Posts Tagged ‘Abu Dhabi’

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How Fink- Staveley Deal Went Awry

June 24, 2009

Wall Street Journal 23 June 09

From the outside, BlackRock‘s $13.5 billion acquisition of Barclays’s money-management unit looked like any other smoothly orchestrated deal. Behind the scenes, though, the announcement was preceded by a high-stakes, last-minute tussle with a major backer who failed to come through with what BlackRock expected.

On the evening of June 9, BlackRock Chief Executive Laurence D. Fink was finalizing the details of the deal to acquire Barclays’s money-management unit, Barclays Global Investors. The acquisition would make BlackRock the world’s largest money manager, overseeing $2.8 trillion in assets. And it would propel Mr. Fink, who long dwelled just below Wall Street’s top rungs, to a perch above his peers.

Enter Amanda Staveley, a 36-year-old British citizen who has for years been plying the Persian Gulf. Ms. Staveley runs PCP Capital Partners, which has brokered investments from the Gulf into British companies. Ms. Staveley is credited with placing a £3.5 billion ($5.77 billion) investment from Abu Dhabi into Barclays last fall. Just months earlier, she earned the title of “Queen of British Football” after arranging the takeover of soccer club Manchester City for buyers from Abu Dhabi. All this has earned her the adoration of the British press, which constantly reminds readers that Ms. Staveley once dated Prince Andrew and was a fashion model and aspiring Olympic sprinter.

Weeks before, Ms. Staveley and Mr. Fink had begun discussions about cooperating. Ms. Staveley said that she could deliver billions of dollars from Gulf sovereign-wealth funds to help fund the deal, said people familiar with the transaction. After a late May visit to Abu Dhabi and Qatar, Mr. Fink penciled in at least $2 billion from Ms. Staveley as part of his acquisition plan, said these people.

Mr. Fink and his advisers planned to announce the transaction the following morning, on June 10, said people familiar with the deal. That Tuesday evening they called on Ms. Staveley, then in the Gulf, to deliver the final paperwork. The most important element was commitment letters from the sovereign-wealth investors. Those letters legally commit investors to a deal, and provide a grounds for lawsuits in the event that the investors renege.

It is here where things went awry, said the people familiar with the transaction. Ms. Staveley didn’t produce letters directly from the investors, but rather from a special-purpose vehicle managed by Ms. Staveley. That wasn’t satisfactory to BlackRock, which wanted to know exactly who was investing in the deal. A person close to the investment vehicle said that such requests were made only at the end of the transaction, and weren’t a requirement in the weeks leading up to the deal’s closing.

Moreover, Mr. Fink expected that sovereign-wealth funds, notably the Qatar Investment Authority, were putting money into the transaction. Yet BlackRock and its lead advisers at Citigroup couldn’t get a clear sense of just where the $2 billion-plus was coming from, said the people familiar with the transaction.

Eventually, BlackRock executives gathered it was coming from a group of wealthy individuals. But Ms. Staveley wouldn’t specify exactly whom, these people said. A person close to the investment vehicle said prospective backers demanded anonymity as part of any investment, a common practice in the Gulf region, and that she had the full amount in hand.

The two sides got into a shouting match, these people said. Late Tuesday night, BlackRock and its advisers became restless. “Where is the money?” they repeatedly asked. Eventually, bankers at Perella Weinberg Partners were called in to assess Ms. Staveley’s investors. One of the bankers called the Qatar Investment Authority, which happened to be a backer of Perella Weinberg. They were told that Ms. Staveley wasn’t working for them, the people familiar with the matter said.

A person close to the investment vehicle said there had been direct negotiations involving Ms. Staveley’s firm, the Qatar Investment Authority and BlackRock in the days leading up to June 9.

By Wednesday, BlackRock had become frustrated and cut off dealings with Ms. Staveley. But that left a $2.3 billion hole. BlackRock needed the money in hand by Friday. Its exclusive deal was set to expire then, leaving a rival free to pick up BGI.

Mr. Fink didn’t panic. He started making calls. Within hours, the commitments came in. PNC Financial Services Group, a longtime BlackRock shareholder, stumped up for cash. As did sovereign-wealth funds from Singapore, China and Kuwait. Next was Highfields Capital Management, a hedge fund. In less than 24 hours, Mr. Fink had enough clout to find $2.8 billion and save his deal.

When BlackRock and Barclays announced their transaction the next morning, the companies’ statement made only the slightest mention of “institutional investors” purchasing a total of $2.8 billion in BlackRock stock. In Wall Street’s deal game, the things that look the simplest probably aren’t.

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Abu Dhabi Boosts Stake in Daimler

March 25, 2009

Islamics can destroy the Western auto industry by manipulating oil prices.  Now they’re buying and owning western auto industries.  Our only weapon?  Don’t buy their product and watch how many they can sell in the Muslim world.

Don

multiple articles:

Abu Dhabi boosts stake in Daimler investment firm

DUBAI, United Arab Emirates — A company owned by the government of Abu Dhabi has pumped an additional $1.41 billion into Aabar Investment PJSC, giving the emirate majority control in the investment firm set to become Daimler AG’s biggest shareholder.

The announcement Monday came a day after Abu Dhabi-based Aabar — an investment vehicle set up by the Persian Gulf sheikdom — said it would pay nearly euro2 billion ($2.72 billion) for a 9.1 percent stake in the German automaker best known for its Mercedes-Benz brand.

Aabar differs from many of the oil-rich Persian Gulf’s sovereign wealth funds in that some of its shares are publicly traded. That arrangement is expected to continue, although the government will now have a clear controlling interest in Aabar.

In a statement Monday, Aabar said Abu Dhabi’s International Petroleum Investment Co. has finished buying 5.18 billion dirhams ($1.41 billion) in Aabar bonds that will be converted into ordinary shares.

IPIC is fully owned by the government of Abu Dhabi, the largest of the seven semiautonomous city-states comprising the UAE and holder of most of the Persian Gulf country’s vast oil wealth. Abu Dhabi is the federation’s capital.

Monday’s announcement follows a similar cash injection worth about $408 million by IPIC last month. Once the latest stock conversion is complete, IPIC will own 71 percent of Aabar, up from about 36 percent now.

Officials from Aabar and IPIC did not immediately respond to request for comment.

IPIC is chaired by Sheik Mansour Bin Zayed Al Nahyan, a prominent member of Abu Dhabi’s ruling family, which controls the United Arab Emirates presidency. He led the takeover of English football team Manchester City and joined Qatari investors in pumping billions of dollars into British bank Barclays PLC last year.

The Daimler deal appears to be Aabar’s biggest overseas investment yet.

In December, Aabar agreed to buy American International Group Inc.’s Swiss-based wealth management arm AIG Private Bank Ltd. According to its annual report, Aabar paid 307 million Swiss francs ($273 million) for the bank and assumed about 100 million Swiss francs worth of debt.

Aabar will become Daimler’s largest shareholder. The automaker’s second-largest owner is Kuwait’s primary sovereign wealth fund, which has a 6.9 percent stake.

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German groups seek Mideast cash to fend off hostile investors

By Daniel Schäfer in Frankfurt, Andrew England in Abu,Dhabi and Richard Milne in London

Financial Times | 24 Marcy 2009

Published: March 24 2009 02:00 | Last updated: March 24 2009 02:00

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German companies are looking eastwards. Daimler’s move to bring in Abu Dhabi-based Aabar Investments is seen by many as a showcase of how large German industrial groups are turning to the Middle East in search for cash, anchor investors and growth opportunities.

The global economic recession has made many German blue-chip companies, which often have a large free float, vulnerable to attacks from hostile shareholders and has spurred the need for fresh equity to bolster their balance sheets.

“There are a lot of German companies searching for anchor investors at the moment,” the head of German operations at a large investment bank said.

Some, such as the debtridden German car parts maker Schaeffler, have been desperately banging on the doors of Gulf funds and other sovereign wealth investors in Asia without being allowed in.

Gulf sovereign investment vehicles, boosted by soaring oil prices, had been particularly active until recently – most visibly with investments in ailing western banks, but also across asset classes and geographical areas.

However, the collapse in oil prices and plunge in global stock markets have resulted in a more cautious approach.

A senior official at the Qatar Investment Authority, for example, recently said it would hold off on investments over the next six months.

But one general trend that benefits both sides remains intact: the quest for value investments in companies that are technologically at the forefront and that can help Gulf countries to expand their domestic economies.

A blueprint for such deals has come from the US, where General Electric last year announced a deal with Mubadala, Abu Dhabi’s increasingly powerful investment vehicle.

Under the agreement, Mubadala bought a stake in GE and has created an €8bn ($11bn) joint venture with the company’s finance arm in the Middle East

Siemens, the German industrial conglomerate, has been talking to investors from the Middle East and Russia for a while about a similar deal that could strengthen its long-term investor base and boost its growth opportunities in the Gulf.

Peter Löscher, Siemens’ chief executive and a former GE manager, told colleagues last year that he was particularly struck by the GE deal.

“I think we could see a new paradigm. These investors don’t have to take over the company, but could acquire a portfolio of stakes in the best industrial companies,” he said.

“They have the money and a big market, so it is a double advantage.”

Similar deals to GE’s have followed. A couple of months ago, MAN, the German truck and engineering conglomerate, spun off 70 per cent of its industrial service unit to Aabar to create a joint venture in the sector.

The Daimler investment is only the latest example of such a deal, but it will not be the last.

Khadem Al-Qubaisi, Aabar’s chairman, told the Financial Times on Sunday that the investment company was interested in buying into further German companies in the near future.

“There are a few companies on the list,” Mr Al-Qubaisi said, praising German companies for their technology, management and skilled workforces.

“We want to buy value and high quality assets,” he said.

He said there was interest in a petrochemical company in Germany, but gave no further details.

Dieter Zetsche, Daimler’s chief executive, told the FT in October that it had been approached by several investors from the “east and south-east” that would like to make big investments in the company.

A Gulf-based banker added he expected the funds to be more “opportunistic,” with a focus on where they felt there was value.

He said they remained in an “enviable position,” in spite of the losses they have suffered in the market turmoil.

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Daimler deal fuels rival makers

By Emmanuelle Smith and Miles Johnson | Financial Times March 24 2009 02:00

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Shares in Daimler rose yesterday after Abu Dhabi-based Aabar Investments agreed to take a 9 per cent stake in the German luxury carmaker.

The €1.9bn deal sparked fresh speculation that other Middle Eastern investors might have their sights on European companies damaged by the downturn.

Daimler shares gained 1.4 per cent to €21.64. Elsewhere in the sector, BMW rose 2.8 per cent to €22.60 while Volkswagen rose 1 per cent to €212.24.

French carmaker Renault ‘s shares increased 3.7 per cent to €15.56. The group was upgraded by Goldman Sachs, the broker, from “sell” to “neutral”. French peer Peugeot , however, was downgraded from “neutral” to “sell” – its shares fell 2.4 per cent to €15.92.

Goldman Sachs said the valuations of western European car manufacturers made this the “best buying opportunity in 10 years” and upgraded its sector coverage to “attractive”.

“We now see light at the end of the tunnel,” the broker said in a note, adding that “car sales declines troughed in February”.

“Historically, such troughs have marked highly attractive entry points, preceding both absolute and sector-relative performance,” it said.

Edmund Shing, European equities strategist at BNP Paribas, was more circumspect. He said of the Daimler deal: “The sector will clearly benefit in the short term, but the need to reinforce balance sheets implies that carmakers anticipate conditions remaining awful.”

He added that, in spite of measures such as France’s €7.8bn state aid package, there would “nonetheless be a sharp retrenchment in consumer spending”.

In the wider market, the pan-European FTSE Euro-first 300 index rose 3 per cent to 739.52, with insurers and banks adding the most points, as they anticipated, and then digested, details of the US Treasury’s toxic asset plans. The French CAC 40 gained 2.8 per cent to 2,869.57 and the Dax was up 2.6 per cent to 4,176.37.