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Aug 2, 2016

DealBook A.M. and P.M. Editions on August 2, 2016



TUESDAY, AUGUST 2, 2016
P.M.
Top Story
By STACY COWLEY
The bipartisan legislation could inspire similar rules in other states to try to end the pattern of men historically outearning women doing the same job.


DealBook Highlights
Big Banks Make a Pitch for Hearts and Minds
By MICHAEL CORKERY
Citigroup’s ad campaign for the Olympics showcases the benefits of large global banks, and other big banks are trying to soften their image.
A cellphone user in Shenzhen, China. The country’s tech industry — particularly its mobile businesses — has in some ways pulled ahead of the United States.
China, Not Silicon Valley, Is Cutting Edge in Mobile Tech
By PAUL MOZUR
American tech companies study Chinese users and apps as a smartphone revolution changes how people interact, buy products and manage their money.
In an effort to promote growth and end deflation, Japan on Tuesday unveiled a stimulus package that it said was worth 28 trillion yen, or $274 billion, equal to more than 5 percent of Japan’s gross domestic product.
Japan Announces More Stimulus Measures as Economy Struggles
By JONATHAN SOBLE
Prime Minister Shinzo Abe’s government is embarking on its biggest spending program yet, with a financial measure worth $274 billion.
DEAL PROFESSOR
Questions of Redstone’s Competency Promise Years of Litigation
By STEVEN DAVIDOFF SOLOMON
In two legal battles over the control of Viacom, judges found that the issues raised required a trial to examine whether Mr. Redstone was competent.
Sony and Michael Jackson formed Sony/ATV Music Publishing more than 20 years ago.
Sony Is Allowed to Close Deal With Michael Jackson’s Estate
By BEN SISARIO
The European Commission approved a merger that would give Sony full control of the songwriting rights to a catalog that includes about 250 Beatles songs.
BREAKINGVIEWS
Online Upstarts Pose a Threat to Procter & Gamble
By KEVIN ALLISON
Internet-adept rivals like Dollar Shave Club, which Unilever just bought for $1 billion, threaten to steal customers and cut into P.&G.’s margins.
 
Buzz Tracker
Biogen is drawing takeover interest from rival dealmakers. Merck and Allergan each have sounded out Biogen on the possibility of a huge deal. – The Wall Street Journal
Donald Trump urges an exit from the stock market. “I did invest and I got out, and it was actually very good timing,” he told Fox Business. “But I’ve never been a big investor in the stock market.” – Bloomberg
And proposes $550 billion in new government debt. “We’ll get a fund. We’ll make a phenomenal deal with the low interest rates,” Mr. Trump said. – The Wall Street Journal
Private equity is muscling into big loans to too risky for banks. Alternative asset managers, flush with cash from clients looking for yield, are financing billion-dollar deals. – The Wall Street Journal
Two of Europe’s biggest banks to be dropped from STOXX 50. Credit Suisse and Deutsche Bank will be dropped from the index of Europe's top 50 blue-chip companies next week. – Reuters
 
For the latest updates:
Go to NYTimes.com/DealBook
 
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Looking Ahead
More major European banks to report earnings. It will be another busy week for earnings reports as several of Europe’s biggest banks share their second-quarter results, among them HSBC, Standard Chartered and the Royal Bank of Scotland, along with the French lenders Crédit Agricole, Société Générale and UniCredit. Results at European banks have not been as dire as some had feared in the quarter, particularly as uncertainty in the financial markets weighed on trading revenue. Credit Suisse and UBS, for instance, both beat analyst expectations, and Deutsche Bank essentially broke even. The British bank Barclays had a solid quarter in its core businesses, but its profit declined 41 percent as it accelerated plans to sell or close businesses and assets that it no longer considered central to its strategy. And Lloyds Banking Group, a British rival, said it would cut an additional 3,000 jobs and close more branches as it warned about a likely “deceleration” in economic growth after Britain’s vote in June to leave the European Union. – Chad Bray
A quarterly report for Tesla at a turbulent time. Tesla Motors will report its earnings for the second quarter on Wednesday, and the bottom line numbers could hardly come at a time of more scrutiny for the maker of high-priced electric cars. Tesla is facing investigations of its self-driving Autopilot technology, which was a factor in a fatal crash on May 7. The company has also announced that it plans to acquire Solar City, whose biggest shareholder is Elon Musk, Tesla’s chief executive. Tesla has also recently opened the so-called Gigafactory, the gigantic battery factory it built in Nevada. The automaker is expected to report a loss for the second quarter, as it has for the last several quarters, because of the heavy spending on the Gigafactory, the introduction of its Model X sport utility vehicle and the development of a more affordable Model 3 compact. – Neal Boudette
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A.M.

TODAY'S TOP HEADLINES
BY AMIE TSANG
HERBALIFE VS. ACTIVIST: JUST MAYBE HE'S RIGHT Bill Ackman, the activist investor, has been painted as a loser in his quest to shut down Herbalife, the nutritional supplement company, but a Federal Trade Commission's complaint has vindicated his claims, Andrew Ross Sorkin writes.

Herbalife was responsible for "deceiving hundreds of thousands of hopeful people," said Edith Ramirez, who oversees the F.T.C. "The small minority of Herbalife distributors who did make a lot of money were paid by Herbalife not for selling the company's products, but for buying the products themselves and then successfully recruiting large networks of others to do the same."

There have been questions about Mr. Ackman's tactics, lobbying regulators and members of Congress, as well as moral questions about "shorting," or betting against a company's stock, but this does seem to be an example where an investor acted as a check on the market.
UBER WAVES THE WHITE FLAG IN CHINA Uber has become yet another company that has failed to capitalize on its foothold in China, but it avoided making many of the same mistakes as its American tech forebears along the way. It created local teams that were able to respond quickly, and the co-founder and chief executive, Travis Kalanick, put in time meeting with Chinese officials. But Didi made it clear it was in the fight for the long run and Uber's investors wanted an end to the battle.

They may be reassured, but customers and drivers in China could be hurt as commissions drop. Uber may well want to focus on building national monopolies elsewhere now, but its stake in Didi now makes it an indirect part owner of its competitor Lyft, which has also been a useful ally in battles with regulators and taxi drivers. This all seems to point to a less directly competitive future, Justin Fox writes on Bloomberg View.

Some view having two poles of leadership as beneficial with the giants of China and the United States competing for customers in emerging markets like India, the Middle East and Africa. But others foresee a series of deals in which those titans carve out their spheres of influence.
ON THE AGENDA The Securities and Exchange Commission Equity Market Structure Advisory Committee meets at 9:30 a.m. Data on income and spending for June will be published at 8:30 a.m. Pfizer and Procter & Gamble report their second-quarter earnings.
BIG BANKS PUSH INSTANT PAYMENTS The snail's pace at which money is processed has led many Americans to use mobile payments services like Paypal's Venmo or Square Cash. Offerings like Apple Pay and pressure from the Federal Reserve's "faster payments committee" have also heightened competition to control the payment network of the future. And banks are catching up - allowing their customers to send money to accounts in seconds - in the hope of vying with these companies, as well as Visa and MasterCard, in the market for instant payments.

If they do not respond, banks could be relegated to performing less profitable back-office functions for newer payment companies and they would lose their first point of contact with a consumer, which allows them to sell other products, like loans.
DEAL NOTES
Mark Vergnano, chief of Chemours, which came close to leaving Wilmington, Del., for the suburbs.
Why Corporate America Is Leaving the Suburbs for the City Companies including McDonald's and General Electric are moving headquarters to cities like Boston and Chicago, partly as a lure to younger employees.
The investor Warren Buffett appeared at a rally with Hillary Clinton on Monday in Omaha.
Warren Buffett Is Latest Billionaire to Excoriate Donald Trump Mr. Buffett, in Omaha with Hillary Clinton, unleashed a withering attack on Mr. Trump for refusing to release his tax returns and for misleading voters about his success as a businessman.
MERGERS & ACQUISITIONS »
Elon Musk is the chairman of SolarCity and chief executive of Tesla Motors.
In Tesla and SolarCity Deal, a Glimpse of Musk's Clean-Energy Aspirations Boards of both companies approved a $2.6 billion merger, putting their faith in Elon Musk's idea of a clean-energy powerhouse.
Elon Musk, the founder of Tesla and SolarCity.
Tesla-SolarCity Deal Could Distract the Carmaker The $2.6 billion purchase of SolarCity, a solar-panel installer, comes at a crucial time for a company with lofty goals and a habit of missing them.
Salesforce to Buy Maker of Productivity Software Salesforce will buy Quip, which makes products to help collaboration on mobile devices, for $582 million in stock.
Thomas Kurian is building Oracle's cloud.
Oracle, Having Bet Billions on Its Future, Sets Sights on Data Analysis The biggest business-software company thinks that information gathering could become a valuable adjunct to many of its database and applications efforts, and it has more data than anybody.
For the latest updates, go to NYTimes.com/DealBook
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PRIVATE EQUITY »
This Is Your Life, Brought to You by Private EquitySince the financial crisis, the private equity industry has become hugely influential. Here's how it plays out in your daily life.
I.P.O./OFFERINGS »
Vista Said to Hire Advisers for Financial Software I.P.O. The private equity firm has hired Goldman Sachs and Bank of America for a potential initial public offering of Misys, a provider of financial software, Bloomberg reports, citing people familiar with the matter.
VENTURE CAPITAL »
New Fund From Technology Crossover Ventures Draws $2.5 Billion Though some worry about a cooling tech boom, the venture capital money keeps pouring in.
The Space Needle in Seattle, created for the 1962 World's Fair, was initially related to the city's prominence in aviation.
The Silicon Valley of Space Start-Ups? It Could be Seattle. Commercial aerospace start-ups are attracting access to investors with deep pockets and an abundance of software talent.
LEGAL/REGULATORY »
A predelivery inspection center for Volkswagen and Audi in Pyeongtaek, South Korea. Prosecutors had been investigating Volkswagen's operations in South Korea for months.
South Korea Bars Volkswagen From Selling 80 Models in Country Penalties include a $16 million fine for the German automaker, which prosecutors said falsified emissions and noise-level documentation.
Sean Stewart, center, is accused of tipping his father about impending deals that led to more than $1 million in profits.
Supreme Court Could Redefine Insider Trading LawThe court will decide what benefit must be provided to prove a quid pro quo arrangement, and it could take insider trading law in a new direction.
A United Effort to Overhaul Corporate Governance A recently released list of common sense boardroom principles is intended to stir conversation in the business community and stimulate economic growth.
Elizabeth Holmes, chief executive of Theranos, in 2015.
Theranos, Embattled Laboratory, Shifts to Medical Machines Elizabeth Holmes, chief executive, introduced technology called the miniLab, suggesting a new business model for the embattled blood-testing company.
Nick Denton, chief executive and founder of Gawker, in court during the company's trial against Hulk Hogan in March.
Nick Denton Files for Bankruptcy, Just Weeks After Gawker Did The long-anticipated move protects the media company's founder from the $115 million legal judgment awarded to Hulk Hogan, who won an invasion-of-privacy lawsuit against Gawker.
Kun Shan Chun, a longtime employee of the Federal Bureau of Investigation, on Monday.
F.B.I. Employee Pleads Guilty to Acting as an Agent of China The employee, Kun Shan Chun, who worked in the bureau's New York office, had been accused of lying about his relationship with a Chinese technology company and various Chinese associates.
The Hinkley Point B power station in Somerset, England. Prime Minister Theresa May has postponed a decision on a new nuclear plant, to be built by France and partly funded by China, until the fall.
British Decision on Nuclear Plant Angers China and France Prime Minister Theresa May's decision to delay the project is seen as a potentially major break from her predecessor's policy toward Beijing.
Anne Verrill, center, at Grace, her restaurant in Portland, Me. In a Facebook post, she said anyone who owned a rifle similar to the one used in the attack in Orlando, Fla. - or even supported the right to own one for private use - was not welcome at her two restaurants.
Restaurant Owner Spurns Those Who Are O.K. With AR-15s A Maine restaurateur joined other establishments in taking a stand against gun violence, but she went further, spurning people over their beliefs as well as actions.
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