Car workers protest in Oshawa, Windsor

Thousands of workers took to the streets yesterday in Oshawa and Windsor, the province's two biggest automaking centres, to send Ottawa a message: Protect manufacturing jobs before it's too late.

In Windsor, close to 40,000 people converged on the Ford Test Track in the city's largest demonstration in about a decade.

"If we don't have rules to govern trade in Canada's auto industry, the income of people who work in it is going to continue to decline," said Buzz Hargrove, Canadian Auto Workers president.

Trade agreements are to blame for the loss of 17,000 auto jobs in the past two years, he maintained in an interview with Canadian Press.

Meanwhile, about 700 people blocked traffic en route to Oshawa MP Colin Carrie's riding office on Simcoe St., said Ken Freeman, president of the Durham Region Labour Council.

The protesters carried banners, many with the slogan: "Colin doesn't seem to Carrie about manufacturing jobs," Freeman said.

The rally included auto workers from Bramalea and Woodbridge as well as teachers and nurses, he added.

Oshawa has lost 7,300 manufacturing jobs in the last four years while General Motors has cut 1,100 jobs, Freeman said.

"It doesn't matter if you're in steel, auto or wood. Manufacturing jobs are leaving this country at an alarming rate and we have a government that doesn't seem to care."

Another rally is scheduled in Ottawa on Wednesday.
Source : http://www.thestar.com

Oil falls $1 after Nigeria oil strike ends

Oil fell over a dollar on Monday after Nigerian oil unions at the weekend suspended a two-day strike that had threatened to halt oil shipments from the world's eighth-largest oil exporter.

London Brent crude fell $1.05 to $69.64 a barrel by 1200 GMT. U.S. crude fell 69 cents to $64.51 a barrel, after surging more than $1.00 on Friday. The market was thin due to holidays in both the UK and the United States.

Nigerian Union leaders said on Saturday workers at the national oil company had suspended the two-day strike after the government agreed to a pay rise and other benefits, although oil traders remained anxious over exports.


Output from the world's eighth-largest exporter is already down by about a quarter after an 18-month campaign of militant attacks against oil installations.

On Friday gunmen kidnapped nine foreign oil workers and a Nigerian colleague from a ship off the coast of Nigeria, taking the total number of foreign hostages to 25.

The U.S. Memorial Day holiday on Monday marks the start of the peak demand summer driving season when motorists hit the roads for vacation.

Record-high pump prices of $3.23 a gallon are not expected to have deterred holidaymakers from their road trips, said motoring group AAA.

Concern that gasoline supplies might run short in the world's largest energy consumer helped drive oil prices to a nine-month high last week.

U.S. gasoline futures bucked the fall in crude futures and were little changed on Monday.

A series of refinery outages have cut U.S. gasoline supplies by 15 percent since the winter, reversing the seasonal trend to stockpile motor fuels ready for summer.

The Organization of the Petroleum Exporting Countries has laid part of the blame for recent oil price spikes on U.S. motor fuel supply problems and has resisted consumer calls to pump more crude.


"Production from OPEC will stay stable," a senior OPEC delegate told Reuters on Monday. "There is no reason for now to change. On the crude side, the market is well balanced."

Refinery capacity constraints were likely to affect markets in consumer countries for some time, he added.

Crude oil speculators boosted their net long positions by more than a fifth on the New York Mercantile Exchange in the week to May 22, betting that prices would rise further. Gasoline speculators in contrast trimmed net length.
Source : http://investing.reuters.co.uk/

Nasdaq takes over OMX for 3.7 billion dollars

The NASDAQ Stock Market, Inc. (Nasdaq) bought Nordic stock exchange operator OMX AB (OMX) for 3.7billion U.S. dollars on Friday.

In a joint announcement release on Friday, Nsadaq and OMX said they have entered into an agreement to combine the two companies, creating the world's premier exchange and technology company.

The new group is to be called the Nsadaq OMX Group.

The combination will be effected through a cash and stock tender offer by Nasdaq for all outstanding shares in OMX.

The consideration offered is equivalent to 0.502 new Nasdaq shares plus 13.76 dollars in cash for each OMX share. Based on Nsadaq's closing price on 23 May, 2007, the offer values OMX at 30.38 dollars per share, equivalent to 3.7 billion dollars and represents a premium of 19 percent to the last full trading day prior to the announcement.

"The future of exchanges is about technology, flexibility and scale. This combination provides our organizations with the ability to grow and accelerate the global flow of equity capital. At the same time, it provides us with an excellent platform for further expansion into derivatives and other asset classes," said Robert Greifeld, chief executive officer of Nasdaq.

"This combination creates a new leader in the exchange industry.Issuers, members, information vendors and investors on both Nasdaq and OMX Nordic Exchange will all benefit from its new global context," commented Magnus Bocker, CEO of OMX.

Found in 1985, OMX merged with Stockholm Stock Exchange in 1998,then combined with Copenhagen Stock Exchange and Iceland Stock Exchange respectively in 2005 and 2006.

The pro forma market capitalization of the Nsadaq OMX group will be approximately 7.1 billion dollars, of which Nasdaq shareholders will own approximately 72 percent and OMX shareholders will hold approximately 28 percent as a result of the cash component of the Offer.

The combined group will be governed by representatives from both Nsadaq and OMX under the leadership of Robert Greifeld, who will serve as CEO and Magnus Bocker, who will serve as president.

The deal came a month after the New York Stock Exchange completed its 14 billion dollars acquisition of Euronext, which operates the Paris, Amsterdam, Brussels, and Lisbon stock exchanges.

Nasdaq, which failed in bid for the London Stock Exchange, is also in talks to buy the U.S. third-largest options exchange, Philadelphia Stock Exchange.
Source : http://news.xinhuanet.com

High-tech casino cheating charged

Two dozen people are accused of cheating casinos in several states and Canada out of more than $3 million since 2002 by using technology and bribes to rig card games.

According to indictments unsealed in San Diego and Seattle, participants in the scheme would signal a dealer to do a false shuffle and bet on the known order of the cards. The indictments also allege that players used hidden transmitters and special software to predict the order in which cards would appear.

Among those indicted is the son of Seattle, Wash., Mayor Greg Nickels.

Authorities said the scheme targeted 18 gaming parlors in Canada, California, Nevada, Mississippi, Louisiana, Washington, Indiana and Connecticut.

Bribes were paid to casino supervisors and dealers during blackjack and mini baccarat. The mayor's son worked as a pit boss at an Indian casino in Washington.
Source : http://www.krqe.com

Alcan snubs Alcoa bid as paltry

Canadian giant Alcan on Tuesday snubbed US rival Alcoa's bid to create the world's biggest aluminum company, calling the former parent's $33bn hostile bid for Alcan paltry.

Alcan's board "unanimously recommends shareholders reject Alcoa Inc's unsolicited offer to acquire Alcan," said a company statement.

"It does not adequately reflect the value of Alcan's extremely attractive assets, strategic capabilities and growth prospects; does not offer an appropriate premium for control of Alcan; and is highly conditional and uncertain," Alcan chairperson Yves Fortier said.

The firms "have fundamentally different approaches and track records in creating shareholder value," he said.

Alcoa, the world's second-largest aluminum company, had offered US$73.25 per share for Alcan on May 7. The offer comprised 80% cash and 20% stock.

Alcoa said a tie-up would forge a "top five" global metals firm with $54bn in revenues, 190 000 employees and a big global footprint with operations in Europe, North America, Asia, Australia and elsewhere.

Alain Belda, chairperson and chief executive of Alcoa, in a conference call after unveiling the bid, said Alcoa and Alcan were "two companies that belong together" for "a stronger future for both".

He said in a letter to Alcan president Dick Evans that the merger could generate $1bn in cost savings while providing more cash for research and development.

Evans responded on Tuesday: "We do not feel the need to merge with anyone."

In an interview with AFP, Evans said Alcan already has the "scale, leading technology, well demonstrated track record and execution" to be a global leader.

Alcan has "strong projected cash flow" and "an exceptionally attractive pipeline of growth opportunities," he said. "So we do not feel an urgent need" to be assimilated to grow.

Founded in 1902 as the Canadian unit of Alcoa, Alcan was spun off in 1928 amid US anti-trust concerns.

Alcoa, which operates in 44 countries, said its offer for Alcan was made after nearly two years of private talks on reuniting, which ultimagely failed.

Evans said Alcan is involved in "ongoing discussions with other third parties" and might consider a combination, if it created "value for shareholders and went beyond what we felt was available for an internal strategy."

But not at the price offered by Alcoa, he said.

When asked if Alcan might bid on Alcoa, he replied: "Our board has asked us to consider all alternatives."

Following Alcoa's May 7 bid, Alcan shares surged 35% to close at $82.11, suggesting a possible bidding war amid a global boom in commodities and surging demand for aluminum and related products, particularly in Asia.

Speculation bristled since February that Alcoa was being targeted for a takeover, possibly by Anglo-Australian miners BHP Billiton and Rio Tinto, and that either of these might now turn their attention to Alcan.

Alcan, operating in 61 countries, acquired French aluminum maker Pechiney in late 2004, creating at the time the biggest packaging and the second-biggest aluminum group in the world, behind Alcoa.

Alcoa's number-one spot meanwhile was eclipsed by a merger in March of Russian aluminum producers Rusal and Sual with Switzerland's Glencore.

An Alcan-Alcoa merger would face US, Canadian, EU, Australian and Brazilian anti-trust authorities, as well as foreign investment clearance in Canada, France and Australia.

On Tuesday, Alcan stock closed at $81.03 in New York, down 0.07%, but still near its 52-week high of $82.60 and more than double its low in September 2006. Alcoa shares meanwhile closed at $38.95, down 1%.
Source : http://www.fin24.co.za/

NYC's yellow cabs going green within 5 years

The city's yellow taxi fleet will go entirely hybrid within five years, Mayor Michael Bloomberg announced Tuesday.

"There's an awful lot of taxicabs on the streets of New York City,'' Bloomberg said. "These cars just sit there in traffic sometimes, belching fumes.

"It's a lot better for all of us,'' he said of the hybrid plan.

Nearly 400 fuel-efficient hybrids have been tested in the city's taxi fleet over the last 18 months, with models including the Toyota Prius, the Toyota Highlander Hybrid, the Lexus RX 400h and the Ford Escape.

Under Bloomberg's plan, that number will increase to 1,000 by October 2008, then will grow by about 20 per cent each year until 2012, when every yellow cab -- currently numbering 13,000 -- will be a hybrid.

Hybrid vehicles run on a combination of gasoline and electricity, emitting less exhaust and achieving higher gas mileage.

The standard yellow cab vehicle, the Ford Crown Victoria, uses 16.7 litres per 100 kilometres. In contrast, the Ford Escape taxis use only 6.5 litres per 100 kilometres.

In addition to making the yellow cab brigade entirely green within five years, the city will require all new vehicles entering the fleet after October 2008 to achieve a minimum of 9.3 litres per 100 kilometres. A year later, all new vehicles must achieve at least 7.8 litres and be hybrid.

Hybrid vehicles are typically more expensive, but the city said the increase in fuel efficiency will save taxi operators more than US$10,000 a year. Shifting the taxi fleet to hybrids is part of Bloomberg's wider sustainability plan for the city, which includes a goal of a 30 per cent reduction in carbon emissions by 2030.
Source : http://www.ctv.ca/

MGM Mirage Forms Committee to Study Kerkorian Announcement

MGM Mirage formed a committee of independent directors to study options after billionaire Kirk Kerkorian said he was considering alternatives for his 56 percent stake in the world's second-biggest casino company.

The committee will be made up of board members who aren't part of management or affiliated with Kerkorian's Tracinda Corp., Las Vegas-based MGM said in a statement on PR Newswire today.

Tracinda said May 21 it intends to negotiate the purchase of two Las Vegas properties, the Bellagio Hotel & Casino and the CityCenter complex, which is under construction. Tracinda also is studying options including a ``financial restructuring'' for the rest of the company.
Source : http://www.bloomberg.com

UPDATE 1-Ross Stores outlook below estimates, shares fall

Off-price retailer Ross Stores Inc. (ROST.O: Quote, Profile , Research) said on Wednesday first-quarter net profit rose on strong sales of home products and dresses, but gave a second-quarter outlook that was below analysts' estimates.

The company forecast second-quarter earnings per share in the range of 35 cents to 37 cents. Analysts are expecting Ross to post 38 cents per share in the second quarter, according to Reuters Estimates.

Ross shares were down 1.3 percent to $33.65 in premarket trading, after closing Tuesday at $34.10 on the Nasdaq.

Net income for the latest quarter that ended on April 29 was $67.0 million, or 48 cents per share, in line with analysts' average forecast as compiled by Reuters Estimates, compared with $59.2 million, or 41 cents per share, a year earlier.

Net sales for the quarter rose 9 percent to $1.4 billion. Same-store sales for the quarter were below the company's expectations due to a larger-than-expected impact from an earlier Easter and bad weather in April.

Ross Stores expects same-store sales gains of 1 percent to 2 percent in the second quarter, Chief Executive Michael Balmuth said in a statement.

He expects same-store sales for the second half of the year to grow between 3 percent and 4 percent, partially due to new merchandising opportunities during the fall season.

The company stood by its full-year earnings outlook of $1.85 to $1.95 per share. Analysts expect $1.93 per share, according to Reuters Estimates.
Source : http://today.reuters.com

Alltel CEO Reveals More Buyout Details, Others To Come Later

Little will change after publicly traded Alltel Corp. goes private, CEO Scott Ford said Monday, less than 24 hours after the company announced it agreed to be acquired by Texas Pacific Group Capital and Goldman Sachs Capital Partners in a $27.5 billion cash and debt deal.

Headquarters will remain in Little Rock, investments will continue to be made in the business, jobs will not be cut and senior management officials will stay, Ford said.

"I know it sounds trite, but I don't think you're going to see much change," Ford said. "I'm saying it not to allay your fears. If Verizon or AT&T had been there and paid more, we'd have sold it to them."

Whether the two wireless companies were interested in Alltel, Ford wouldn't say. He did not disclose who the other suitors were, but did say the company "made several rounds of management presentations to various equity groups" and that some were surprised a deal happened so quickly.

"I think the process that we used to try and herd people into the right kind of environment to take care of our shareholders helped deliver a superior price from what we would have otherwise gotten, and I think that will all be clear in the fullness of time, too," he said.

TPG Capital and GS Capital Partners agreed to pay $71.50 a share and assume Alltel's relatively low $2.7 billion debt. Debt from the transaction would be transferred to Alltel.

"Our shareholders weren't going to see $71.50 in my career path at the current course and speed we were going previously," Ford said.

The price is 10 percent more than Alltel's Friday closing price of $65.21. Alltel's stock (NYSE: AT) rose 6.7 percent Monday to $69.60.

Monday's stock performance appeared to indicate the market believes the deal will happen, Ford said, noting that if the stock price rises above the agreed price, it will not affect the deal.

The deal is not necessarily final, although Ford would not speak about a window of time the company had to seek or receive offers from other buyers. Details will be in a document to be filed with the federal Securities and Exchange Commission later this week, he said. He also would not say anything specific about termination fees.

"Every deal in America has a fiduciary out," he said. "If someone wants to come over the top, they're free to come over the top."

Analysts said the deal was solid and that it was unlikely Alltel would receive a higher bid from another prospective buyer.

"The valuation and leverage seem fair to full for the company and at this stage, an over-the-top bid seems relatively unlikely," Bank of America Securities analyst David Barden said in a note.

"We expect this deal to be successfully completed, given a long and comprehensive process undertaken by Alltel," Morgan Stanley analyst Simon Flannery said in a note to investors. "We think that potential strategic bidders are unlikely to get involved at these price levels."

Neither Barden nor Flannery receive direct or indirect compensation for expressing specific views, according to disclosures attached to each note. Both of their employers own 1 percent or more of a class of Alltel's common equity securities and expect to receive compensation for investment banking services from Alltel.

TPG Capital and GS Capital Partners want to invest in the wireless business, Ford said, noting that the company will still be able to make acquisitions and invest in its network.

Ford was quiet on any potential investment the company would make at the Federal Communications Commission auction of radio spectrum for wireless broadband communications.

Alltel's senior management will work out a deal with the new owners concerning money, Ford said.

According to the company's most recent proxy statement, Alltel's top five officials could make up to a combined $250 million from the company's sale.

For Alltel's other 15,000 or so employees, the deal does not get any better, Ford said.

"If you're a shareholder employee, you get paid, and you get to keep your job," he said, adding there are no forced reduction plans for employees.

TPG Capital and GS Capital Partners also agreed, as part of the contract, to make a goodwill offering to the employees, which Ford said he thought employees would be pleased with as details come out.

"As part of the contract, we got money for them as part of the transition," he said.

Whether or not the buyout was a good deal for the acquirers remains to be seen, according to Flannery.

"Alltel is strongly positioned with a good management team, but in order to get an attractive return on investment, a lot of things have to go right."

The overall economy must stay healthy and Alltel must continue to differentiate itself from its larger competitors, Flannery said.

"The exit will also be important. Can Alltel be sold at an attractive price to a strategic buyer in the next three to four years, or will the company reemerge as a public company?" Flannery said.
Source : http://www.nwaonline.net

Macy's: State St. store 'doing badly'

The parent company of Macy's acknowledged Friday that its State Street department store, flagship of the former Marshall Field's chain, is "doing badly."


Since replacing the green Field's awnings across the upper Midwest with the Macy's name and red star in September, Federated Department Stores Inc. has been on a mission to win over Chicago-area shoppers, many of whom were attached to the hometown Field's brand and unfamiliar with Macy's.

Federated executives have suggested at times that they were struggling with the transition, but the company does not break out revenue figures for individual stores or chains under its very large corporate umbrella. This week the company said it was disappointed with sales at the roughly dozen regional department store chains the company converted to Macy's eight months ago.

At a press conference after its annual meeting here Friday, Federated's chief financial officer, Karen Hoguet, said former Field's stores are performing no worse or better than the roughly 400 regional department stores Federated acquired from St. Louis-based May Department Stores Co. in 2005 and converted to Macy's.

But there is an exception: the Chicago store on State Street.

The landmark store, long a tourist destination, is "doing badly," Hoguet said, without providing specific performance data..

Macy's hasn't been doing enough to drive traffic to the store, she said, something the retailer is working to change.

This weekend Macy's is advertising 50 percent discounts on clearance merchandise at the State Street store only and total savings of 60 percent to 90 percent on thousands of spring fashions.

The promotion is part of a broader move, announced this week, to step up advertising and sale events at former May stores to boost sales.

Chairman and Chief Executive Terry Lundgren was quick to interject that operating a Midwest flagship in Chicago remains core to Macy's strategy.

"We're very committed to that store," said Lundgren, noting that rival Carson Pirie Scott a few blocks south closed its flagship store earlier this year. New owner Bon-Ton Stores decided the giant emporium was too costly to operate.

On Wednesday Lundgren characterized the former May stores' sales performance as "disappointing," as Federated missed its first-quarter sales target and earned less than Wall Street had expected.

Analysts estimate the sales drop at former May stores averaged 7 percent to 10 percent.

Sales at all Federated stores open at least a year, a key measure of a retailer's health, rose 0.6 percent, well below the increase of 2.5 percent to 3.5 percent Federated had predicted in February for the first quarter. The former May stores account for about half of Macy's approximately 800 stores.

Lundgren explained the sales miss by saying that he threw too many changes at the former May stores too quickly, namely lots of new in-house merchandise and fewer promotions.

The arrival later this year of the Martha Stewart Collection for the home, made exclusively for Macy's, should bring more shoppers to the stores, Lundgren said. Home goods account for about 15 percent of Federated's sales. The business has been "challenging" lately, he said, as people delay buying new homes.

At the meeting, shareholders approved changing Federated's corporate name to Macy's Inc. effective June 1. The change is intended to boost awareness of the Macy's name. Macy's accounts for 90 percent of Federated's business. Bloomingdale's makes up the rest.

Federated's board also declared a 2 percent increase in the quarterly dividend, to 13 cents per share.

Lundgren reiterated after the meeting that Federated is close to a decision to move Frango mint production to Chicago. Lundgren pledged to Mayor Richard Daley after Federated acquired Marshall Field's and changed its name to Macy's that he would try to return some of the famous chocolate-mint production to Chicago.
Source : http://www.chicagotribune.com

Consumers, deals lift stocks

Stocks surged higher yesterday as the latest round of takeovers prodded investors to continue a months-long buying streak.

The Dow registered its 24th record close this year and the S&P 500 came within striking distance of its record high.

A reading that was stronger than expected on consumer sentiment helped investors set aside some concern that higher gas prices would force consumers to pull back on spending.

The mood of consumers remains vitally important since that spending accounts for two-thirds of economic activity.

The Dow rose 79.81 yesterday to 13,556.53, and set a new intraday trading high of 13,558.48. The S&P 500 rose 10 to 1,522.75, its highest level in more than six years. That's less than 5 points from a record close of 1,527.46, set in March 2000. The Nasdaq gained 19.07 to 2,558.45.

For the week, the Dow rose 1.73% and the S&P 500 gained 1.12%. The Nasdaq fell 0.15%.

Also, the yen rose from an almost three-month low against the dollar after China allowed its currency to strengthen at a faster pace and lifted interest rates to cool an overheating economy.

A rising Chinese currency would make Chinese imports less competitive in the U.S.
Source : http://www.nydailynews.com

Radio giant reaches deal

After a contentious, months-long effort to go private, Clear Channel Communications Inc. appears close to reaching its goal.

Clear Channel announced an agreement to sell the company to its private equity buyers for $19.45 billion, or $27.45 billion including debt. Shareholders would have the option of taking $39.20 a share or stock in the private company.

That option to profit alongside private equity buyers has changed the stance of some shareholders opposed to previous offers from buyers Bain Capital Partners and Thomas H. Lee Partners.

Highfields Capital Management and the California Public Employees' Retirement System are among those in support of the new offer, said a CalPERS spokesman and a source familiar with Highfields' position.

The deal also would cap the transaction fee Clear Channel would have to pay its buyers at $87.5 million and require that at least two independent directors be included on the company's board.

The latest offer, unanimously approved by Clear Channel's board, is the fourth the private equity duo have made for the nation's largest radio broadcaster. Bain and Lee originally proposed acquiring Clear Channel for $18.7 billion, or $37.60 a share, in November. Including the assumption of Clear Channel's debt, that deal was valued at $26.7 billion.

Clear Channel, Bain and Lee declined to comment beyond a news release issued Friday morning.

"The opportunity to play along is probably what got some of the holdouts to finally sit at the table," said David Bank, an analyst with RBC Capital Markets in New York.

Shareholders would have the option of holding up to 30 percent of the corporation's outstanding capital stock — about 30.6 million shares — with an approximate value of about $1.2 billion. No shareholder would be allowed to hold more than 9.9 percent of the company's outstanding capital stock.

"This gives us the opportunity to participate with the private equity firms to get more value," said Clark McKinley, a spokesman for CalPERS. The pension fund owns 3.1 million shares of Clear Channel stock valued at about $118 million.

Several large shareholders including CalPERS, Highfields and Fidelity Management & Research — Clear Channel's largest shareholder with 9.8 percent of shares outstanding — have opposed previous offers, saying they didn't provide adequate shareholder value.

Spokesmen for Fidelity and Highfields declined to comment for this article.

Early this month, preliminary shareholder vote totals showed enough opposition to derail a once-sweetened $39-a-share offer. Under Texas law, at least two-thirds of Clear Channel's shareholders would have to vote for the transaction for it to be completed.

Although Bain and Lee's latest offer is just 20 cents a share higher, it offers shareholders something they rarely get — a chance to share in the riches private equity buyers are expected to reap. And in an era reminiscent of the buyout boom of the 1980s, shareholders increasingly are seeking a piece of those profits.

A recent $7.8 billion deal to buy stereo maker Harman International Industries Inc. gives shareholders the chance to hold up to a 27 percent stake in a private Harman.

"Investors in general are starting to become believers that there is no magic to private equity," Bank said.

Bain and Lee's most recent bid is similar to one Clear Channel's board rejected two weeks ago. That offer would have boosted payments to most shareholders from $39 to $39.20 a share by lowering payments to the company's board to $37.60 a share. It also would have given shareholders the choice between cash or stock in a private Clear Channel.

Intrigued by the stock offer, an arrangement known as "stub equity," shareholders lobbied Clear Channel's board to reconsider its rejection of the bid. The resulting negotiations brought about Bain and Lee's latest offer.

A shareholder vote scheduled for Tuesday on the $39-a-share offer has been canceled, and a vote on the new bid has not yet been announced. But Miller Tabak & Co. analyst David Joyce expects a vote could come late this summer — a longer delay because of the stub-equity component.

This time, he expects the deal will garner enough shareholder support to pull Clear Channel out of the public arena.

"The stock is reflecting that," he said.

Shares of Clear Channel traded at double their normal volume and rose 44 cents to close $38.23 Friday on the New York Stock Exchange.
Source : http://www.mysanantonio.com

Saudis buy GE plastics arm in $11bn deal

General Electric is offloading its ailing plastics division in an $11bn (£5.6bn) deal that is the largest ever completed in the Gulf.

The division is being bought by Basic Industries of Saudi Arabia, one of the world's largest chemicals companies, which is 70pc-owned by the Saudi government.

The price tag is far higher than the $8bn-$10bn analysts had expected. The unit has been on the market since January after high crude oil prices cut into GE's earnings. Sabic, as the Saudi company is known, has easy access to the world's largest oil reserves.

GE is expected to pump the proceeds of the sale into more stable earnings streams such as its healthcare business.

GE Plastics posted a profit of $674m on sales of $6.65bn last year. It specialises in polycarbonates - easily-worked plastics used in applications ranging from riot shields to compact-disc cases.

GE's proprietary Lexan plastic is used in roofs, lighting, walkways, windows and domes. It operates in 21 countries around the world, including the fast-growing markets of China, India and Brazil.

Sabic's investments in capacity expansion are expected to reach $20bn by 2009 as it seeks to move beyond its Saudi Arabian base and establish manufacturing facilities closer to its customers.

The late King Khalid bin Abdulaziz established Sabic in 1976 with the aim making Saudi Arabia less dependent on oil.

It has grown to employ 17,000 people.
Source : http://www.telegraph.co.uk

Oil Is Steady Amid Speculation Refinery Demand Will Increase

Crude oil in New York was little changed amid signs that U.S. refineries will increase operating rates as they try to replenish gasoline stockpiles.

Refineries operated at 89.5 percent of capacity last week the third straight weekly gain, according to the Energy Department. The profit margin for turning oil into fuels rose to the highest since at least 1989 yesterday, based on closing futures prices. Valero Energy Corp., ConocoPhillips and Murphy Oil Corp. have shut units for repairs this week.

``Everything is still extremely bullish but a bit of a correction is in order,'' said Ric Navy, a broker at BNP Paribas SA in New York. ``You can have as many government investigations as you want but the fact remains that refineries are shutting units because of fires and other problems and we have hurricane season ahead.''

Crude oil for June delivery rose 8 cents to settle at $64.94 a barrel at 3:05 p.m. on the New York Mercantile Exchange. Prices touched $65.64 a barrel, the highest since May 1. Oil rose 4.1 percent this week and is 6.5 percent lower than a year ago.

Gasoline for June delivery in New York declined 2.89 cents, or 1.2 percent, to close at $2.4077 a gallon. Futures touched $2.44 a gallon yesterday, the highest since April 30.

``We're just taking a little break here,'' said Tim Evans, an energy analyst with Citigroup Global Markets Inc. in New York. ``Prices may resume their upward move when we come back next week.''

U.S. gasoline consumption peaks during the driving season, which lasts from the Memorial Day holiday in late May to Labor Day in early September.

Congressional Hearings

Committees in both the U.S. House of Representatives and Senate have held hearings on rising gasoline prices. A Senate panel approved legislation on May 8 that would make gasoline price gouging a federal crime.

Regular gasoline at the pump, averaged nationwide, rose 1.5 cent to a record $3.129 a gallon yesterday, according to AAA, the nation's largest motorist organization. Gasoline prices are up 7.1 percent from a year ago.

BP Plc will idle the primary fluid catalytic cracking unit at its Texas City, Texas refinery for 10 days of maintenance starting tomorrow, according to a person knowledgeable about the plant. The facility has three crackers, which make gasoline components. It's capable of processing 460,000 barrels of oil per day and is the third-largest U.S. refinery.

Nigerian Production

Royal Dutch Shell Plc's Nigerian venture resumed some production at an oil-gathering center after gaining access to the facility yesterday, a spokeswoman said. The Bomu manifold, a gathering point for crude oil flowing to the Bonny export terminal, was shut on May 10 by a protest that lasted several days. The terminal normally handles 170,000 barrels a day.

Bonny's exports for May and June remain under force majeure, a legal clause meaning deliveries are suspended because of conditions beyond the company's control, Shell spokeswoman Eurwen Thomas in London said.

Nigeria is losing more than 800,000 barrels a day of production because of violence, kidnappings and damage to oil facilities. About half of that has been shut for more than a year in the western Niger delta region, where a force majeure remains in place on exports from Shell's Forcados terminal and EA field.

Brent crude oil for July settlement fell 85 cents, or 1.2 percent, to close at $69.42 a barrel on the London-based ICE Futures exchange. Futures topped $70 yesterday for the first time since September.

Changes to Nigerian supply have a greater effect on North Sea prices, since the country's oil is priced in relation to Brent.

Crude oil may rise next week as refiners increase gasoline production, according to a Bloomberg News survey. Twenty of 40 analysts surveyed, or 50 percent, said oil prices will rise. Thirteen, or 33 percent, said prices will decline and seven forecast little change.
Source : http://www.bloomberg.com

China lifts interest rates, set to widen yuan's trading band

China yesterday announced that it would widen the trading band of its currency and raise interest rates, apparently to counter foreign criticism of its exchange rate and rein in its runaway economy.

The moves came ahead of a high-level meeting in Washington next week during which China and the US are expected to discuss major thorns in their trading relationship, of which the currency rate is the biggest.

The interest rate hikes, meanwhile, were widely anticipated as China seeks to cool an economy that grew at a blistering 11.1 percent rate in the first quarter of the year.

The currency trading range will be broadened to 0.5 percent either side of a daily reference rate against the US dollar from the previous 0.3 percent, with effect from Monday.

The yuan closed at 7.668 to the dollar yestyerday, the latest in a series of recent record highs amid upward pressure on the yuan.

The central bank also said beginning today it would raise the benchmark for one-year lending rates by 0.18 percentage point to 6.57 percent and hike the deposit rate by 0.27 percentage point to 3.06 percent.

The move was intended to ensure "reasonable growth" in investments, and keep prices stable, the People's Bank of China said in a statement on its Web site.

The interest rate hike was China's fourth since April last year, signalling its determination to cool a liquidity-driven investment boom and a skyrocketing stock market.

The central bank also said that it would hike the required reserve ratio by 0.5 percentage point to 11.5 percent with effect from June 5.
Source : http://www.taipeitimes.com

€365m treasure taken from Atlantic

DEEP-SEA explorers from the US have recovered €365 million worth of colonial-era silver and gold coins from a 400-year-old wreck in the Atlantic Ocean — but are refusing to confirm if it is from a British vessel.

A jet chartered by Tampa-based Odyssey Marine Exploration landed in Florida recently with hundreds of plastic containers brimming with 17 tons of coins raised from the ocean floor, Odyssey co-chairman Greg Stemm said.

More than 500,000 pieces are expected to fetch an average of €740 each from collectors and investors.

“For this colonial era, I think (the find) is unprecedented,” said rare coin expert Nick Bruyer, who examined a batch of coins from the wreck. “I don’t know of anything equal or comparable to it.”

Citing security concerns, the company declined to release any details about the ship or the wreck site. Stemm said a formal announcement would come later, but court records indicate the coins might come from a 400-year-old ship found off the UK.

Because the shipwreck was found in a lane where many colonial-era vessels went down, there is still some uncertainty about its nationality, size and age, Stemm said, although evidence points to a specific known shipwreck. The site is beyond the territorial waters or legal jurisdiction of any country, he said.

He wouldn’t say if the loot was taken from the same wreck site near the English Channel that Odyssey recently petitioned a federal court for permission to salvage.

In seeking exclusive rights to that site, an Odyssey attorney told a federal judge last autumn that the company likely had found the remains of a 17th-century merchant vessel that sank with valuable cargo aboard, about 40 miles off the south-western tip of England. A judge signed an order granting those rights last month.

In keeping with the secretive nature of the project dubbed “Black Swan”, Odyssey also isn’t talking yet about the types, denominations and country of origin of the coins.

Bruyer said he observed a wide range of varieties and dates of likely uncirculated currency in much better condition than artefacts yielded by most shipwrecks of a similar age.

The Black Swan coins — mostly silver pieces — will likely fetch several hundred euro to several thousand euro each, with some possibly commanding much more.

The richest ever shipwreck haul was yielded by the Spanish galleon Nuestra Senora de Atocha, which sank in 1622.

Treasure-hunter Mel Fisher found it in 1985, and retrieved €296m in coins.
Source : http://www.irishexaminer.com

Clear Channel approves increased buyout proposal

Clear Channel Communications said on Friday its board approved an increased buyout proposal of $39.20 a share, or $19.6 billion, which includes an option that allows current shareholders to take about a 30 percent stake in the restructured company.

The radio operator canceled a vote on the deal scheduled for May 22 and said it will set a new date after filing a new proxy statement.

The company had been under shareholder pressure to postpone the meeting in order to allow Bain Capital Partners and Thomas H. Lee Partners to raise their $19.5 billion bid by 20 cents a share to $39.20 a share.

Clear Channel originally rejected that $39.20 offer, arguing that its acceptance would delay the date of the meeting by up to 90 days, with no certainty the transaction would be approved by shareholders.

But shareholders pressured Clear Channel to reconsider its decision, with several stockholders previously telling Reuters they had called on the company's board to put the higher bid to a vote.

Shareholder support for the revised bid has been gathering momentum, a source familiar with the situation told Reuters on Thursday. Significant shareholders, including Fidelity and NWQ, have told Clear Channel that they are supportive of the revised proposal, the source added. Fidelity and NWQ were not available for comment yesterday.

Another significant shareholder, Highfields, is also supportive, sources previously told Reuters. Highfields and Fidelity had previously opposed a lower bid by the two buyout firms.

The deal faces a difficult hurdle because under Texas law, holders of at least two-thirds of a company's shares must approve the transaction. Shareholders who fail to vote are counted as voting against the deal.
Source : http://news.com.com

AQuantive Deal no Silver Bullet for Microsoft

Microsoft Corp.'s planned acquisition of digital advertising and marketing services agency aQuantive Inc. will give the company the tools it needs to dig its heels in as a competitor in the rapidly evolving digital advertising market.

But Microsoft now is under pressure to leverage its pricey acquisition as a range of companies -- including technology competitors such as Google and traditional marketing and advertising players such as WPP Group -- jockey for position to sell ads for emerging channels such as digital and online entertainment, analysts say.

Selling advertising is one of many businesses the Internet has reshaped over the last 10 years, as traditional channels such as print and newspaper are rapidly losing share to the range of ways companies can advertise online.

Google Inc. showed everyone how to sell ads by leveraging search-engine result and has all but sewn up this segment of online advertising, analysts say. But now digital entertainment segments such as interactive games and on-demand television programming are emerging as new frontiers, and Microsoft is eyeing those channels -- where it already has investments such as Xbox 360 and an IPTV platform -- going forward as a way to make up for lost time.

"This is less about search than what comes after search, and they want to make sure they are more well positioned for that," said Forrester Research Inc. analyst Shar VanBoskirk.

"It's very challenging for Yahoo or Microsoft, Ask.com or AOL to really catch up to Google on the consumer side," agreed Greg Sterling, principal analyst for Sterling Market Intelligence in Oakland, California. "I think Microsoft sees itself as having an advantage in other areas, such as IPTV, mobile and games."

aQuantive should play nicely to those advantages, giving Microsoft media planning and buying capabilities, as well as ad network capabilities that can help the company match advertiser campaigns with publisher inventory through aQuantive's DRIVEpm service, said Joe Doran, general manger for Microsoft digital advertising solutions.

The acquisition also will give Microsoft something Google will not get with its intended purchase of DoubleClick Inc. -- a full-service interactive advertising agency in the aQuantive property Avenue A Razorfish. Doran said Microsoft will keep the agency "at arm's length" so it can serve its customers independently.

AQuantive's Atlas set of products, which allow agencies and publishers to manage, develop and serve up ads directly to online properties, also allows Microsoft to sell advertising for sites other than its own, something it currently cannot do with its adCenter platform. Doran said Microsoft plans to integrate adCenter with Atlas to extend the reach of its own paid-search platform, and has no plans to abandon its efforts in this area.

Few would argue the aQuantive deal is a bad move for Microsoft, but it certainly came at a premium -- an 85.4 percent premium at the time it was announced, to be exact. Microsoft said it will pay US$66.50 per share for aQuantive's stock, which closed Thursday at $35.87. However, by the end of Friday, aQuantive's stock had soared to nearly its proposed sale price, closing at $63.79.

Still, when one considers that aQuantive made only $442.2 million for its entire 2006 fiscal year, while online advertising giant Google made $3.66 billion in just its fiscal 2007 first quarter, $6 billion seems a hefty -- but necessary -- price to pay for a foot in the door of the emerging digital advertising market.

"Microsoft clearly had to do something big to get back into the game given what their competitors have done," said Gartner Inc. analyst Andrew Frank.

Both Sterling and Boskirk said the price Microsoft is willing to pay for aQuantive is not that large if you consider the long-term strategic potential of the deal. "They're making an investment on a large part of the [estimated $600 billion] advertising market, period," Boskirk said. "All of the traditional ads are shifting to digital. From that perspective, $6 billion is pretty inexpensive to pay for entry into that."

But the deal is certainly not a silver bullet for Microsoft, and Sterling suspects the company will have to cough up more cash before the dust settles to ensure it has staying power. "It doesn't solve all of their problems, but this is not the end of the line for Microsoft," he said.

And even if the deal proves successful, Microsoft will still have to contend with Google and the sizeable head start it has in online advertising. Google may currently be a one-trick pony --making the bulk of its revenue through online search -- but that pony shows no signs of tiring. Expanding its ability to sell advertising across more channels and Web sites does not solve the problem of why Microsoft's paid-search advertising business has flagged: people still overwhelmingly prefer Google's search engine to Windows Live.

This trend likely will continue and, aside from the Avenue A Razorfish part of the deal, Google expects to get many of the same advertising assets Microsoft will gain with its aQuantive purchase, This also complicates Microsoft's position, Boskirk said. "I think Microsoft has a lot of responsibility with picking up this business to get their money's worth," she said.
Source : http://www.pcworld.com

Microsoft chases Google with $6bn purchase of internet ad broker

Microsoft is spending $6bn (£3bn) on its biggest acquisition in a desperate attempt to keep up with Google in the market for online advertising.

The internet ad broker aQuantive agreed to be taken over yesterday, after Microsoft offered close to double the company's stock market value.

Analysts expressed astonishment at the 85 per cent premium, and warned that it exposes how Microsoft has been forced to play an expensive game of catch-up with Google.

Less than a month ago, Microsoft ducked out of the auction for DoubleClick, the market-leading online ad broker, which was bought for $3.1bn by Google, saying the price had become unrealistic. Depending on which measure of earnings used, it is buying aQuantive at a valuation similar to, or even higher than, the price Google paid for DoubleClick.

Explaining the acquisition yesterday, Microsoft's chief financial officer, Chris Liddell, said: "We believe it's exactly the right company to buy, and hence we're willing to pay." The 10-year-old aQuantive is a bigger company than DoubleClick, since it also owns an advertising agency.

Businesses are spending larger and larger proportions of their ad budgets online, reflecting how potential customers are spending more time surfing the internet and less time with traditional media such as television and radio.

"We are committed to earn a bigger slice of that $40bn pie that's growing," said Kevin Johnson, the president of Microsoft's platforms and services unit.

AQuantive's technologies place adverts on websites and help advertisers improve the effectiveness of their internet marketing campaigns. Like Google and Yahoo!, Microsoft's online business, MSN, has expanded from offering advertising space on its sites to brokering adverts for other web publishers, but it is trailing in third place in this business. Its dramatic move yesterday capped a month of frenetic deal-doing in the internet advertising space.

Yahoo! reacted to the Google-DoubleClick deal by snatching up the 80 per cent of rival Right Media it did not own, paying $680m to do so. And this week, the world's second-largest group of advertising agencies, London-based WPP, said it would acquire 24/7 Real Media for $649m.

Shares in aQuantive climbed 78 per cent to $63.72 in midday trading on Nasdaq, close to the $66.50-per-share value of the Microsoft offer.

"There had to have been some desperation for Microsoft to pay the price that it did," said Toan Tran, an analyst at Morningstar. "Sometimes, I am worried that Microsoft has Google tunnel vision. It is so worried what Google is doing that it becomes way too reactionary."

Observers said the swoop on aQuantive made it less likely that Microsoft would seal a merger deal with Yahoo!. The on-again, off-again talks about a combination were given new impetus after Google's acquisition of DoubleClick, since Microsoft and Yahoo! feared falling further behind their rival in the online ad market. Yahoo! shares leapt 18 per cent on one day earlier this month when news leaked of the negotiations with Microsoft.
Source : http://news.independent.co.uk

La. loses steel mill but gains respect

ThyssenKrupp AG's announcement Friday that it will build a $3.7 billion, 2,700-employee steel plant in Alabama ended Louisiana's bid to lure the German steel giant to St. James Parish.

But the fact that Louisiana made it to the final round of the competition is noteworthy, experts say, and a sign that Louisiana may be overcoming its reputation for being less than business friendly and is strengthening its hand at economic development projects.

"To be selected as one of two finalists from among 20 states and 67 sites for a project of this magnitude is a tremendous honor and proves that Louisiana is moving forward with extraordinary momentum," Gov. Kathleen Blanco said in a statement Friday addressing the state's loss to Alabama. "Our success with this project demonstrates that Louisiana has established a stronghold in the global economy and can successfully compete for world-class projects."

Louisiana has captured in recent years three new manufacturing projects with investments in excess of $1 billion and several multimillion-dollar projects in multistate competitions, an achievement that has corporate site selectors taking notice.

"Louisiana has handled its own in landing projects recently," said Adam Burns, managing director of Site Selection Magazine, a trade publication produced by the International Asset Management Council, whose members are corporate real estate executives and site selectors. "Certainly (Louisiana Department of Economic Development) is doing a lot of the right things to get the investments that they need to."

In June 2004, shortly after Blanco took office promising to make Louisiana more attractive to businesses, the state got its first hit when Chicago firm Union Tank Car Co. said it would build a $100 million, 850-employee rail car plant in Alexandria. Louisiana initially lost the project to Texas, but the company reconsidered three months later. That plant now is running near capacity, said Bruce Winslow, a spokesman for Union Tank Car.

Winslow said it was, in part, Louisiana's emergence as a pro-business state that won over the company.

"We found that the governor was a friend to business and a friend to Union Tank Car," Winslow said. "At this point we're very pleased with our decision to invest in Alexandria."

The rail car plant is one of 16 businesses to announce an investment of $100 million or more in the state since January 2004, according to the economic development office. That includes three business investments of $1 billion or more and 1,500 jobs total. The figure counts only new business in Louisiana, not companies that expanded operations, such as General Motors Corp.'s expansion of its Shreveport truck plant.

The state got its first billion-dollar investment announcement in 2005 when chlorine producer Shintech said it would build a $1 billion plant southwest of Baton Rouge. The plant is under construction.

The Shintech deal was followed by Lake Charles Cogeneration LLC's $1.3 billion gas plant announcement for the Port of Lake Charles.

The largest project now under way is a $5 billion investment by Synfuel Inc., which is planning to build a major coal gasification plant in Ascension Parish.

Those developments indicate that Louisiana is taking steps to shed its image as a bad partner to business, said Michael Olivier, secretary of the Louisiana Department of Economic Development.

"I think we have achieved a lot of things," said Olivier, who credits his office with helping to erase Louisiana's negative business reputation.

"The problem is that Louisiana is characterized in a way that has not been of great service to us," Olivier said. "We had to change our image. We had to be seen as pro-business, as business-friendly."

In addition to assembling generous incentive packages, the state has made some in-house adjustments in hopes of bolstering its image. Among them has been hiring a "professional economic developer," to head up its research department. That person's job is to sniff out industry trends that would make the state more proactive in its bid to attract business. The job includes monitoring currency exchange rates, for instance, to spot investors from countries that may enjoy at least a temporary advantage from the relatively cheap dollar.

"What we've done is make a conscious effort to improve our product," Olivier said. While Olivier said Louisiana isn't copying any other state's economic development strategy, he'd like Louisiana to aspire to the success achieved in North Carolina, South Carolina and Alabama, states that have made headlines for snagging major deals.

"We believe those are three states that have done a good job of turning around their economy," Olivier said. "We're seeing what they've done and that progression of focusing on certain types of resources."

Louisiana was well on its way to achieving similar success before Katrina, Olivier said. But the storm set the state back.

"Man, I've got to tell you, that set us off course," Olivier said. Before Katrina "we were on fire and everybody knew it."

According to recent surveys, the state still is doing a pretty good job of letting site selectors at major corporations know it's open for business. A survey in Site Selection magazine that ranks states based on the "ease of doing business" there placed Louisiana 17th among 25 states in 2006. Louisiana was tied with Iowa. That's an improvement on five years ago, when the state ranked 24th and better than 1998, when Louisiana did not make the list at all.

Olivier said the ThyssenKrupp deal also will serve notice to an international audience.

"If Louisiana intends to be competitive, it has to be globally competitive," Olivier said. "And the one thing this ThyssenKrupp project demonstrates is that we can be globally competitive."

Five companies already have expressed interest in the St. James Parish site considered by ThyssenKrupp, said Lana Sonnier, a spokeswoman for the economic development office. Sonnier declined to release the names of the companies because of confidentiality issues and for fear of tipping off other states that might want to recruit them. She described the companies as "manufacturing type" businesses in need of access to railroads and water.
Source : http://blog.nola.com/times-picayune

New stamp prices go into effect Monday

U.S. Postal Service customers will soon need more than just a 39-cent stamp to send a first-class letter. Effective Monday, the Postal Service is hiking stamp prices by 2 cents to 41 cents.

Postal service officials said this increase -- part of a new pricing system that include other price changes -- is to cover increasing operational costs, including rising fuel and employee healthcare costs.

The last time consumers saw stamp prices increase was in January 2006. To fund an escrow account required by a 2003 federal law, the stamp went from 37 cents to 39 cents.

Other postage prices also will increase on Monday, including those for certificates of mailing, delivery confirmation and other extra services and fees.

Not all postage prices are going up, however. Mailing a 2-ounce, first-class mail letter, for example, will cost 58 cents. That's 5 cents less than the previous rate of 63 cents.

The U.S. Postal Service will also move from a weight-based system to one that considers size and shape more. With differing rates for letters, large envelopes and packages, officials said this will be more in line with industry standards.

For example, UPS and FedEx use these standards, said David Partenheimer, a postal service spokesman.

"For us, it's a brand new way of pricing and something that, we think, is to encourage more efficient mailing," he said.

Partenheimer said mailers can save money if they find ways to configure the mail into shapes that reduce handling costs for carriers.

For instance, if mailers fold contents they would normally put into a first-class mail large envelope to fit into a letter-sized envelope, they can save as much as 39 cents per piece. First-class large envelopes will cost 80 cents.

Customers can also buy a new kind of stamp to save themselves from future stamp increases: Forever Stamps.

They can buy them at the new 41-cent first-class mail letter price and it is good forever on first-class, one-ounce letters, even if prices go up again.

Customers sending international mail will experience some changes as well. USPS has consolidated its eight main international products into four: Global Express Guaranteed, Express Mail International, Priority Mail International and First-Class Mail International.

With new packaging, mailers will also be able to use the same Priority Mail and Express Mail packaging for domestic and international shipping. But Skip Seda, president of A-1 Postage Meters & Shipping Systems in Columbus, said these changes may hurt some customers.

He said he thinks the 2-cent increase may not upset a lot of people -- it's the size-based system that might.

Seda said many of their clients are businesses that regularly mail items that exceed a quarter-inch -- the maximum thickness allowed for letters.

And for individual customers, Seda said this might cause confusion.

"How are they going to know if that piece of mail is less than a quarter-inch thick?" Seda said. "How are they going to know that at home?"

Locally, businesses that send out loads of mail each day will feel the pinch, he said.

TSYS, one of the largest U.S. Postal Service customers in the southeast, sends more than one million items through the mail daily from Columbus.

"Through our extensive pre-sort capabilities we are able to achieve cost-saving discounts for our clients on postage," said Rick St. John, TSYS Group Executive for Output Services. "However, even with these discounts there will be some impact to TSYS clients from the rate hike."

Seda said he hopes customers do not blame his company and other postage businesses for the price increases.

"I think they see us the most," Seda said. "In most cases, we're the messenger. I hope it's not a kill-the-messenger mentality."

Partenheimer said a rate case was filed about a year ago and the Postal Services' Board of Governors approved the hike in March with an effective date of May 14.

Seda said it has only been about two weeks since they found out and since then have been working diligently to adjust to these new rates. It means all of their more than 1,500 customers who have purchased one of their mailing machines will need to install a different chip to reflect new prices.

As for price decreases, Seda said "it is a great, great deal."

"But they only gave us 12 days to get that into our machines," he said. "Business activity has increased, but sales have decreased in the last month. And the reason is there is so much more for us to do."

"This is something that needed to be done, but it could have been done differently," he added. "They should have made this decision a year ago and implemented it now."

Partenheimer said if business mailers need help during the transition, they can contact their regional rate case coordinator. Businesses can find out who that is by contacting their local postmaster.
Source : http://www.ledger-enquirer.com

Iran's Economy Vulnerable, Experts say

Iran's economy is vulnerable to outside pressure, giving the Bush administration and its allies more opportunities than generally believed for compelling the regime to halt its nuclear weapons program, a panel of U.S. experts said.

"There has been no serious discussion of what lies between doing nothing and doing everything," American Enterprise Institute scholar Danielle Pletka said on Wednesday.

By doing nothing, she cited calls by the Baker-Hamilton Iraq Study Group and others to open a direct dialogue with Tehran, which many analysts view as appeasement.

By doing everything, she meant a U.S. military campaign against Iran.

The debate between advocates of those positions "has become a caricature of U.S. foreign policy choices," Pletka said.

Instead, there was a broad range of economic pressures the U.S. and its allies could bring to bear that could do serious damage to the regime.

AEI yesterday released an on-line data base compiled by researcher Omeed Jafari listing more than 300 companies from 38 countries that were doing significant business in Iran.

An examination of Iran's business relationships showed that unlike North Korea, Iran's economy was "tightly dependent on buying and selling ... and on the good will of export credit agencies," Pletka said.

As an example, she noted that Italy's export credit agency has extended $6 billion in export credits and political risk insurance to Italian companies doing business in Iran.

If Iran defaults on any of its commitments to those companies, "it's the Italian taxpayer who is left holding the bag."

Pletka and other experts praised recent efforts by the U.S. Treasury Secretary Hank Paulson and Undersecretary Stuart Levy to increase the pressure on Iran by limiting Iran's access to international financial markets.

In the year or so that Treasury has been active on Iran they have been "far more effective than the State Department has been" for all the years it's been working on Iran," Pletka said.
Source : http://www.newsmax.com

American bank, dredging firm boost local construction

The dredging and drilling industry in Nigeria is set to receive a boost following the initiative of the Nigeria-American Chamber of Commerce in collaboration with US Commercial Service of the US Consulate and Kofa International Company of the United States. At a one day seminar titled: “US equipment and raw materials finance to Nigeria” held at the Golden Gate Restaurant in Lagos, stakeholders from both Nigeria and the United States gathered and deliberated on financing and sourcing of equipment abroad for the dredging and drilling industry, especially for those in the oil and construction industry.

Under the scheme, an American bank, the Manufacturing and Trade Bank (M&T Bank) in collaboration with some local banks will be financing the purchasing of equipment from the United States. According to Mr. Benjamin M. Akwete, the Vice President of the Baltimore , United States-based M&T Bank, the local financial institutions in Nigeria will provide guarantee on behalf of Nigerian buyers of US goods and services. In attendance were representatives of Nigerian banks such as UBA, Skye Bank etc, etc.

The M&T, according to the Ghana-born vice president, will typically consider financing arrangements that offer reasonable assurance of repayment. Towards this, the US Commercial Service will be involved in verification of Nigerian firms that are wishing to do business with American companies and finance institutions. According to Mr. Joseph Olatunji, a commercial specialist at the US Commercial Service, his unit serves as a veritable link in identifying firms in Nigeria and provide legitimacy to their association with business associates in US. He commended the initiative of Kofa International Company of US whose president, Mr. Ganiyu Ademola Dada, is the facilitator of not just the seminar, but also the export-import soft loan which M&T Bank will offer.

Mr Dada said the essence was to create an environment of using American fund to create wealth in Nigeria by providing low cost capital to Nigerians. He gave as good example Mr. Cosmas Maduka, president of Coscharis Motors who has been able to do good business with ABRO Industries Inc., a US-based firm which was then looking for ways of increasing its export sales of vehicle-care products to Nigeria in 2003. Today, Coscharis Motors, with $10-12 million in annual purchases, is the largest customer of ABRO Industries. One of the American firms offering equipment facilities is the Dredging Supply Company (DSC) Incorporated of US whose international sales director, Mr. Charles Sinunu made a power-point presentation of arrays of drilling and dredging equipment which Nigerian firms can get through the scheme unfolded at the seminar.

Representatives of medium scale firms in the construction, drilling and dredging industry were told that DSC would not only be selling equipment, but also providing the man-power needs for maintenance of such equipment which included Barracuda portable dredge, Marlin Underwater pump mining dredge, shark portable dredge among others.
Source : http://www.tribune.com.ng

Yar’Adua set to tackle Nigeria’s energy crisis

INDICATIONS are that the President-elect, Alhaji Musa Yar'dua, mighteffect a clean sweep of major government agencies and extra-ministerial department especially in the energy sector.

A source close to the president-elect told our correspondent on Wednesday that move was imminent and that it was meant to restore public confidence in most of the agencies.

He said that Yar'dua was keen on the step so as to give a new lease of life to those agencies and to ensure that it achieved the needed results in providing Nigerians with uninterrupted power supply.

He said that the policy change might affect institutions like the Nigerian National Petroleum Corporation and some of its subsidiaries and the Power Holding Company that is already being privatised.

Our source said that the plan was meant to bring about efficiency in the supply chain for gas used in electricity generation and the management of the power plants. Yar'dua had earlier said that he would declare a state of emergency in the power industry as part of his plan to achieve uninterrupted power supply to Nigerians.

The administration had two months inaugurated three power plants each in Papalanto in Ogun State, Omotoso in Ondo State and Geregu in Ogun State. Some others have been slated for inauguration towards the end of the year and early next year.

Our source said that the President-elect had, however, held initial discussions with some of the stakeholders in the industry on how to achieve his plan. When contacted on the development, the spokesperson for the President-elect, Mr. Ndu Ughamadu said that his boss would not want further discussion on the move, especially in the news media until after inauguration on May 29, 2007.
Source : http://www.tribune.com.ng/

Stag or ‘flation?

With skinny trousers and Mary Quant dresses, fashionable Americans are taking their cues from the 1960s this spring. For financial markets and central bankers the retro theme comes from a different, less pleasant, decade. With growth slow yet inflation stubborn, America is facing a weak echo of that 1970s scourge—stagflation.

The economy grew by only 1.3% at an annual rate in the first three months of the year, whereas the overall GDP deflator—the broadest output-based measure of price pressure—rose at an annual rate of 4%. The deflator for “core” personal consumption expenditures (PCE), which excludes fuel and food, rose more modestly in the first quarter. But this favourite inflation yardstick of the Federal Reserve was still outside its comfort zone.

By the standards of the 1970s, when inflation was in double digits and unemployment not far behind, today’s plight is hardly grave. Jobs are plentiful and price pressures, by historical standards, are low. But for today’s central bankers, determined to maintain their credibility as inflation-fighters, it is distressing all the same. Despite a year of sluggish growth, America’s underlying prices have been rising uncomfortably fast.

So far the central bankers have talked tough and done little. They have kept short-term interest rates steady at 5.25% since June, but have made clear that inflation is what worries them most. That bias is likely to be repeated at the Fed’s next policy-setting meeting.

Less obvious is what will happen over the next few months. Financial markets reckon the Fed will eventually fear recession more than inflation. The price of Fed and eurodollar futures suggests that the central bankers are very likely to cut rates by at least a quarter point in the second half of the year, with more loosening likely early in 2008.

That may not mean much. Financial markets have consistently overestimated the central bank’s willingness to cut rates in recent months. Look at the sources of inflationary pressure and it is hard to see the Fed dropping its guard. Energy costs have risen sharply (petrol prices are up 80 cents a gallon or more than 30% in the past three months). The dollar is down, hitting a record low of 1.366 against the euro on April 30. Virtually every measure of wage growth has been accelerating, although increases in productivity have been lacklustre.

Traditional danger signals, in short, all point one way. But they may be becoming less important. The statistical evidence suggests that, thanks to the central bankers’ credibility as inflation fighters, America’s underlying rate of price increases has become less vulnerable to transitory pressures, such as rising energy or food prices. The relation between unemployment and inflation has also weakened. And with profit margins fat, America’s firms have room to absorb higher wage costs.

In the Fed We Trust

What matters most, as several Fed governors have pointed out in recent weeks, are people’s expectations of future inflation, which in turn depend on their faith in the central bankers. Provided people believe in the Fed’s determination to keep inflation low, inflation expectations will stay low. That seems to have been the case. Most gauges of long-run inflation expectations, such as surveys of professional forecasters, have been relatively stable, at 2% or just above, for the Fed’s preferred inflation gauge. However, one measure—the Michigan consumer survey—has jumped a fair bit in April, thanks to higher fuel costs.

Despite the underlying inflation risks, a statistical quirk may push core inflation down in the coming months. Housing costs make up a large chunk of America’s inflation basket (almost 40% of the core consumer-price index and 20% of the Fed’s preferred measure). Since the statisticians lack a direct measure of housing costs for homeowners, they impute a cost based on rents. As the property bubble burst in 2006, more people decided to rent houses rather than buy. That pushed up the imputed cost of housing. Now the supply of rental properties is rising as beleaguered owners try to rent out their unsold flats. With vacancy rates high, rents may slow. March’s core PCE index was flat, bringing the 12-month increase down to 2.1%, barely above the Fed’s informal limit. It may fall further in the coming months. Exclude rents and it looks even better.

Less clear is whether core inflation at 2% would calm the central bankers enough for them to cut interest rates. One problem is that Fed officials have not agreed on what their optimal inflation rate is or how quickly they would like to reach it.

Some of the board’s more hawkish members would probably prefer core consumer inflation to be well within the central bank’s comfort zone of 1-2%. Others might be content with something closer to 2%. One governor, Frederic Mishkin, recently made clear that getting inflation below 2% would demand a reduction in inflation expectations that could be “difficult and time-consuming to bring about”.

Much will depend on just how weak the economy continues to be. So far, sub-par growth has not brought the higher unemployment that the central bankers expected and want. And their official forecast is that GDP growth will strengthen in the second half of the year.

The most recent evidence is mixed. Durable-goods orders suggest investment spending may be recovering from its recent funk. A widely watched index from the Institute for Supply Management showed manufacturing was unexpectedly strong in April. With a weaker dollar and perky growth in the rest of the world, exports are likely to grow fast.

But news from the housing market is getting ever gloomier. An index of pending home sales fell unexpectedly to its lowest level in four years in March. And, hit by higher fuel costs as well as falling house prices, consumers may finally be flagging. Americans cut their spending by 0.2% in real terms in March.

Add these mixed signals on growth to the uncertainties about inflation and the chances are that the Fed will simply do nothing for a good while yet. Unlike in fashion, in central banking the underlying trend can take a while to spot.
Source :http://www.financialexpress.com

Radler points the finger at Black in testimony

David Radler, the prosecution's star witness and once one of Conrad Black's closest associates, linked the former media magnate to the alleged fraudulent skimming of money away from Hollinger International Inc.

Prosecutors asked Radler, Black's long-time partner and second-in-command, if Black had instructed him that 25 per cent of all "non-compete" fees from the sale of the Chicago-based company's assets would be paid to Hollinger Inc., a Toronto-based firm.

"He confirmed that was the plan," Radler testified Tuesday, his second day on the witness stand at Black's trial in Chicago. "He said yes, and that was it."

Things weren't going so well for their publishing empire in the late 1990s, and so Hollinger International began selling off some of its U.S. community newspapers to pay off debt, he said.

"Conrad suggested (in a phone call) we insert ourselves in the non-compete process and I agreed," he said.

Non-compete agreements are monies paid by a purchaser to the seller, to ensure the seller doesn't open a competing publication in the same market.

Radler -- who has already pleaded guilty to one count of fraud and is testifying as part of a plea bargain deal -- said Black and the other three co-defendants used part of the tax-free non-compete payments as bonuses to themselves.

Prosecutors say by doing so and not telling the Hollinger International Inc. board, the defendants cheated shareholders of US$84 million.

Black, 62, and co-accused John Boultbee, Peter Atkinson and Mark Kipnis maintain they didn't break the law and disclosed the payments.

Radler had assumed the money would stay with Hollinger International. He admitted that he and Black had very few conversations about the impact on company shareholders, but testified they were allowed to do so provided they got approvals from the audit committee.

"I didn't know if it was legal or not legal. I didn't like the transaction. I should have said something. But I didn't. I regret that I didn't say anything," Radler said.

Lead prosecutor Eric Sussman had been expected to wrap up questioning Radler on Tuesday. But CTV's David Akin told Newsnet that prosecutors introduced numerous boxes of documents that they say include important evidence to the case.

These are the boxes that Conrad Black once tried to remove from his Toronto headquarters, an act caught on security video. "The prosecution says they contain cancelled cheques, e-mails," Akin reported. "All stuff that's important to the prosecution's case."

Black's defence lawyers convinced the judge they needed time to go over the documents. The trial adjourned at 1 p.m. EDT.

The defence might not start its cross-examination until late Wednesday or Thursday, which means Radler might not be done until early next week, he said.

Defence plans

Attorney Robert Kent wrote the initial indictment against Black. He said Radler is the whistleblower who can prove the prosecution's case against Black and the others.

"He's the only person from the inside, who, from the government perspective, can explain to the jury what the plan was and how the defendants went about implementing it," he said.

After court ended, Canadian defence lawyer Eddie Greenspan remarked to reporters, "I didn't come to Chicago to just sit there."

Black, when asked about Radler's testimony, said: "You gotta wait for the cross-examination. I won't comment until the defence has finished." He then added, "You may not recognize him."

Greenspan has said he looks forward to cross-examining Radler. He wants to paint him as a liar who agreed to testify against Black to save his own skin.

Chicago lawyer Hugh Totten, who has been following the trial, said Radler's testimony so far hasn't provided clear evidence of criminal acts.

"The jury has been waiting to hear from this guy for seven weeks (and) he's not selling it (his arguments) to the jury," he told The Canadian Press.

"What you have now is a lot of testimony out there that's really conflicted -- It's not clear that these people had criminal intent."

Totten expected an aggressive cross-examination of Radler.

Radler was calm in the witness stand on Tuesday, although he appeared rattled at times by the barrage of defence objections.

Black, who eyed Radler after he took the witness stand, spent most of Tuesday taking notes and whispering to his lawyers.

With a report from CTV's Joy Malbon and files from CTV's David Akin, The Canadian Press and The Associated Press
Source : http://www.ctv.ca

BAE plans 1.6 bln placing to fund Armor deal

British defense contractor BAE Systems Plc said on Tuesday it planned a share placing to raise around 750 million pounds ($1.5 billion) to help fund its acquisition of U.S. Armor Holdings Inc.

BAE announced on Monday its plan to expand its share of the lucrative U.S. military market with a $4.1 billion deal to buy the U.S. body amour and army truck maker for $88 per share.

"The number of ordinary shares to be sold in the placing and the placing price will be decided at the close of the accelerated bookbuilding period," BAE said in a statement on Tuesday.

Europe's largest defense contractor -- which makes Typhoon jet fighters, Nimrod reconnaissance planes and nuclear-powered submarines -- is building up its military business after selling its stake in planemaker Airbus last year.

BAE already makes about 40 percent of its annual sales of almost 14 billion pounds in the United States. It ranks as eighth biggest Pentagon contractor, taking the lead role on $4.7 billion of awards last year and also undertakes major sub-contract work for other firms like Lockheed Martin Corp. and Northrop Grumman Corp..

BAE shares closed at 446 pence on Friday to value the business at 14.3 billion pounds. London markets were closed on Monday.
Source : http://investing.reuters.co.uk

Goldman Sachs to acquire 100% of South Korea asset manager

Goldman Sachs said in a statement that the deal is expected to close later this year, subject to regulatory approvals.
However, it declined to reveal the acquisition price.

Macquarie-IMM Investment Management, which employs 22 professional investors according to its Web site, is 65% owned by Macquarie Investment Management and 35% owned by South Korea's IMM & Co.
"This acquisition is a significant milestone for GSAM in Korea, a growing financial hub with significant market potential," said Stephen Fitzgerald, head of GSAM International in the statement.
"By leveraging our global and local expertise, GSAM aims ultimately to deliver the best client service and product offerings to become the pre-eminent asset manager to institutions, government agencies and investors in Korea and in turn, one of the leading asset managers in the Asia region."
Macquarie-IMM, with about KRW10 trillion assets under its management, is a boutique investment manager providing investment products to corporate, institutional and mutual fund clients in Korea.
-Edited by Rosalyn Lim
Source : http://www.marketwatch.com

Challenges ahead as ADB seeks to redefine itself

With 1.9 billion people in Asia living on $2 a day, the Asian Development Bank faces tough challenges to balance its mission to help the poor and the need to better serve a growing number of middle-income countries.

Winding up its 40th annual meeting on Monday, the Manila-based agency will hear more from its governors on what its new role should be in a region which experts say will account for 45 percent of global growth by 2020.

Some of the ADB's bigger shareholders said on Sunday that reducing poverty should remain its main focus, while more efficient use of energy was needed as environmental degradation spread across the region and the world.

One focus of the meeting in Kyoto, western Japan, has been a report by a panel of experts on the future of the ADB. The report will be the basis for debate on the agency's future role, priorities and strategies to keep pace with a changing economic environment in the region.

The development body has 67 members, ranging from struggling Bangladesh and Afghanistan to booming China and India, and powerful donors such as Japan and the United States.

The panel of experts, envisaging a dramatically transformed Asia by 2020, said the "New ADB" will need to focus more on inclusive and more environmentally sustainable growth, regional integration, and technology and knowledge management.

REDUCING POVERTY

"It is abundantly clear that the nature of investment demand is changing rapidly, which is an indication of the inherent strength and resilience of Asian economies," Subba Rao, head of India's delegation, told the meeting on Monday.

Though the report stresses the need to care for the region's poor, delegates from some developing countries expressed concerns that the poor could be left behind.

The United States, the largest shareholder along with Japan, and some industrialised nations said the ADB should not lose sight of its goal of reducing poverty.

"We are concerned that a 'two-bank model' is emerging in some thinking," Christopher Pearce, head of Australia's delegation, told the meeting on Sunday.

"This could see Asian Development Fund countries relegated to lesser importance than their more prosperous neighbours," he said.

The ADB aims to complete a review on how to set the course for strengthening Asian economies and itself by the next annual meeting in Madrid, Spain.

A decade after financial turmoil engulfed the region, Asian economies have recovered sharply, boosting trade with rest of the world and accumulating massive foreign exchange reserves.

Per capita income in developing Asia, in real terms, grew from less than $170 in 1967 to over $1,000 in 2005.
Source : http://www.alertnet.org

In contest for LaSalle, reported bidder banks on experience

Last Wednesday, Citizens Financial Group Inc. finished rebranding 10 former branches of Lisle-based GreatBanc Inc. as Charter One Bank.

In its announcement, the Providence, R.I.-based parent of Charter One pointed out that GreatBanc is the latest of 30 "successful" acquisitions it has made since 1998, with all conversions completed on or ahead of schedule.

Now Citizens could face one of its biggest integration tests yet.

A consortium led by its owner, Royal Bank of Scotland Plc, reportedly made a $24.5 billion offer over the weekend for LaSalle Bank, Chicago's No. 2 bank, in a bid to expand its Windy City presence. The deal would make RBS the market share leader in Chicago-area deposits, deposing JPMorgan Chase by a slim margin.

The offer by the RBS group would trump a $21 billion bid that Bank of America made on April 22 for LaSalle, which is owned by Amsterdam-based ABN Amro.

ABN had set a Sunday night deadline to accept higher offers for LaSalle.

But not even that will be the end of it, because Bank of America would still have five days to make a counteroffer.

"We have a binding contract and intend to take all necessary steps to protect our legal rights," a Bank of America spokesman said Sunday.

Representatives from Royal Bank of Scotland and ABN declined to comment Sunday.

Charter One has been trying to beef up its Chicago presence but has been less efficient in picking up market share than LaSalle, despite having about the same number of branches.

LaSalle has about 140 Chicago-area offices and market share of 14.1 percent. Charter One, with about 130 branches, is tied for fifth with Chicago-area market share of 3.18 percent, having completed in February its GreatBanc purchase. GreatBanc had 64,000 customer accounts, 10 branches and 14 ATMs in Cook, Will and McHenry counties.

LaSalle also operates 260 offices in Indiana and Michigan. A deal for LaSalle would springboard Charter One from fifth in the Detroit market, with 6.22 percent market share, to first, with a combined 29.2 percent.

The future of the LaSalle name, which has a 67-year history in Chicago, is uncertain should RBS take it over. But the name would definitely be mothballed if Bank of America wins the bidding contest. Bank of America, the United States' second-biggest bank, has a strategy of operating under its own brand name.

RBS, in contrast, has shown a willingness to operate under more than one brand. In the United States, Citizens does business primarily under two monikers, Citizens and Charter One.

But some question whether RBS would want two brands – LaSalle and Charter One – competing against each other in the same market.

Citizens has more than 1,600 branches, about 3,100 ATMs and more than 25,000 employees. It has branches in 13 states, as well as non-branch retail and commercial offices in about 40 states, and is the nation's eighth-biggest bank. RBS is one of the world's 10 biggest banks.

An acquisition of LaSalle by either Bank of America or RBS will likely result in layoffs. ABN, including LaSalle, currently has about 8,700 Chicago area workers, while Bank of America and Charter One have 3,700 and 1,500, respectively.

Bank of America has already said it sees potential to cut costs at LaSalle by as much as 50 percent, suggesting widespread job reductions.

RBS' bid for LaSalle comes about two weeks after London-based Barclays Plc announced a $88 billion for ABN. As part of the deal, Bank of America would purchase LaSalle for $21 billion.

In what's turning out to be biggest takeover ever for a financial services company, RBS and two other European banks only days later indicated that they would pay about $98 billion for all of ABN.

Then, last Thursday, a Dutch court granted a request from a shareholder group and blocked the sale of LaSalle to Bank of America, saying it was "unacceptable" for ABN to sell LaSalle without shareholder approval.

On Friday in a U.S. District Court in New York, Bank of America sued ABN, seeking to prevent it from negotiating to sell LaSalle to other buyers. It claimed it "stands to sustain billions of dollars of foreseeable monetary damages" and is seeking monetary damages against ABN. ABN assured it that no shareholder vote would be needed under Dutch law to complete the purchase, the lawsuit said.
Source : http://www.chicagotribune.com

Call for Qantas directors to resign

The $11-billion private equity bid for Qantas is effectively dead this morning after the Takeovers Panel refused to hear a last minute appeal.

In what's most likely a final and fatal blow, the panel rejected an application to allow a late acceptance from a big US investor that would have extended the world's largest airline buyout by two weeks.

As our Business Editor Peter Ryan reports, today's focus is likely to be on Qantas' share price and calls for the airline's board to be sacked.

PETER RYAN: Whether it was confusion, poor communication or a miscalculated gamble, what counted in Airline Partner's bid for Qantas was a simple deadline.

And when that critical moment passed on Friday night the consortium itself put up a white flag, but hastily lowered it when a New York hedge fund manager agreed to hand over a five per cent slab of Qantas shares, taking acceptances to just over the required 50 per cent level.

According to APA (Airline Partners Australia), the razor thin margin, though late, should still be considered and appealed to the Takeovers Panel to make an exception.

But the panel was in no mood for excuses, and after meeting over the weekend told APA the deadline was final.

TAKEOVERS PANEL RULING (voiceover): The panel does not accept that Qantas shareholders have not had a reasonable opportunity to participate in the offer, or that a single shareholder failing to deliver its acceptance by the close of the offer has denied shareholders a reasonable opportunity to participate in the offer.

PETER RYAN: The decision to block APA's appeal came as no surprise, according to long time Qantas watcher Brent Mitchell of Shaw Stockbroking.

BRENT MITCHELL: This was seven hours late. If it was a day late, would it be allowed to be approved? Two days late? It just opens up a whole Pandora's box that I don't think the Takeovers Panel would want to enter into.

PETER RYAN: In essence, the Takeovers Panel appears to be saying that simply because one big sophisticated investor from the United States misses a deadline, that's no excuse. Do you agree with that ruling?

BRENT MITCHELL: Look, I agree with that especially as APA themselves made a great point of saying that the bid would be final as at that time, and no late acceptances would be processed. So, it's very much what they said would happen and they've been forced to stick by it.

PETER RYAN: While APA says it will seek a review of the panel's rejection of the appeal, the real focus of the failed bid is turning to the future of the Qantas board.

MARCUS PADLEY: I think they have one, put a lot of institutions offside and two, they have also almost lost their independence as representatives of the shareholders.

PETER RYAN: Marcus Padley of the investment newsletter Marcus Today says some Qantas directors need to go.

MARCUS PADLEY: I think they've compromised themselves, and I think there would have to be some board changes, quite honestly.

PETER RYAN: The Chairman of Qantas, Margaret Jackson, has been perhaps the most vocal in urging shareholders to take the bid. Does she need to step down?

MARCUS PADLEY: She in the person in particular who has made really very public comments about some managers who did not accept the bid, and I think yeah, she is very much the person in the firing line along those lines.

PETER RYAN: What could be the final nail in the coffin of the Qantas bid has been welcomed by staff, unions and politicians concerned about issues such as national interest.

Peter Somerville of the Air Pilots Association expects another bid soon. But he remains critical of a strategy that focused on management rewards rather than the future of staff.

PETER SOMERVILLE: We would still like to see any future bid or new owners for Qantas take the staff with them. The pilots and the other staff of Qantas want to be part of a growing, profitable and strong Qantas. Not just spoken of as human resources, but part of the company.

PETER RYAN: Qantas last night issued a statement, acknowledging the bid from Airline Partners had failed. The airline's shares are now expected to go into a trading halt this morning amid expectations of a heavy sell off, while the market assesses the fallout of an audacious takeover bid gone wrong.

TONY EASTLEY: Business Editor Peter Ryan.

And AM asked for an interview with Qantas Chairman Margaret Jackson but was told she's unavailable.
Source : http://www.abc.net.au

Call for Qantas directors to resign

The $11-billion private equity bid for Qantas is effectively dead this morning after the Takeovers Panel refused to hear a last minute appeal.

In what's most likely a final and fatal blow, the panel rejected an application to allow a late acceptance from a big US investor that would have extended the world's largest airline buyout by two weeks.

As our Business Editor Peter Ryan reports, today's focus is likely to be on Qantas' share price and calls for the airline's board to be sacked.

PETER RYAN: Whether it was confusion, poor communication or a miscalculated gamble, what counted in Airline Partner's bid for Qantas was a simple deadline.

And when that critical moment passed on Friday night the consortium itself put up a white flag, but hastily lowered it when a New York hedge fund manager agreed to hand over a five per cent slab of Qantas shares, taking acceptances to just over the required 50 per cent level.

According to APA (Airline Partners Australia), the razor thin margin, though late, should still be considered and appealed to the Takeovers Panel to make an exception.

But the panel was in no mood for excuses, and after meeting over the weekend told APA the deadline was final.

TAKEOVERS PANEL RULING (voiceover): The panel does not accept that Qantas shareholders have not had a reasonable opportunity to participate in the offer, or that a single shareholder failing to deliver its acceptance by the close of the offer has denied shareholders a reasonable opportunity to participate in the offer.

PETER RYAN: The decision to block APA's appeal came as no surprise, according to long time Qantas watcher Brent Mitchell of Shaw Stockbroking.

BRENT MITCHELL: This was seven hours late. If it was a day late, would it be allowed to be approved? Two days late? It just opens up a whole Pandora's box that I don't think the Takeovers Panel would want to enter into.

PETER RYAN: In essence, the Takeovers Panel appears to be saying that simply because one big sophisticated investor from the United States misses a deadline, that's no excuse. Do you agree with that ruling?

BRENT MITCHELL: Look, I agree with that especially as APA themselves made a great point of saying that the bid would be final as at that time, and no late acceptances would be processed. So, it's very much what they said would happen and they've been forced to stick by it.

PETER RYAN: While APA says it will seek a review of the panel's rejection of the appeal, the real focus of the failed bid is turning to the future of the Qantas board.

MARCUS PADLEY: I think they have one, put a lot of institutions offside and two, they have also almost lost their independence as representatives of the shareholders.

PETER RYAN: Marcus Padley of the investment newsletter Marcus Today says some Qantas directors need to go.

MARCUS PADLEY: I think they've compromised themselves, and I think there would have to be some board changes, quite honestly.

PETER RYAN: The Chairman of Qantas, Margaret Jackson, has been perhaps the most vocal in urging shareholders to take the bid. Does she need to step down?

MARCUS PADLEY: She in the person in particular who has made really very public comments about some managers who did not accept the bid, and I think yeah, she is very much the person in the firing line along those lines.

PETER RYAN: What could be the final nail in the coffin of the Qantas bid has been welcomed by staff, unions and politicians concerned about issues such as national interest.

Peter Somerville of the Air Pilots Association expects another bid soon. But he remains critical of a strategy that focused on management rewards rather than the future of staff.

PETER SOMERVILLE: We would still like to see any future bid or new owners for Qantas take the staff with them. The pilots and the other staff of Qantas want to be part of a growing, profitable and strong Qantas. Not just spoken of as human resources, but part of the company.

PETER RYAN: Qantas last night issued a statement, acknowledging the bid from Airline Partners had failed. The airline's shares are now expected to go into a trading halt this morning amid expectations of a heavy sell off, while the market assesses the fallout of an audacious takeover bid gone wrong.

TONY EASTLEY: Business Editor Peter Ryan.

And AM asked for an interview with Qantas Chairman Margaret Jackson but was told she's unavailable.
Source : http://www.abc.net.au