Latest / Bloomberg Intelligence / Bloomberg's Porter on INTC/McAfee, Heilemann on VP Picks(Audio)

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Bloomberg's Porter on INTC/McAfee, Heilemann on VP Picks(Audio) · Bloomberg Intelligence

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  Speaker 1: I'm Charlie Tellett, and that's a Bloomberg Business Flash. You're
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  Speaker 1: listening to Taking the Stoff with Kathleen Hayes and Pim
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  Speaker 1: Fox on Bloomberg Radio. Intel It's computer security unit McAfee
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  Speaker 1: is drawing interest from private equity firms as the company
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  Speaker 1: considers selling the business. This is according to people with
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  Speaker 1: the knowledge knowledge of the matter contacted by Bloomberg here
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  Speaker 1: to talk about the deal, and his story is Bloomberg's
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  Speaker 1: own Kyle Porter. He is from our deal's team here
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  Speaker 1: in the U S So, Kyle, why is Intel considering
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  Speaker 1: selling its computer security unit at a time when so
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  Speaker 1: many people are concerned about computer security? Oh, good afternoon.
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  Speaker 1: It's a combination of fact. Is really the fact that
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  Speaker 1: the acquisition was done five years ago. There was an
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  Speaker 1: aim of integrating into the process of constructing the computer
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  Speaker 1: chips security software that has gone a lot slower than
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  Speaker 1: Intel wort of Light. At the same time, there's been
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  Speaker 1: a real lack of comparative investment in the product, and
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  Speaker 1: there's allowed competitors to get ahead. Uh. That has allows
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  Speaker 1: them to look forward and say, well, maybe we should
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  Speaker 1: be thinking looking about with this business. Maybe there is
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  Speaker 1: a better owner and private equity. It's a corporate widowed
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  Speaker 1: as said, it's sort of the classic things that they'll
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  Speaker 1: account Kyle. The price tag in was seven point seven billion, dollars.
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  Speaker 1: Was this a seven point seven billion dollar mistake? That's
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  Speaker 1: above might pay grade to answer with a yet or no.
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  Speaker 1: But if you look at the division in which mccaffee sits,
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  Speaker 1: and there are other products in there, they're operating profit
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  Speaker 1: last year with two and ten million. If you've take
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  Speaker 1: an ebitdar Figer, it's not going to be a million
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  Speaker 1: miles away from that, and you're not going to get more.
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  Speaker 1: Even at eleven times, you'd be talking possibly three billion
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  Speaker 1: for a product equits for them to buy it. So
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  Speaker 1: it sounds like you just answered Pim's question. If you
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  Speaker 1: bought it for almost eight billion, you're only selling for
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  Speaker 1: three Maybe that wasn't such a good deer With that
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  Speaker 1: in mind, who wants to buy? Who says, great, we
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  Speaker 1: can pick up a bargain now, it's it's from the
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  Speaker 1: information that we've received, it's been the product the firms
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  Speaker 1: that have a lot of technology to experience. Three of
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  Speaker 1: the firms that's in the story to Tom A Brow
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  Speaker 1: and this only really do technology and software deals. And
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  Speaker 1: there are the first firm that we have listed there
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  Speaker 1: has also got a very long attract record of doing
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  Speaker 1: deals in this space and being very successful at it.
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  Speaker 1: We understand if her process is initiated and it's you know,
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  Speaker 1: you've got to be clear that while we understand the
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  Speaker 1: Intel has talked to potential advisors about running something, they
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  Speaker 1: haven't made a decision yet. You could expected view of
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  Speaker 1: responsors to come out of the woodwork. Is McAfee competitive
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  Speaker 1: in the security business right now? It's certainly not. It's
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  Speaker 1: certainly a well known brand and you know it's used
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  Speaker 1: by a lot of businesses and consumers. Where you put
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  Speaker 1: it in the five of the top ten, yeah, I'd
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  Speaker 1: still say quite possibly. So, Uh, what does this mean
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  Speaker 1: for Intel? I guess outside of the is there anything
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  Speaker 1: else they might want to sell? For example? I mean,
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  Speaker 1: is there anything and that's sort of hanging around their
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  Speaker 1: neck now that you guys are trying to sets out, well,
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  Speaker 1: there's been a lot of talker and Intel mean, it's
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  Speaker 1: if they've made very completame, if they're looking at refocusing,
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  Speaker 1: looking at doing different things with the business. Earlier this year,
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  Speaker 1: that was talking and selling off a significant chunk of
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  Speaker 1: their venture capital ports earlier we'd estimated about a billions worth,
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  Speaker 1: and that with all smaller businesses that they linked to
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  Speaker 1: gowing consumer part of the business now that was subsequently pulled.
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  Speaker 1: We understand partly as a resort of pressure internally and
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  Speaker 1: partly because there was a feeling that they weren't going
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  Speaker 1: to get the prices that they wanted from specialist private
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  Speaker 1: equerty players. But I wouldn't be surprised to see more
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  Speaker 1: indes on Intel. Possibly they're looking at divestments in the
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  Speaker 1: coming months. Uh. Is Brian Crecentages are the chief executive
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  Speaker 1: of Intel. Is this part of his overall strategy for
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  Speaker 1: the company. H. He's certainly looking at learning and changing
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  Speaker 1: the company and boost productivity. As you mentioned in the story,
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  Speaker 1: the definitely been a sort of hit that it's in
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  Speaker 1: the pastor for years by Intel away from more of
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  Speaker 1: the tumor in the PC business. I'm just wondering, too, uh,
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  Speaker 1: in the environment we're in right now. You had a
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  Speaker 1: story this week about Pearla Weinberg, another big private equity
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  Speaker 1: arm UH saying it plans a second fund. What is
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  Speaker 1: the what's the landscape now? What's the move? We've got
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  Speaker 1: the baseball today from the FED, modest growth in the US,
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  Speaker 1: brexident certainty in the UK. How would you describe sentiment
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  Speaker 1: and animal spirits right now in terms of if every
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  Speaker 1: equity and deals in general is because it's considered a
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  Speaker 1: pretty strong macro signal when they pick up and or
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  Speaker 1: if they saw down. Well, that's very true. But if
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  Speaker 1: you're looking at private equity and the basic model is
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  Speaker 1: too you know, buy low and sell high, and when
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  Speaker 1: equities are it's high, it's very difficult to compete against
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  Speaker 1: corporates when you're looking at acquisitions and bringing stuffing directly
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  Speaker 1: from the stock market. There's been you know, not a
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  Speaker 1: great deal of activity on that from the past two
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  Speaker 1: or three years, and sponsors are continuing to accumulate capital
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  Speaker 1: and not doing deal. If you're looking to exit, it's
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  Speaker 1: been a perfect onto. That's been record distributions by a
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  Speaker 1: lot of sponsors over the past two to three years.
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  Speaker 1: They're now desperate to start getting things done and the
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  Speaker 1: best environment united to go look for assets that they
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  Speaker 1: can fit in widowed by corporates that when you come
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  Speaker 1: in you can pull them out and get a dedicated
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  Speaker 1: management tinion that you can improve them. And you could
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  Speaker 1: certainly say that McAfee would sit into that boocket. Thank
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  Speaker 1: you very much for spending time with us. Kyle Porter's
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  Speaker 1: Deals America's reporter for a Bloomberg News speaking about the
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  Speaker 1: potential sale of Intel's McAfee unit, said to draw interest
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  Speaker 1: from a variety of private equity firms. Are shares of
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  Speaker 1: Inteller up twelve cents right now thirty five dollars and
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  Speaker 1: seven cents. Let's turn our attention now to politics and
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  Speaker 1: John Hileman. He is, of course the co host of,
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  Speaker 1: with all due respect car managing editor, Bloomberg Politics. He
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  Speaker 1: is also the host of the program weeknights five pm
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  Speaker 1: on Bloomberg Television and Bloomberg One in Washington, d C.
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  Speaker 1: John Hyleman give us an update on the vice presidential
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  Speaker 1: selection process for uh. Let's start off with Donald Trump. Well,
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  Speaker 1: the game's a foot him. Um. You know we had
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  Speaker 1: the big news this morning was you know, Donald Trump
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  Speaker 1: had been in the Indie Indianapolis last night on stage
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  Speaker 1: with Governor Pence. A lot of reporting suggesting that Pence was,
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  Speaker 1: if not the certain pick, certainly uh, in among the
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  Speaker 1: top one or two, um or the top two or
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  Speaker 1: three maybe considerations. Um. Trump made some comments last night
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  Speaker 1: on stage that suggested that kind of toying with the
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  Speaker 1: idea of calling Pence potential vice president. Then his family.
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  Speaker 1: Trump's family showed up this morning to meet with him
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  Speaker 1: and Governor Pence at the governor's mansion. So Ivanka Trump
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  Speaker 1: and Eric Trump and Paul manif At, the campaign manager,
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  Speaker 1: all caught on camera showing up there. Uh, and a
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  Speaker 1: lot of people as a that that that eight or
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  Speaker 1: nine or ten am this morning, thought well, that's it.
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  Speaker 1: It looks like it's gonna be Mike Pence. Then suddenly
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  Speaker 1: we learned that new Gigris was on his way to
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  Speaker 1: Indiana Polis also, as was Jeff Sessions. Uh, the senator,
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  Speaker 1: Alabama Senator, who's up. I've been doing a lot of
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  Speaker 1: what was the only I believe senate endorser for Donald Trump.
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  Speaker 1: So those two guys are now meeting with Trump and
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  Speaker 1: the family also, and it's said that Trump spoke today
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  Speaker 1: on the phone with Chris Christie and that his family
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  Speaker 1: met with Christie a couple of days ago. So we
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  Speaker 1: believe at this point, and you know, you never really
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  Speaker 1: know in the world of deep steaks, there could always
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  Speaker 1: be a surprise, but we think at this moment that
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  Speaker 1: the shortlist is now down to those four guys, King Rich, Uh, Sessions, Christie,
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  Speaker 1: and Pence. And I think that where we're at right
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  Speaker 1: now is is Trump trying to do his final gut check.
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  Speaker 1: He knows these guys a little bit, now, knows what
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  Speaker 1: they believe in, knows how compatible they are, but trying
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  Speaker 1: to figure out what does he really want from a
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  Speaker 1: running mate most and who does he feel most comfortable with,
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  Speaker 1: not just as a a companion on the campaign trail,
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  Speaker 1: but also potentially as a governing partner if he wins.
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  Speaker 1: So for those in New Gangridge has been so much
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  Speaker 1: in the public eye, Chris Christine in the public eye,
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  Speaker 1: tell us bit more about Indiana Governor Mike Pence, because John,
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  Speaker 1: I would say, among the four you've mentioned, he seems
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  Speaker 1: to be the least known on the national stage. He's
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  Speaker 1: a highly uh regarded and well known figure within the
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  Speaker 1: conservative movement. He was a congressman, a congressman for a
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  Speaker 1: very long time from Indiana before he became the governor
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  Speaker 1: of Indiana, succeeding the very popular governor Mitch Daniels. And
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  Speaker 1: he's a guy, he's very very He's a con social conservative,
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  Speaker 1: a strong, strong ardent born again Christian, very very far
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  Speaker 1: on the conservative end of the spectrum in terms of
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  Speaker 1: his views on social issues. And cultural issues, also a
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  Speaker 1: very strong conservative on foreign policy and on fiscal matters.
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  Speaker 1: And to the extent that Trump is interested in him,
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  Speaker 1: it seems to be driven, at least in terms if
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  Speaker 1: you're thinking about pure political calculation, driven by the problem
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  Speaker 1: that Trump has with conservatives in his own party. If
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  Speaker 1: he's gonna try to unify the Republican Party and pull
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  Speaker 1: people from the right into his column, some of whom
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  Speaker 1: are still dubious about him, Pence would be maybe a
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  Speaker 1: good way to do that. John, can you comment on
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  Speaker 1: the ongoing battle it seems between Donald Trump and Ruth
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  Speaker 1: Bader Ginsburg, a Supreme Court justice. Well, it's a little unusual,
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  Speaker 1: for sure, Pim. I mean the notion that Ruth Bader
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  Speaker 1: Ginsburg decided to criticize Donald Trump three times in the
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  Speaker 1: course of the last few days, on Friday, on Saturday,
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  Speaker 1: and then again on Monday. It's a various news outlets.
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  Speaker 1: It's unusual for a sitting Supreme Court justice to insert
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  Speaker 1: him or herself in politics in that way. But Ginsburg,
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  Speaker 1: as you know, is known as the notorious RVG, so
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  Speaker 1: maybe she's just trying to live up to her nickname.
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  Speaker 1: Um Trump, of course, is now attacked her twice on Twitter. Uh,
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  Speaker 1: first telling her that she should not have said what
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  Speaker 1: she said and should apologize, then saying that she should resign. Um.
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  Speaker 1: You know, it's a little unclear what Bader Ginsburg's motives
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  Speaker 1: are other than speaking her heart, and she doesn't really care.
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  Speaker 1: This is a fight, though. That's kind of good for
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  Speaker 1: Trump beating up judges. Good with conservatives. John Harman, thank
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  Speaker 1: you so very much. He's co hosted with all due respect.
• 11:02
  Speaker 1: He hosts with all due respect Monday through Friday at
• 11:05
  Speaker 1: five o'clock Wall Street Time on Bloomberg TV. You can
• 11:07
  Speaker 1: also catch that show on Bloomberg in Washington, d C.
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  Speaker 1: This is Bloomberg m