Behind the rain forest cafe and gumpegum trip bubba shrimp. We are clearly going to have a great morning, we have breaking news on one of my favorite subjects, activist investing. A big update, the drug Company Behind botox and those implants, people with knowledge of the matter say that the drugmaker activist are in town to buy the company for 60 billion, higher than a hostile offer from another pharmaceutical company, valiant. The bid, of course, is backed by bill ackman. Either way. Ll wins this is true. Look at what is happening with activist shares. They have a high stock price, rising, but of course we want to show you what is happening with allergan. It would be a 60 billion deal under discussion here. We have to draw a distinction, activist is a drug company, ergan look at the stock, both of them today, bill ackman remember, he has come out aggressively against Senior Management at allergan. Now that he has to change his hat and simply be an allergan guy, how does he feel about their management . Also point out that there are some very interesting players already. Dan loeb is there, longtime capital. There is geocapital from blue ridge, for example. A number of hedge funds with fairly large positions perhaps betting on this potential outcome over the future of allergan. We heard from dan loeb several weeks ago about his biggest physicians and what he was most excited about, he made no mention of this. This is true. I think that Larry Robbins might be in activis as well. He did very good this year. The hedge fund run by john a former Julian Robertson golden child, i want to say it is a fund of 7 billion dollars or 8 billion, but hes never done any fundraising. Dont you love of friends of the family fund . A longterm mostly equity guy. You have got a strong line up there. Checked, i do not see glenview among the largest holders of activist. I may have gotten that wrong. In the meantime, i want to bring least theate, at latest information about the fines and penalties that regulators are levying against some of the largest banks over allegations of manipulating the foreign currency market. The office of the comptroller of the currencies has Just Announced its own fines, 350 million against citigroup. 200 50 million against bank of america. 300 50 million against jpmorgan. These bags were found to fail in identifying Foreign Exchange as well as employee misconduct. They are issuing orders, as you would expect from a regulator, requiring that these are regulated and corrected with more oversight inside of the banks in line with what we have commissionthe crtc and the Financial Conduct Authority in britain that announced their own fines earlier today against five global banks, among them rbs and ubs in addition to citigroup. To give somet credit to our Bloomberg News team in london, who crushed it in terms of reporting this. Back in the middle of 2013 bloomberg reporters in london the currencys off rigging, affectively reporting for the first time that this was going on. We knew that there was manipulation of other benchmarks. Today, 3. 3 billion in fines, and now these additional fines from the office of the comptroller of currency. To explain is here where this investigation may go next. What agehen you read see what they public published today, it really puts things into context. They are similar to the libor chat logs with some really unpleasant conversations. Particularly about clients and their plans on how they were rigging the market, just laying it out there in archived chats. Probably some Lessons Learned for Foreign Exchange traders around the world, but this has been a long time coming. These are substantial fines and when you add up all the regulators many of these banks to 1 billion. Up we are still waiting to see what the department of justice and Federal Reserve has to levy against these banks and potentially more. I picked up one excerpt. Read it. It is so good. But you might have to censor it a bit. This one happens to be clean, right . This was an exchange between two traders trying to manipulate the price of the euro dollar. The bank not identified says to begin with, they are exchanging confidential information about client orders, infraction number one. Number two, colluding to manipulate the fix. When you say join forces, ding ding, how do you not know that that is collusion . Anyone who says hate the game, not the player, are you kidding me . You work at two different banks and you said to join forces, to gang up. The big challenge of this investigation is everyone getting their heads around it, including these global regulators. Fx is a largely unregulated market. It does not have the same rules and regulations that all of the Security Market has. It really doesnt even have a regulator. A lot of these traders kind of thought that they were not doing anything wrong. They just were not in that mindset. Hold on, hold on. It becomes the industry norm. That is a key point. You get a lot of wrongdoing, but i dont know that they are necessarily connecting the dots that may be exchanging confidential client information could be in infraction that leads to billions in fines. It would appear that these guys took it one step further, talking about a cartel, talking about the conditions under which other traders would be allowed into the club and holding probations, threatening them. Hold on, im sorry. Ofple who just paid millions dollars per year, gosh darn it, simply dont know any better . Of course they know better. But you may know better than me, you worked inside the bank, deutsche bank, which we have not heard from today. You see this time and again. Downnt this how things go in the foreign currency markets for generations . Youou see this and then just see it is ok for everyone to do this and all of a sudden everyone finds out what is going on and regulators around the world are like 08. How about everything i learned to do i learned in kindergarten . If someone jumps off her bridge, dont follow them. If you work at a bank, Better Business practice your Senior Management should be coming you never chat should you and another Investment Bank be communicating about client information and ganging up together . Sorry, charlie. That is why a lot of the banks it will be interesting to see what the fed has to say about this failure to supervise to become very relevant, it is a lot of what the banks could be in trouble for, failure to supervise employees doing this very thing. When you take the series 25, all about being a supervisor, you know you are studying for the test. You want to take it to be a manager and get paid like a manager, but guess what . You have to take the downside risk. Except if the guy at your desk. Or a woman. Of women are clean here, right . The guy running your desk has been doing this, the guy before him has been doing this with black it doesnt matter. Not in principle, but in has been doing this it doesnt matter. Not in principle, but it does. They brought this up two years ago at regulatory meetings in england. Real shift to be a in saying ok, this is what you can do, this is what you cannot do in the Foreign Exchange market, although it is obvious to most people that this is unacceptable behavior. Apparently it was not obvious to these guys. The Justice Department is investigating some Serious Fraud in the u. K. The Justice Department could be doing the deferred prosecution route. Bringing criminal charges against individuals. Thats the other thing, individuals are not in the clear , those settlements will be pursued separately. There could be one or dozens of individual traders in trouble for this. The chance of providing authorities and investigators with good evidence is there. That is in no . If you are the manager of that person, just as your manager letting go and his manager let it go . Sorry. Hey, i will always agree with you guys. Lets remind everyone that news is that the top of the hour, the office of the , dropping fines on jpmorgan and bank of america, a new name this morning, the total now is almost four point 3 billion in fines and penalties for rigging the market. View fromme back, the the kitchen and what the economy looks like when you fire everyone from busboys to executives. Including mornings at the racehorse cafe. Plus, serious money for a hilarious route hilarious website. That is what will ferrell wants. Welcome back to Market Makers. Back to the breaking news we got at the top of the hour, a bloomberg exclusive, people with knowledge of the matter say that rival drugmaker say it for me . Davis octavius actavis. Backed by bill ackman, allergans biggest shareholder. A complicated situation that goes back months and months, with bill ackman coming after allergan. Actavise along the way, got interested. They had been looking at a company for a while. It was like they were running a threeway situation. A beauty contest. There you go. Along the way they got up out by astrazenecah after fell apart look at them and thought that it was their inversion deal. Anyway, they have been in talks for quite some time. Over the last couple of days we have picked up on a lot of progress. They are less than 5 of the asking price apart. Seeking the 205 range. 205 per share at 215. Is looking if they are willing to be bought, why would they be so opposed to valiant . That is 180 dollars per share. It is simply a lower offer than what they are negotiating right now. But there is also the fact that it just seems like a spiritual issue that they have with valiant, they see it as a company that would got rmb, if you will. Their reputation amongst other companies is not great. They are seen as a company where all they are they got and they pillage. However, actavis will have to do something creative. Even without the additional premium they are 31 times estimated earnings. It is going to be hard to make this deal if creative. They at . What are 80 . 90 . Before they even get to a deal . Itself,an issue by because bill ackman, months and months ago, accumulated his position in allergan and you will probably see institutional and arbitrage investors coming after him because they have lost that downside. Talk smacker him, about them . What can they really do . To court, right . Can they . There was a ruling from last week and we misread, it said that bill ackman would be able to vote his shares if there was a proxy fight. But the judge really opened up the idea for institutional and angry investors to come after him. He said that there were serious issues let me rephrase, serious questions and about how he went about accumulation. Thehey wondered about legality of it . Exactly. There may or may not have been a loophole. The judge left the issue open. In some ways i think he has opened the door for investors to come after him. I dont disagree, im just saying that every time i bet against a bill, he takes my head, smashes it into the ground, and twists it and i remember you are right, i was wrong. Matter,r a laughing funny or die is looking for a bigtime buyer. The comedy site, funny or die, is looking to cash in, evaluating options, including a possible sign that possible sale. One of the most popular shows on there is between two ferns. Likes my guest today is bradley pitts. Hout my guest today is bradley pitts. How old were you when you lost your virginity . I will tell you about when i lost mine. I would not like to hear that. What is a site like that really worth . Is find out from alex sherman. It has brought the awkward silence into American Comedy at all levels. There are no more commercials in punchlines today, there is just that awkward silence. It killed the sitcom. The office did it all the time. It worth . Between 100 million and 300 million, which is part of the reason why some of these digital websites are so theoretically mediale to the legacy companies. At t and disney have both recently made investments in digital media. You can get these things on the cheap, but this is what young people are watching. As this slow migration of ad dollars goes from tv hold on, there are advertisements . Advertisements, there are also shorts, other short form digital videos made in conjunction with sponsors. Theoretically, gm could be a part of one of these things. We saw it a little bit with Jerry Seinfeld and his comedians and cars getting coffee done in conjunction with acura. That is the way we are going here. Done inrs for videos conjunction with sponsors. Isnt it much cheaper than actually buying a big platform . Hugely. I think that is part of the motivation for why these Companies Want to sell now. They see an appetite out there for legacy Media Companies that think of themselves do i want to spend 5 billion on a Legacy Media Company where sure, it is much higher, but that the nearterm moneymaker that i have to pony up . A shot on a to take smaller digital Media Company that the radically that theoretically the lack have younger that theoretically have younger viewers and stars that love doing it. Exactly. Started hisell website with adam mckay. Are they the only guys who stand to take out well here . Are there other agile backers . There are three cofounders, and in addition hbo owns a small percentage, time warner owns about 12 . Sequoia was in a handful of venture capital. Lets pretend you are a focus group. Are you more likely to watch a funny or die video van must see tv on a thursday night . You mean a sitcom . Absolutely. Without dollars it makes a lot of sense. Agreed. The problem right now is that there is not really good measurement for how many people are using these ads and then acting on them. Isnt that the case for advertisers forever . But it is pushing down the valuation on the site. There are counteracting forces here that slowly are trickling upwards. Maker was bought for 500 million by disney. Billionia has 2. 5 dollars at this point. We are getting up to Cable Company levels. If it gets sold, to say a major studio company, will they still be able to attract the kinds of people like at judd apatow and james franco . Presumably come in part because it is will ferrells place. Theoretically, thats true. Any legacy would involve keeping the people there. Having you over to dinner at his really big house. Thank you, alex. We will be back with more. You are watching Market Makers here on bloomberg television. It is 10 30 a. M. In new york city. I am Erik Schatzker. I am stephanie ruhle. What questions are weighing on the minds of businesses . Who better to ask then Tilman Fertitta. Welcome. You were just saying we were showing waldorfastoria and the major price it sold for. Knowsusinessman, one who consumers, what you think about that . It is a crazy number. The contract was signed a few weeks ago. Ipo. They are doing an an old rule of thumb you take what you are paying for it. That means you are charging 1300 and nine. You might get that some nights, but the numbers do not work. The average daily rate are not 1300. It is not. The average rate and what they are selling for, it is unbelievable. We talk about the crash coming, and it probably is coming when you see silly things like that one point million three 1. 3 million that just does not work. Function of the amount of capital pouring into is thatate these a function of the amount of capital pouring into real estate and these have to get bid up . Is what is happening, probably in new york more than anywhere else, but you see it in texas, california. Repeats itself, as we know, and i think he will repeat itself sooner this time. Use melee crash in the realist you smell a crash in the real estate market. I do. It will be 1986 all over again . It did not come back until 1996 in texas. Oil came down. Last night in new york city, you opened up a highend restaurant. Why, if you think a crash is coming . You have to keep going. [laughter] you sound like chuck prince. It is a great, highend concept, and it will hurt when it crashes. Everyone wants them right now. Comps at higherend restaurants are better today than ever. Sales and volume does not seem to be a problem for anybody right now. There seems to be a problem with cost structure. You know, it is so funny i know you know this. I had a dinner at your good friend rich handlers house and bernanke was there and he said there is no inflation. Go buy something whether it is the drugstore, the broom and mop store. There is inflation rate of everywhere. You see it in your business . I have so many different so i buybusinesses, things everything is more expensive. Think about yourself. You go to the store to buy something for your kids, everything is more expensive right now. You say you have no problem on the revenue side, but on the cost side. 100 . Why not raise prices . We are. If you are traveling, you pay more for a hotel room, a pot of coffee delivered to your room. There is huge inflation going on right now. Why is it masked by official statistics, do you think . Know. O not i asked ben bernanke about adding he said my advisors are telling me to leave. I have to go. [laughter] you are getting. T did you think keating you are kidding. What did you think of him . Check out one million items a month and they come up with inflation or deflation. I told him they need to find a new school. For him to say there is not inflation is just not believable. The consumer out there watching this show will tell you everything they pay for is more expensive today. When you look at the unemployment number and people are saying things are great, it is only 5. 8 , are you saying hogwash people cannot afford much . Or 50se people under 60 looking for a job and find a job to do can find a job if they want to go to work. People are hiring. Are you hiring . Absolutely. If minimum wage gets increased, what will that do to your business . It is amazing. There is a minimum wage increase in california in july. Just for me, it was a 3 million increase a year. When somebody goes someplace and says why am i having to pay 40 or 20 for aor 18 piece of chicken, it is so today. Ve to do business do you have reservations about passing those costs to the consumer . You have to. I have a problem where yo