Just when it looked as if an outside bidder had outbid Jim Crane’s management led-private equity group for control of Houston-based EGL, Inc., Crane’s group upped its bid to $46.25 a share (prior posts here) this past Friday. Then, yesterday, the Crane group’s main competitor for EGL — an affiliate of Apollo Management, LP — sweetened its bid to $47.50 per share. EGL’s board, which is being toasted daily by EGL shareholders, notified Crane’s group that it is available until Wednesday to discuss a revision to that group’s $46.25 per share offer.
For those of you keeping score, that newest bid price represents just under a 60% premium over the EGL share price from when Crane’s group announced its his original bid for the company earlier this year.
This all must be very confusing to Ben Stein.

Well, well, well. Look who has bought a big stake in The Woodlands-based Anadarko Petroleum Corporation:

Icahn Management LP, one of investor Carl Icahn’s investment vehicles, has purchased about 3.1 million shares in Anadarko Petroleum Corp., according to a Reuters report Tuesday.
The purchase amounts to a 0.7 percent stake in Anadarko, which has 463.9 million shares outstanding.
Reuters said regulatory filings stated that his ownership in The Woodlands-based Anadarko (NYSE: APC) was worth about $133.5 million as of March 31.

The always-entertaining Icahn lost out last year to Anadarko in the bidding over Kerr-McGee.

NY Times business columnist Ben Stein has penned some real stinkers, but this past Sunday’s column may just be his worst yet.
First, Brad DeLong explains Stein’s basic misunderstanding of fundamental principles of unemployment and economic growth, and then observes of Stein’s confusion:

It’s a misconception like… like… like this: “Dear Dr. Gridlock: I took my foot off the accelerator three second ago. Why is the car still going 60? Why doesn’t the car instantaneously stop when I take my foot off the accelerator?”
So if only Ben Stein would stop calling himself an economist, it would brighten my day, so I pray for it.
Note that I no longer prayer for competent editors at the New York Times who would exercise even a little quality control. Of that I have despaired.

Then, Felix Salmon proceeds to eviscerate the remainder of Stein’s column, including Stein’s populist call for a WalMart in Midtown of New York City:

A Wal-Mart in Midtown? Maybe we could tear down Rockefeller Center and build one there. Or repurpose the Central Park Zoo as a big-box retailer; the Sheep Meadow could be the parking lot. Obviously we’d need to give Wal-Mart the space rent-free, or for maybe no more than a buck or two a foot, because that’s how the company can offer us its everyday low prices. But doing so would surely be worthwhile: “every New Yorker needs food and paper towels.” I only wonder how we’ve all managed to cope until now.

Finally, in regard to another topic that Stein has addressed in his column, the bidding competition for Houston-based freight logistics company EGL, Inc that was noted here last week continued over the past weekend:

The bidding war continues for EGL Inc.
Over the weekend, both EGL Chief Executive Officer James Crane and CEVA Group PLC, an affiliate of New York-based Apollo Management LP, upped the ante on their offers for the company. [. . .]
On May 11, Crane amended his offer to $45 per share in cash.
On May 12, CEVA countered with $46 per share in cash, and on May 13, EGL’s special committee determined that the revised proposal from the CEVA group was a superior proposal as defined in the merger agreement.
The committee has given Crane’s group until May 16 to make another offer.

EGL’s stock was trading at $29.76 a share when EGL chairman and CEO Jim Crane made his original management led, private equity-backed offer to take the company private. Sounds like a good deal for EGL shareholders, eh? Not according to Ben, who said the following about such buyouts in his Times column earlier this year:

[M]anagement buyouts are great for management. But by every standard I can see, they are yet another sad sign of how our corporate trustees have lost their moral compass. The time for them to stop is long overdue. If the stockholders have hired you and pay your wage to manage their assets, your job is to do that for themónot to buy them out at fire-sale prices and turn around and make billions that rightfully belong to them. The management buyout is a sad and infuriating avatar of a decadent age.

To which I commented at the time:

My anecdotal experience is that a good sign to hold on to one’s pocket book firmly is when someone tells you that it is better to have fewer bidders competing to purchase something. Indeed, my sense is that a management-led, private equity-financed play for a public company is usually just as likely to spur competing offers for the company as it is an attempt to lowball the public company’s shareholders. When the folks who know the most about a company’s business show that kind of confidence in the value of the company, that sends a strong signal to the market that more value can be made. Such confidence tends to be contagious.

Has there ever been a Times columnist as far out of their league as Stein?
Update: Don’t miss Larry Ribstein’s post regarding the Times editors’ decision to hire Stein, which includes this wry observation:

Is this why the Times needs a governance structure that insulates its managers from markets?

Former Austin resident Joe Weisenthal over at DealBreaker sums up this Street.com analysis of the continuing financial performance troubles of Austin-based Whole Foods:

Being from Austin, it’s a little painful to see cracks in a homegrown success story like Whole Food success story (Dell has been painful enough). Then again, every company has to get its comeuppance, which is what the company is now in the process of receiving. Sure, it continues to open new stores, and apparently the one on Houston even has a sushi conveyor belt, although we haven’t been able to verify that first hand. But everyone sells sushi now, and everyone sells organic foods. Basically, a Whole Foods store isn’t unique like it used to be, and the company is feeling the pain. Plus, the high-end grocery space is getting more crowded. In the east, there’s Wegmans, which ostensibly makes Whole Foods look like an Albertsons. And then supposedly there’s a chain called Eataly, coming from Italy, which will make Whole Foods look like your little Korean grocer down the street. So it’s finally getting tested, something its investors aren’t used to.

Whole Foods shares dropped more than 10 percent Thursday, closing at a 2 1/2-year low of $41.15. That Texas grocery store competition remains absolutely brutal.

Have you checked out what’s been going on this week in regard to EGL, Inc chairman and CEO Jim Crane’s proposed private equity buyout of EGL?:

Jim Crane, chief executive of EGL Inc., has a decision to make. The company’s special committee of board directors said Monday that it has determined that the latest bid for the company by an affiliate of Apollo Management LP is superior to Crane’s bid.
The New York private equity firm, through an affiliated European company, CEVA Group Plc, submitted a new bid at $43 on May 3. That is $5 a share higher than an offer accepted by the board from Crane and his partners, Centerbridge Partners LP and The Woodbridge Co. Ltd.
In March, Crane — the transportation and logistics company’s largest single shareholder — was forced to sweeten his cash offer from $36 to $38 in light of pressure from Apollo, which claimed that Crane was trying to steer the board away from its first offer.
Crane has until May 11 to respond to the special committee’s decision with a revised proposal. If no further bid is tendered, the board would then consider whether or not to terminate the existing merger agreement with Crane and accept the Apollo bid.
EGL would have to pay a $30 million termination fee to kill the current deal with Crane and his partners.
Apollo’s latest offer for EGL (NASDAQ: EAGL) puts a $1.75 billion value on the company, or about 8 percent higher than the May 2 closing price of $40.

Let’s see now. By my calculation, when Crane’s group made its original buyout proposal early this year, EGL stock was trading at $29.78. Now, four months later, Apollo is offering $43 a share, despite the fact that EGL’s financial performance was less than stellar during the 4th quarter of 2006.
And Ben Stein says that management led-private equity buyouts are bad for public company shareholders?

Alex Pollock has an interesting idea to help decide the debate over the true effects of the Sarbanes-Oxley Act on the U.S. securities markets:

[I]f Sarbanes-Oxley 404 were voluntary, would investors differentiate among American companies and pay a premium for the securities of those companies which implemented it, compared to those which chose not to? . . .
In this context, we can say there are two competing theories:
A. Sarbanes-Oxley is bad for investors because the costs are excessive relative to the benefits, and
B. Sarbanes-Oxley is good for investors because it protects them and makes them willing to pay more for securities.
Theory B is usually used as an argument for keeping Sarbanes-Oxley Section 404 mandatory, but it is actually a great argument for making it voluntary.
Under a voluntary regime, if Theory B is right and investors love how they are protected by Sarbanes-Oxley 404, they will bid up the prices of the securities issued by companies who implement it. We will then observe within the U.S. market a premium analogous to the ìcross listingî premium, and everyone will end up following suit.
But if, as many of us believe more likely, investors think their money is better spent on research and development or marketing than on excessive accounting routines, paperwork, and bureaucracy, the companies will respond accordingly. [. . .]
Investor choice would demonstrate whether Theory A or Theory B is correct. Alternately stated, letís send Sarbanes-Oxley to the court of investors.