The Deal Video

Sullivan & Cromwell's Cohen on Glass-Steagall

2009-11-09T20:03:46Z

Sullivan & Cromwell LLP managing partner Rodgin Cohen says that one of the myths of the Great Recession is that the abolition of Glass-Steagall was responsible for the financial crisis. Cohen says the origin of the financial crisis was actually unregulated mortgage bankers and brokers. See the video below or download it at iTunes. - Maria Woehr

Also see:
Rodgin Cohen on Decade's end
Sullivan & Cromwell's Cohen on Lehman's failure

Sullivan & Cromwell's Cohen on Lehman's failure

2009-11-09T16:22:53Z

Should Lehman Brothers Holdings Inc. have been allowed to fail? Sullivan & Cromwell LLP managing partner Rodgin Cohen says the steps taken after the collapse of Bear Stearns Cos. may not have been aggressive enough, but the fallout after the failure of Lehman Brothers was "just unpredictable." - Maria Woehr

Also see:
Rodgin Cohen on Decade's end

Oppenheimer's Heinberg on bake-offs for PE exits

2009-11-09T13:31:07Z

Marshall Heinberg, the head of investment banking at Oppenheimer & Co., says that although middle market dealmaking has been slow, bake-offs for private equity exits with dual track alternatives are starting up again.See the video below or download it at iTunes. - Maria Woehr

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Linklaters' Schmidt on Pfizer-Wyeth review

2009-11-06T21:03:03Z

The approval by U.S. antitrust regulators of Pfizer Inc.'s (NYSE:PFE) acquisition of Wyeth is an outlier of how merger reviews will be conducted under the Obama administration. That's according to Jeffrey Schmidt, a partner with Linklaters and a former director of the Federal Trade Commission's office of competition under President George W. Bush. Schmidt, who will be discussing the antitrust landscape at The Deal Economy 2010 conference Nov. 18 and 19, says based on reports about the review, it seems regulators expanded their investigation beyond what would have taken place under the previous administration. See the video below or download it at iTunes. - Suzanne Stevens

Also see:

Linklaters' Schmidt on antitrust merger reviews

Rodgin Cohen on Decade's end

2009-11-06T18:31:24Z

One of our last videos of our Decade of The Deal series pays a visit to Rodgin Cohen, the bank lawyer and Sullivan & Cromwell LLP managing partner who Andrew Ross Sorkin in his new "Too Big to Fail" describes as "one of the most influential and yet least well-known people on Wall Street." Well, Cohen is pretty familiar to us at The Deal, not least for his role in many of the most important banking transactions of the past 30 years. But 2007 and 2008 provided the kind of challenges that even Cohen, who also has a history of crisis management, found unprecedented. Indeed, he proved ubiquitous throughout the tangled sequence of bailouts and bankruptcies last year, from orchestrating various sovereign wealth infusions to advising failing firms such as Bear Stearns Cos., Fannie Mae (NYSE:FNM), Lehman Brothers Holdings Inc., American International Group Inc. (NYSE:AIG) and Wachovia, not to say the likes of Morgan Stanley (NYSE:MS) and Goldman, Sachs & Co. (NYSE:GS).

It was quite a stretch. In Sorkin's book, people are always saying: Somebody call Cohen. In this clip, Cohen discusses some of the personal aspects of last year's bailouts and panics: The sense that one crisis continually bled into the next; the tendency of rescue plans to be hatched over weekends; the sheer nervous exhaustion of wrestling with an ever-shifting disaster. Cohen himself dates the crisis to August 2007, when Countrywide Financial Corp., the big subprime mortgage peddler, nearly failed -- Bank of America Corp. (NYSE:BAC) injected $2 billion into it, leading to a takeover -- putting the entire system at risk. That systemic risk would become a hammering theme, month by month, weekend by weekend. Let Cohen take you into the heart of the crisis. See the video below or download it at iTunes. - Robert Teitelman

Linklaters' Schmidt on antitrust merger reviews

2009-11-06T14:02:24Z

Candidate Barack Obama talked plenty during last year's presidential campaign about the need for more aggressive antitrust merger reviews. Have the Federal Trade Commission and the Department of Justice delivered? We put the question to Jeffrey Schmidt, a partner in the New York office of Linklaters and a former director of the Federal Trade Commission's bureau of competition under President George W. Bush. Schmidt, who will be discussing the antitrust environment at The Deal Economy 2010 conference Nov. 18 and 19, says while there haven't been many high-profile challenges, you can be sure the agencies are scrutinizing proposed acquisitions more closely than they have in years. See the video below or download it at iTunes. - Suzanne Stevens

Register for the event here.

Hyatt debuts 8% above price

2009-11-06T13:27:32Z

Hyatt Hotels Corp. (NYSE:H) opened Thursday at $27, above the $25 price established Wednesday evening. The stock is at $27.41 in late-morning trading. In the year's fourth-largest initial public offering, the private equity-backed hotel chain raised $950 million in gross proceeds. The successful debut came on the heels of bankers pulling three IPOs -- for PlainsCapital Corp., Aviv REIT Inc. and AEI -- after failing to find enough buyers for those deals. In the latest episode of our video series on IPOs, The Deal spoke with Scott Cutler, head of listings, Americas, NYSE Euronext (NYSE:NYX), about Hyatt's healthy IPO, the "discerning market" and what lies ahead next week, when Dollar General Corp. is expected to go public. Watch the video below or download it on iTunes. - Mary Kathleen Flynn

For The Deal's previous video interview with Scott Cutler, click here. Subscribers to The Deal Pipeline may read more about Hyatt's IPO here and Dollar General's here.

Foursquare's Crowley on building the 'next Twitter'

2009-11-05T19:20:44Z

Foursquare Labs Inc., a New York mobile social networking startup whose $1.35 million first-round financing in September was the most competitive in recent memory, may be the next big hit on the Internet, say many tech entrepreneurs and investors. But beyond buzz, what is Foursquare, how does it plan to make money, and why did it choose O'Reilly AlphaTech Ventures and Union Square Ventures from among the many investors clamoring to back it? To find out, The Deal asked Foursquare CEO Dennis Crowley, the former co-founder of Dodgeball, which Google Inc. (NASDAQ:GOOG) bought and subsequently deadpooled, for a behind-the-scenes tour. Watch the video below or download it on iTunes. - Mary Kathleen Flynn

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Special thanks to Dennis Crowley, Naveen Selvadurai, Harry Heymann and Nathan Folkman from Foursquare and to the folks at The Scratcher. Credits for The Deal's video go to: Tom Groppe (executive producer), Maria Woehr (producer), Mary Kathleen Flynn (reporter), Vipal Monga (director, camera crew, editor), George White (audio crew), Neil Buchalter (photo editor) and Brennen Wysong (copy editor).

NYSE Euronext's Cutler on hot week for IPOs

2009-11-03T19:44:08Z

Hyatt Hotels Corp. is one of six initial public offerings anticipated this week, making it the most active week in IPOs since that of Sept. 21, when seven companies went public. The hotel chain, which is expected to debut Thursday on the New York Stock Exchange under the ticker symbol H, hopes to raise as much as $988 million in the year's fourth largest IPO. In the latest episode of our video series on IPOs, The Deal spoke with Scott Cutler, head of listings, Americas, NYSE Euronext, about what this week will say about the overall health of the IPO market. Watch the video below or download it on iTunes. - Mary Kathleen Flynn

For previous episodes of The Deal's IPO video series, shot on location at the New York Stock Exchange, click here for our conversation with Jim Robinson, co-founder, RRE Ventures, an investor in disk storage provider Nexsan Technologies Inc., one of only 14 venture capital-backed companies that has registered to go public with the SEC; and here for our chat with Deborah Farrington, partner, StarVest Partners, which backed NetSuite Inc. (NYSE:N).

And for more on this week's IPOs, subscribers to The Deal Pipeline may click here.

Financial services tech firms attract investors

2009-11-03T16:10:21Z

Banks have spent nearly two years downsizing through workforce reductions and other cost-cutting measures. Now many are turning to technology to further drive efficiency and to help maintain service levels. That in turn is attracting a variety of investors to financial services technology, or fintech, firms with the tools to address those needs. In this edition of Inside The Deal, Jeff Bistrong, managing director with the middle-market-focused investment bank Harris Williams & Co., says Xerox Corp.'s (NYSE:XRX) acquisition of Affiliated Computer Systems Inc. (NYSE:ACS) and Dell Inc.'s (NASDAQ:DELL) purchase of Perot Services Corp. (NYSE:PER) qualify as examples with both targets offering some fintech services. But Bistrong says middle-market firms and private equity investors are also driving fintech transactions. See the video below or download it at iTunes. - Suzanne Stevens

Also see:
Technology M&A's tipping point

Oppenheimer's Heinberg on a CIT Group bankruptcy

2009-11-03T15:25:20Z

A CIT Group Inc. (NYSE:CIT) bankruptcy would have an impact on middle market lending says Marshall Heinberg, the head of investment banking at Oppenheimer & Co. because the firm has been a very big player in small or big capital companies. However good companies will find alternative financing, he adds. See the video below or download it at iTunes.- Maria Woehr

Technology M&A's tipping point

2009-11-02T19:26:37Z

The technology M&A marketplace is set for a rebound, driven by a convergence of higher stock prices and a willingness among buyers to "loosen the purse strings" after months of cash conservation. So says Jeff Bistrong, managing director with the middle-market-focused investment bank Harris Williams & Co. In this edition of Inside The Deal, Bistrong says the result is an increase in stock deals and transformational acquisitions. - Suzanne Stevens

Do corporations need M&A bankers?

2009-10-30T15:30:28Z

In case you haven't heard -- or seen trumpeted on our home page or in the magazine -- 2009 marks The Deal LLC's 10th year. We've been celebrating since January with our ongoing Decade of The Deal project. And the current issue of The Deal magazine offers analysis on the dramatic events that have defined the M&A market since 1999.

Of particular interest to corporate dealmakers is the story Nice work if you can get it. In it, Vipal Monga and I explore how the relationship between investment bankers and their corporate clients has evolved. The bankers and corporate executives interviewed for the story agreed that corporations have gotten better at doing deals. They've built in-house M&A teams that are as capable as any investment banking team at identifying targets, gathering market intelligence and conducting due diligence.

"The assumption that you need a banker on every deal is going away," says Michael Frankel, senior vice president of business development and M&A for LexisNexis, a provider of work flow and risk management services. "It's no longer enough for a banker to say 'Here's how to do the deal.' Bankers are being asked to demonstrate value more often."

These days that comes in the form of specialized industry knowledge, debt restructuring, tax structuring, sophisticated analytics and insight into a target's management or board. "Clients want more color around the name, not the name itself," says Chris Hite, co-head of global health care at Citigroup Inc. (NYSE:C). And certainly there's a premium on the capital markets expertise a banker can provide.

Says Rob Kindler, head of global M&A at Morgan Stanley (NYSE:MS):

"The investment bank can bring a perspective on what the rating agencies are going to do on the debt side, how the debt is going to trade, what the capital markets reaction is going to be. [That] is very difficult to get in-house expertise on because you're just focused on your own company, rather than the whole market." (See video).

Of course, there are some companies that just seem wired to keep their dealmaking in-house, even on complex transactions. Oracle Corp. (NASDAQ:ORCL) is proceeding with its $7.4 billion bid for Sun Microsystems Inc. (NASDAQ:JAVA) without a financial adviser. It also reached its $8.5 billion agreement to buy BEA Systems Inc. in 2008 -- a hostile deal with Carl Icahn invested in the target -- without the help of bankers.

Similarly, Google Inc. (NASDAQ:GOOG) didn't use bankers when in 2006 it acquired radio advertising technology maker dMarc Broadcasting Inc. for $102 million up-front and up to $1.14 billion in additional payments based on performance over three years. That is a hefty earnout, one that an outside financial adviser might have cautioned against. "It was learning by jumping in the deep end," says Michael Adair, who led North American finance at Google between 2004 and 2008.

That Google didn't rely heavily on investment bankers didn't keep bankers from calling. "I think there was a lot of frustration, with bankers thinking, 'We're doing a lot of free work for Google, and we're not getting any deals,' " says Adair, who spent three years in investment banking at Lehman Brothers Holdings Inc. and Merrill Lynch & Co. "But that's the business model, and every bank wanted to get a piece of Google."

It is possible Intel Corp. (NASDAQ:INTC) inspires a similar frustration. With deep in-house deal expertise and a steady flow of manageable transactions, Intel has used investment bankers in just two of the nearly 90 deals it has completed in the past 15 years. And yet it still speaks to plenty of them, gathering market intelligence and data free of charge. But also presumably offering insight into which markets or products it's placing its own bets.

Still, in a market as volatile as the present one, some corporations that have in the past relied mostly on in-house deal expertise seem more open to using bankers. "While we haven't had a pattern of using banks," says Elias Mendoza, VP of corporate development for IBM Corp. (NYSE:IBM), "I think the nature of the environment, the way things are evolving competitively in M&A in our spaces, we'll be open to using banks more than we have before."

M&A bankers will be no doubt be happy to hear that. - Suzanne Stevens

Also check out these videos:

Hilco's Cory Lipoff on the retail reorg challenge

2009-10-29T16:33:40Z

Fewer retailers are filing for bankruptcy than in the first half of 2009. That's what Cory Lipoff, a vice president with the strategic advisory and reorganization firm Hilco Merchant Resources LLC told us in this interview. For those retailers already in bankruptcy, however, the ability to reorganize is more difficult today than it has been in the past. In this edition of Inside the Deal, Lipoff says the inventories of many retailers are so highly leveraged that there's little if any money available for a reorganization. See the video below or download it at iTunes. - Suzanne Stevens

Also see
Hilco's Cory Lipoff on retail bankruptcies

Wheego's McQuary on the future of cars

2009-10-29T13:48:58Z

Electric cars may be the future of the automotive industry, so we took a spin in one from Wheego Electric Cars Inc. along with Wheego CEO Mike McQuary.

The startup, which is seeking $2.5 million in venture capital, has produced a two-seater city car called the Whip, which can reach speeds of up to 35 miles per hour and travel up to 50 miles on an eight-hour charge. While it is not as sleek as the better known, faster alternative, the Tesla Roadster (base price: $109,000), the Wheego at $19,500 before a $7,500 government incentive costs a pittance in comparison. See the video above or download it at iTunes. - Matthew Wurtzel