Saudi Arrests Raise Questions, Broadcom’s Qualcomm Bid: DealBook Briefing

• A former U.S. ambassador to the kingdom told the NYT that Prince Alwaleed had a reputation “for being quite outspoken and blunt and being critical of other parts of the royal family — and he’s not well liked.”

President Trump offered his support on Sunday for Prince Mohammed’s modernization campaign, but made no mention of the arrests, according to the NYT.

Citigroup faces a setback in its efforts to rebuild its Saudi business, given that one of its major shareholders is Prince Alwaleed, Bloomberg reports.

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Today’s DealBook briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Amie Tsang in London.

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What do the arrests mean for Aramco?

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Fayez Nureldine/Agence France-Presse — Getty Images

Depends whom you ask. Andrew has spoken with several people inside the kingdom who say that the detentions show a crackdown on corruption. Bob Diamond, the former C.E.O. of Barclays, expressed a similar view at a conference yesterday, according to Bloomberg.

But Andrew and Michael have spoken with others, including executives and investors in New York — some of whom have had long relationships with Prince Alwaleed — who suggested that the arrests will make the business community less certain about investing in Saudi Arabia.

More from Clifford Krauss, NYT:

Helima Croft, global head of commodity strategy at RBC Capital Markets, who attended the Riyadh conference, was somewhat more circumspect. “Does this scare off a pension fund or can this be sold as creating the necessary conditions of success?” she asked. “It’s a high-stakes game.”

More on Aramco

• Whether Mr. Trump’s unexpected pitch on Twitter to have Aramco list its shares on the N.Y.S.E. will have much sway with the Saudi government is unclear. But he told reporters that he was aware of Saudi concerns about litigation if Aramco were to list on an American exchange.

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Broadcom bids for Qualcomm

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George Rose/Getty Images

Michael says that Qualcomm is expected to quickly reject the bid as too low. But deal makers have been whispering about how Broadcom and its C.E.O., Hock Tan, may have been laying the political groundwork for this deal.

Remember that Mr. Tan announced last week — at a White House news conference with Mr. Trump, no less — that Broadcom was moving its legal headquarters to the United States from Singapore. Did Broadcom make the decision to win friends in the White House as it prepared to go after a major rival? Any alliance with Qualcomm is expected to face close regulatory scrutiny.

More smart things to think about

• Pay attention to any role that Silver Lake, which has backed Mr. Tan for 12 years, plays in supporting Broadcom’s bid. Private equity firms usually don’t back unsolicited takeover offers, but will this time be different?

• If Broadcom wins, will it be able to strike a peace deal with Apple, which has been in a long-running legal fight with Qualcomm?

Fallout from the Paradise Papers spreads wide

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International Consortium of Investigative Journalists

Among those under scrutiny in light of the 13.4 million documents from the law firm Appleby, which were obtained by the Süddeutsche Zeitung in Germany and shared with other media organizations, including the ICIJ and the NYT:

Wilbur Ross

The commerce secretary’s stake in a shipping firm with ties to both a Russian oligarch subject to American sanctions and to Vladimir Putin’s son-in-law may not violate law. But it creates ethical concerns. From Mike McIntire, Sasha Chavkin and Martha Hamilton, the NYT:

While several Trump campaign and business associates have come under scrutiny, until now no business connections have been reported between senior administration officials and members of Mr. Putin’s family or inner circle.

Other Trump administration officials

Both Gary Cohn, who was associated with 22 Bermuda entities while an executive at Goldman Sachs, and Rex Tillerson, who was a director of a Bermuda-based joint venture with the government of Yemen when he ran Exxon Mobil’s operations there, appear in the files. There is no evidence of illegality in any of their dealings.

Yuri Milner

The Russian investor has sought to counter concerns that his investments in Facebook and Twitter were financed by hundreds of millions of dollars from the Kremlin through the state-controlled bank VTB, while an investing partner was backed by Gazprom, according to Jesse Drucker of the NYT. (Mr. Milner’s DST Global no longer owns those stakes.)

There is no evidence that Mr. Milner or his companies had any connection to the Kremlin’s interference in the 2016 presidential election, pointing out that DST never asked for board seats or any type of control at Facebook or Twitter. “Only a worldview that sees my nationality as inherently suspicious could find such a fairy-tale compelling,” he said in a statement, according to Johana Bhuiyan of Recode.

Glencore

The ICIJ examined confidential emails, board minutes and contracts from the giant trading firm to piece together its deal for big copper mines in the Democratic Republic of Congo.

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What’s SoftBank’s plan B for Sprint?

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Masa Son couldn’t accept the terms of merging Sprint, of which his SoftBank owns 82 percent, with T-Mobile if it meant becoming a minority shareholder of the combined business. That’s why he pulled the plug on the deal talks over dinner at his Tokyo home on Saturday night. Sprint’s C.E.O., Marcelo Claure, tweeted a defense of the move.

What does SoftBank do now with a stand-alone Sprint? Here’s more from Jonathan Soble of the NYT, who attended a SoftBank news conference today:

Mr. Son acknowledged that Sprint was “not in a strong position” as the No. 4 carrier in the U.S. market. He also acknowledged that combining Sprint and T-Mobile had been his “fundamental strategy” all along.

While he would consider selling Sprint — depending on “the price, the opportunity and the buyer” — Mr. Son added that he was committed to staying in the American wireless market because of its importance to his long-term bet on the internet of things.

Keep these numbers in mind: Sprint has $34.2 billion in long-term debt, while SoftBank has $101.7 billion. Can Sprint and SoftBank pay for necessary network upgrades?

In other SoftBank news: Mr. Son is negotiating to buy a stake in Uber, but at today’s news conference, he mentioned the possibility of investing in Lyft instead, according to Recode.

The Washington flyaround

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Al Drago for The New York Times

• The House speaker, Paul Ryan, said on Sunday that he expected the Republicans’ tax bill in his chamber to win approval by Thanksgiving. (Fox News, NYT)

• Some Republicans also want the tax bill to undercut the Affordable Care Act’s individual mandate, though the House Ways and Means Committee chairman Kevin Brady remains noncommittal about linking the two. (Politico)

• In an NYT Op-Ed, Senator Marco Rubio emphasized how the bill would expand the child tax credit. Republicans have been scrambling to address studies that concluded the bill’s ultimate beneficiaries would be wealthy individuals, not the middle class. (NYT, Bloomberg)

• Mr. Trump on who deserves credit for the stock market’s performance: “The reason our stock market is so successful is because of me.” (ABC News)

• The potential next cloud to hang over the tax overhaul push? Robert Mueller has enough evidence to indict Michael Flynn and his son, according to unidentified people. (NBC News)

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Revolving Door

Bill Dudley, the president of the New York Fed, is expected to announce as soon as this week that he will retire, according to unidentified people. (NYT)

The Speed Read

M. A.

• Qatar Airways is buying a 9.6 percent stake in Cathay Pacific Airways for $661 million. (WSJ)

Policy and Legal

• Brazilian lawmakers have watered down a proposal to impose licensing requirements on Uber that would have crippled its business model. (NYT)

• Jean-Charles Brisard, a corporate security and intelligence consultant, posed as a Wall Street Journal reporter to speak to Carson Block, the founder of Muddy Waters Research, according to video footage reviewed by the … WSJ.

• United States securities regulators have been questioning a wealth manager in Miami about its ties to Guggenheim Partners, according to people familiar with the matter. (WSJ)

Banks and Banking

• Goldman Sachs and China Investment Corporation are partnering on a multibillion-dollar fund to help the giant Chinese sovereign wealth fund invest in manufacturing and other sectors in the United States, according to people familiar with the matter. (WSJ)

Money Managers

• On Tuesday, Bill Ackman will have to vie for investor votes for the first time since his bet on Valeant Pharmaceuticals led to billions of dollars in losses at his hedge fund more than two years ago. (WSJ)

Business and Economy

• Conversations about the ever-rising stock market are dominated by one question: When will it end? (NYT)

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• A shortage of artificial intelligence experts means companies are looking at ways that A.I. can build more A.I. (NYT)

• A conference known as the 3% Movement has put a spotlight on the power dynamics that shape the advertising industry. (NYT)

• The Walt Disney Company has decided not to give advance screenings of films during the holiday season to The Los Angeles Times, citing what it called unfair coverage of its business ties. (Twitter)

• WeWork plans to open a private elementary school inside a New York City WeWork facility. (Bloomberg)

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