WEBVTT - Bloomberg's Porter on INTC/McAfee, Heilemann on VP Picks(Audio)

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<v Speaker 1>Global business news twenty four hours a day at Bloomberg

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<v Speaker 1>This is a Bloomberg Business Flash from Bloomberg World Handquarters.

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<v Speaker 1>I'm Charlie Pellett. The BBC is reporting that Boris Johnson

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<v Speaker 1>I'm Charlie Tellett, and that's a Bloomberg Business Flash. You're

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<v Speaker 1>listening to Taking the Stoff with Kathleen Hayes and Pim

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<v Speaker 1>Fox on Bloomberg Radio. Intel It's computer security unit McAfee

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<v Speaker 1>is drawing interest from private equity firms as the company

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<v Speaker 1>considers selling the business. This is according to people with

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<v Speaker 1>the knowledge knowledge of the matter contacted by Bloomberg here

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<v Speaker 1>to talk about the deal, and his story is Bloomberg's

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<v Speaker 1>own Kyle Porter. He is from our deal's team here

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<v Speaker 1>in the U S So, Kyle, why is Intel considering

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<v Speaker 1>selling its computer security unit at a time when so

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<v Speaker 1>many people are concerned about computer security? Oh, good afternoon.

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<v Speaker 1>It's a combination of fact. Is really the fact that

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<v Speaker 1>the acquisition was done five years ago. There was an

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<v Speaker 1>aim of integrating into the process of constructing the computer

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<v Speaker 1>chips security software that has gone a lot slower than

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<v Speaker 1>Intel wort of Light. At the same time, there's been

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<v Speaker 1>a real lack of comparative investment in the product, and

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<v Speaker 1>there's allowed competitors to get ahead. Uh. That has allows

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<v Speaker 1>them to look forward and say, well, maybe we should

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<v Speaker 1>be thinking looking about with this business. Maybe there is

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<v Speaker 1>a better owner and private equity. It's a corporate widowed

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<v Speaker 1>as said, it's sort of the classic things that they'll

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<v Speaker 1>account Kyle. The price tag in was seven point seven billion, dollars.

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<v Speaker 1>Was this a seven point seven billion dollar mistake? That's

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<v Speaker 1>above might pay grade to answer with a yet or no.

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<v Speaker 1>But if you look at the division in which mccaffee sits,

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<v Speaker 1>and there are other products in there, they're operating profit

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<v Speaker 1>last year with two and ten million. If you've take

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<v Speaker 1>an ebitdar Figer, it's not going to be a million

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<v Speaker 1>miles away from that, and you're not going to get more.

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<v Speaker 1>Even at eleven times, you'd be talking possibly three billion

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<v Speaker 1>for a product equits for them to buy it. So

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<v Speaker 1>it sounds like you just answered Pim's question. If you

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<v Speaker 1>bought it for almost eight billion, you're only selling for

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<v Speaker 1>three Maybe that wasn't such a good deer With that

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<v Speaker 1>in mind, who wants to buy? Who says, great, we

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<v Speaker 1>can pick up a bargain now, it's it's from the

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<v Speaker 1>information that we've received, it's been the product the firms

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<v Speaker 1>that have a lot of technology to experience. Three of

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<v Speaker 1>the firms that's in the story to Tom A Brow

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<v Speaker 1>and this only really do technology and software deals. And

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<v Speaker 1>there are the first firm that we have listed there

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<v Speaker 1>has also got a very long attract record of doing

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<v Speaker 1>deals in this space and being very successful at it.

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<v Speaker 1>We understand if her process is initiated and it's you know,

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<v Speaker 1>you've got to be clear that while we understand the

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<v Speaker 1>Intel has talked to potential advisors about running something, they

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<v Speaker 1>haven't made a decision yet. You could expected view of

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<v Speaker 1>responsors to come out of the woodwork. Is McAfee competitive

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<v Speaker 1>in the security business right now? It's certainly not. It's

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<v Speaker 1>certainly a well known brand and you know it's used

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<v Speaker 1>by a lot of businesses and consumers. Where you put

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<v Speaker 1>it in the five of the top ten, yeah, I'd

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<v Speaker 1>still say quite possibly. So, Uh, what does this mean

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<v Speaker 1>for Intel? I guess outside of the is there anything

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<v Speaker 1>else they might want to sell? For example? I mean,

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<v Speaker 1>is there anything and that's sort of hanging around their

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<v Speaker 1>neck now that you guys are trying to sets out, well,

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<v Speaker 1>there's been a lot of talker and Intel mean, it's

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<v Speaker 1>if they've made very completame, if they're looking at refocusing,

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<v Speaker 1>looking at doing different things with the business. Earlier this year,

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<v Speaker 1>that was talking and selling off a significant chunk of

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<v Speaker 1>their venture capital ports earlier we'd estimated about a billions worth,

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<v Speaker 1>and that with all smaller businesses that they linked to

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<v Speaker 1>gowing consumer part of the business now that was subsequently pulled.

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<v Speaker 1>We understand partly as a resort of pressure internally and

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<v Speaker 1>partly because there was a feeling that they weren't going

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<v Speaker 1>to get the prices that they wanted from specialist private

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<v Speaker 1>equerty players. But I wouldn't be surprised to see more

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<v Speaker 1>indes on Intel. Possibly they're looking at divestments in the

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<v Speaker 1>coming months. Uh. Is Brian Crecentages are the chief executive

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<v Speaker 1>of Intel. Is this part of his overall strategy for

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<v Speaker 1>the company. H. He's certainly looking at learning and changing

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<v Speaker 1>the company and boost productivity. As you mentioned in the story,

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<v Speaker 1>the definitely been a sort of hit that it's in

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<v Speaker 1>the pastor for years by Intel away from more of

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<v Speaker 1>the tumor in the PC business. I'm just wondering, too, uh,

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<v Speaker 1>in the environment we're in right now. You had a

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<v Speaker 1>story this week about Pearla Weinberg, another big private equity

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<v Speaker 1>arm UH saying it plans a second fund. What is

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<v Speaker 1>the what's the landscape now? What's the move? We've got

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<v Speaker 1>the baseball today from the FED, modest growth in the US,

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<v Speaker 1>brexident certainty in the UK. How would you describe sentiment

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<v Speaker 1>and animal spirits right now in terms of if every

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<v Speaker 1>equity and deals in general is because it's considered a

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<v Speaker 1>pretty strong macro signal when they pick up and or

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<v Speaker 1>if they saw down. Well, that's very true. But if

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<v Speaker 1>you're looking at private equity and the basic model is

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<v Speaker 1>too you know, buy low and sell high, and when

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<v Speaker 1>equities are it's high, it's very difficult to compete against

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<v Speaker 1>corporates when you're looking at acquisitions and bringing stuffing directly

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<v Speaker 1>from the stock market. There's been you know, not a

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<v Speaker 1>great deal of activity on that from the past two

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<v Speaker 1>or three years, and sponsors are continuing to accumulate capital

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<v Speaker 1>and not doing deal. If you're looking to exit, it's

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<v Speaker 1>been a perfect onto. That's been record distributions by a

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<v Speaker 1>lot of sponsors over the past two to three years.

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<v Speaker 1>They're now desperate to start getting things done and the

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<v Speaker 1>best environment united to go look for assets that they

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<v Speaker 1>can fit in widowed by corporates that when you come

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<v Speaker 1>in you can pull them out and get a dedicated

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<v Speaker 1>management tinion that you can improve them. And you could

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<v Speaker 1>certainly say that McAfee would sit into that boocket. Thank

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<v Speaker 1>you very much for spending time with us. Kyle Porter's

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<v Speaker 1>Deals America's reporter for a Bloomberg News speaking about the

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<v Speaker 1>potential sale of Intel's McAfee unit, said to draw interest

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<v Speaker 1>from a variety of private equity firms. Are shares of

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<v Speaker 1>Inteller up twelve cents right now thirty five dollars and

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<v Speaker 1>seven cents. Let's turn our attention now to politics and

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<v Speaker 1>John Hileman. He is, of course the co host of,

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<v Speaker 1>with all due respect car managing editor, Bloomberg Politics. He

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<v Speaker 1>is also the host of the program weeknights five pm

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<v Speaker 1>on Bloomberg Television and Bloomberg One in Washington, d C.

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<v Speaker 1>John Hyleman give us an update on the vice presidential

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<v Speaker 1>selection process for uh. Let's start off with Donald Trump. Well,

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<v Speaker 1>the game's a foot him. Um. You know we had

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<v Speaker 1>the big news this morning was you know, Donald Trump

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<v Speaker 1>had been in the Indie Indianapolis last night on stage

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<v Speaker 1>with Governor Pence. A lot of reporting suggesting that Pence was,

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<v Speaker 1>if not the certain pick, certainly uh, in among the

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<v Speaker 1>top one or two, um or the top two or

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<v Speaker 1>three maybe considerations. Um. Trump made some comments last night

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<v Speaker 1>on stage that suggested that kind of toying with the

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<v Speaker 1>idea of calling Pence potential vice president. Then his family.

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<v Speaker 1>Trump's family showed up this morning to meet with him

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<v Speaker 1>and Governor Pence at the governor's mansion. So Ivanka Trump

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<v Speaker 1>and Eric Trump and Paul manif At, the campaign manager,

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<v Speaker 1>all caught on camera showing up there. Uh, and a

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<v Speaker 1>lot of people as a that that that eight or

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<v Speaker 1>nine or ten am this morning, thought well, that's it.

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<v Speaker 1>It looks like it's gonna be Mike Pence. Then suddenly

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<v Speaker 1>we learned that new Gigris was on his way to

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<v Speaker 1>Indiana Polis also, as was Jeff Sessions. Uh, the senator,

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<v Speaker 1>Alabama Senator, who's up. I've been doing a lot of

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<v Speaker 1>what was the only I believe senate endorser for Donald Trump.

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<v Speaker 1>So those two guys are now meeting with Trump and

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<v Speaker 1>the family also, and it's said that Trump spoke today

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<v Speaker 1>on the phone with Chris Christie and that his family

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<v Speaker 1>met with Christie a couple of days ago. So we

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<v Speaker 1>believe at this point, and you know, you never really

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<v Speaker 1>know in the world of deep steaks, there could always

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<v Speaker 1>be a surprise, but we think at this moment that

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<v Speaker 1>the shortlist is now down to those four guys, King Rich, Uh, Sessions, Christie,

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<v Speaker 1>and Pence. And I think that where we're at right

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<v Speaker 1>now is is Trump trying to do his final gut check.

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<v Speaker 1>He knows these guys a little bit, now, knows what

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<v Speaker 1>they believe in, knows how compatible they are, but trying

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<v Speaker 1>to figure out what does he really want from a

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<v Speaker 1>running mate most and who does he feel most comfortable with,

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<v Speaker 1>not just as a a companion on the campaign trail,

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<v Speaker 1>but also potentially as a governing partner if he wins.

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<v Speaker 1>So for those in New Gangridge has been so much

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<v Speaker 1>in the public eye, Chris Christine in the public eye,

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<v Speaker 1>tell us bit more about Indiana Governor Mike Pence, because John,

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<v Speaker 1>I would say, among the four you've mentioned, he seems

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<v Speaker 1>to be the least known on the national stage. He's

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<v Speaker 1>a highly uh regarded and well known figure within the

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<v Speaker 1>conservative movement. He was a congressman, a congressman for a

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<v Speaker 1>very long time from Indiana before he became the governor

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<v Speaker 1>of Indiana, succeeding the very popular governor Mitch Daniels. And

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<v Speaker 1>he's a guy, he's very very He's a con social conservative,

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<v Speaker 1>a strong, strong ardent born again Christian, very very far

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<v Speaker 1>on the conservative end of the spectrum in terms of

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<v Speaker 1>his views on social issues. And cultural issues, also a

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<v Speaker 1>very strong conservative on foreign policy and on fiscal matters.

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<v Speaker 1>And to the extent that Trump is interested in him,

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<v Speaker 1>it seems to be driven, at least in terms if

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<v Speaker 1>you're thinking about pure political calculation, driven by the problem

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<v Speaker 1>that Trump has with conservatives in his own party. If

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<v Speaker 1>he's gonna try to unify the Republican Party and pull

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<v Speaker 1>people from the right into his column, some of whom

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<v Speaker 1>are still dubious about him, Pence would be maybe a

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<v Speaker 1>good way to do that. John, can you comment on

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<v Speaker 1>the ongoing battle it seems between Donald Trump and Ruth

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<v Speaker 1>Bader Ginsburg, a Supreme Court justice. Well, it's a little unusual,

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<v Speaker 1>for sure, Pim. I mean the notion that Ruth Bader

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<v Speaker 1>Ginsburg decided to criticize Donald Trump three times in the

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<v Speaker 1>course of the last few days, on Friday, on Saturday,

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<v Speaker 1>and then again on Monday. It's a various news outlets.

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<v Speaker 1>It's unusual for a sitting Supreme Court justice to insert

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<v Speaker 1>him or herself in politics in that way. But Ginsburg,

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<v Speaker 1>as you know, is known as the notorious RVG, so

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<v Speaker 1>maybe she's just trying to live up to her nickname.

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<v Speaker 1>Um Trump, of course, is now attacked her twice on Twitter. Uh,

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<v Speaker 1>first telling her that she should not have said what

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<v Speaker 1>she said and should apologize, then saying that she should resign. Um.

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<v Speaker 1>You know, it's a little unclear what Bader Ginsburg's motives

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<v Speaker 1>are other than speaking her heart, and she doesn't really care.

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<v Speaker 1>This is a fight, though. That's kind of good for

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<v Speaker 1>Trump beating up judges. Good with conservatives. John Harman, thank

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<v Speaker 1>you so very much. He's co hosted with all due respect.

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<v Speaker 1>He hosts with all due respect Monday through Friday at

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<v Speaker 1>five o'clock Wall Street Time on Bloomberg TV. You can

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<v Speaker 1>also catch that show on Bloomberg in Washington, d C.

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<v Speaker 1>This is Bloomberg m