| Bear Stearns boss to repel boarders
BEIJING, Jan. 10 -- Bear Stearns Cos Inc's management shake-up could make the investment bank a takeover target, but the possibility of more writedowns and chance of legal entanglements from the subprime mortgage crisis could sideline suitors for now, analysts said. Bear Stearns' president Alan Schwartz on Tuesday became the company's new chief executive, replacing James Cayne, who was under fire for the company's big mortgage losses and the collapse of two hedge funds. The appointment of Schwartz, a 57-year-old investment banker, could signal Bear Stearns' willingness to entertain offers, even as its shares hover near four-year lows, some analysts said. But Schwartz said he plans to return the company to strong profitability and he's not waiting around for a takeover bid to materialize.
BofA may reap tax break with acquisition
Bank of America Corp.'s acquisition of Countrywide Financial Corp. could provide about $500 million in tax savings over five years for the Charlotte bank, according to a tax expert's review of the deal. The Charlotte bank on Friday said it was buying the nation's biggest mortgage lender for about $4 billion. The acquisition came after the bank had already invested $2 billion in the California-based company, which was struggling amid the nation's mortgage meltdown. Bank of America can benefit from Countrywide's troubles because it's buying the lender in a stock transaction at a price worth less than the tax value of its assets, said Robert Willens, who has launched New York-based Robert Willens LLC after 20 years with investment bank Lehman Brothers. That occurrence would allow Bank of America to use unrealized losses at Countrywide to offset its own profits, lowering the bank's taxable income.
GMAC eyes mortgage firm
GMAC LLC, the former financial services division of General Motors Corp., could buy another large non-U.S. mortgage firm and combine it with Residential Capital LLC, a struggling GMAC-owned mortgage company, according to a GMAC news release Wednesday. Once a cash cow for GM, GMAC's problems have been cause for concern at GM, which owns 49% of GMAC after selling a 51% stake in the financial services firm last year to a group led by Cerberus Capital Management. .
Buffet Denies Interest in Countrywide
Shares in Countrywide Financial Corp. fell to a 4-year low Friday after billionaire investor Warren Buffett said he never came close to buying shares in the Calabasas-based lender. Reports surfaced in August that the chairman of Omaha-based Berkshire Hathaway Inc. might buy a stake in the struggling lender. The reports said that Buffett had been increasing his stake in financial services companies with significant exposure to the mortgage market at the time. He was quoted on CNBC saying the worsening credit and housing markets may present some real investment opportunities. Buffett said in an interview late Thursday on Fox Business Network that he never bought any Countrywide stock, and that the company lacked a comprehensive recovery plan that might have attracted him. This news comes after Securities and Exchange Commission said it opened an informal inquiry into stock sales by Countrywide Chief Executive Angelo Mozilo after North Carolinas State Treasurer raised concerns about the timing and frequency of Mozilos trades.
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