Receiving Wide Coverage ...
Allergan Case Reveals Morgan Stanley M&A Switch-Up: As drug company Allergan defends itself against a $53 billion hostile takeover bid from Valeant Pharmaceuticals, it is shedding light on Morgan Stanley's mergers and acquisitions practices. Allergan, the Irvine, Calif. Maker of Botox, has published excerpts from emails written by senior Morgan Stanley investment bankers that it says show Valeant's business model is unsustainable, the New York Times reports. Morgan Stanley is now advising Valeant, but earlier tried to get hired by Allergan. Robert Kindler, vice chairman and global head of mergers and acquisitions at Morgan Stanley, wrote in an email to Allergan's chief, "My takeaway is that [Allergan] is not being nearly aggressive enough in going after the [Valeant] business model and currency." In another, David Horn, a Morgan Stanley health care banker, refers to Valeant as a "house of cards and your investors should not want to take their stock." Valeant's CEO Michael Pearson supported Kindler in a statement, calling him one of the "best M&A bankers" and chiding Allergan for a "sign of desperation," the Wall Street Journal notes. "While we will have some fun with him later, he's still very much on our team," Pearson said.
Don't Cry for Argentina Creditors: The U.S. Supreme Court has sided with a group of New York hedge fund creditors and ordered Argentina to pay them $1.5 billion. The so-called "holdouts" never accepted the country's offer to swap out bonds they held for new securities worth far less in the wake of its 2001 default. Argentina must decide by the end of the month whether to reach a deal with the holdouts or default on its next debt payment due at the end of the month. Argentina President Cristina Fernández de Kirchner "has raised the prospect of a sovereign default, saying that her government could not succumb to the 'extortion' of the US Supreme Court decision," the Financial Times writes. Kirchner has refused to negotiate with the holdouts, calling them "vultures," reports the Wall Street Journal. But in an address Monday night, she also said Argentina wouldn't default on its restructured debt and would make its interest payment at the end of June. This long-running battle has had some unusual highlights. In 2007, creditors attempted to seize the Argentinian presidential plane. Elliott Management's NML Capital impounded a navy training vessel in 2012 and this year tried to block Argentina from launching a pair of satellites, the Journal reports.
Wall Street Journal
It's a far cry from "Membership has its privileges." In a profile of Amex's efforts to sell its products to ordinary, non-wealthy Americans, the Journal details the Bluebird program it runs with Walmart and its Serve prepaid card. Bluebird, a combination of an FDIC-insured bank account and a prepaid card that can be purchased at Walmart, is part of a broader strategy to pump more transactions through AmEx's processing network, where it collects a merchant fee each time a customer uses its card, the paper notes. AmEx also offers a more traditional prepaid card called Serve that can be purchased at drugstores and other retailers. Consumers spent $182 billion on prepaid plastic last year, a 207% increase over the past five years, according to the Nilson Report. The card company is competing for this downstream market against NetSpend, Green Dot and traditional banks.
HSBC has appointed Patrick Burke as it new U.S. head, promoting the banker who in the past four years has spearheaded the wind-down of the lender's legacy Household consumer finance business, the Financial Times notes. He will become president and chief executive of HSBC US in November. Burke will take over from Irene Dorner, who two years ago was named the most powerful woman in banking by American Banker Magazine and who is retiring after 32 years at the bank. The management change comes at a rocky time for the bank's U.S. operations, which two years ago received a record $1.9 billion fine for violating sanctions and money laundering rules and which this year was among a group of lenders including Citigroup, Royal Bank of Scotland and Santander to have the Federal Reserve reject their capital plans.
New York Times
Despite so much business and banking being conducted over the internet, consumers say they wouldn't give up privacy for convenience. In a survey, 15,000 consumers in 15 countries were asked, "Would you be willing to trade some privacy for greater convenience and ease?" Worldwide, 51% replied no, and 27% said yes, the New York Times reports. (The remainder had no opinion or didn't know.) In the U.S., 56% said no and 21% said yes. The study was conducted by Edelman Berland, a market research firm, and sponsored by EMC, the data storage company. Consumers worldwide strongly agreed that there should be laws "to prohibit businesses from buying and selling data without my opt-in consent" 87 percent. When asked to name the leading threats to online privacy in the future, 51% picked "businesses using, trading or selling my personal data for financial gain without my knowledge or benefit."