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Aug 22, 2016

DealBook Morning News - August 22, 2016: Tenants Struggle in Win-Win Contracts for Landlord.

The New York Times

By Amie Tsang
If you pay rent to a property management company with the aim of eventually owning the place, are you a renter or a homeowner? Some companies are blurring that line.
Rent-to-own contracts allow dwellers in the United States who lack good credit or cannot qualify for a mortgage to pay rent to a landlord with the eventual promise of owning the home.
But the renters are responsible for repairs, and they do not receive a legal title to the home until the last payment is made. Unlike a contract for deed, they also still need to find financing to complete the deal.
The companies get the best of both worlds — all the rent and no need to fix up the properties. Tenants, however, often walk away with nothing. Many struggle to pay for the repairs. Others, meanwhile, find themselves facing evictions because they are not aware of the state the houses are in and cannot meet deadlines to bring the property up to scratch.
”Financially, they kind of stuck it to me,” said one person with a rent-to-own contract. However, “when you don’t have any options and someone is willing to work with you, it’s really a blessing.”
Beryl Satter, who has chronicled the exploitation of black homeowners in Chicago in a book, “Family Properties,” doesn’t see it that way. “If you’re doubling your money off of people who are scraping by and you’re taking advantage of their vulnerability to enrich yourself, that is being predatory.”
Should these companies be subject to landlord-tenant obligations? Yes, says Judith Fox, a law professor at the University of Notre Dame. “You can’t have it both ways.”
Pfizer Said to Be Near Deal for Medivation
Pfizer is apparently close to nabbing a leader in the cancer drug market, according to reports from The Financial Times and The Wall Street Journal, which cite people familiar with the talks. Pfizer would pay about $14 billion to buy Medivation, a biotechnology company based in California that makes the world’s best-selling prostate cancer drug.
The purchase would mark a return to big ticket deal making for Pfizer, which abandoned a $152 billion merger with Allergan because of tax rules and lost out in the race to buy Pharmacyclics last year. Medivation’s big-selling drug and its experiments in stopping tumor cells from multiplying have companies in hot pursuit. It has already rejected the advances of Sanofi, the French drug maker.
Private Equity Keeps the Elderly at Home
With the elderly care sector already littered with stories of abuse, can for-profit companies enter an industry that has traditionally been the realm of nonprofit do-gooders? Eager entrepreneurs think so.
A year ago, the government opened up programs that keep older and disabled Americans out of nursing homes to for-profit companies with the hope of expanding the services faster.
The business appeal is clear. Medicare enrollment is expected to grow and the programs have hefty profit margins — as much as 15 percent, compared with an average of 2 percent for nursing homes.
One program — PACE, or the Program of All-Inclusive Care for the Elderly — is still relatively small with only 40,000 people enrolled as of January this year.
But it has piqued the interest of the tech industry, which is notoriously aggressive and deep-pocketed and could play a significant role in the program as it grows. Private equity money has also made its way into the system.
Syngenta’s headquarters in Basel, Switzerland. If it is completed, the acquisition by China National Chemical Corporation would be China’s biggest foreign deal ever.
U.S. Regulator Signs Off on ChemChina-Syngenta Deal
The approval by the Committee on Foreign Investments removed one of the biggest potential obstacles to the $43 billion acquisition.
Japanese Electronics Company Said to Be in Talks to Buy U.S. Chipmaker
Renesas Electronics, a major Japanese chipmaker, is expected to spend up to $3 billion buying Intersil, a company based in California that makes chips essential to regulating power in cars, industrial machinery and smartphones.
Chinese Investment Continues to Flow into British Football
A consortium led by the Chinese investment group Everbright and the private equity firm PCP Capital Partners has approached Fenway Sports Group, which owns Liverpool Football Club, about taking a stake in it.
The Hedge Fund Robot that Outsmarted Its Human Master
Yoshinori Nomura, a 43-year-old money manager, is setting his software loose in Japan, one of the most turbulent markets in the world. If he succeeds, it would offer hope for AI traders around the world.
Chinese Maker of Selfie Apps Planning I.P.O.
Meitu, one of the most popular selfie app makers in China, filed an application for an initial public offering that could raise as much as $1 billion, according to people familiar with the matter.
Downtown Phoenix, as seen from the offices of Gainsight, a Redwood City, Calif., company that opened the 12-person office in November.
Bay Area Start-Ups Find Low-Cost Outposts in Arizona
After struggling with high salaries and soaring housing costs, some Silicon Valley tech companies expanded outward to areas where they could grow quickly and make jobs more appealing.
Edward Siedle, a forensic fraud investigator at Benchmark Financial Services, said, “Leveraging the power of the whistle-blower is tremendously helpful, and it’s not costing the state anything.”
To Crack Down on Securities Fraud, States Reward Whistle-Blowers
In return for helping states to enforce securities fraud laws and protect residents from financial harm, confidential informants earn a piece of the penalty.

Fed Vice Chairman Raises Concerns Over Long-Term Economic Prospects
Stanley Fischer, the vice chairman of the Federal Reserve, raised concerns about the economy in the long term and said that more public investment and regulatory changes were needed to bolster flagging productivity.
India Names Urjit Patel to Be Next Central Bank Chief
The appointment of Mr. Patel, currently a deputy governor of the Reserve Bank of India, ends weeks of speculation about a successor to Raghuram Rajan.
President Obama discussed the Trans-Pacific Partnership after a meeting with current and former diplomats and defense officials at the White House in November 2015.
Obama Readies One Last Push for Trans-Pacific Partnership
As both presidential candidates campaign against it, the White House is negotiating with Republicans in Congress to ratify the largest regional trade agreement ever.
Garry Charnock near some of the many solar panels in Ashton Hayes, England. Mr. Charnock, a former journalist, started the town’s emissions-reduction effort about 10 years ago.
English Village Becomes Climate Leader by Quietly Cleaning Up Its Own Patch
In Ashton Hayes, residents have banded together to cut greenhouse emissions with solar panels, wine-and-cheese nights and no politicians.

Monday, August 22, 2016