Saturday, June 25, 2005
China Decides to Show It Can Buy as Well as Sell - New York Times
China Decides to Show It Can Buy as Well as Sell - New York Times
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June 25, 2005
China Decides to Show It Can Buy as Well as Sell
By MARK A. STEIN
AFTER years of aggressively selling things to America, China is now starting to buy just as aggressively. Its advantage remains price: Chinese companies are outbidding rivals in takeover battles as they have undercut competitors on price.
Meanwhile, two former executives were sentenced to prison for having stolen hundreds of millions of dollars from stockholders, a big accounting firm scrambled to avoid being indicted for selling tax shelters it acknowledges were illegal, and a federal appeals court ruling spurred a debate about whether businesses were over-regulated.
LONELY NO MORE China showed how willing it is to pay a premium for American industrial assets when a group led by Qingdao Haier, a Chinese appliance maker, said it planned to offer $1.3 billion for the Maytag Corporation, America's third-largest home appliance maker. Maytag, known for the lonely repairman in its ads, agreed in May to sell itself to Ripplewood Holdings, a private equity group, for $1.13 billion, but will now wait to see Haier's formal offer.
Two days later, another Chinese company popped an even bigger, potentially more significant deal. The China National Offshore Oil Corporation offered $18.5 billion for Unocal, a California oil company with huge reserves in Asia. The Chinese company was undeterred by the fact that Unocal had already agreed to sell itself to the Chevron Corporation for $16.4 billion. A bidding war seems likely, which could be bad news for Chevron because Chinese oil companies have shown a willingness to pay dearly for energy assets elsewhere.
China's acquisitiveness, including Lenovo's purchase of I.B.M.'s personal computer business in December, is raising alarms in Washington. Energy Secretary Samuel W. Bodman told Reuters that his department's review of the Unocal deal would be "a complex matter."
TOUGH ON CRIME A federal judge sentenced the father and son who ran the Adelphia Communications Corporation to long prison terms after they were convicted on multiple counts of bank fraud, securities fraud and conspiracy. They had looted hundreds of millions of dollars from the company and concealed its true debt load from investors.
The founder and chief executive, John J. Rigas, who is 80 and is suffering from bladder cancer and a heart ailment, was sentenced to 15 years, though that may be revised if he becomes terminally ill in the next two years. His son, Timothy J. Rigas, 49, the former chief financial officer, was sentenced to 20 years.
Another of John Rigas's sons, Michael J. Rigas, the former executive vice president for operations, was acquitted of conspiracy and wire fraud in the trial. But jurors were deadlocked on 15 counts of securities fraud and two counts of bank fraud, and he is scheduled to be retried on those charges in October.
GIMME SHELTER Executives at KPMG, the accounting firm, scrambled to head off a criminal indictment that could shutter the firm and a wave of client lawsuits that could force it to seek bankruptcy protection. At issue were tax shelters the firm sold from 1997 to 2001. KPMG earned $124 million in fees from the shelters, which let investors avoid a total of $1.4 billion in taxes.
KPMG has acknowledged "unlawful conduct" in selling the shelters, an admission that could make it easier to reach a deal with prosecutors to avoid criminal charges. But that makes it easier for clients to sue to recover the fees they paid KPMG and the taxes, penalties and interest they paid the government after the shelters were disallowed.
Regardless of how KPMG resolves its disputes with regulators and clients, the Justice Department is likely to seek criminal indictments of some of the firm's partners, former federal officials said.
TIME TO EASE OFF? A federal appeals court said the Securities and Exchange Commission should have performed a cost-benefit analysis before it decided that every mutual fund must have an independent chairman and a majority of independent directors on its board.
Opponents of regulation hailed the ruling as a victory because they said the benefit of new rules should justify the cost of complying with them. Supporters of regulations also claimed victory, however, because the court validated the commission's authority to impose such rules.
The S.E.C. acted last year after investigators found that some large fund companies had let favored investors share in the gains of some of their funds without taking the same risk as other investors.
The commission has said it will meet next Wednesday to reconsider the rule requiring each mutual fund to have an independent chairman.
FAMILY FEUD 2 Having picked a number of very public, heated arguments over the last year, the Dolan family took steps to draw a curtain around its broadcasting empire. Their company, Cablevision Systems, offered to buy all of its publicly traded shares for about $7.9 billion.
In addition to $21 in cash for each Cablevision share, investors would receive one share of Rainbow Media Holdings, a new company that will own Cablevision's cable channels, its pro sports teams and Madison Square Garden. Cablevision's chief executive, James L. Dolan, will run Rainbow. His father, Charles F. Dolan, will continue as chairman of Cablevision.
Cablevision's decision to go private follows a similar move by Cox Communications. Analysts said other cable companies might follow, as they seek to invest in new services without having to worry about meeting quarterly earnings expectations.
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June 25, 2005
China Decides to Show It Can Buy as Well as Sell
By MARK A. STEIN
AFTER years of aggressively selling things to America, China is now starting to buy just as aggressively. Its advantage remains price: Chinese companies are outbidding rivals in takeover battles as they have undercut competitors on price.
Meanwhile, two former executives were sentenced to prison for having stolen hundreds of millions of dollars from stockholders, a big accounting firm scrambled to avoid being indicted for selling tax shelters it acknowledges were illegal, and a federal appeals court ruling spurred a debate about whether businesses were over-regulated.
LONELY NO MORE China showed how willing it is to pay a premium for American industrial assets when a group led by Qingdao Haier, a Chinese appliance maker, said it planned to offer $1.3 billion for the Maytag Corporation, America's third-largest home appliance maker. Maytag, known for the lonely repairman in its ads, agreed in May to sell itself to Ripplewood Holdings, a private equity group, for $1.13 billion, but will now wait to see Haier's formal offer.
Two days later, another Chinese company popped an even bigger, potentially more significant deal. The China National Offshore Oil Corporation offered $18.5 billion for Unocal, a California oil company with huge reserves in Asia. The Chinese company was undeterred by the fact that Unocal had already agreed to sell itself to the Chevron Corporation for $16.4 billion. A bidding war seems likely, which could be bad news for Chevron because Chinese oil companies have shown a willingness to pay dearly for energy assets elsewhere.
China's acquisitiveness, including Lenovo's purchase of I.B.M.'s personal computer business in December, is raising alarms in Washington. Energy Secretary Samuel W. Bodman told Reuters that his department's review of the Unocal deal would be "a complex matter."
TOUGH ON CRIME A federal judge sentenced the father and son who ran the Adelphia Communications Corporation to long prison terms after they were convicted on multiple counts of bank fraud, securities fraud and conspiracy. They had looted hundreds of millions of dollars from the company and concealed its true debt load from investors.
The founder and chief executive, John J. Rigas, who is 80 and is suffering from bladder cancer and a heart ailment, was sentenced to 15 years, though that may be revised if he becomes terminally ill in the next two years. His son, Timothy J. Rigas, 49, the former chief financial officer, was sentenced to 20 years.
Another of John Rigas's sons, Michael J. Rigas, the former executive vice president for operations, was acquitted of conspiracy and wire fraud in the trial. But jurors were deadlocked on 15 counts of securities fraud and two counts of bank fraud, and he is scheduled to be retried on those charges in October.
GIMME SHELTER Executives at KPMG, the accounting firm, scrambled to head off a criminal indictment that could shutter the firm and a wave of client lawsuits that could force it to seek bankruptcy protection. At issue were tax shelters the firm sold from 1997 to 2001. KPMG earned $124 million in fees from the shelters, which let investors avoid a total of $1.4 billion in taxes.
KPMG has acknowledged "unlawful conduct" in selling the shelters, an admission that could make it easier to reach a deal with prosecutors to avoid criminal charges. But that makes it easier for clients to sue to recover the fees they paid KPMG and the taxes, penalties and interest they paid the government after the shelters were disallowed.
Regardless of how KPMG resolves its disputes with regulators and clients, the Justice Department is likely to seek criminal indictments of some of the firm's partners, former federal officials said.
TIME TO EASE OFF? A federal appeals court said the Securities and Exchange Commission should have performed a cost-benefit analysis before it decided that every mutual fund must have an independent chairman and a majority of independent directors on its board.
Opponents of regulation hailed the ruling as a victory because they said the benefit of new rules should justify the cost of complying with them. Supporters of regulations also claimed victory, however, because the court validated the commission's authority to impose such rules.
The S.E.C. acted last year after investigators found that some large fund companies had let favored investors share in the gains of some of their funds without taking the same risk as other investors.
The commission has said it will meet next Wednesday to reconsider the rule requiring each mutual fund to have an independent chairman.
FAMILY FEUD 2 Having picked a number of very public, heated arguments over the last year, the Dolan family took steps to draw a curtain around its broadcasting empire. Their company, Cablevision Systems, offered to buy all of its publicly traded shares for about $7.9 billion.
In addition to $21 in cash for each Cablevision share, investors would receive one share of Rainbow Media Holdings, a new company that will own Cablevision's cable channels, its pro sports teams and Madison Square Garden. Cablevision's chief executive, James L. Dolan, will run Rainbow. His father, Charles F. Dolan, will continue as chairman of Cablevision.
Cablevision's decision to go private follows a similar move by Cox Communications. Analysts said other cable companies might follow, as they seek to invest in new services without having to worry about meeting quarterly earnings expectations.
Copyright 2005 The New York Times Company Home Privacy Policy Search Corrections XML Help Contact Us Work for Us Back to Top
