WSF Headline Roundup - 5/14/08 - Icahn vs YHOO?; US foreclosures rise; Ex-UBS exec charged with tax fraud; Senate nixes oil reserve; Clear Channel deal; B of A expects higher home equity losses; AIG; Credit Agricole rts offer; IAC makes peace with Liberty

• Yahoo Rises on Reports That Icahn Is Considering Board Fight
• Hopes rise over Icahn’s Yahoo campaign
• U.S. Foreclosures Rise 65 Percent as Vacated Homes Add to Glut
• Ex-UBS Employee Charged over US Tax Fraud
• Senate rejects Bush policy of boosting oil reserve
• Bernanke Says Fed to Boost Loans to Banks as Needed
• Clear Channel parties have deal in principle
• Bank of America Expects Higher Losses on Home Equity
• Financial Rebels With a Cause: AIG
• Crédit Agricole forced into €5.9bn rights issue
• IAC and Liberty in agreement over IAC spin-offs
• Tribune Co. rejects latest offer for Wrigley
• Clinton's Wide Margin in West Virginia Won't Cut Obama's Lead

Yahoo Rises on Reports That Icahn Is Considering Board Fight - Bloomberg 

Yahoo! Inc., the Internet company that spurned a $47.5 billion bid from Microsoft Corp., rose in German trading on reports that billionaire investor Carl Icahn might try to unseat the board, opening the door to another offer.
 
  Icahn may use a stake of 50 million shares, accumulated this month, to nominate a full or partial slate of board members at Yahoo's annual meeting July 3, CNBC and the Wall Street Journal said yesterday. The investor may decide what to do by today, the newspaper said.
 
  The threat of a challenge from Icahn could persuade Yahoo Chief Executive Officer Jerry Yang to sell to Microsoft, said Sachin Shah, a merger-arbitrage analyst at ICAP Securities in Jersey City, New Jersey. Microsoft walked away from its bid on May 3 after Yang demanded more. Icahn has used board challenges at companies such as Motorola Inc. to influence their strategy.
 
  ``This is kind of a best-case scenario,'' said Shah, who recommends buying Yahoo shares. ``If anybody is going to come off the bench and solicit a proxy, you want Carl Icahn to be the guy.''....

Hopes rise over Icahn’s Yahoo campaign - Financial Times

Yahoo’s shares jumped to their highest level since Microsoft abandoned its takeover offer as expectations rose on Tuesday that the internet company was about to come under renewed pressure to consider a deal.

Carl Icahn, the activist investor, is considering proposing nominees to the company’s board as a way to force Yahoo’s hand, according to one investor who has worked as an ally with him on similar situations.

This investor, and other media reports, also claimed that Mr Icahn had amassed a stake of as much as 4 per cent of Yahoo’s shares in preparation for a fight.

Yahoo has set a deadline of Thursday for shareholders to propose alternative directors to be voted on at its annual meeting on July 3, leaving little time for organised opposition to emerge after Microsoft’s surprise abandonment of its $46.5bn bid less than two weeks ago.....

 

Ex-UBS employee charged over US tax fraud - Financial Times

 

Two bankers, including a former employee of UBS, the world’s leading wealth manager, have been charged by US authorities with helping a American billionaire evade income taxes on about $200m of assets deposited in Swiss and Liechtenstein bank accounts.

Bradley Birkenfeld, Mario Staggl and “others known and unknown” were accused in the indictment, unsealed on Tuesday, of conspiring to defraud the US from at least 2001 by engaging in a scheme that included falsifying documents, helping to set up shell companies and destroying banking records.

Mr Birkenfeld, who appeared in court on Tuesday, is a former UBS private banker, based in Geneva, who became involved in a legal dispute with his former employer over the terms of his employment and compensation, the Financial Times has learnt. The indictment said he was a US citizen who had lived in Switzerland since 1996.

Mr Birkenfeld was formerly a member of the team headed by Martin Liechti, one of the most senior private bankers at UBS. The FT identified Mr Liechti as the person recently detained by authorities in the US investigating whether the Swiss bank had helped US clients evade US tax obligations.

 

U.S. Foreclosures Rise 65 Percent as Vacated Homes Add to Glut - Bloomberg 

U.S. foreclosure filings climbed 65 percent and bank seizures more than doubled in April from a year earlier as rates on adjustable mortgages increased and vacated homes added to a glut of unsold homes, RealtyTrac Inc. said.
 
  More than 243,300 properties, or one in every 519 households, were in some stage of foreclosure, the highest monthly total since RealtyTrac, a seller of default data, began statistics in January 2005. Nevada, California and Florida had the highest rates. Filings rose 4 percent from March.
 
  The collapse of the U.S. housing market, the worst since the Great Depression, is contributing to the economic slowdown and may push the economy into a recession. Median prices for a single- family home fell 7.7 percent in the first quarter, the biggest drop in 29 years, the National Association of Realtors reported yesterday. There were 4.06 million U.S. homes for sale at the end of March, 40,000 more than the prior month, the Realtors association said in an April 22 report.
 
  ``Inventory levels have soared to unprecedented levels'' Brian Fabbri, chief North American economist for BNP Paribas, said in an interview. ``Builders and homeowners have to lower their prices significantly to sell that inventory out.''....

Senate rejects Bush policy of boosting oil reserve - Reuters 

The U.S. Senate voted overwhelmingly on Tuesday to stop adding oil to the Strategic Petroleum Reserve until crude prices fall below $75 a barrel, repudiating the Bush administration's policy of boosting the stockpile at a time of record fuel costs.
 
  The Senate voted 97 to 1 to suspend oil deliveries to the emergency oil reserve, after most Republicans abandoned the president on the issue. The plan was tacked on to a flood insurance reform bill that passed 92 to 6, enough to override a presidential veto.
 
  "Instead of hiding barrels of oil in the nearly full Strategic Petroleum Reserve, we want to put them on the market to increase supply and lower prices," said Senate Majority Leader Harry Reid.
 
  "When the American consumer is being burned at the stake by high gas prices this government ought not be carrying the wood. It's just that simple," said Democrat Byron Dorgan, the main sponsor of the proposal.....

Bernanke Says Fed to Boost Loans to Banks as Needed - Bloomberg 

Federal Reserve Chairman Ben S. Bernanke said financial markets remain unsettled and the central bank will increase its auctions of cash to banks as needed.
 
  While markets have improved, they remain ``far from normal,'' Bernanke said today in a speech to an Atlanta Fed conference at Sea Island, Georgia. ``We stand ready to increase the size of the auctions if further warranted by financial developments.''
 
  Bernanke's comments contrast with those by Treasury Secretary Henry Paulson and Wall Street leaders including Vikram Pandit, chief executive officer of Citigroup Inc., who say the worst of the credit crisis is over. The Fed chief said it will take ``some time'' for financial firms to resolve the crisis by raising new capital and strengthening their management of risk.....

Clear Channel parties have deal in principle - Reuters 

The dispute over financing the leveraged buyout of U.S. radio operator Clear Channel Communications ended late Tuesday as the parties reached agreement to settle the litigation and struck a new deal at a lower price of $17.9 billion (9.2 billion pounds).
 
  It brings to an end court battles between the private equity buyers, Clear Channel, and the banks which agreed to finance the deal when lending was more lucrative. It also resuscitates a deal that has been in jeopardy for months.
 
  The new deal will see Thomas H. Lee Partners and Bain Capital pay $36 a share to buy the radio operator, as opposed to the $39.20, or close to $20 billion, they agreed at the peak of the private equity boom last year.
 
  "It's a great company and the economics of the business are great," Clear Channel Chief Executive Mark Mays told Reuters in an interview. "While you don't like to sue the people that lend you money, sometimes is it necessary. This was an equitable deal for everyone."....

Clear Channel Agrees to Buyout at Reduced Price as Banks Settle - Bloomberg 

Clear Channel Communications Inc., the largest U.S. radio broadcaster, agreed to a buyout at a reduced offer of $36 a share as private-equity firms and banks financing the deal reached a legal settlement.
 
  The purchase price, valuing the takeover at $17.9 billion, is lower than the $39.20 a share Bain Capital LLC and Thomas H. Lee Partners LP agreed to pay last year, according to a statement issued by Clear Channel late yesterday. The agreement with Citigroup Inc. and five other banks settles lawsuits in New York and Texas over claims the lenders refused to provide $22.1 billion in promised funding.
 
  The accord caps more than 1 1/2 years of wrangling over the buyout amid declines in radio advertising sales and the leveraged-lending market. Shareholders will vote on the revised offer and the purchase is expected to close by the end of the third quarter pending approval, Clear Channel said.
 
  ``This agreement greatly increases the certainty the merger will close,'' Clear Channel Chief Executive Officer Mark Mays said in the statement.....

Bank of America Expects Higher Losses on Home Equity - Bloomberg 

Bank of America Corp., the nation's biggest consumer bank, said losses on home-equity loans will be even worse than predicted three weeks ago, adding to evidence that more consumers are falling behind on debts.
 
  More customers are under financial stress and using credit cards to pay for necessities, said Liam McGee, president of the consumer and small business division, at an investor conference today in New York. Losses on the bank's $118 billion in loans linked to home values may top 2.5 percent, higher than the 2 percent to 2.5 percent projected last month. He didn't specify a time frame.
 
  Credit-card customers are cutting back on retail, travel and entertainment purchases, said McGee, whose company is the nation's largest credit-card issuer and ranks No. 1 by deposits. That backs up economists and bankers who say the U.S. may be teetering near a recession as consumers struggle with job losses and gasoline prices of more than $4 a gallon.
 
  McGee said Bank of America expects the economy, measured by real gross domestic product, will shrink in the second quarter. The bank had $184 billion of credit card debt outstanding at the end of the first quarter and about a 20 percent market share.....

Financial Rebels With a Cause: AIG - Wall Street Journal 

Maurice R. "Hank" Greenberg, who built American International Group Inc. into the world's largest insurer in his nearly 40 years as chief executive, upped the pressure on current management in a sharply worded letter that said "AIG is in crisis" and called on directors to postpone Wednesday's annual meeting.
 
  "I am as concerned as millions of other investors as I watch the deterioration of a great company," wrote Mr. Greenberg, who is a major holder of AIG shares himself, and also heads Starr International Co., AIG's largest shareholder.

AIG's board responded that it sees no need to postpone the annual meeting, according to a spokesman.
 
  AIG and its chief executive, Martin Sullivan, a onetime top deputy to Mr. Greenberg, are under pressure to halt the losses it is suffering on investments tied to subprime-mortgage securities.....

Crédit Agricole forced into €5.9bn rights issue - Financial Times 

Crédit Agricole is planning a €5.9bn ($9.1bn) rights issue to shore up its capital base after large writedowns at Calyon, its investment banking arm.
 
  France’s third-largest bank by market capitalisation, in a statement released ahead of Thursday’s results, confirmed a €1.2bn writedown at Calyon in the first three months of the year related to losses in the US subprime market. This followed a €3.3bn writedown in the final quarter of last year.

The news came a day after the Financial Times confirmed that the head of Calyon, Marc Litzler, was to be replaced because of the bank’s losses linked to US subprime mortgages.....

IAC and Liberty in agreement over IAC spin-offs - Financial Times 

Barry Diller’s IAC/InterActiveCorp and its controlling shareholder, John Malone’s Liberty Media, have reached an agreement on spinning off four of IAC’s largest businesses, putting to rest a dispute that took the two top executives to court.
 
  Liberty said it now backs a proposal by Diller that the spun-off IAC units operate under a single-tier share structure, a move that would dilute Liberty’s control but, Diller argued, would make them more attractive to outside investors.

IAC plans to spin off its HSN cable shopping network, Ticketmaster box office service, Interval time share exchange and LendingTree online mortgage business. The remaining IAC will focus on its Internet media and advertising businesses.
 
  Liberty agreed to drop an appeal, filed last week, of a Delaware court decision from late March over the spin-offs and said it would support IAC’s proposed control structure for the units as independent entities....

Tribune Co. rejects latest offer for Wrigley - Chicago Tribune 

Tribune Co. on Tuesday rejected the latest proposal from the Illinois Sports Facilities Authority to acquire Wrigley Field, saying that the new undisclosed offer was not workable from a team standpoint.
 
  "Any transaction transferring ownership of Wrigley Field to the public must satisfy the interests of Tribune, the Cubs and the public. While we appreciate the creativity of the latest ISFA proposal, it does not work from Tribune's or the Cubs' perspective,'' said Crane Kenney, Cubs Chairman. "We'll continue working with the city and state and at the same time begin the private process to explore interest in the team, stadium and our ownership interest in Comcast SportsNet.'....

Clinton's Wide Margin in West Virginia Won't Cut Obama's Lead - Bloomberg 

Hillary Clinton won an overwhelming victory in yesterday's West Virginia primary that did little to dent Barack Obama's lead in the Democratic presidential race.
 
  With more 90 percent of precincts reporting, Clinton captured 67 percent of the vote and the bulk of the state's 28 pledged delegates. She vowed to continue through five remaining primaries, even as Obama turns his sights on Republican John McCain.
 
  While Clinton called the result ``a vote of confidence'' in her candidacy, Stephen Wayne, a professor of government at Georgetown University in Washington, said it won't alter the trajectory of her campaign or Obama's.
 
  ``Superdelegates are continuing to announce for him. Calls for her withdrawal are getting more persistent. The die has been cast,'' Wayne said before the vote....