The Deal
Saturday, October 25, 
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[Posted on March 5, 2008 - 4:53 PM]

schwartz.jpgMicrosoft Corp. has brought in some muscle to help it clinch a deal for Yahoo! Inc. The software maker has enlisted Bear, Stearns & Co. CEO Alan Schwartz (far left, with Bear Stearns chairman James Cayne) to advise it on the $42 billion deal, according to The Wall Street Journal. Microsoft obviously didn't recruit the veteran dealmaker to run discounted cash flow analyses or even take a front-line role negotiating the transaction. The tech giant already has a cadre of veteran bankers working on the deal, so it bears asking what Schwartz's arrival on the scene might signify.

There are only a handful of rainmakers on Wall Street--Roger Altman, Robert Greenhill, Felix Rohatyn (back in the day), Bruce Wasserstein (chairman of The Deal LLC), a few others--bankers with the reputation and game to operate at the very highest levels of the profession. Schwartz, in addition to reputedly having one of the best minds on Wall Street, is one of them. Recruiting him not only adds to Microsoft's M&A firepower, but also deprives Yahoo! of a potentially important asset. Among Schwartz's recent exploits, in 2006 he helped former Time Warner Inc. CEO Richard Parsons parry an attack by financier Carl Icahn and Wasserstein, CEO of Lazard. In another big media deal, Schwartz advised then Walt Disney Co. boss Michael Eisner on the company's purchase of Capital Cities/ABC in 1996.

With such experience, Schwartz can serve Microsoft CEO Steve Ballmer as consigliere on the deal. The banker will be versed in the subtle machinations behind any major merger. He also might function as a go-between among advisers and shareholders involved in the transaction. The latter requires a deft touch because many Yahoo! investors happen to be shareholders in Microsoft, multiplying the familial complexities. But Schwartz can also tell Ballmer, who so far is treading lightly in dealing with Yahoo!, when the time is right to start shooting.

Bear Stearns named Schwartz as CEO in January to replace Cayne, who stepped down following a huge writedown stemming from the subprime mortgage mess. Schwartz, a former pro baseball prospect who joined the company in 1976 as a stock salesman and who in the mid-1980s became head of the investment banking division, last summer succeeded then-president Warren Spector.

Microsoft's move to tap Schwartz raises another interesting question: Is it unhappy with how the Yahoo! deal is proceeding and, by implication, dissatisfied with its bankers? Advising the company are Morgan Stanley's Paul Taubman, Chuck Cory, Drew Guevara and Thomas Wayne and Blackstone Group LP's Jill Greenthal, themselves some of the top names in the M&A game. Taubman, for example, is head of investment banking at Morgan, last year advising Cablevision System Corp.'s special committee in its wrestling match with the Dolan family, among his other mandates. Before joining Blackstone in 2003, meanwhile, Greenthal was co-head of the global media group at Credit Suisse First Boston, advising on such tech deals as Yahoo!'s 2003 purchase of search company Overture Services for $1.8 billion.

Morgan Stanley and Blackstone won't be happy at the prospect of having to share the spoils, and credit, with a rival, but of course they'll set aside any lingering resentment in the interest of collecting the huge fees (and the bump in the league tables) assuming the deal comes off. For Microsoft, it looks like a shrewd move. - Alain Sherter

See March 5 story from The Wall Street Journal
See Jan. 11 story on Alan Schwartz from
See Jan. 9 story on Schwartz from The Times
See Feb. 1 post on Microsoft and Yahoo! advisers from Dealscape

From: Timothy Geithner ,

SCAM: Bear Stearns, -Timothy Geithner and
the Blackstone-BCCI set up

bear stearns, blackstone, blackrock, fed, new york, citibank, Timothy Geithner

The Blackstone Group, a major private equity firm tied to foreign policy influence lobbying groups such as Kissinger Associates, Scowcroft Advisors, and the Madeline Albright Group, had an affiliated spinoff company, BlackRock, a Caymans Island foreign bank associate, evaluate the “fairness” to shareholders of the JP Morgan Acquisition of Bear Stearns. The deal involved a bailout of Bear Stearns creditors directly, and indirectly through cash infusions via the Fed’s open window of lending, including lending billions to Citibank in exchange for mortgage collateral. The lead negotiator of the deal, the President of the NY Fed, Geithner, is a former employee of Kissinger Associates, a Saudi-China lobbying firm, and was appointed to the Fed by Peter Peterson of Blackstone. He also worked for Secretary Rubin at the Clinton Treasury Department. Secretary Rubin is now an executive with Citibank a major beneficiary of the bailout. Citibank has major Saudi shareholders, and as such is not an American bank, per se. Citibank has been investigat4ed for illegal terrorist money laundering activities in the Middle East, and Geithner was an employee at Kissinger Associates when it was engaged in discussions of mergers with BCCI, which was later indicted for drug money laundering.

bear stearns, blackstone, blackrock, fed, new york, citibank, Timothy Geithner

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