GM board to finalise bankruptcy General Motors' board will meet on Friday to approve the stricken carmaker's move into bankruptcy protection after agreeing an 11th-hour deal with some of its biggest bondholders. Holders of $27bn of unsecured bonds will get up to 25% of the restructured company - much more than the 10% stake proposed earlier - enabling GM to spend a shorter time in Chapter 11 protection. Washington will provide more than $30bn on top of $20bn in existing loans to carry GM through bankruptcy, with several billion dollars more expected from the Canadian government. The US government has also agreed to turn the loans into a controlling ownership stake in GM of up to 72.5%. See this article online.
http://ftalphaville.ft.com/blog/2009/05/29/56374/gm-board-to-finalise
| Row intensifies over GM's Europe units General Motors was poised to file for bankruptcy protection as tensions over the fate of GM's Opel/Vauxhall operations in Europe broke into the open, with German officials accusing Washington of an "ambush" after the failure of critical bail-out talks early on Thursday morning. The collapse of the talks created growing uncertainty amid the 5,500 Vauxhall workers in the UK. The business secretary, Lord Mandelson, angrily rejected claims by Unite, the union, that one of Vauxhall's two UK plants was under threat from the restructuring of GM Europe. See this article online.
http://ftalphaville.ft.com/blog/2009/05/29/56375/row-intensifies-over
| Sky bids big for Virgin Media channels British Sky Broadcasting has made what appears to be a knock-out bid for a package of seven digital television channels owned by Virgin Media, offering about 60% higher than its nearest challenger. None of the other declared bidders, including Channel 4, Time Warner, RTL and NBC Universal, have bid much more than £100m - well short of BSkyB's £160m approach. The BSkyB bid creates a dilemma for Virgin Media, which aims to reduce its net debt of £5.9bn but would hesitate to sell to its fiercest rival in the distribution of programming. See this article online.
http://ftalphaville.ft.com/blog/2009/05/29/56373/sky-bids-big-for-vir
| Terra Firma injects more cash into EMI UK buyout firm Terra Firma has been forced to inject more cash into EMI for the second time in six months, after the debt-laden UK music group missed targets imposed in its banking covenants. Terra Firma, run by Guy Hands, injected £28m into EMI in March, indicating its first-half results to March 31 failed to live up to conditions in the £2.6bn in loans Citigroup extended to finance the £4bn EMI takeover in 2007. The news comes amid revived speculation of possible bid interest in EMI. See this article online.
http://ftalphaville.ft.com/blog/2009/05/29/56372/terra-firma-injects-
| Time Warner to spin off AOL by year-end Time Warner will spin off the entire AOL internet business by year-end, the US media group said on Thursday, bringing the curtain down on one of the biggest and worst deals in history. AOL's all-share acquisition in 2001 valued Time Warner at $164bn but was followed by a series of huge write-downs, including a $100bn charge in 2002. Steve Case, former AOL chief executive and an architect of the deal, using the Twitter messaging service on Thursday welcomed the separation. See this article online.
http://ftalphaville.ft.com/blog/2009/05/29/56371/time-warner-to-spin-
| Investors fear bank tests too lax Shares in British banks fell on Thursday after it emerged that economic assumptions used to test whether some of the biggest institutions could withstand a deep recession may have been less stringent than assumed in financial markets. The FSA financial regulator published details of the worst-case economic scenarios used to test banks including RBS, Barclays and Lloyds, prompting some analysts to suggest that some of the assumptions were merely on "the bearish edge" of existing forecasts. See this article online.
http://ftalphaville.ft.com/blog/2009/05/29/56370/investors-fear-bank-
| Credit Suisse begins UK property sale Credit Suisse has begun a sale of its London property estate that could raise as much as £500m as part of a strategy to focus on core banking operations. The investment bank this week instructed CB Richard Ellis to begin marketing the smaller of its two buildings in Canary Wharf, with indications that its landmark tower at Cabot Square is also likely to go up for sale by year-end. See this article online.
http://ftalphaville.ft.com/blog/2009/05/29/56369/credit-suisse-begins
| Greenlight's Einhorn shorts Moody's Shares of Moody's fell sharply on Thursday after hedge fund manager David Einhorn, who correctly questioned the health of Lehman Brothers four months before its collapse, disclosed he was shorting the ratings agency, reports Reuters. Einhorn, whose Greenlight Capital manages $5bn, said Wednesday the parent of Moody's Investors Service undercut the value of its primary business - assigning grades to bonds - after giving AAA ratings to insurer AIG, mortgage banker Fannie Mae, bond insurer MBIA and other companies later revealed to be badly overextended. See this article online.
http://ftalphaville.ft.com/blog/2009/05/29/56368/greenlights-einhorn-
| Candover to sell Wood Mackenzie Candover, the ailing UK-listed private equity group, is close to agreeing the sale of Wood Mackenzie, the fast-growing energy consultancy, for which it expects to receive four bids from rival buyout groups next week. The deal, which Candover hopes will value the Edinburgh-based company as high as £650m, would provide a boost as Candover looks to sell all or part of itself to resolve its own liquidity crisis. But some bidders say the asking price – set by Goldman Sachs - is too high. See this article online.
http://ftalphaville.ft.com/blog/2009/05/29/56366/candover-to-sell-woo
| US commercial property raises debt fears Fears have grown among US credit investors that probable ratings downgrades of commercial property debt might thwart US government efforts to revive the markets that help fund commercial real estate. S&P warned this week it was likely to downgrade tens of billions of dollars in triple A securities backed by recent real estate loans – with 90% of the securities backed by 2007 mortgages likely to face rating cuts. The move surprised the market and triggered a sharp fall in the value of AAA-rated commercial mortgage-backed securities
. See this article online.
http://ftalphaville.ft.com/blog/2009/05/29/56365/us-commercial-proper
| Man Group profits tumble Man Group's annual profit tumbled by nearly two-thirds while investors continued to pull out billions of dollars after March 31. Assets under management by the UK's biggest listed hedge fund group dropped 7.8% to $44bn after the end of the fiscal year, reflecting net outflows of $4.4bn from institutional investors. However, the group said private investors were starting to return. Man now has $28.5bn in private investor funds under management against $15.5bn in institutional funds. See this article online.
http://ftalphaville.ft.com/blog/2009/05/29/56364/man-group-profits-tu
| NY insurance chief Dinallo resigns Eric Dinallo, New York's insurance superintendent, is resigning to take up a position teaching finance at New York University's Stern School of Business. Dinallo took the position as the state's insurance regulator in January 2007, tackling a range of crises including the collapse of AIG and upheavals in the bond insurance market. He is widely as a contender to become New York's next attorney-general if Andrew Cuomo, the incumbent, runs as the Democratic nominee for governor in 2010. See this article online.
http://ftalphaville.ft.com/blog/2009/05/29/56367/ny-insurance-chief-d
| Overnight markets: Modestly up Asian stocks rose on Friday, led by mining companies, as better-than-expected Japanese factory output figures boosted copper prices. Futures on the S&P500 Index lost 0.2% after the gauge climbed 1.5% on Thursday as a rebound in 10-year Treasuries eased concerns that record government debt sales would trigger higher borrowing costs, and oil prices climbed.
Asian markets (Fri)
03:15 BST
Nikkei up 5.78 (0.06%) at at 9,457.17
Topix down 1.05 (-0.10%) at 894.54
Hang Seng up 105.02 (0.59%) at 17,990.29 US markets (Thurs)
S&P500 up 13.77 (1.54%) at 906.83
DJIA up 103.78 (1.25%) at 8,403.80
Nasdaq up 20.87 (1.20%) at 1,751.79
European markets (Thurs)
Eurofirst 300 down 10.42 (-1.20%) at 860.21
FTSE100 down 28.69 (-0.65%) at 4,387.54
Currencies
03:40 BST
€/$ 1.3862 (1.3824)
$/¥ 96.4100 (95.500)
£/$ 1.5959 (1.5971) Commodities
03:50 BST
Brent Crude (ICE) down $0.32 at $64.07
Light Crude (Nymex) down $0.27 at $64.81
100 Oz Gold (Comex) down $1.10 at $960.40
Copper (Comex) up $1.30 at $215.00 10-year government bond yields (%)
03:20 BST
US 3.61 (3.72)
UK 3.79 (3.74)
Germany 3.63 (3.63)
Japan 1.49 (1.49) Sources: FT, Bloomberg See this article online.
http://ftalphaville.ft.com/blog/2009/05/29/56363/overnight-markets-mo
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