peHub Second Opinion

***Deal Journal suggests that hostile bidder Microsoft could learn from Inbev’s takeover of Anheuser Busch. Got a reluctant target? Just raise your bid. How simple is that? They show a handy little chart that outlines the high correlation between increased hostile bids and times the board recommended the bids. Strikingly, the bids not increased were not once recommended, except in 2007. Raising ones bid certainly makes the bidder look better, but with strategy in mind, why not just lowball to end up with a fair value?

***So AXA Private Equity Head Dominique Senequier called for a code of ethics in private equity, following uproar over obscene profits made by managers of Barclay’s private equity . My response to this is mixed. On one hand, I’m a journalist and therefore hold myself to a code of ethics. On the other hand, I’m sure voluntary codes with no concrete roles and entities to enforce them are ever that effective, especially in business. I certainly do not feel a voluntary code would do much good. The fact that a few firms are drawing one up now as a way to “head off the potential devising of legislation to regulate their activities” serves as further proof that PE doesn’t always have the  most honest of intentions.

***You may remember news of William “Boots” Del Baggio’s departure firing from Sand Hill Capital. Seems Mr. Boots is now out of favor even more.

***Everyone’s talking about the SEC commentary on short sellers spreading false rumors. I’m pretty fascinated by this whole conversation even though I don’t pay much attention to short sellers. From an M&A point of view, I was immediately reminded of Clarins—the company that got so tired of defending M&A rumors that the owners just up and took it private. If that’s not an argument against the spreading of false rumors then I don’t know what is. Still, many journalists and traders make a living on rumor mongering. Is there such a thing as a responsible rumor? And if the rumor exists, is it wrong to repeat it even if it’s clearly labeled “rumor”?