Corporate Finance - Insider Trading Trio Made £590,000 Profit

Corporate Finance

(Corporate Finance) : - A top banker made more than half a million pounds for himself, his wife and a friend through insider trading, a court heard today.

Christian Littlewood, 37, used his position as a corporate finance adviser to listen into conversations in city pubs and spy on colleagues' computer screens and documents.

Southwark Crown Court heard his wife used her Chinese name to invest hundreds of thousands of pounds in companies he found out were about to be bought.

He would tip off Angie Littlewood, 39, who is also known as Siew Yoon Lew, when he learned the sensitive information that a company's share price was set to increase.

Alongside the couple, self-employed juice bar owner Helmy Omar Sa'aid, 34, also stood in the dock.

The three have all admitted eight charges of insider trading between March 2000 and August 2008.

Between them they invested £2,150,000 and made a profit of £590,000.

Nicholas Dean, prosecuting, said it would have been "convenient" for Mr and Mrs Littlewood to use a name that was not immediately recognisable to casual investigation.

Neither colleagues nor the Financial Services Authority (FSA) would be alerted to the scam if his family name did not appear alongside transactions.

The barrister said: "For almost all of the period, Christian Littlewood was employed by Dresdner Kleinwort Wasserstein (DKW), an investment bank."

He told the court Littlewood's area of expertise was in mergers and acquisitions, and by the time he left DKW at the end of 2007 he held a position of "some seniority".

His gross salaries, including huge bonuses, ranged from £200,000 to more than £400,000 over the period he abused the information he had access to.

Mr Dean explained that Littlewood would have become aware that "small companies, and not so small companies, were being taken over by bigger companies".

He said the trader looked at information he was allowed to see, but also at data he was not.

The prosecutor said he had "necessary and legitimate access to price sensitive information, and had access to information that was not relevant to him".

He told the court Littlewood worked in an environment where he could quite easily eavesdrop on conversations in a pub near his office, or while he was making a cup of tea, or peer at his colleagues' screens and paperwork.

Although Angie Littlewood acted on her husband's tip-offs, the prosecutor said her role was not inactive.

"She, we say, was no mere cipher," Mr Dean told the court.

He said the Singaporean woman of Chinese origin was qualified as a lawyer and in finance, with two Masters degrees.

Like her husband, she had experience in mergers and acquisitions, the barrister said.

The couple married in 2000 and have three children.

She gave up her job at investment bank UBS in 2001, where she earned £55,000 a year as a corporate financier.

Sa'aid was a friend of Angie Littlewood, but Mr Dean said the businessman did not get on with Christian Littlewood.

However Mr Dean said Christian Littlewood was able to keep tabs on Sa'aid's trading, as he wrote an email to his wife which read "Hel has not sold".

Of the eight charges faced by the three, some relate to deals Littlewood had legitimate access to through his job, and some relate to those he did not.

They will be sentenced later this week.

Corporate Finance - Hogan Lovells and SH star in LoveFilm acquisition

Corporate Finance

(Corporate Finance) :- Hogan Lovells and Stephenson Harwood took the key mandates on the £200m sale of the remaining shares in LoveFilm to Amazon.

Stephenson Harwood ­corporate partner Liz Field led the team acting for ­longstanding client LoveFilm on the deal. Tax partner Maryanna ­Sharrock, employee incentives partner Jeremy Glover and head of competition Julianne O’Leary also advised.

At Hogan Lovells corporate finance partner Richard Lewis led the team of ­advisers for Amazon.

LoveFilm has turned to Stephenson Harwood for legal advice since 2004, when it was acquired by Arts Alliance Media.

More recently the firm acted on the acquisition of Amazon Europe’s UK and German DVD rental ­business in 2008 - a deal that saw the online retailer take a significant minority take in the UK film ­subscription business.

Prior to the latest transaction, which is expected to reach completion in the first quarter of the year, Amazon owned 42 per cent of LoveFilm.

In the UK Amazon has used a range of firms for corporate advice. These have included CMS Cameron McKenna, Olswang and Osborne Clarke. Herbert Smith has also acted for the retailer on competition issues.

Amazon will now wholly own the business after ­buying the remaining shares from existing shareholders, which include four venture capital firms alongside LoveFilm staff.

Amazon now plans to grow the business alongside other movie-related assets, including the film database website IMDb

Obama Backs Cut in U.S. Corporate Tax Rate

Corporate Finance

President Barack Obama called on Congress to cut the top U.S. corporate tax rate for the first time in 25 years “without adding to our deficit,” a sign that businesses will have to give up tax breaks in exchange for lower rates.

The president, in his State of the Union address to Congress last night, also pressed for simplifying the tax system for individuals, which would restructure how more than $1 trillion in revenue is collected annually.
“The best thing we could do on taxes for all Americans is to simplify the individual tax code,” he said, to applause from the audience. “This will be a tough job, but members of both parties have expressed interest in doing this, and I am prepared to join them.”

Some analysts said Obama’s willingness to consider a corporate tax overhaul along with tax simplification may lead to changes in the code.

“Tax reform has been like the weather, everyone talks about it but no one does anything about it,” said Pat Heck, a partner at the Washington law firm KL Gates and a former top aide to the Senate Finance Committee. “Tonight’s speech could be a game changer. While it would be naïve to think tax reform legislation will be drafted overnight, a long journey always begins with a first step.”

‘Disappointed’

Representative David Camp, a Michigan Republican who chairs the tax-writing House Ways and Means Committee, said he was “disappointed” by the lack of details in Obama’s call for a tax overhaul.
“I think it could have used a little bit more on his proposals on individual tax reform,” Camp said in an interview after the speech. “Frankly, we really need more of a path forward even on the corporate side. I think we need some more concrete plans.”

Obama’s proposal for a corporate tax-rate decrease, accompanied by removal of tax breaks, is at odds with that espoused by corporate chiefs. Robert McDonald, CEO of Procter & Gamble Co., and groups such as the Washington-based Business Roundtable have urged the administration and lawmakers to set aside deficit concerns for now to focus on rate reduction.

Each percentage-point reduction in the 35 percent corporate tax rate could cost $8 billion or more a year in foregone revenue to the Treasury, according to the congressional Joint Committee on Taxation.
Financing a rate cut could mean that corporate tax breaks such as a deduction for domestic manufacturing and production income and accelerated depreciation of capital expenses may have to be sacrificed.

Winners and Losers

“If it’s revenue neutral for businesses, there’s probably some winners and some losers,” said Daniel Shaviro, a professor of taxation at the New York University School of Law. “And when you take away a lot of special benefits, you tend to get losers complaining more than the winners celebrating.”
The top marginal corporate tax rate, or the rate paid on the last dollar of income earned, has stood at 35 percent since 1993.

Companies often pay a lower effective tax rate, after taking advantage of tax credits and deductions and keeping overseas earnings reinvested indefinitely. The U.S. is among a handful of countries that tax profits earned in other countries, though only when the money is brought home, or repatriated.

Obama’s call to cut the top rate “will be highly welcomed by the business community,” though it ought to be paired with changing the way overseas profits are taxed, said Drew Lyon, a principal in the Washington national tax services office of PricewaterhouseCoopers LLP. He said Obama should endorse switching from a worldwide system of taxation to a “territorial” system, where companies’ overseas branches and subsidiaries pay tax only to their host governments.

Deficit Concerns

A report by the Washington advocacy group Citizens for Tax Justice released before the speech said the goal should be to reduce the budget deficit, which was $1.3 trillion for the fiscal year ending Sept. 30. The report said Obama should follow President Ronald Reagan’s example in ending more corporate tax breaks than necessary to finance a rate cut.

The president in his speech also called for ending Bush-era income tax cuts for individuals earning more than $200,000 and married couples earning more than $250,000.

The tax cuts enacted under President George W. Bush for all income levels were extended through 2012 as part of a deal Obama worked out with congressional Republican leaders in December.

Obama also asked Congress to make permanent a stimulus tax credit for higher education expenses, up to $10,000 for four years of college. That Corporate Finance proposal was estimated by the JCT last year to cost $58.1 billion over 10 years.

Corporate Finance News - Zilli Wants a Partner to Share Baby

Corporate Finance

Baby Zilli, the organic baby food company founded by celebrity chef Aldo Zilli, is preparing to sell a 20pc stake in the business.

The company has appointed advisers from Cavendish Corporate Finance to raise up to £2m in a deal that is likely to value the start-up Baby Zilli at £10m.

The new funds will be used to finance Baby Zilli's expansion plans. These include growing the company's sales and operational support team, and developing further the organic baby food range, such as creating "finger snacks".

Dean Dunham, a well-known media lawyer and serial entrepreneur, teamed up with Mr Zilli to establish the business in 2008. Since then, Baby Zilli has been funded by its founders.

According to sources, the company forecasts that it can achieve significant growth over the next four years, generating sales of around £73m in year four and earnings before interest, tax, depreciation and amortisation of around £15m in the UK alone.

Mr Zilli, an Italian, owns a number of restaurants, such as Zilli Fish in Soho, London.

The move to sell a stake in the business follows significant interest in organic baby food brands. In 2008, Organix, founded in 1992 by Lizzie Vann, was bought by Hero Group. Swiss-based Hero Group is owned by the German Oetker family, whose wealth is estimated to be £4bn.

Blue Sky Corporate Finance advises on Shropshire buyout

Birmingham advisers at Blue Sky Corporate Finance have worked with the organization team in the overthrow of a Shropshire-based software firm for an secret amount.

Occam Systems, which supplies technology used by colleges and universities to manage student lodging, was sold in a business was monetarily backed by a high net-worth individual (Business Angel).
Blue Sky managing director Paul Heaven said it was a complicated deal.
 
He said: “A transaction of this type is made slightly more complicated by the fact that different parties have differing interests in the various legal documents that emerge during the process.
“The financial backer and the management team sit on the same side of the table during the negotiations of the contract to acquire the company but they have a different perspective when it comes to the negotiation of the shareholder agreement.

“In these circumstances it is important that the buy-in management team are properly advised.”
David Wilkes, now managing director of Occam and head of the management buy-in team, said: “A management buy-out is not a transaction that most entrepreneurs encounter every day.

“It’s easy to think that because you know the business you don’t need advice.

“In reality you’re dealing with professional advisers acting for the investor as well as those acting for the seller – your personal needs and those of the business can get pulled in both directions. Having Paul on hand to guide me, provide independent advice, and to review the mass of documents you have to sign was an immense help.

“Particularly in the couple of weeks leading up to completion it meant I could still find time to sell, critical to any business.”

Legal advice to the company during the deal was provided by Harrison Clark Solicitors in Worcester and advice to the vendors was provided by George Green Solicitors of Cradley Heath.

PEM Corporate Finance Advises On Sale Of Leading UK Payday Lending Business

CorporateFinancenews.blogspot.com

Kieran Moulden and Stuart Carter, Directors of leading UK payday lending business, Fortress Group UK, are pleased to publicize the sale of the company to Texas based Think Finance Inc.

Bury St Edmunds based Fortress, founded in 2007, has developed quickly to become one of the UK’s foremost payday lending businesses. Fortress is an entirely online lender, and was recognized with best of breed IT systems and observance procedures to allow it to be scalable. It has grown rapidly since formation and a recent report found it to be one of the top five players in the market.

Fortress, which trades under the brand names “1 Month Loan” and “Mayday Payday”, provides short term unsecured loans to private individuals known as payday loans as they are intended to be repaid “on payday”. Such loans have high interest rates but their cost compares favourably to unauthorized overdraft facilities and they are much easier to access than bank finance. For the customers they are convenient and confidential.

Payday lending is a mature market in the United States – indeed there are more payday lending outlets than there are branches of McDonalds. The UK market is less developed but growing rapidly and is attractive to US acquirers as demonstrated by the recent agreement by NASDAQ listed Dollar Financial Corp to acquire Purpose UK Holding the largest UK payday lender for £124M

Think Finance is one of the US’s fastest growing private companies with three year revenue growth of over 70% . Think Finance provides innovative financial products which provide under-banked consumers with better solutions for their financial needs combining, convenience, affordability, and transparency. Established in 2001, Think Finance has served over 1 million customers. The company is privately held and backed by some of Silicon Valley’s most respected venture capital firms, including Sequoia Capital and Technology Crossover Partners.

Think Finance will provide capital to support Fortress’s expansion. All of the Fortress Directors will remain with the business to lead its development.

Kieran Moulden, CEO of Fortress, said “This is a fantastic deal for Fortress, which gives us an entrepreneurial corporate partner to help fund our growth as the UK market develops. I would like to thank PEM Corporate Finance for their tenacity and insight over the past year during which they have helped us to prepare the company for sale and to market the company internationally.”

Lake Falconer of PEM Corporate Finance added “Kieran and Stuart have achieved a huge amount in building Fortress to such a strong position in a short period of time. Think is an ideal buyer which should help them continue on their growth trajectory. We were pleased that our marketing of the company delivered such strong competitive interest, particularly from North America.”

Legal advice to the Directors of Fortress was provided by Vanessa Walton and Tom Pickthorn at Mills & Reeve in Cambridge.

Mobile Number Portability Launch Today In India

Today is the day for all those who frustrated with their mobile phone networks have been waiting for. You can dump their operator at only Rs 19. And yes, it is so post-paid and prepaid customers.

As Mobile Number Portability takes across the country today, everything you need to switch providers if you have now is not meeting your needs and standards. Of course, you can do in its current coverage area. So not really help people who move into town. You can not keep the number was in Mumbai, where the transition from the bottom of Delhi. But in addition, this service is certainly a little weary calm nerves and help prevent a lot of unnecessary services cries.

Although studies show that MNP will make a negligible difference to the operator's subscriber base and thus overall service, it would be interesting to follow the customer enthusiasm and response to the highly hyped service, which is finally launched, three years late.

Park District Hires Corporate Finance Director

The Naperville Park District has hired a new CFO. Form Stanish, CPA, who took over last Monday had served as chief financial officer of the Village of Willowbrook for 12 years. She also worked as accounting manager for the city of Naperville from 1993 to 1998.

“Not only does Sue Stanish bring excellent qualifications and experience to the district’s finance department, but she also brings personal knowledge of Naperville,” said Park District Executive Director Ray McGury.

Stanish said she is looking forward to working as part of a team that will be building and maintaining parks and facilities for the community. She will be working with the park board and staff to maintain the district’s excellent bond rating and general financial health.

“My goal will be to keep the same level of professionalism in my department that has been here previously,” she said.

Corporate Finance Advisors Invited To Bid For Northern Rock

City analysts revealed yesterday that the most likely outcome for Northern Rock is a sale, as Edinburgh-based Virgin Money – owned by Sir Richard Branson – makes a prime bid for the group.

UK Financial Investments (UKFI), the organisation that oversees the taxpayers’ holdings in banks, said that corporate finance advisors would be given a fortnight to tender for work. The state-owned Northern Rank was nationalized three years ago at the height of the credit crunch. Since that time, the government has begun to take the first steps to privatize the institution.

Chief executive for the fledgling Virgin Money, Jayne-Anne Gadhia said that she expects to tell MPs she believes that the high street bank faces significant barriers still. Virgin Money announced it would hope to open 70 branches during the next five years, which could be done in one move if it acquires the 75-branch strong Northern Rock.

Other potential buyers for the financial group include NBNK Investments, which hired former Northern Rock boss Gary Hoffman last November. However, with the hire of Mr Hoffman, NBNK cannot bid on Northern Rock until November 2011. Other names include Tesco Bank and private equity company JC Flowers.

UKFI said that it is inviting expressions of interest from all corporate finance advisors that work with Northern Rock and UKFI. Northern Rock was infamously nationalised in February 2008 as customers lined around the block at branches to withdraw their money.

Last year, the Corporate financial institution was split in two as ‘good’ assets were saved under Northern Rock Plc and “bad assets” were moved in Northern Rock (Asset Management).
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Corporate Finance - Arden Boosted By Late Corporate Deals

LONDON (SHARE CAST) - AIM-listed broker Arden Partners has reported a loss for the year to October 2010, but still make an underlying profit in Corporate Finance.

A couple of important fundraising at the end of the period helped increase the income of corporate finance, but secondary income from equity trading fell 29%.

Generally revenues were flat at £13m but there was a sway from a profit of £1.52m to a loss of £512,000. Stripping out share based payments of £1.08m, up from £702,000 the previous year, Arden was profitable. There were also restructuring costs of around £700,000 in the period following the departure of the chief executive Jeremy Grime. The underlying profit was £1.3m, down from £2.2m.

Arden intends to focus its activities on its core areas of the United Kingdom and India. CEO Jonathan Keeling, focusing on the possibility of India. Last month, Arden has raised £ 6,800,000 for Hardy Oil & Gas.
Net cash fell to 9 million pounds in late October 2010, but its financial position remains comfortable. At year end, Arden spent £ 947 000 to buy back shares.

Geithner To Meet With Corporate Finance Chiefs On Tax Reform

The Treasury Department has released the list of companies expected to be represented when Timothy Geithner, the Treasury secretary, discusses tax reform Friday with corporate chief financial officers.

The companies are: Honeywell, Cisco, Johnson & Johnson, Coca-Cola, Emerson, United Technologies Corporation, Wal-Mart, Exxon, PepsiCo, Microsoft, Procter & Gamble, Bank of America, Caterpillar, Disney, Eli Lilly, General Electric, Dow Chemical and MetLife.

The meeting comes as tax reform is getting increased attention around Washington, even as members of both parties acknowledge that overhauling the nation’s tax code would be a difficult undertaking.

Treasury representatives have cautioned that Friday’s event is one in a series of meetings dealing with tax reform and have advised not to read too much into it.

For his part, President Obama has said he wants a “conversation” on the issue this year. And Valerie Jarrett, a senior White House adviser, recently called Friday’s Treasury meeting an opening step in what would most likely be a drawn-out push to overhaul the tax code.

Republicans have also been supportive of considering tax reform. Rep. Dave Camp (R-Mich.), the new chairman of the House Ways and Means Committee, announced Thursday the panel would have the first in a string of hearings on the issue next week.