Thursday, January 20, 2011
The FCC granted approval for the NBC-Comcast transaction yesterday. The deal was announced last Spring and has been pending approval since then. You'll remember that because the NBC-Comcast deal involves broadcast and cable properties, it required the approval of the FCC in addition to the normal antitrust review. The standard for the FCC in passing on deals is whether the transaction is in the public interest. That's a fairly broad and vaguely worded mandate. So, one shouldn't be surprised that there are differences of opinion on the panel as to what that interest actually is. In the end, the FCC approved the deal with a number of conditions, including selling off control of Hulu so that it can freely compete with Comcast's Xfinity service. The FCC press release approving the transaction is here.
Of course, it wasn't all roses for the deal. There were dissents on the FCC panel. Here's Commissioner Copp's dissent and his summary of the effects of the transaction:
In sum, this is simply too much, too big, too powerful, too lacking in benefits for American consumers and citizens. I have respect for the business acumen of the applicants, and have no doubts that they will strive to make Comcast-NBCU a financial success. But simply blessing business deals is not the FCC’s statutorily-mandated job. Our job is to determine whether the record here demonstrates that this new media giant will serve the public interest. While I welcome the improvements made to the original terms, at the end of the day this transaction is a huge boost for media industry (and digital industry) consolidation. It puts new media on a road traditional media should never have taken. It further erodes diversity, localism and competition—the three essential pillars of the public interest standard mandated by law. I would be true to neither the statute nor to everything I have fought for here at the Commission over the past decade if I did not dissent from what I consider to be a damaging and potentially dangerous deal.
Time will tell.
Tuesday, January 18, 2011
Clearly since the financial crisis, Iceland has been on its heels. Dealing with the incredible debt that Icelanders have been left to pay has forced some very difficult decisions on the current government. One of those was the decision to sell HS Orka hf, the state-owned geothermal company to the Swedish energy concern Magma. The sale was completed on Dec. 23, 2010. It's hard to really visualize how important Orka is in Iceland. Think about this: in Reykjavik, there are no private homes with "boilers" for heating. That's because Orka runs a centralized geothermal heating system for all the residents of the country's capital city. Orka is responsible for all the heat and hot water. It's central to the economic and social life of the country.
It's no surprise then that the sale of the company to foreigner owners has generated a lot of controversy. Yesterday, the Icelandic singer Bjork presented the Icelandic PM with a petition calling for Iceland to buy back the company from its new foreign owner. The petition had 47,000 names on it - that's an incredible 15% of that small country's population. Indications are that the government will respond to the petition by forcing a sale back to the government and keeping the utility in public hands.
At all relevant times, CUTILLO worked at the law firm of Ropes & Gray LLP. In 2007 and 2008, CUTILLO and another Ropes & Gray attorney, BRIEN SANTARLAS, provided ZVI GOFFER with inside information they misappropriated from Ropes & Gray about several mergers and acquisitions of public companies for which the law firm was providing legal services. The inside information included information regarding the potential acquisition of 3Com Corporation ("3Com") and the potential acquisition of Axcan Pharma, Inc. ("Axcan"). CUTILLO and SANTARLAS provided the inside information concerning these companies to JASON GOLDFARB, another New York attorney, who allegedly passed the inside information to GOFFER. In exchange for providing the inside information to GOFFER, CUTILLO, SANTARLAS, and allegedly GOLDFARB, received cash payments.
Don't be like Arthur.
Monday, January 17, 2011
According to Bloomberg J. Crew apparently apparently got no bids during its go-shop period that ended on Jan. 15. I must admit, given that the incumbent CEO has a clear preference for TPG/Leonard Green, this result is hardly surprising.
Shareholders in South Africa just approved Walmart's $2.3 billion acquisition of South African retailer Massmart. Now the Congress of South African Trade Unions (COSATU) - who opposed the sale - have called for the 'mother-of-all-boycotts':
"We urge shareholders to vote against this deal. If the deal goes through, COSATU will do what it does best. We will organize a mother of all boycotts against Massmart," COSATU's first deputy president, Tyotyo James, told shareholders immediately before the vote.
In the end, the threat of a boycott wasn't enough to deter shareholders from voting in favor of the transaction (79%). However, threading the needle that is local politics of South Africa will prove a challenge for Walmart in completing this deal.