We thought with the bankruptcies and bailouts, there would be a flurry of end-of-year dealmaking, but it hasn’t seemed to hit yet.
Lehman, so capably advised by Harvey Miller, has been relatively quiet, but it did just get approval for the sale of its investment management division, Neuberger Berman in a management buyout. In that $922 million deal (down from an anticipated $2.15 billion back in August), management will own 51% and Lehman’s creditors the balance.
AIG has been a little more active. Today it announced the sale of Hartford Steam Boiler to Munich Re for $742 million (after paying $1.2 billion for HSB in 2000). Joe Weisenthal summarizes HSB’s business but gets it a little wrong. He says it’s a solid business that will be around for a while, “but when a boiler blows up, it doesn’t ruin your whole business.” Despite the misnomer, HSB insures all sorts of physical plant equipment that actually does ruin a whole business if it blows up. He’s got the right point, though – why is AIG dumping off this solid, long-term, real business and holding onto the defaults and swaps?
Heidi Moore at Deal Journal summarizes a few other deals AIG has done, but in the end there are many miles to go before the taxpayers are paid back. Prior to HSB, the biggest business unit AIG has sold off since the government stepped in is its Swiss private bank to an Abu Dhabi investment group for $336 million (plus assumption of $83 million in debt). On the asset side, AIG dumped $39.3 billion of RMBSs for $19 billion to Maiden Lane II, a SIV of the NY Fed.
Of course, it’s got to be more fun than a barrel full of monkeys over at AIG right now. As if things weren’t bad enough, now Maurice Greenberg, the ousted CEO, is firing off sarcastic letters second guessing the pricing and ridiculing the entire AIG bailout.
Is there just not enough cash available or are businesses too focused on shoring up their balance sheets?
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I wish you the best of luck. ATL is in the shitter. Maybe you can be a safe harbor from Elie Mystal’s massive fuckup over there.
I wish you the best of luck. ATL is in the shitter. Maybe you can be a safe harbor from Elie Mystal’s massive fuckup over there.