Carlyle closes record $10b capital-raising

LONDON - The Carlyle Group has completed the world's largest corporate buyout capital-raising at $10 billion to finance mega-sized deals on both sides of the Atlantic, the private equity firm said yesterday.

Carlyle's latest capital-raising was through two funds. The US-focused Carlyle Partners IV got $7.85 billion of commitments, and European fund Carlyle Europe Partners II received $2.2 billion of commitments.

The massive fundraising comes amid press reports that private equity firms Warburg Pincus and Blackstone also are looking to raise up to $8 billion each.

Iinvestors seek ouster of CEOPurcell

NEW YORK - Eight former Morgan Stanley partners who earlier this month quietly asked the board to replace chairman and chief executive Philip Purcell went public yesterday, saying that management changes announced by the firm failed to address the problems they raised.

On Monday, Morgan Stanley shook up its management ranks by naming chief administrative officer Stephen Crawford and fixed-income division head Zoe Cruz as co-presidents, replacing Stephan Newhouse.

The firm has not addressed the status of Newhouse or two senior bankers affected by the moves, Vikram Pandit, head of institutional securities, and John Havens, global head of institutional equity markets. “This ‘restructuring' is not responsive to the concerns expressed in our letter and, we believe, is not in the best interest of Morgan Stanley shareholders,” the former partners said in a statement.

MCI accepts Verizon's $7.6 billion offer

WASHINGTON - MCI Inc. yesterday accepted a sweetened takeover offer of $7.6 billion from Verizon Communications Inc., citing Verizon's scale and growth prospects in rejecting Qwest Communications International Inc.'s larger bid.

MCI said Verizon raised its cash-and-stock offer to $23.50 a share, including $8.75 per MCI share in cash and $14.75 per MCI share in Verizon stock. Of the $8.75, up to $5.60 would be paid to MCI shareholders when they approve the deal, and the bid includes protection for MCI shareholders against a decline in Verizon's stock price.

Qwest said it would “assess the situation”, but that it still believed its $8.45 billion bid was superior.

Many MCI shareholders have urged Qwest to pursue MCI, saying Verizon's original $6.75 billion offer was too low. Verizon said its revised bid was a “compelling” offer for MCI shareholders.

Hurricanes spoil 2004 profit for Hannover Re

FRANKFURT - The world's fourth-largest reinsurer, Hannover Re, reported a 20 percent jump in net profit in the final three months of 2004, though earnings for the year overall were spoiled by hurricanes.

Hannover Re said yesterday that it made net profit of 118 million euros ($153.3 million) in the fourth quarter, slightly ahead of an average forecast from analysts polled by Reuters, helped by strong reinsurance prices. But the good result was outweighed by hurricane damage, which forced the group's profit for the full year down to 309 million euros - more than one fifth less than Hannover Re had hoped for.

Its annual profit was also lower than the 355 million euros it earned a year earlier.

Andersen ‘allowed' $74b WorldCom fraud

NEW YORK - Former WorldCom Inc. auditor Arthur Andersen LLP, while earning more than $40 million in fees, could have stopped a $74 billion fraud at the company “dead in its tracks”, a lawyer for investors suing the accounting firm said.

Sean Coffey, the lead lawyer for the investors, said today during his opening argument that Andersen, the lone remaining defendant in the case, played a key role in the fraud at WorldCom, the second-largest US long-distance company, by signing off on false financial filings used to sell more than $15 billion in bonds.

“That fraud could have been stopped dead in its tracks if Arthur Andersen had been looking to do its job instead of looking to line its pockets,” Coffey, a partner at New York's Bernstein Litowitz Berger & Grossman, told jurors in federal court in New York. “Because Andersen failed to do its job, investors lost tens of billions of dollars.”

NCR veteran to succeed Fiorina at HP

SAN JOSE - Hewlett-Packard Co. has named Mark Hurd, the head of NCR Corp., as its new chief executive to succeed Carly Fiorina, who was ousted last month, according to a published report.

Hurd, 48, joined Dayton, Ohio-based NCR in 1980 and spearheaded an ambitious turnaround when he became the computer services company's CEO and president in March 2003.

Hurd is known as a relentless cost cutter.

According to The Wall Street Journal's online edition, HP directors selected Hurd to run the technology company because they were impressed with how he engineered an ambitious turnaround at NCR.

Spiegel can seek creditor votes on plan

CHICAGO - Spiegel Inc., the bankrupt mail-order marketer, won court approval to have its creditors vote on a bankruptcy-exit plan that gives ownership of the company to Commerzbank AG and other unsecured creditors.

Roughly two-thirds of the voting creditors must vote in favour of the plan before the court considers final approval. The ruling by US Bankruptcy Judge Cornelius Blackshear in New York keeps the Downers Grove, Illinois-based company on schedule to exit bankruptcy by May 31.

Spiegel, which owns the Eddie Bauer clothing chain, proposes to give unsecured creditors owed more than $1.3 billion all the equity in a reorganised company called Eddie Bauer Holdings Inc. The recovery is worth about 90 cents for each dollar creditors are owed, court papers show, compared with a national average of 40 cents on the dollar.