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Nandan Nilekani is limiting his "scarce capital" to company and country.

Nandan Nilekani

Shares of several ethanol players climbed Wednesday on talk of pending consolidation in the industry.

Privately held Poet LLC, the nation's top ethanol producer, said this week that it was talking with other companies about possible buyouts. The Sioux Falls, S.D., firm did not identify the companies it is looking at.

And VeraSun Energy Corp., the nation's No. 2 producer, said it had received an unsolicited takeover bid one month after seeking Chapter 11 bankruptcy protection.

VeraSun shares gained a penny to 8 cents in over-the-counter trading.

Aventine Renewable Energy Holdings Inc. gained 16 cents, or 23.2 percent, to 85 cents in afternoon trading. Verenium Corp. was up 6 cents, or 10.5 percent, to 69 cents, and Pacific Ethanol Inc. rose 5 cents, or 8.6 percent, to 63 cents. BioFuel Energy Corp. gained a penny to 40 cents.

Meanwhile, shares of The Andersons Inc. fell 21 percent Wednesday after the ethanol, railroad and fertilizer company lowered its 2008 earnings estimate. Piper Jaffray analyst Michael E. Cox cut his rating on The Andersons to "Neutral" from "Buy," but the company's revision was based on fertilizer price volatility not its ethanol operations.

When Panasonic President Fumio Ohtsubo said in early November that the company was interested acquiring mid-sized tech manufacturer Sanyo Electric, he envisioned finalizing the deal by late December (BusinessWeek.com, 11/7/08). The path to forming a tech giant with $110 billion in annual revenues seemed clear-cut: Panasonic would start by buying out Sanyo's three biggest investors (BusinessWeek.com, 11/6/08)—Goldman Sachs (GS), Daiwa SMBC Capital and Sumitomo Mitsui Banking—for their combined 70% stake.

But that's not how things are playing out. On Nov. 26, after nearly three weeks of discussions, Goldman Sachs said it had rejected Panasonic's offer earlier in the week and walked out of the talks. "We didn't agree on the price and the deal structure," says Goldman Sachs spokeswoman Miyako Takebe in Tokyo.

Panasonic was offering 120 yen for each Sanyo share, according to Daiwa SMBC and other sources. That's roughly $7.8 billion, or three times the $2.6 billion that Goldman, Daiwa, and Sumitomo Mitsui coughed up for their Sanyo stakes in January 2006, less than three years ago.

Daiwa SMBC left the door open

Still, the offer was 23% below Sanyo's stock price at the close of trading on Nov. 25. (Sanyo stock lost 3.9% Nov. 26.) And it fell far short of the 250 yen per share that Goldman wanted, according to the Yomiuri Shimbun and financial daily Nikkei newspapers.

Among Sanyo's trio of key investors, Goldman was the only one to break off talks. While Daiwa SMBC also dismissed Panasonic's offer as too low, the difference was that Daiwa spokesman Kenichi Kanda didn't rule out more discussions in the future. (Sumitomo Mitsui and Panasonic both declined to comment.)

Panasonic is eager to add Sanyo's expertise in two areas—batteries and solar panels. Sanyo is the largest global supplier of rechargeable batteries for laptops, cameras, mobile phones, and other portable gizmos. It's also the world's seventh-biggest manufacturer of solar cells. Together, the two companies would have a strong portfolio of green technologies, giving them an edge in developing new batteries for hybrid and electric cars and solar energy equipment for homes and offices.

First, however, Panasonic must negotiate a compromise with Sanyo's investors. A key reason for the dispute stems from the two sides' differing views about how to value the 430 million Sanyo preferred shares held by the three key investors. Each share will be convertible to 10 common shares as of mid-March 2009. Added together, the 4.3 billion shares would account for 70% of Sanyo's stock.

Sumitomo Mitsui Favors the deal

According to sources close to the talks, Panasonic wants the price to reflect the reduction in value of each Sanyo share after such a stock conversion took place. For its part, Goldman is said to contend that Sanyo's current share price already reflects that dilution. The truth lies somewhere in the gray zone between the two claims, says Macquarie Securities analyst David Gibson, who has done the math. "The market has not [fully] factored in the dilution from the preferred shares," Gibson says.

Without Goldman's cooperation, Panasonic would have to woo the remaining two. Getting Sumitomo Mitsui Banking on its side shouldn't be a problem. Apart from being a major shareholder, Sumitomo Mitsui Banking is also Sanyo's main creditor. It has said its top priority is finding a buyer that can help Sanyo pay back the loans, according to someone with knowledge of the discussions between Panasonic and Sanyo. Indeed, it was a top Sumitomo Mitsui Banking Group executive who set up the first secret meetings between the heads of Panasonic and Sanyo a couple of months ago, says this person.

Panasonic might try to lure Daiwa by sweetening the offer a bit. If Daiwa agrees, then what? Panasonic would still face a battle if it asks all Sanyo shareholders to vote on the matter, although it's too early to know whether this might happen and whose side ordinary shareholders would rally behind. The uncertainty has hurt Panasonic's shares, which fell 2.7% on the news—a bigger drop than that sustained by the Tokyo Bourse's electrical machinery index, which slid 1.4%.

By Kenji Hall and Hiroko Tashiro
Hall and Tashiro cover Japan's corporate sector from BusinessWeek's Tokyo bureau .

Yet Ten Sleep, population 350, is just as connected as any place these days, and home to a new company that is outsourcing jobs not from the United States to the Far East, but in the opposite direction.

Eleutian Technology hires people in towns across northern Wyoming to teach English to Koreans of all ages using Skype, the free online calling and person-to-person video service. Two years old, Eleutian already is one of Wyoming's fastest-growing businesses.

The company has close to 300 teachers hooked up to more than 15,000 students in Korea, and CEO Kent Holiday said he's just getting started.

"Our plan was never to be a company that had a few thousand subscribers," Holiday said. "It's a $100 billion market just between Korea, Japan and China, and so we wanted to be the leader and we wanted to have millions of users."

Holiday got the idea for the company after a short stint teaching English in Korea in the early 1990s. He went to work in Korea's telecommunications industry and eventually became a top executive of Korea Telecom (nyse: KTC - news - people ).

All along, he kept in mind that language education someday would be possible online. He made his move in 2006, getting grief from friends about quitting his high-six-figures job. "I said `You know what? The time's right,'" he said.

A small biotech company thinks it can make trading desks better by eliminating the people.

Colin Hill

In the midst of the biggest financial crisis in a generation, a tiny biotech company, called Gene Network Sciences, of Cambridge, Mass., thinks it can make Wall Street smarter. How? Get rid of the humans.

Their idea: Take the supercomputers Gene Network Sciences already uses to help Pfizer (nyse: PFE - news - people ) and Biogen Idec (nasdaq: BIIB - news - people ) invent drugs and use them to help hedge funds trade stocks, bonds,and other assets. "Computers and data are smarter than people," says Colin Hill, the theoretical physicist who founded GNS and will be chairman of its new trading spinoff, Fina Technologies.

"We believe the economy and the financial system are governed by complex networks, just like the genes that control cells and the neurons that control brains," says Hill. "And we believe that, using artificial intelligence, we can start to extract that circuitry from raw data."

Already, computers have replaced many of the guys who run trading desks. Now Fina wants to replace the computer-programming math whizzes with more computers. Perhaps one-tenth of fund managers are "quants"--short for quantitative traders--who run computer algorithms that buy and sell stocks so often they may account for one-third to one-half the trading volume on the New York Stock Exchange.

When it works, it makes fortunes. James Simon founded quant firm Renaissance Technologies in 1982, and is now worth $7.4 billion. David E. Shaw, a computational biologist, founded the quant firm D. E. Shaw in 1988, and is now worth $2.7 billion.

But sometimes, groups of these funds lose money at once--they are all using the same math, and thereby make the same bad bets. Fina thinks it can avert the problem by losing the phalanxes of mathematicians and their market-predicting equations and instead letting computers run the show.

Instead of trying to work out a way to predict the market using a human brain, Fina’s system would dump all available data into a computer system that takes snapshots of billions of possible predictive configurations. Imagine putting a picture puzzle together in that many different ways and deriving probabilities from all of them.

It's not nice to say, but if GM collapses, it could be a good thing for some companies, states and workers.

More From Jerry Flint

I do not expect General Motors to shut its doors this month, next month or any month in the near future. Instead, I fully expect our Federal government, lame duck Congress or "new duck" Congress will write the checks to keep GM in business--at least for now.

It seems fair to ask what would happen if taxpayers do not rescue General Motors (nyse: GM - news - people ). I suspect that if Americans had a vote, they would turn down GM. The truth is that our people now buy more cars with foreign nameplates than with American nameplates. Another reality: Parts of the country would prosper if GM fell.

Of course, a GM collapse would be bad news for GM workers who would lose their jobs. Factoring in all the layoffs already planned and those to come, I estimate the number would be close to 75,000, with most of those job losses in Michigan and other Rust Belt states with GM plants. As far as the pensioners go, GM's pension fund is huge; those people would get their pensions, and retirees would get Medicare like the rest of us, instead of health benefits from a GM plan.

The scaremongers like to talk about 3 million jobs lost, all things considered, which means not just the factory and white-collar workers of the auto company but the parts suppliers, dealers, repair garages and hot dog stands outside the factories.

These same people continually remind us about the lost tax revenue, which might mean fewer pay raises for teachers and school administrators and hospital workers in the Rust Belt. These are politically terrible thoughts--the teachers' union and the medical workers' union are among the largest contributors to political campaigns.

My opposing viewpoint: An end to GM would not be the end of the world. We are not going to have to walk to work. Other manufacturers will build our cars and trucks. In fact, business will grow for the other carmakers.

GM sells 20% of the vehicles in America. Today's depressed market is on pace to sell about 12 million vehicles a year in the U.S., which means GM sales of 2.4 million. That is about 10 new assembly plants the others would need to build to replace the lost GM vehicles. Every car plant in the North America would have to run overtime to make up for the shut GM plants.