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| Deals and Dealmakers Mergers, Lbos and general greedheadness |
| Everyone loves a deal story. We follow deals because the big ones always include someone scraping millions of dollars off the table -- or trying to -- with all the ego, avarice and human drama that implies. There are definitely bigger "deals and dealmakers" writers than me out there, but I've had my moments. My real deal-story specialty is IPO coverage, and those are in the ''IPO Clips'' category rather than here. Go to that tab to see my coverage of Google, Orbitz, Athenahealth or other startups. This page is about mergers and LBOs -- some that got done, some that fell apart, and some that should've been done but never were. My stories, because of the brands and goals of the publications where I've worked, tend to be stronger on the intellectual aspects of finance and strategy, and less concerned with the personalities of the dealmakers. That's one thing I'm looking to change at my next stop by expanding what I do to cover the rivalries and grudges and ambitions that lie just beneath many of these stories. I'll still do the numbers -- I'm deep into the numbers -- but I want to do both. Some of my favorites: Priceline. How many people did you know in the fourth quarter of 2000 who looked at Priceline, then fresh from a $199 million quarterly loss, and said: This is a killer LBO ready to happen? Now you know one. If Priceline's leaders had had the guts to take my advice they would have made almost $4 billion on about a $300 million bet. But most people reacted like BW’s senior finance editor at the time, who told me I was insane and that Priceline was a dead company walking. Barry Diller. Like much of Wall Street, I was a Barry Diller bull in 2003, when he put together $9 billion of deals to create IAC/InterActiveCorp. So I called him The Web Mogul in this cover. By 2004, I was turning up the heat. By 2005, I exposed the division between IAC and Expedia, Diller's biggest-ever deal, in this piece. In 2007, Diller moved to break up his remaining empire. John Malone. This one won an internal award at Bloomberg because it was, as our New York bureau chief said, the first story about Malone's crazily complex empire he had ever understood. It also broke news of Malone's rift with Diller over Expedia, which led to a 20% jump in Expedia stock within a month of this May 2007 story. Also, for all the Street's skepticism at the time, our analysis of how DirecTV is doing against cable companies is looking better and better. DirecTV rose 18% over the next five months, while cable stocks fell 20%, as DTV picked up market share. The annoying part: Because I don't get to do personality journalism at Bloomberg, my January 2007 pitch to make this story about the division between Diller and Greg Maffei, a former Expedia chairman Malone had hired to run Liberty Media, was left for the Journal to do (and to do brilliantly, and on page one) nine months later. We did the numbers, and did them well, because that's what we do. But the numbers weren't the real story. Sam Zell and Tribune. I did two stories about Zell's $14-billion-of-other- people's money deal to buy Tribune in the summer of 2007. The first was followed by the NYT, BusinessWeek and other wire services, and was about how the deal was likely to collapse around 2010 because Tribune was blowing the financial projections the deal was based on. In the second piece, I explained how to make money off the chaos, since the deal’s structure meant Zell’s financial incentives were still to go ahead and close the buy, even though the market was betting he wouldn't. If you followed my fairly explicit advice to buy Tribune stock, you made an annualized return of more than 100%. Shares hit a 52-week low the day this story appeared and then moved up 50% in four months, exactly as we predicted. Mario Gabelli, the Dolans and Cablevision. I came onto the Cablevision story late, but began breaking the scoops as soon as I did. I broke four stories in a month as the $22 billion deal moved toward defeat, and did the definitive numbers story on why the LBO went down and why Cablevision is worth much more than the market thinks. The market thinks this story is wrong, judging from the stock price, but it's early yet. Bottom line: The day shareholders voted on this deal, the NY Post said it would pass, the WSJ said it was too close to call, the NYT did no story and Bloomberg said it was dead. One for four. |