IDEA OF FORGIVING GREEK DEBT RETURNS | Talk of slashing the government debt loads of European countries, beginning with Greece, is back, DealBook’s Peter Eavis writes. “For all the opposition, the idea has resurfaced with a vengeance in recent days as the new government in Athens, facing a cash squeeze and aiming to make life easier for its citizens, looks for immediate ways to reduce what it owes,” he adds.
Debt forgiveness remains an explosive issue. But with Europe grappling with staggeringly high unemployment and stubbornly low growth, showing some mercy on debt may yet gain ground. Writing down debt allows governments to spend less money servicing their obligations, freeing up funds for more stimulus spending. “It may also bolster overall confidence in a nation, laying the groundwork for more investment,” Mr. Eavis writes.
The pressure on Greece increased on Wednesday when the European Central Bank decided that it would no longer accept Greek government bonds as collateral for loans, saying that it was not confident the country could meet its bailout requirements. The move jarred markets in the United States late in the trading day. European markets were little changed on Thursday morning, halting a three-day advance. The Greek stock market tumbled as bank shares fell. Asian stocks finished the day mostly lower.
So how big a deal is the E.C.B.’s decision?
Lorcan Roche Kelly of Bloomberg Business writes: “All together, the move from the E.C.B. should have very little immediate effect on the Greek banks ‒ provided there is not a complete loss of confidence in the Greek banking system in the coming days ‒ and should be viewed as what it is: The E.C.B. is pressuring the Greek government.”
“The E.C.B. is flexing its muscles,” Karl Whelan, a professor of economics at University College Dublin, writes on Medium, and giving notice that it is “very close to pulling liquidity from Greece but no funds have been withdrawn yet.”
SPLIT AT S.E.C. OVER WAIVERS | After Oppenheimer & Company’s latest regulatory infraction on Wednesday ‒ one of at least 30 over the last decade ‒ some regulators are questioning whether the government has enabled a cycle of misbehavior, DealBook’s Ben Protess reports. The regulators, Kara M. Stein and Luis A. Aguilar, Democratic members of the Securities and Exchange Commission, criticized their own agency for allowing Oppenheimer to avoid certain repercussions for its actions.
Although Oppenheimer settled a case last week that set off a so-called bad actor ban, which automatically disqualified it from most private offerings of securities, the S.E.C. issued a waiver from that ban. Ms. Stein and Mr. Aguilar voted against the waiver. The commission’s three other members, including two Republicans and the chairwoman, Mary Jo White, voted to support it. The dissent “delivered the latest salvo in a fight over the S.E.C.’s waiver policy, a once-obscure debate that now hangs over most every enforcement case, often presenting an obstacle to settlement,” Mr. Protess writes.
“The issue has pitted the commission’s liberal wing, which has channeled a populist uproar over Wall Street misdeeds, against the two Republican commissioners,” he adds. It also creates a conundrum for the S.E.C. chairwoman, Mary Jo White, the deciding vote, “whose reputation as a tough-on-crime former federal prosecutor helped her sail through Senate confirmation.”
ON THE AGENDA | The Challenger job cut report is out at 7:30 a.m. The Gallup payroll to population report is released at 8:30 a.m. Weekly jobless claims are out at 8:30 a.m. Data on international trade is released at 8:30 a.m. The first reading of fourth-quarter productivity and costs comes out at 8:30 a.m. Twitter and GoPro announce fourth-quarter results after the market closes.
On the Hill: Treasury Secretary Jacob J. Lew testifies before a Senate Finance Committee hearing to consider President Obama’s budget for fiscal year 2016.
CAESARS CHIEF TO STEP DOWN | Gary Loveman, the longtime chief executive of Caesars Entertainment, the casino operator whose biggest unit recently filed for Chapter 11 bankruptcy, plans to step down from that role, the company said on Wednesday. His successor, Mark P. Frissora, the former chief executive of Hertz, will join the board of Caesars immediately and take the reins of the company on July 1. Mr. Loveman will continue to serve as chairman of Caesars and of Caesars Entertainment Operating Company, the unit now in bankruptcy.
Mr. Frissora joined Hertz in 2006 after the rental car company was acquired in a private equity buyout. He stepped down from his post there in September, citing personal reasons, after the company came under scrutiny by the billionaire investor Carl C. Icahn, who said he lacked “confidence in management.”
| Contact: @melbournecoal | E-mail
British Telecommunications Giant BT to Buy EE for $19 Billion | Under the terms of the cash-and-stock deal, BT said Deutsche Telekom would hold a 12 percent stake in the former British monopoly, and that Orange would retain a 4 percent holding once the takeover was complete.
DealBook »
Under Armour Buys 2 Fitness Apps for $560 Million | The two deals are the latest move by the company to create an athletics-minded online network, an effort that began with the 2013 acquisition of MapMyFitness for $150 million.
DealBook »
Offer for Canary Wharf Owner Has Enough Support to Proceed | Investors holding more than 94 percent of the outstanding shares of Songbird Estates have agreed to accept the $3.9 billion takeover offer by the Qatar Investment Authority and Brookfield Property Partners.
DealBook »
Verizon Said to Near $10 Billion Asset Sale to Frontier | Verizon is said to be close to selling a package of wireline assets to the regional telecommunications company Frontier Communications for around $10 billion, The Wall Street Journal writes, citing unidentified people familiar with the matter.
WALL STREET JOURNAL
Mike’s Hard Lemonade Said to Be Up for Sale | Mike’s Hard Lemonade is said to be in the early stages of exploring a sale that could value the malt beverage maker at more than $1 billion, Reuters writes, citing unidentified people familiar with the matter.
REUTERS
Office Retailers Say a Merger Will Keep Them Competitive | The deal to unite Staples and Office Depot, the two biggest providers of office supplies, is likely to face antitrust scrutiny ‒ regulators shot down a similar deal in 1997, but the competitive landscape has since changed.
DealBook »
CBS’s Moonves Said to Be Seeking to Buy Out Majority Owner | Leslie Moonves, the chief executive of the CBS Corporation, is said to be discussing ways to buy out the company’s controlling shareholder, National Amusem*nts, before a potential deal with Viacom, The New York Post reports, citing unidentified sources.
NEW YORK POST
Howard Lutnick’s BGC Extends Offer for Clearinghouse GFI | Shareholders of GFI, who rejected a lower offer from the CME Group last week, now have until Feb. 19 to tender their shares.
DealBook »
CME Closing Futures Floor Trading | The CME Group, the world’s biggest futures market operator, said on Wednesday that it was closing most of its futures trading pits in Chicago and New York as electronic trading has become more dominant, The Wall Street Journal reports.
WALL STREET JOURNAL
INVESTMENT BANKING »
BNP Paribas Finishes Dismal Year on an Up Note | Profit rose sharply in the fourth quarter, as the French bank closed out a year in which it paid a record fine in the United States in a sanctions-violation case.
DealBook »
Richard Handler, C.E.O. of Jefferies, Turns Down Bonus | Mr. Handler and Brian P. Friedman, the president of Leucadia National, the parent of Jefferies, rejected $2.2 million bonuses because the firm missed its performance targets.
DealBook »
PRIVATE EQUITY »
Pension Funds Criticize Transparency at K.K.R. | Public pension fund investors are concerned after discovering that the private equity firm Kohlberg Kravis Roberts did not tell them for nearly a year that its decision to refund some money was prompted by a Securities and Exchange Commission exam, The Wall Street Journal writes.
WALL STREET JOURNAL
Apollo Said to Be in Lead to Buy Home Security Company | The private equity firm Apollo Global Management is said to be in advanced discussions to acquire Protection 1 in a deal that could value the home security company at close to $1.5 billion, including debt, Reuters reports, citing unidentified people familiar with the matter.
REUTERS
HEDGE FUNDS »
Zoetis Adds Ackman Deputy to Its Board, Avoiding a Fight | The appointment of William F. Doyle, a top lieutenant at William A. Ackman’s hedge fund, Pershing Square Capital Management, comes after Pershing said it would hold talks with the veterinary medicine maker.
DealBook »
A Primer on Starboard, the Activist That Pushed for a Staples-Office Depot Merger | Few investors had awaited a merger of the two office supply sellers more than Jeffrey Smith’s Starboard Value, a $3 billion hedge fund that has claimed some notable victories in its relatively short life.
DealBook »
Smucker Deal for Pet Food Could Be Bait for Activists | The $5.8 billion purchase of Big Heart Pet Brands is predicated on scale, but the complexity of integration could give some investors pause, Kevin Allison writes for Reuters Breakingviews.
DealBook »
I.P.O./OFFERINGS »
Apollo Said to Weigh I.P.O. of Great Wolf Resorts | Apollo Global Management, which took Great Wolf Resorts private in 2012 for $703 million, is said to be considering a sale or initial public offering of the indoor water parks operator, Reuters reports, citing unidentified people familiar with the matter.
REUTERS
VENTURE CAPITAL »
Uber Tries to Ease Concerns in South Korea | The ride-hailing start-up Uber said on Wednesday that it was asking the South Korean government to register its drivers so that it could overcome legal challenges and continue to operate there, The New York Times writes.
NEW YORK TIMES
LEGAL/REGULATORY »
Federal Prosecutor Who Fought Wall Street Is Joining Paul Weiss Law Firm | Richard Tarlowe, head of the complex frauds and cybercrime unit at the United States attorney’s office in Manhattan, will focus on white-collar criminal defense, digital security and foreign corrupt practices cases.
DealBook »
Man Behind Silk Road Website Is Convicted on All Counts | The most serious counts carry potential life sentences for Ross W. Ulbricht, who prosecutors said operated the online black market that sold drugs and other illicit goods, The New York Times reports.
NEW YORK TIMES
UBS Said to Face Fresh Tax Inquiry | Federal prosecutors are said to have begun a new investigation into whether the Swiss bank UBS helped Americans evade taxes through investments largely banned in the United States, The Wall Street Journal reports, citing unidentified people familiar with the matter.
WALL STREET JOURNAL
F.C.C. Plans Strong Hand to Regulate the Internet | The proposal by the Federal Communications Commission would create legal authority to ensure that no content is blocked and that the Internet is not divided into fast and slow lanes, The New York Times writes.
NEW YORK TIMES
European Union Raises Forecast for Growth | European Union officials on Thursday nudged up growth forecasts across the 28-nation bloc, the first time in eight years that all the economies in the region are expected to grow, The New York Times writes.
NEW YORK TIMES
European Authorities Fine ICAP $17 Million in Libor Investigation | ICAP said the European Commission’s accusations related to activity that was the subject of separate settlements with American and British regulators.
DealBook »
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