AT&T to sell Yellow Pages 53 percent stake to Cerberus

DALLAS, Mon Apr 9, 2012 – AT&T Inc. said on Monday it would sell a 53 percent stake in its Yellow Pages business to private equity firm Cerberus Capital Management LP, which will pay AT&T $750 million in cash and take on $200 million in debt.

AT&T had said in January that it would consider selling the dwindling business, which generated about $3.3 billion in revenue in 2011. After the deal the telephone directory business will honor existing union contracts, the company said.

AT&T said it expects the deal to have a minimal effect on 2012 earnings and does not expect a material gain or loss.

Hearst Corp. acquires stake in Stylus Media Group

NEW YORK, Thu Mar 29, 2012 – Broadcaster and publisher Hearst Corp. said it has acquired a 20 percent stake in Stylus Media Group, a website which tracks consumer behavior and trends across industries ranging from automobiles to fashion and hospitality.

The privately held companies did not disclose the terms of the deal.

Hearst Corp., founded by media magnate William Randolph Hearst in 1887, is a diversified media and information company, which owns newspapers such as the Houston Chronicle and the San Francisco Chronicle and magazines such as Cosmopolitan and Harper’s Bazaar. The company also holds interests in various TV and Radio stations.

Hearst’s Interactive Media Group segment will handle the company’s stake in Stylus and Kenneth Bronfin, President of Hearst Interactive Media will join the Stylus’ board.

London-based Stylus Media Group, launched in September 2010, caters to diversified clients such as Saatchi and Saatchi, Starwood Hotels and Resorts, Ford and Sony among others, and has a worldwide staff of 100 employees.

Morgan Stanley wants all of Citi Group venture-sources

NEW YORK, Fri Mar 23, 2012 – Morgan Stanley is interested in buying all of Citigroup Inc’s. stake in their wealth management joint venture this year in what could be a roughly $10 billion deal, said people familiar with Morgan Stanley management’s thinking.

Under the terms of the Morgan Stanley Smith Barney joint venture, Morgan Stanley will get an option starting May 31 to buy 14 percent more of the business from Citigroup, adding to the 51 percent stake it already has. It has options to buy the remaining portion in two more chunks through May 2014.

But both sides are beginning to suggest they would be interested in doing a deal for Citigroup’s entire 49 percent stake now instead of waiting for two more years, and have started behind-the-scenes posturing to negotiate.

Morgan Stanley and Citigroup spokespersons declined to comment on the potential for an accelerated deal.

Citigroup is carrying its stake in Morgan Stanley Smith Barney at a $21 billion valuation, while Morgan Stanley is carrying its stake at just shy of a $20 billion valuation. That means the 49 percent stake was worth $10.3 billion or $9.7 billion, respectively, as of Dec. 31.

While that might not be a large gap, investment bankers and analysts said Morgan Stanley is likely to come in with an initial lowball offer in the range of $15 billion, while Citigroup is likely to counter with a value of around $23 billion.

From Morgan Stanley’s point of view, Citigroup’s need to raise capital, as well as weak earnings and soft valuations for financial firms, should make it an eager seller.

The U.S. Federal Reserve this month denied Citigroup’s request to raise dividends after the bank failed its stress test. Citigroup is submitting a revised plan, which would either require a more modest dividend request or more capital. Selling its entire stake in Morgan Stanley Smith Barney would give it more flexibility to pay higher dividends.

Buffett builds $10.7 billion stake in IBM, tied for largest share

OMAHA, Neb. ― Warren Buffett said his Berkshire Hathaway Inc. has accumulated a 5.5 percent stake in IBM, the billionaire investor’s biggest bet in the technology field he has historically shunned.

Buffett, in a CNBC interview on Monday, said he had bought about 64 million shares of IBM at a cost of $10.7 billion. Berkshire started buying the shares in March, with a goal of building a $10 billion position, he said.

Buffett said IBM did not know that he was building a stake and that the company was finding out about his investment for the first time as he disclosed it on CNBC.

IBM spokesmen were not immediately available to comment.

The legendary investor said he has always looked at IBM’s annual report — his preferred method of identifying companies to invest in — but this year “I read it through a different lens.”

Buffett said follow-on conversations with various technology executives throughout the Berkshire conglomerate convinced him to start building the stake.

Berkshire is due to make a quarterly report of its equity holdings on Monday night.

According to Thomson Reuters data, a 5.5 percent position in IBM would tie Buffett with State Street Global Advisors for the largest stake in the company.

IBM shares rose nearly 1 percent in premarket trading. Since early March, when Buffett started building his position, IBM shares are up about 17 percent, against a 3 percent decline for the S&P 500.

One place where Buffett is not investing is European banks.

Buffett, who put $5 billion into Bank of America Corp earlier this year, comes up whenever there is talk of a large European bank needing to raise capital, particularly in the current environment of writedowns on sovereign debt.

But he told CNBC that he would need to understand European banks better before investing in them, and that he has not yet seen an investment opportunity there in which he wants to take part.

The “Oracle of Omaha” and Berkshire Hathaway chief executive said he expects Europe’s economy to show improvement 10 years from now, but getting there will be difficult.