Sign up today and take advantage of member-only content — the kind of timely, cutting edge industry insight that only IDD can deliver.
  • Investment Dealers' Digest one-month trial subscription
  • IDDMagazine.com one-month trial subscription
  • Free e-newsletters
  • Free whitepapers

It's A Deal

By Tom Granahan, IDD Magazine

December 21, 2007

League Tables Aren't That Important

There’s more talk Friday of a big Wall Street bank selling a piece of itself to a foreign state-owned company. The Wall Street Journal and the Financial Times both report that Merrill may be next in line, in this case getting a $5 billion infusion from Singapore’s Temasek.

Merrill wouldn’t comment on the reports, but separately, the FT raised an interesting point about one advantage of all these deals to sovereign wealth funds: it could be really good for the banks’ league-table rankings.

“The banks, battered by subprime woes, have gone to sovereign wealth funds to bolster their balance sheets. In fact, the recapitalization deals will count towards M&A league table activity as each bank can claim credit for 'advising' itself in the 'deal,'" the FT writes.
 
There’s been no shortage of these SWF deals. UBS is selling a 9% stake to Singapore via the Government of Singapore Investment Corporation (GIC), which will become the bank’s largest holder. The move comes on the heels of the Abu Dhabi Investment Authority’s (ADIA) deal, announced in late November, to pay $7.5 billion for a 4.9% stake in Citigroup. UBS is also unloading another 1.5% stake to an undisclosed Middle East investor, and Morgan Stanley recently said it will receive a $5 billion infusion from China Investment Corp.
 
It’s safe to say the league tables aren’t first and foremost on the minds of the big banks as they unload stakes to foreign investors, but it’s a nice little perk.

Recent Posts

PE's Forecast

If the clouds would just go away for more than a day, perhaps the summer will arrive in time to give dealmakers a break from the M&A industry’s perfect storm.

A Day For The Ages

A Dow Jones Industrial Average with no Citi and no GM? No surprise, but somehow it still hurts.

Starting Small May Lead To Something Big

Despite the ever-mushrooming number of independent M&A advisory boutiques, it doesn’t take a genius to realize that the middle-market dealmaking landscape has changed.

It's A Joke, Right?

How can the consortium offer for GM's Saturn Distribution Corp., announced by a mysterious private equity firm named Black Oak Partners, be taken seriously?

Index of Posts

0 Comments

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Money Management Executive, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Tom Granahan

Tom Granahan is the Editor of IDD. He has more than 15 years of financial-journalism experience, having written about the stock market for Dow Jones Newswires and The Wall Street Journal for several years. He also supervised the Newswires' U.S. bureaus, and was the founding editor of Dow Jones Market Talk, which some consider to be one of the earliest forms of financial-news blogging. He graduated with a BA in journalism from Temple University in his hometown of Philadelphia.

Related Items