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CBOE Files to Raise $300 Million in IPO as Exchange Swaps Seats for Shares

by on March 11, 2010

By Whitney Kisling March 11 (Bloomberg) — The Chicago Board Options Exchange, the last major member-owned U.S. bourse, filed to sell up to $300 million in stock in an initial public offering. CBOE Holdings Inc. said in a filing with the Securities and Exchange Commission that it would issue 55.8 million Class A shares to members and 12.25 million Class B shares to former members of the Chicago Board of Trade who helped create the exchange in 1973. The Chicago-based company will pay a special dividend of $1.67 for each share of Class A and Class B common stock outstanding, the filing showed. CBOE directors approved a plan in December to change the structure and swap seats for shares. The vote followed a November agreement by the CBOE to pay $4.17 million to settle appeals in a three-year-old lawsuit related to its ownership. “This is a culmination of many months of work,” William Brodsky , chief executive officer of the CBOE, said at a conference in Boca Raton, Florida, sponsored by the Futures Industry Association, a trade group based in Washington. The offering would come after eight U.S. companies delayed or postponed IPOs this year and the 13 that completed deals cut their offerings by 26 percent on average, data compiled by Bloomberg show. The Chicago Board of Trade was acquired by the Chicago Mercantile Exchange in 2007, creating CME Group Inc., the world’s largest futures exchange. Board of Trade members’ ownership rights were written into the CBOE’s incorporation documents after CBOT members created it in 1973. To contact the reporter on this story: Whitney Kisling in New York at wkisling@bloomberg.net .

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CBOE Files to Raise $300 Million in IPO as Exchange Swaps Seats for Shares

Billionaire George Soros More Than Doubles Gold ETF Stake in 4th Quarter

by on February 17, 2010

By Katherine Burton and Glenys Sim Feb. 17 (Bloomberg) — Billionaire George Soros ’s Soros Fund Management LLC more than doubled its holding in the biggest gold exchange-traded fund in the fourth quarter after bullion advanced 8.9 percent to a record. The $25 billion New York-based firm became the fourth- largest holder in the SPDR Gold Trust, adding 3.728 million shares valued at $421 million, according to a filing with the U.S. Securities and Exchange Commission yesterday. Its investment was worth about $663 million, the fund’s largest single investment, as of Dec. 31. Soros joined China Investment Corp. and central banks including those in China and India in acquiring gold. China Investment, the $300 billion sovereign wealth fund based in Beijing, took a 1.45 million-share stake in the SPDR Gold Trust worth $155.6 million, according to a SEC 13F filing posted on Feb. 5. “The dollar is weak and people are just shifting their money into a safer haven,” Tetsuya Yoshii , vice president for derivative products at Mizuho Corporate Bank Ltd., said from Tokyo today. “Central banks are adding gold to their reserves and we’re going to see more people adding gold to their investment portfolio as they shift into safer stuff.” Gold for immediate delivery traded little changed at $1,118.35 an ounce at 2:48 p.m. in Singapore. It rose for a ninth straight year in 2009, reaching a record $1,226.56 an ounce on Dec. 3, as the dollar dropped 4.2 percent against a basket of six major currencies. ‘Ultimate Bubble’ India bought 200 metric tons from the International Monetary Fund in October, while China’s holdings have expanded 76 percent to 1,054 tons since 2003, it said in April. SEC filings are done quarterly, with a 45-day lag, so Soros could have sold some or all of the position since then. Soros, speaking last month at the World Economic Forum in Davos, called gold the “ultimate asset bubble” and said the price could tumble, according to a report in the U.K.’s Daily Telegraph newspaper. Money managers who oversee more than $100 million in equities must file a Form 13F listing their U.S.-traded stocks, options and convertible bonds. The filings don’t show non-U.S. securities or how much cash the firms hold. Michael Vachon , a spokesman for Soros, declined to comment on Soros’s investments. Assets held by the SPDR Gold Trust have expanded 2.2 percent this year after surging 24 percent in 2009. They stood at 1,109.42 metric tons yesterday. Institutional investor Paulson & Co. held the largest number of shares in the fund as of Dec. 31, with 8.65 percent, or 31.5 million shares. Gold demand grew 2.6 percent in the fourth quarter from the previous three months as investment and jewelry consumption climbed amid record prices, the World Gold Council said in a report today. Global consumption increased to 819.7 metric tons as prices averaged 15 percent more than the third quarter, the London-based industry group said. To contact the reporters on this story: Katherine Burton in New York at kburton@bloomberg.net ; Glenys Sim in Singapore at gsim4@bloomberg.net

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Billionaire George Soros More Than Doubles Gold ETF Stake in 4th Quarter

China Milk Defaults on Shortage of Foreign Currency, Seeks Creditor Talks

February 12, 2010

By Lars Klemming and Katrina Nicholas Feb. 12 (Bloomberg) — China Milk Products Group Ltd. , a supplier of raw milk and dairy cow embryos, said it’s defaulting on some repayment obligations because it hasn’t enough money outside China to pay for early redemption of its bonds. “The company is currently exploring different options with a view to meeting its funding requirements,” according to a filing with Singapore’s stock exchange today. The notes are China Milk’s $150 million of zero coupon convertible bonds due 2012 and issued in January 2007. China Milk said Jan. 5 it had received “ valid put exercise notices ” from holders of about $146 million of the notes and was “awaiting clearance” from China for the remittance of $170.56 million so it could make the required payments. The delay was “administrative and procedural in nature.” China Milk said in today’s filing that it will try to work out an agreement with bondholders. “Any remittance of funds out of China entails a series of procedural steps and regulatory clearances in respect of which the company is currently unable to gauge the length of such a process,” the statement said. Daqing-based China Milk also said it hadn’t appointed any legal advisers at this stage. China Milk said Feb. 1 its Chief Financial Officer, Choi Ho Yan , 33, resigned to “pursue other career interests.” Trade in the company’s shares was halted on Feb. 9. The stock has fallen 30 percent this month. To contact the reporters on this story: Katrina Nicholas in Singapore on Knicholas2@bloomberg.net ; Lars Klemming in Singapore at lklemming@bloomberg.net

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Tesla IPO On The Way

January 29, 2010

NEW YORK — Electric car manufacturer Tesla Motors Inc. said Friday it plans to sell stock to the public. The company, based in Palo Alto, Calif., did not disclose in a filing with the Securities and Exchange Commission specifically how much it plans to raise though it listed $100 million as a placeholder figure. The actual amount it raises could be higher. Tesla also did not give a date for when it plans to launch the IPO, nor did it say how many shares it would sell or at what price. A Tesla IPO has been widely anticipated. The company has garnered attention for its high-end Roadster, an all-electric sports car that retails for $109,000. The two-door Roadster is the only model Tesla currently sells, but the company plans to start selling a four-door sedan, the Model S, in 2012. The Model S is slated to go for $49,900 when including a federal tax credit. That car is designed to travel as far as 300 miles on a three- to five-hour charge. The company has not been profitable. Since its founding in 2003, it has lost $236.4 million, according to its filing. During the first nine months of 2009, it lost $31.5 million. The company said it has $106.5 million in cash as of Sept. 30. Tesla said it has sold 937 Roadsters as of Dec. 31. The company has 10 stores in U.S. and Europe and disclosed plans to double that by end of the year. The company said it hopes to have 50 stores “within the next several years. Tesla disclosed some of its biggest stakeholders in its filing. CEO Elon Musk, 38, a co-founder of PayPal and chairman of spaceship developer Space Exploration Corp., is the biggest shareholder by far with more than 81 million shares in the company. Venture capital and other investment firms make up the bulk of Tesla’s other large investors. They include Blackstar Investco LLC, Al Wahada Capital Investment LLC and affiliates of VantagePoint Venture Partners and Valor Equity Partners. To help it build the Model S, the Department of Energy agreed to extend Tesla a $465 million loan last June. That money came from a pool Congress set aside in 2007 to help automakers develop fuel-efficient technology. Ford Motor Co., Nissan Motor Co. and other carmakers have also received loans from the fund. Tesla’s loan could give the government a stake in the automaker when it goes public. According to the filing, the Energy Department received warrants to purchase more than 9 million shares of Tesla when the loan closed on Jan. 20. David Minlow, president of the IPO research firm IPOfinancial.com, called Tesla’s intent to go public a “warning shot across the bow” of the automotive industry. But he cautioned that the company is not yet making a profit and will have to show investors it can produce cars on a large scale. “I don’t believe that just the sex appeal of the product and the name that goes with it is going to automatically convert into blind optimism on the part of investors,” Minlow said. Several high profile investment banks are underwriting the offering, including Goldman Sachs & Co., Morgan Stanley, J.P. Morgan and Deutsche Bank Securities.

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Ackman Buys 2% of Kraft, Urges Rosenfeld to Use More Cash in Cadbury Offer

January 15, 2010

By Christine Richard and Zachary R. Mider Jan. 15 (Bloomberg) — William Ackman’s Pershing Square Capital Management LP bought a 2 percent stake in Kraft Foods Inc. and is urging management to pursue a bid for Cadbury Plc that minimizes the stock component of the offer. The stake of at least 32 million shares, valued at about $932 million based on yesterday’s closing price , will be disclosed in a filing with U.K. regulators on Jan. 18, Ackman said in an interview today. Kraft Chief Executive Officer Irene Rosenfeld has until Jan. 19 to modify Kraft’s current 10.9 billion-pound ($17.7 billion) stock-and-cash offer for the Uxbridge, England-based confectioner. “We think very highly of Irene Rosenfeld and her business plan. We think this deal makes tremendous strategic sense,” Ackman said, adding that Kraft shares are undervalued. “The more Kraft stock they issue, the less interesting this deal is. Fortunately, the seller also prefers cash.” Ackman is the second high-profile Kraft investor to weigh in on the Northfield, Illinois-based food company’s offer. Warren Buffett’s Berkshire Hathaway Inc., Kraft’s biggest shareholder, said on Jan. 5 that Kraft’s stock is undervalued. To contact the reporter on this story: Zachary R. Mider in New York at zmider1@bloomberg.net

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Ackman Buys 2% Stake in Kraft, Favors Cadbury Bid

January 15, 2010

By Christine Richard and Zachary R. Mider Jan. 15 (Bloomberg) — William Ackman’s Pershing Square Capital Management LP bought a 2 percent stake in Kraft Foods Inc. and is urging management to pursue a bid for Cadbury Plc that minimizes the stock component of the offer. The stake of at least 32 million shares, valued at about $932 million based on yesterday’s closing price , will be disclosed in a filing with U.K. regulators on Jan. 18, Ackman said in an interview today. Kraft Chief Executive Officer Irene Rosenfeld has until Jan. 19 to modify Kraft’s current 10.9 billion-pound ($17.7 billion) stock-and-cash offer for the Uxbridge, England-based confectioner. “We think very highly of Irene Rosenfeld and her business plan. We think this deal makes tremendous strategic sense,” Ackman said, adding that Kraft shares are undervalued. “The more Kraft stock they issue, the less interesting this deal is. Fortunately, the seller also prefers cash.” Ackman is the second high-profile Kraft investor to weigh in on the Northfield, Illinois-based food company’s offer. Warren Buffett’s Berkshire Hathaway Inc., Kraft’s biggest shareholder, said on Jan. 5 that Kraft’s stock is undervalued. To contact the reporter on this story: Zachary R. Mider in New York at zmider1@bloomberg.net

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BlackRock Plans $2.5 Billion Debt Sale, Firm’s First Offering in Two Years

December 7, 2009

By Bryan Keogh and Gabrielle Coppola Dec. 7 (Bloomberg) — BlackRock Inc. , the world’s largest asset manager, plans to sell $2.5 billion of bonds in three parts, the company’s first offering since its debut issue more than two years ago. Blackrock plans to sell three-year notes in addition to the five- and 10-year debt initially planned, according to a person familiar with the offering. The $500 million of three-year notes may price to yield 110 basis points more than similar-maturity Treasuries, the $1 billion of five-year debt may yield 135 basis points more than benchmarks, and the $1 billion of 10-year bonds may pay a spread of 160 basis points, said the person, who declined to be identified because terms aren’t set. A basis point is 0.01 percentage point. Proceeds will be used to repay commercial paper, the New York-based asset manager said today in a filing with the U.S. Securities and Exchange Commission. The filing didn’t specify the size of the deal or the maturities being offered. BlackRock sold $700 million of 6.25 percent, 10-year notes in September 2007, according to data compiled by Bloomberg. The securities traded at 109.9 cents on the dollar on Nov. 23 to yield 4.72 percent, or 135 basis points more than similar- maturity Treasuries, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. To contact the reporters on this story: Bryan Keogh in London at bkeogh4@bloomberg.net ; Gabrielle Coppola in New York at gcoppola@bloomberg.net

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BlackRock Plans $2.5 Billion Debt Sale, Firm’s First Offering in Two Years

December 7, 2009

By Bryan Keogh and Gabrielle Coppola Dec. 7 (Bloomberg) — BlackRock Inc. , the world’s largest asset manager, plans to sell $2.5 billion of bonds in three parts, the company’s first offering since its debut issue more than two years ago. Blackrock plans to sell three-year notes in addition to the five- and 10-year debt initially planned, according to a person familiar with the offering. The $500 million of three-year notes may price to yield 110 basis points more than similar-maturity Treasuries, the $1 billion of five-year debt may yield 135 basis points more than benchmarks, and the $1 billion of 10-year bonds may pay a spread of 160 basis points, said the person, who declined to be identified because terms aren’t set. A basis point is 0.01 percentage point. Proceeds will be used to repay commercial paper, the New York-based asset manager said today in a filing with the U.S. Securities and Exchange Commission. The filing didn’t specify the size of the deal or the maturities being offered. BlackRock sold $700 million of 6.25 percent, 10-year notes in September 2007, according to data compiled by Bloomberg. The securities traded at 109.9 cents on the dollar on Nov. 23 to yield 4.72 percent, or 135 basis points more than similar- maturity Treasuries, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. To contact the reporters on this story: Bryan Keogh in London at bkeogh4@bloomberg.net ; Gabrielle Coppola in New York at gcoppola@bloomberg.net

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Cadbury Chief Stitzer Still Opposes Kraft Bid, Says Comments Misconstrued

September 25, 2009

By Keith Campbell Sept. 25 (Bloomberg) — Cadbury Plc said it still opposes Kraft Foods Inc. ’s 9.9 billion-pound ($15.9 billion) takeover approach and said reports that Chief Executive Officer Todd Stitzer had softened his stance were “misconstrued.” Bank of America-Merrill Lynch , which organized an investor conference where Stitzer spoke Sept. 22, said two days ago that Cadbury’s chief indicated he may consider a higher bid from Kraft. An earlier Reuters report, which Merrill subsequently denied, said Stitzer had discussed a fair value for the London- based maker of Dairy Milk chocolate. Stitzer “was asked a question about the strategic merit” of Kraft’s offer at that conference, Cadbury said in a statement this afternoon. “Commentary on this issue has misconstrued Mr. Stitzer’s remarks to imply a softening of his view regarding a combination between Kraft and Cadbury. For the avoidance of doubt, Mr. Stitzer does not believe that Kraft’s proposal makes strategic or financial sense, and his comments should not be interpreted in any other way.” A Merrill spokeswoman declined to comment. Kraft spokeswoman Lisa Gibbons said the company had no comment. Cadbury spokesman Trevor Datson said earlier today that the candy maker “proactively” contacted the U.K. Takeover Panel, the independent regulator that ensures offers comply with U.K. rules, after the reports of Stitzer’s remarks. Takeover Panel “We have proactively been in contact with the panel in regards to some of the serious misrepresentation of Todd Stitzer’s comments,” he said by phone. Datson declined to comment further or provide a transcript of Stitzer’s remarks. Chris Jillings , deputy director-general of the Takeover Panel, couldn’t be immediately reached to comment. The Financial Times reported earlier that the regulator was examining the CEO’s remarks. “By no means does Cadbury management give the impression they want to remain independent, and they stress they want to maximize value to shareholders,” Merrill analysts and salesmen said in a note sent to clients during the conference. “Cadbury indicated that the next step is for Kraft to make a formal offer, at hopefully a more attractive price.” Stitzer told the conference that comparable transactions proposed in the candy industry had a multiple of earnings before interest, tax, depreciation and amortization in the “mid teens,” Merrill sales specialist Simon Archer wrote. Share Gains Cadbury shares rose for a fourth straight day today, adding 5.5 pence, or 0.7 percent, to 800.5 pence at 4 p.m. in London, touching their highest level since Sept. 8, the day after Kraft disclosed its bid approach. Kraft would probably have to pay 14.7 times Ebitda to be successful, according to the average of six analysts surveyed by Bloomberg News on Sept. 8. That implies a bid of about $21 billion, Bloomberg calculations show. Shares of Cadbury have traded above Kraft’s bid price, originally worth 745 pence, since the approach was first disclosed on speculation the U.S. company will be forced to raise its bid or a counteroffer will emerge. The value of Kraft’s cash-and-stock bid is currently 726 pence per share. Kraft Chief Executive Officer Irene Rosenfeld said the company wants to buy Cadbury but doesn’t have to, according to the transcript of a presentation to employees on Sept. 24 released in a filing with the Securities & Exchange Commission today. Shares of Kraft rose 6 cents to $26.44 in New York trading this morning. To contact the reporter on this story: Keith Campbell in Milan via k.campbell@bloomberg.net

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Asian Stocks Fall as Seven & I Cuts Profit Forecast, Commodity Prices Drop

September 1, 2009

By Jonathan Burgos Sept. 2 (Bloomberg) — Asian stocks fell, led by consumer and mining companies, as Seven & I Holdings Co. cut its profit forecast and commodity prices declined. Seven & I, Japan’s largest retailer, dropped 3.6 percent in Tokyo. BHP Billiton Ltd., the world’s largest mining company, lost 2 percent in Sydney. Mitsubishi UFJ Financial Group Inc., Japan’s largest publicly traded bank, slipped 2.7 percent as concern lenders will report more losses dragged U.S. financial shares lower yesterday. The drops in U.S. equities and commodities “will prompt investors to sell related stocks,” said Hiroichi Nishi , an equities manager at Tokyo-based Nikko Cordial Securities Inc. “As the global economy recovers, there are many investors who want to buy on dips.” The MSCI Asia Pacific Index dropped 1.6 percent to 112.19 as of 9:57 a.m. in Tokyo. The gauge has risen 59 percent from a more than five-year low on March 9 on speculation the global economy is recovering. That’s taken the average price of stocks on the index to 1.5 times book value, close to an 11-month high. Japan’s Nikkei 225 Stock Average declined 2.8 percent to 10,239.66. Australia’s S&P/ASX 200 Index slipped 1.7 percent. New Zealand’s NZX 50 Index lost 1 percent. South Korea’s Kospi Index fell 1.5 percent. Futures on the S&P 500 Index were little changed. The gauge slid 2.2 percent yesterday, the most since Aug. 17. The KBW Bank Index of 24 U.S. financial companies fell 5.8 percent as analysts at RBC Capital Markets said U.S. banks on the West Coast still face credit deterioration and higher loan losses. Banks Decline Mitsubishi UFJ dropped 2.7 percent to 579 yen. Westpac Banking Corp., Australia’s largest bank by market value, sank 2.7 percent to A$24.17. Seven & I declined 3.6 percent to 2,150 yen. The company cut its full-year net income target by 11 percent yesterday. “There are signs of recovery in certain sectors of the domestic economy, but an overall recovery seems unlikely,” the company said in a filing with the Tokyo stock exchange. “Consumer sentiment remains weak.” BHP Billiton lost 2 percent to A$36.53. Rio Tinto Group Ltd., the world’s third largest mining company, fell 2.2 percent to A$56.09. Inpex Corp., Japan’s largest oil explorer, slumped 4.1 percent to 732,000 yen. Crude oil fell 2.7 percent to $68.05 a barrel in New York yesterday, the lowest settlement since Aug. 17. A gauge of six metals in London dropped 3.6 percent, the most since July 8. To contact the reporter for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net .

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Asian Stocks Fall as Seven & I Cuts Profit Forecast, Commodity Prices Drop

September 1, 2009

By Jonathan Burgos Sept. 2 (Bloomberg) — Asian stocks fell, led by consumer and mining companies, as Seven & I Holdings Co. cut its profit forecast and commodity prices declined. Seven & I, Japan’s largest retailer, dropped 3.6 percent in Tokyo. BHP Billiton Ltd., the world’s largest mining company, lost 2 percent in Sydney. Mitsubishi UFJ Financial Group Inc., Japan’s largest publicly traded bank, slipped 2.7 percent as concern lenders will report more losses dragged U.S. financial shares lower yesterday. The drops in U.S. equities and commodities “will prompt investors to sell related stocks,” said Hiroichi Nishi , an equities manager at Tokyo-based Nikko Cordial Securities Inc. “As the global economy recovers, there are many investors who want to buy on dips.” The MSCI Asia Pacific Index dropped 1.6 percent to 112.19 as of 9:57 a.m. in Tokyo. The gauge has risen 59 percent from a more than five-year low on March 9 on speculation the global economy is recovering. That’s taken the average price of stocks on the index to 1.5 times book value, close to an 11-month high. Japan’s Nikkei 225 Stock Average declined 2.8 percent to 10,239.66. Australia’s S&P/ASX 200 Index slipped 1.7 percent. New Zealand’s NZX 50 Index lost 1 percent. South Korea’s Kospi Index fell 1.5 percent. Futures on the S&P 500 Index were little changed. The gauge slid 2.2 percent yesterday, the most since Aug. 17. The KBW Bank Index of 24 U.S. financial companies fell 5.8 percent as analysts at RBC Capital Markets said U.S. banks on the West Coast still face credit deterioration and higher loan losses. Banks Decline Mitsubishi UFJ dropped 2.7 percent to 579 yen. Westpac Banking Corp., Australia’s largest bank by market value, sank 2.7 percent to A$24.17. Seven & I declined 3.6 percent to 2,150 yen. The company cut its full-year net income target by 11 percent yesterday. “There are signs of recovery in certain sectors of the domestic economy, but an overall recovery seems unlikely,” the company said in a filing with the Tokyo stock exchange. “Consumer sentiment remains weak.” BHP Billiton lost 2 percent to A$36.53. Rio Tinto Group Ltd., the world’s third largest mining company, fell 2.2 percent to A$56.09. Inpex Corp., Japan’s largest oil explorer, slumped 4.1 percent to 732,000 yen. Crude oil fell 2.7 percent to $68.05 a barrel in New York yesterday, the lowest settlement since Aug. 17. A gauge of six metals in London dropped 3.6 percent, the most since July 8. To contact the reporter for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net .

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