Good Tuesday morning. Breaking: Emerson Electric has withdrawn its $29 billion takeover bid for Rockwell Automation, having been unable to persuade its target to come to the negotiating table. More to come on DealBook.
The deal, which will be announced this morning, is part of WeWork’s plan to move beyond providing co-working spaces. The wildly ambitious company, which is already planning a kindergarten for budding entrepreneurs, wants to fit into more aspects of everyday life.
That’s why it is spending an undisclosed amount to buy Meetup, the 16-year-old social network that connects like-minded hobbyists.
“It’s like a magical puzzle that fits together,” Scott Heiferman, the chief executive and a co-founder of Meetup, told DealBook’s Michael J. de la Merced.
Having Meetups in WeWork spaces helps make use of office locations that tend to be busy during the day and less so after hours. But Shiva Rajaraman, WeWork’s chief product officer, asserted that the union was about building a bigger sense of community: “This is a great tool to introduce people to their passions.”
How it came together: Mr. Heiferman and his team, who hadn’t raised outside money in years, began looking for investments to finance international expansion. That eventually led to a meeting with WeWork’s co-founder and C.E.O., Adam Neumann.
Today’s DealBook briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Amie Tsang in London.
It has now been more than three weeks since Prince Alwaleed bin Talal, the face of the kingdom’s business elite for decades, was detained without explanation as part of a purported anticorruption drive. And the mystery is making many potential business partners of Saudi Arabia nervous.
For his latest column, Andrew spoke with executives including Bill Gates and the former Citigroup chairman Dick Parsons. Here’s what Mr. Parsons said:
And Mr. Gates called the prince “an important partner” in both business and philanthropic matters.
What executives are whispering about: Whether Crown Prince Mohammed bin Salman, who has led the arrests of Saudi royals, plans to seize Prince Alwaleed’s Rotana entertainment company. It’s the biggest media player in the region and owns television, magazine and radio assets.
That was what John Huey, a former editor in chief of Time Inc., said of his former employer after it agreed to sell itself to Meredith for $2.8 billion.
Employees of the publisher have demanded to know whether the Koch brothers, the billionaire industrialists who helped finance the deal, would try to exert political influence through magazines like Time, according to the NYT.
It’s not clear whether the Kochs will have the chance to do so. The FT reports that Meredith is considering breaking up Time Inc. and selling off news-focused magazines like Time, Fortune and Sports Illustrated (a prospect that we raised yesterday).
The Koch division behind the deal
Many people may not have heard of Koch Equity Development. But the unit of Koch Industries that lent $650 million to Meredith has helped plenty of other takeover transactions, according to the WSJ. Among them: the sales of Infor for $2 billion and of ADT for about $7 billion.
The Time Inc. flyaround:
• Our friend Joe Nocera predicts that neither Time nor his publishing alma mater, Fortune, will survive the move to Meredith. (Bloomberg View)
• Tara Lachapelle writes that while Time Inc. shareholders are receiving a below-average takeover premium, “This is a situation in which investors will want to take the money that Meredith and the Kochs are offering and run.” (Gadfly)
Ken Griffin of Citadel — a financier who would stand to benefit — said that he didn’t need his taxes cut that much:
And Randy Levine, the president of the Yankees and a self-described longtime supporter of Mr. Trump, wrote an open letter to the president on the conservative news site Newsmax calling for big changes to the proposed tax plans.
Where we stand on the Senate Budget Committee vote:
Republican leaders have been feverishly trying to devise compromises that would win over their colleagues on the committee before today’s scheduled vote on whether to forward the tax proposal to the full Senate. Two Republican members of the committee, Ron Johnson of Wisconsin and Bob Corker of Tennessee, have expressed opposition to the current legislation.
• Last-minute changes to the Senate’s tax bill could personally benefit Mr. Trump because of his stakes in so-called pass-through entities, according to a new analysis. (WaPo)
• Overseas airlines — including Middle Eastern carriers fighting with their American counterparts — would have to pay corporate taxes on part of their profits under the proposal. (WSJ)
• One of the lesser known beneficiaries of the House plan is a tuna cannery in American Samoa. Its tax break would be reinstated. (WSJ)
The White House’s selection of Mick Mulvaney as acting director is part of Mr. Trump’s push to deregulate Wall Street, the NYT reported. The effort is built on the premise that the financial industry has been left “devastated and unable to properly serve the public,” according to a presidential tweet.
For the moment, there are still two people claiming to be the leader of the agency. Neither Leandra English nor Mick Mulvaney have backed down from their claims to the acting director role. A judge heard opening arguments in Ms. English’s lawsuit against Mr. Trump over who is acting director of the consumer watchdog.
Many legal experts, including our friend Steven Davidoff Solomon of U.C. Berkeley, have supported the White House assertion that it can pick the agency’s next leader based on a federal statute.
The $48 billion level that SoftBank is offering as it seeks to buy up shares from existing investors is an opening bid, and the NYT notes that the price is likely to fluctuate as the tender offer proceeds.
Moreover, secondary offerings like what SoftBank is pursuing tend to be at a lower valuation than primary ones in which a company sells new shares. (Uber is also selling new stock to the Japanese conglomerate at its current valuation of $78.5 billion.)
But some investors will be disappointed in the lower valuation in any case, and will see in it an appraisal of Uber’s challenges: its chronically fractious board; its grappling with regulatory challenges around the world; and its latest headache, a hacking scandal that had been kept under wraps until recently.
The Uber flyaround:
• Illinois and the city of Chicago have sued the ride-hailing company over that hack. (Recode)
• Waymo, the self-driving car unit of Alphabet, has sought a delay in its court battle with Uber after new evidence emerged in the case. (NYT)
At least, it has on some Korean exchanges. And it’s poised to do so on American markets this morning.
Bitcoin supporters feel vindicated for now, according to the NYT — but some are preparing for a downturn. As one commenter on Reddit put it, “This is officially madness. I am going to prepare myself for a large correction.”
— Dan Drezner, a professor at Tufts University’s Fletcher School of Law and Diplomacy, in a WaPo op-ed on Anthony Scaramucci’s threat to sue the school’s student newspaper over two columns that called the former financier “unethical.”
• Arby’s, which is owned by Roark Capital Group, agreed to buy Buffalo Wild Wings for about $2.4 billion. (Arby’s)
• Wells Fargo bankers, who were given bonuses based solely on how much revenue they brought in, overcharged hundreds of clients. (WSJ)
• All British banks passed Bank of England stress tests for the first time since the annual exercise was started, and the central bank said it may increase a financial safety measure in case of a disorderly Brexit. (Bloomberg)
• SpaceX raised $100 million in new venture capital funding, according to an S.E.C. filing. (Axios)
• Peter Thiel keeps in touch with the editors of the Stanford Review, a campus publication he co-founded, and many of the publication’s alumni have built a small but tight-knit network across the Bay Area. (Stanford Politics)
• The Victoria Beckham brand received almost $40 million from the private equity firm Neo Investment Partners. (NYT)
• The activist investor White Tale said it would take its demands directly to Clariant shareholders after the Swiss maker of chemicals snubbed its request for an independent strategic review and three seats on its board of directors. (Reuters)
• The European Union voted to extend its authorization for the world’s best-selling herbicide after a lengthy and combative European review process that unfolded amid claims and counterclaims about the cancer-causing risks of glyphosate. (NYT)
• The power required to charge Tesla’s electric truck would be so great that it raises questions about the project’s viability, according to the consultancy Aurora Energy Research. (FT)
• The Supreme Court heard a case on Monday challenging an administrative tribunal that rules on patent disputes and appeared divided over the constitutionality of a procedure that makes it easier to challenge questionable patents. (NYT)
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