Archive for May, 2008

Dubai’s Tecom in talks with Dell, plans buyouts (Reuters)

Sunday, May 18th, 2008 | Finance News

SHARM EL-SHEIKH, Egypt (Reuters) -
Tecom Investments, a
telecom investor owned by the ruler of Dubai, is mulling a
joint venture with Dell Inc. (DELL.O) and said it expects to
make up to three acquisitions in the Middle East and Africa
this year, including in a mobile phone firm.

At least one of the purchases is likely to be in the United
Arab Emirates, of which Dubai is a member, Abdullatif al-Mulla,
chief executive officer of Tecom Investments, said in an
interview in Sharm el-Sheikh, ahead of a World Economic Forum

Tecom has been in contact with Dell about a possible joint
venture, Mulla said, declining to be more specific about
Tecom's plans.

(Reporting by Will Rasmussen; Writing by James Cordahi;
Editing by Amran Abocar)


Westpac may have to boost $17.6 billion St George bid (Reuters)

Saturday, May 17th, 2008 | Finance News

SYDNEY (Reuters) -
Westpac Banking Corp Ltd (WBC.AX), which
has bid $17.6 billion for St George Bank (SGB.AX) in the
biggest banking takeover ever in Australia, is bracing for
rival offers to emerge that could push the price tag even

Speaking to Australia Broadcasting Corporation (ABC)
television on Sunday, Westpac chairman Ted Evans said "never
say never" when asked whether the bid would be raised.

Soon after the interview, Westpac issued a statement saying
much the same thing: "Westpac considers that it has made a full
and fair offer which is compelling both in terms of its price
and terms. However, Westpac reserves the right to review its
offer if it considers that circumstances warrant this."

Last week, Westpac offered 1.31 of its own shares for every
St George share. The offer was accepted by the St George board
on Tuesday but speculation has been rife that another bank may
start a bidding war.

"These are early days and this is certainly not a done
deal," said Craig James, a senior analyst at Commonwealth
Securities in Sydney. "It is likely that the National Australia
, ANZ and the Commonwealth Bank will show some interest and
there will be a fair bit of competition."

The combined entity would have a market capitalization of
around A$66 billion ($62.3 billion), overtaking Commonwealth
Bank of Australia
's (CBA.AX) A$61 billion. It would rank second
to National Australia Bank (NAB.AX) by asset value.

A battle in the banking industry would run alongside the
bid by BHP Billiton Ltd/Plc (BHP.AX) (BLT.L), the world's
largest miner, for rival Rio Tinto Ltd/Plc (RIO.AX) to create a
mining titan. Rio is fighting the takeover.


Setting the cat amongst the pigeons, St George Bank's chief
executive, Paul Fegan, told the newspaper the Australian in an
interview published on Saturday that he expected other local
and global banks to monitor the situation and was open to more

"Under the agreement we have with Westpac, we can't shop or
talk (with other potential bidders)," he said "But we can
answer our telephones. And the phones have been very busy."

Westpac's Evans told the ABC television program his bank
had made a good offer but was prepared for counter-offers.

"We made a compelling bid that would see us right through
this, not just on price ... It's even more compelling on the
operating model we are offering," he said.

"I'd be very surprised if anyone can or would match that."

Evans said Westpac had made an earlier, lower offer that
had been rejected.

St George needed Westpac to stay competitive, he said.

St George has been struggling with soaring funding costs in
the debt markets stemming from the global credit crunch. It
disappointed investors by trimming its earnings forecast due to
the rise in funding costs.

"St George couldn't afford to continue the way they had
been operating in a changed world with the cost of funds
compared to us, so the world has changed and it won't go back
the way it was," Evans said.

"The funding difference between a AA as Westpac is, and A
as St George is, is now quite significant," he added, referring
to credit ratings, which help determine funding costs.

Shares in St George fell 0.6 percent on Friday to close at
A$33.28 and Westpac gained 0.8 percent to A$24.86, while the
overall market was up 0.7 percent.


(Editing by Alan Raybould)


KDB ends talks with Goldman on Daewoo sale (Reuters)

Saturday, May 17th, 2008 | Finance News

SEOUL (Reuters) -
A top shareholder in Daewoo Shipbuilding
and Marine Engineering Co Ltd (042660.KS) said on Sunday it had
withdrawn from talks to have Goldman Sachs (GS.N) manage the
sale of the South Korean shipbuilder.

State-run Korea Development Bank (KDB) and other banks want
to sell their 50.4 percent stake in the world's third-largest
shipbuilder and KDB picked the Wall Street bank in April to
handle the deal.

"We had been in talks with Goldman, a preferred negotiator,
to manage the deal," a KDB spokesman said by telephone. "But
Goldman said it could not accept our requests, so the talks

He declined to give any details on those requests. Goldman
declined to comment.

The sale is expected to be the country's biggest M&A
transaction this year, fetching more than $4 billion, based on
the stake's market value of 4.15 trillion won ($4 billion).

Local media reported, without citing sources, that the KDB
had asked Goldman Sachs to address a potential conflict of
interest because the U.S. bank had invested in a Chinese
shipbuilder. The shipbuilding company was not identified.

Ernst & Young (ERNY.UL) has been selected as the accounting
adviser and South Korean law firm Lee & Ko as legal adviser.

The deal has drawn interest from a number of domestic
companies, including steel giant POSCO (005490.KS) and South
Korean business group Hanwha.

Goldman Sachs topped South Korea's M&A arrangers' league
table in 2007, when it managed a sale of shares in broadband
provider hanarotelecom (033630.KQ) shares by a consortium led
by American International Group to SK Telecom (017670.KS).

($1=1037.0 Won)

(Reporting by Cheon Jong-woo and Kim Yeon-hee; Editing by
Alan Raybould)