The original name was Back Rub and other unusual things about Google.

Facebook is the worst performing IPO of the decade.

Rumor Alert I: Facebook is buying browser maker Opera Software

A Moment of Truth? Mitt Romney says that cutting government spending will throw the U.S. into a recession or depression.

Microsoft has big plans for its Windows 8 tablets (it’ll be 80 inches)

Is it okay to give away my old iPhone as a present? No.

The HP team responsible for Enyo is heading over to Google

Poor Siri. She’s criticized and under-appreciated. Now some say Steve Jobs would be embarrassed by her.

Rumor Alert II: Dells is thinking about buying Quest Software

What’s the carry? Hank Greenberg is seeking outside investors to help him fund PE deals that last a decade or longer.

Happy Memorial Day everyone!

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The tax-collecting Internal Revenue Service will need to write detailed regulations to implement any new law. The agency will make recommendations now to lawmakers if it sees problems, an IRS official told Reuters.

“We have to look down the road that it may become law,” the official said, when asked if the issue was under consideration. “We don’t want to be surprised,” the official added, declining to be identified.

Carried interest is the slice of profits that private equity fund managers earn on their investments. The amounts can be huge if the funds perform well and make their managers very wealthy.

President Barack Obama and most other Democrats in Washington favor lifting the levy on this type of income, which is now taxed at the 15 percent capital gains rate rather than the top 35 percent rate applied to wages or salary.

The Democratic critics say Romney’s taxes illustrate an unfair loophole. Romney, a co-founder of buyout firm Bain Capital, earns most of his income from investment profits, dividends and interest.

The Obama re-election campaign eyes Romney’s taxes and his time at private equity firm Bain Capital as a weakness for the Republican opponent. Obama has highlighted lightly-taxed millionaires to paint Romney as unfairly privileged.

The carried interest proposal is a perennial one that will likely rear its head again at year’s end, when lawmakers face a series of fiscal deadlines coming to be known as “taxmageddon” or the “fiscal cliff.”

Expiration of all lower individual tax rates enacted under President George W. Bush will kick in if Congress fails to act. Movement on these issues is not expected until after the Nov. 6 elections.

“It is a prudent thing to be doing,” John Harrington, a partner at SNR Denton and former tax counsel for the Treasury Department, said of the government’s preparation.

The IRS and the Treasury Department have worked with lawmakers on carried interest bills in the past, specifically to close potential loopholes, said Steven Bortnick, a partner at Pepper Hamilton LLP.

“The fact that they’re now looking may mean that they think it’s more likely that something’s going to happen, but it’s not surprising,” he said.

Carried interest is often conditional on a fund making a profit or hitting a performance hurdle in terms of the rate of investment return achieved, often set at 8 percent.

The amounts can be huge if the funds perform well and make their managers wealthy.

Advocates for maintaining the lower carried interest rate say fund managers are making risky investment decisions with the potential for losing money, making the income most like investment, which is subject to the lower tax rate.

Lawmakers came close to changing the tax treatment at the end of 2010, but the effort ultimately died in the U.S. Senate.

Some moderate Democrats have been concerned on the impact on business, which has typically derailed the efforts in the Senate.

Higher carried interest taxes may be a valuable revenue source for lawmakers desperate to balance the budget.

A series of individual and business tax breaks have expired, and the business community is lobbying for retroactive approval, as well as extension for next year. Raising the tax on carried interest is often proposed as a way to pay for the extension of popular tax breaks, known as “tax extenders.”

(By Patrick Temple-West and Kim Dixon)

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1. Mark Boslet was first to the scene after Techcrunch broke the news of the KPCB suit

2. Steve Blank went around asking if Silicon Valley is actually suffering from Facebook

3. Reuters was on top of the Facebook face-plant, when news broke that Morgan Stanley cut its estimates

4. Connie Loizos spoke to Bill Hambrecht—who says (no stunner) Facebook got its IPO wrong

5. Connie also spoke with some legal pros about the KPCB mess, who had interesting predictions

6. Mark Suster paid peHUB a visit with a guest piece, and said VC’s brightest days lie ahead

7. Mark Boslet wanted to know who the most aggressive sellers of Facebook were—and, for good reason!

8. Luisa Beltran had coverage of GSO Capital Partners’ loss—Tim White, who’s going to have his own shop

9. Maximilian Schroeck and David Mes spoke about the new challenge for VCs—it isn’t a “J-Curve” any longer!

10. Lawrence Aragon was on top of the news when the story broke that Sequoia’s Mike Moritz will be stepping back from the business

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Despite several requests to reach Edwards and get an official statement from the university, neither was made available.

Abbott, Edwards’s predecessor, stepped down as chief investment officer just six months after assuming the role in late 2010. At the time of his departure, the university issued a statement saying: “It had become apparent that his style of conducting business is inconsistent with Cornell’s policies and expectations.”

Cornell declined to elaborate on the reasons for Abbott’s exit saying it does not discuss personnel matters.

Edwards, who was elevated to the role of interim chief investment officer following Abbott’s resignation, had previously been, since March 2008, a senior investment officer at the endowment.

Cornell’s endowment, with $5.4 billion in assets, was the fifth-best performing endowment among the Ivy League’s eight universities during fiscal 2011, posting a 19.9 percent return in the year that ended on June 30, 2011.

Cornell had 19.5 percent of its assets invested in private equity as of June 30, 2011, or about $1.1 billion. Returns for the endowment’s private equity program were strong in 2011, posting gains of 27.8 percent.

The four best-performing endowments in the Ivy League over that time period also happened to be the largest. The Ivy League’s top performer was Columbia University, with a 23.6 percent gain. Yale University and Princeton University were tied for having the second-best endowment performance, with 21.9 percent returns, and Harvard University, which has the nation’s largest endowment with $32 billion in assets, returned 21.4 percent in the year ending June 30, 2011.

Gregory Roth is a senior editor at Buyouts Magazine and peHUB. Follow his tweets @RothReuters. Follow Buyouts tweets @Buyouts.

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There were 373 global announced mergers this week, valued at roughly $60.7 billion. The total is the lowest number of deals so far this year, according to preliminary data from Thomson Reuters. But deal value more than doubled from last week when 574 deals collected $28.5 billion, TR said.

We had some notable transactions this week led by Eaton Corp.’s $11.46 billion deal for Cooper Industries.

The number of private equity-backed deals was also low. According to TR, there were 51 PE-backed deals valued at $8.4 billion. This compares to 80 deals last week that totaled $8.6 billion.

One caveat, though. The number of deals and their value could change (up or down) as Thomson Reuters get more information on transactions. Here’s the week’s top PE deals, according to Thomson Reuters.

Photo of snails courtesy of Shutterstock

[slideshow]

[slide title="5. Tarami Corp"]
Dydo Drino this week announced it would pay 11 billion yen (US$138 million) to buy jelly maker Tarami Corp, according to Bloomberg.

In 2009, Sun Capital Partner sold Tarami, a Japan-based maker of fruit and fruit-flavored gelatin cups, to a private equity subsidiary of Mitsubishi UFJ Lease & Finance Company Ltd.

[slide title="4. Global Blue"]
Silver Lake and Partners Group yesterday agreed to buy Swiss-based tax-free shopping business Global Blue for 1 billion Euros ($1.3 billion) from rival Equistone, Reuters reported.

Nyon, Switzerland-based Global Blue, a duty free shopping group, helps overseas travelers in Europe reclaim sales tax on their shopping.
Equistone, formerly Barclays Private Equity, bought Global Blue in 2007 in a deal valuing the business at 360 million euros.

[slide title="3. Formula One"]

CVC Capital Partners recently sold a $1.6 billion stake in the Formula One racing business to a group of investors, including the investment management firm BlackRock. After the sale, CVC owns about 42 percent of Formula One.

The sale is an attempt by CVC to reduce its risk before Formula One goes public, the New York Times said.

[slide title="2. Motel 6"]

This week, Accor agreed to sell its troubled U.S. budget hotel business to the Blackstone Group for $1.9 billion.

The sale includes Accor’s Motel 6 and Studio 6 chains and comprises 1,102 hotels in Canada and the United States.

[slide title="1. AMC Entertainment"]

The week’s biggest deal comes from China.

Dalian Wanda Group, a Chinese conglomerate, has agreed to buy movie chain AMC Entertainment for $2.6 billion, including debt, Reuters said. AMC is owned by an investment group that includes Bain Capital, CCMP Capital Advisors and Spectrum Equity Capital.

[/slideshow]

According to the New York Daily News, rumors are “flying” in MLB and New York banking circles that the family that owns the Bronx Bombers is “exploring the possibility” of selling the Yankees. George Steinbrenner, who died in 2010, acquired the storied baseball team in 1973 for $8.8 million.

The Steinbrenners are considering a sale because the L.A. Dodgers fetched such a high price, the story says. In April, the Dodgers were sold to a group led by former basketball great Earvin “Magic” Johnson for $2.175 billion. Future television rights for the Dodgers have been estimated to be worth as much as $3 billion and are considered the team’s most valuable asset, sister news service Reuters has reported.

Private equity was expected to be a major player in the Dodgers auction. Kohlberg Kravis Roberts & Co., Thomas H. Lee Partners and Providence Equity Partners were reportedly interested in joining the bidders, according to reports.

The Steinbrenner family, in various press reports, has denied exploring a possible sale. But what if? The Yankees could fetch $3 billion, the New York Daily News says. That number jumps to $4 billion when Yankee stadium and the YES Network are included, according to Sports&Stars.

Don’t expect private equity to be very interested in the Yankees. Paying “3 billion is nuts for the team alone,” one PE exec says.

The exec points to several problems with current Yankee deal talk. The baseball team and the YES Network are not owned by the same investors, so the two assets probably couldn’t be sold together, the source says. “These would be separate transactions,” the person says.

Also, what one piece sells for dramatically affects what the rest will fetch, the exec says. The YES Network could be worth as much as $3 billion by itself, the source says. The team and stadium could be cobbled together in a separate package that could go for $3 billion, the exec says. But the Yankees are highly leveraged, with about $1 billion in debt, the source says. “Is it $3 billion plus debt for the Yankees and the stadium?” the exec says. “That would be nonsense.”

More importantly, MLB doesn’t want private equity, so PE will likely not be a major player in a potential Yankee sale, the exec says. “The league doesn’t want someone who will sell in three to five years,” the person says. “They want stable, long-term ownership.”

Photo courtesy of REUTERS/Gary Cameron

Talbots said it remains open to pursuing a transaction with Sycamore at $3.05 per share pursuant to an acceptable merger agreement.

The company said it was exploring other strategic alternatives.

The struggling retailer put itself up for sale after it tried to change its store formats and cater to a younger generation of shoppers and lagged behind peers such as Ann Inc and Chico’s FAS Inc.

Image Credit: Talbots

What’s New, Guy? Terra Firma’s letter to investors

Octogenarian Seeks Capital for 10 Year Fund. Apply Here.

Good News, Zuck!! At least one thing went right last month for ya

Prosecutors seek to tie Raj to Raj

New Orleans’ beacon of Katrina lays off staffers

So Um Who was in charge of JP’s risk oversight? Oh, these folks.

So What’s Summit Selling Next?

Got Him! Suspect allegedly confesses Patz killing

Feel the Burn: How much has been lost on $FB already?

Image Credit: Jonathan Marino

Wah Wah Wah. Facebook doesn’t like how its IPO went and now it wants to switch to the Big Board

Mark Zuckerberg’s new, unpleasant life as head of public company.

The Yankees could go up for sale with a $3 bln value.

Tony Soprano explains Bain Capital.

Parlor Trick  Video: This woman crushes cans with her shoulder blades

Now we understand the Instagram buy. Facebook launches a standalone camera app.

A 20-year old entrepreneur squatted at AOL’s Palo Alto office for two months and built his startup.

Here’s Mark Cuban’s post mortem on the Facebook IPO. It’s a killer but not for the reasons you think.

Marvel creates a superhero who draws his power from a “listening device.” This after a kid refused to wear his hearing aid.

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That’s right; we’re going into a long holiday weekend. With that in mind, I thought I’d find out what everyone is doing. Lest you forget, peHUB has often tried to figure out what PE execs do when they’re not working on deals. Do they jet to glamorous places, like Monaco or the Hamptons, and drink martini’s poolside? Are they spending the weekend dealmaking? Or, are they like the rest of us mere mortals and planning to hang out with the family?

The answer is it’s a mix. Many execs are attending graduations, some are golfing while others are traveling to Napa or to summer homes, so they can cookout and get away from civilization. Surprisingly, only a handful of buyout pros who responded to peHUB say they plan to work this Memorial Day weekend. They have deals that are closing, which is good for everyone, so we’re not complaining.

One exec says he plans to coach soccer and baseball, and then attend a Memorial Day picnic. “The last thing I want to do is travel,” the exec says. Another buyout pro plans to go to his wife’s 20th college reunion and then a wedding for an associate. He expects to top off the weekend with a Memorial Day cookout with family and friends.

Stewart Kohl, co-CEO of The Riverside Co., will be attending his own 35 year reunion at Oberlin College. He plans to catch up with old friends and see “what became of all of the women who rejected me over those four years,” he says with a laugh.

He will also be speaking on a panel about what it’s like to run a PE firm alongside his classmate and co-CEO Béla Szigethy. If beer or wine is served, Stewart says he plans to imbibe but just modestly. He also hopes to take a nostalgic bike ride around Oberlin.

The most romantic getaway goes to this PE exec. He’s heading to Rome to celebrate his anniversary with his wife. The trip is a “reward for all her patience,” the exec says.

Another buyout exec, who grew up playing basketball and baseball, lamented the cultural divide that exists between him and his son. The exec is heading to the lacrosse Final Four at Gillette Stadium in Foxborough, Mass. “Which shows how far my kids are from my roots,” the person says.

The most intense pursuit this weekend? One PE pro will be racing cars in Monticello, N.Y. Several high-powered execs race cars, the source says, but he wouldn’t name names. Motorsports are not for everyone, he says. Many people like the idea of racing cars until they actually do it. “It’s terribly expensive, it’s uncomfortable and you can get really hurt. Some people get car sick,” the source says. “You have to like the adrenaline.”

Racing cars, for this exec, is just a hobby right now, “but in a few years I’d like to do Daytona,” he says.

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