knows, but it’s going to be a long time from now,” Brenneman told the Wharton Restructuring and Turnaround Conference in Philadelphia on Friday.

Despite his view that the U.S. was mired in economic famine, Brenneman said it was a great time for private equity firms to buy good assets for low valuations.

“Really good companies are priced the same as so-so or bad companies. It’s a great time to buy things you couldn’t otherwise buy,” he said.  ”The best P/E times have been in times like these,” Brenneman said.