Nokia is expanding its business by acquiring the world’s leading provider of mapping software, Navteq. Nokia announced that the company is ready to but Navteq for about US$8.1 billion in cash. One month ago, to grab Navteq and boost its software and services, Nokia was ready to pay $78 in cash for each Navteq share, 34 percent premium over Navteq’s share price, but virtually the closing price is US $77.97 per share. The acquisition will help Nokia to improve its mapping services in its mobile phones.
Nokia will have to compete with companies like Apple, whose iPhone comes with navigational software from Google; Garmin Ltd., which makes a wide range of satellite navigation gear used in cars, boats, planes and handheld devices. They are customer of Navteq; and TomTom, which agreed in July to buy Tele Atlas NV, which currently provides mapping service to Nokia. Nokia stated that the boards of both companies have approved the purchase, which is expected to close in the first quarter of 2008. Nokia will obtain the necessary financing through a mix of cash and debt. The acquisition of Navteq may be a defensive mode for Nokia, so that other companies can not buy it. Other companies like Microsoft, Yahoo and Google are increasing their map-based services.
Johnson & Johnson is reducing its 4,820 employees worldwide, as it’s facing stiff pressure for patent expirations on two important drugs over the next two years, which can erode profits worth million dollars. The cut would amount 3 to 4 % of the company’s global work force of 120,000 people. Company also predicted that the restructuring would entail pretax charges of $550 to $750 million in the second half of 2007 and to better integrate its Cordis business company would also consolidate certain operations at the pharmaceuticals segment. Apart from it, J&J will streamline companywide functions such as human resources, information technology and finance. New Brunswick, N.J-based Johnson & Johnson is operating from 57 countries, worldwide, however, it declined to elucidate, exactly where the cuts would take place. Company gives indication that it would close a Mountain View, Calif., operation and eliminate the jobs of 600 of the people who work there and additional 200 people there will be relocated. J&J is hoping to meet its 2007 profit targets of $4.02 to $4.07 per share, as company feels that the job cuts and other streamlining efforts would save $1.3 billion to $1.6 billion a year. News pushed J&J’s shares by $1.21, or 2 percent, to $61.28. Pharmaceutical company lost its customers confidence, when federal health advisers and medical researchers have raised safety questions about drug-coated stents. Research has alleged that most patients with drug-coated stents face a higher risk of heart attacks and death than patients with bare-metal stents, and that all stent users have an increased risk of blood clots. Report shrinks the sale of such stents, as earlier this month Johnson & Johnson discloses that its sales for Cypher drug-coated stents in US dropped 41 percent. Image Via: New York Times
Consumer products maker, Procter & Gamble (PG) posted 19% profit in the fourth quarter, due to cost controls and strong sales of new Gillette razors. The company earned $2.27 billion, or 67 cents per share, compared to $1.9 billion, or 55 cents per share, a year earlier. Quarterly sales rose 8% to $19.27 billion from $17.84 billion, led by surging demand for its blades, razors, fabric, home care, and health care. Company registered 5% increase in its whole sales, while its overseas sale rose 3%. Newly launched, Gillette Fusion shaving system and Venus Breeze shaver for women posted strong sales, whereas sales in its blades and razors increased by 18% to $1.4 billion. Meanwhile, new products such as Tide detergent, Crest toothpaste and Olay skin care experienced growth and pushed company’s sales up by 12% to $76.5 billion for its fiscal year, from $68.2 billion. After posting a lucrative quarter, PG is planning to repurchase $24 billion to $30 billion of its stock over the next three years at a rate of $8 billion to $10 billion per year. A.G. Lafley, P&G’s chairman and chief executive, said: Our strong cash generation results and our confidence in the business outlook have enabled us to substantially increase our share repurchase commitment for the next three years Buoyant with the result, P&G is expecting overwhelming earning for the next fiscal year. It expects earnings per share to rise by $3.44 to $3.47. For the current quarter, the company forecast earnings per share of 88 cents to 90 cents, whereas Wall Street expects profits of 91 cents a share. For the coming time, the company expects a tough competitive environment, as its rivals, such as Colgate-Palmolive Co. and Kimberly-Clark Corp., are spending on their restructuring savings to promote their brands. However, to counter its rival, P&G is funding its plans internally instead of taking restructuring charges. Image Via: Mercury-News
This was one industry Vijay Mallya had not dabbled yet. The world’s oldest and 2nd largest scotch-whisky brewer has been a politician, is into aviation business, collects vintage cars, has business interests in racing, horse breeding, hotels etc. Now after promoting a preimium airline and acquiring a big stake in a low budget airline, Mallya (51) wants to enter into high-end retail business. The flamboyant Indian tycoon, Vijay Mallya’s UB Group, will hold a 55 percent stake in UB City – the Collection, a Bangalore shopping mall exclusively retailing luxury brands. Mallya the self-styled king of good times, has already roped in France’s Louis Vuitton to be one of the anchor tenants of the mall, to be located in downtown Bangalore. The mall will be thrown open to public in early 2008.
The project was made public early this week when Vijay Mallya along with Irfan Razack, chairman and managing director of Prestige group which is partnering with UB group in promoting the mall. It has been purely driven by the vision of Mallya, who calls it a value proposition, said Irfan Razack, whose company Prestige Constructionois will hold the remaining 45% stake in the venture. It will be an iconic landmark of Bangalore — like what the Petronas Towers is to Kuala Lumpur. It will be an opportunity to tap high networth individuals. said Razack adding that the cost of the project will be around Rs.300 crore (US$ 76.26 million). Other brands who have signed on for space in the 1.5 million square feet fully airconditioned mega mall are Gucci, Fendi, Mont Blanc, Van Cleef & Arpels, Zegna, Rolex and Omega. The Venetian-style project will include a 250-room JW Marriot hotel.
Bidding war for ABN Amro is not ending even after posting a higher bid. Mishmash, in and outside the Dutch bank, is adding worries to RBS-led consortium and Barclays. RBS-led consortiums’ vow to acquire ABN Amro will shape today as Fortis shareholders will vote on $96.8bn Dutch bank bidding, and on the other side, Barclays has formally launched its $89 billion or 13.15 euros in cash and 2.13 new Barclays’ shares for each ABN share bid for it. For RBS-led consortium, the Fortis vote is a pivotal factor, as they will accumulate $17.8 billion for funding the deal. If RBS-led consortium succeeds in acquiring ABN Amro, the Belgian-Dutch Fortis would obtain the bulk of ABN Amro’s Dutch operations, and its wealthy private clients and asset management businesses worldwide. With Amro’s asserts, Fortis’s will add additional 4.3 % earnings per share by 2010, but board rule out any profit in short period. Fortis has dual-headquarters structure, therefore the vote will take place twice – first in Brussels in the morning and then in Utrecht, Netherlands, in the afternoon. Shareholders can vote in both, either, or neither, but both meetings must approve the share issue for it to go through. If shareholders approve the takeover and the share issue, analysts believe the consortium will almost certainly win ABN, but it could be a very close call. After valuing the Fortis’ worth, Barclays presents anew proposal, which is worth about 34.54 euros per share of ABN, at the current share prices and foreign exchange rates. Barclays’ offer memorandum will run from August 7 until October 4 and asserts that its deal is still attractive because it will provide greater growth in the long run, despite the lower value. Bid war has become acrimonious for claimers as they are using all possible, fair and unfair means to acquire Dutch bank. Although, ABN Amro has pulled its support from Barclays, yet it could not part itself away from it as Amro’s chief executive Rijkman Groenink has urged Fortis shareholders to vote against the RBS-led consortium’s takeover, alleging that shareholders will lose at least 25% face value of its shares. RBS countered the comment by alleging it as a “bizarre” coming after ABN’s withdrawal of its recommendation for the lower Barclays takeover offer. After pulling its support from Barclays, ABN Amro has said it will advise its shareholders as to which suitor it prefers at a meeting to be scheduled by Sept. 27.
After months of ruckus, Imperial Chemical Industries (ICI) has accepted $16.32bn (£8bn) Akzo Nobel’s indicative offer. ICI accepted Dutch chemicals group’s offer, after it agreed to sweeten it to £6.7 from £6.5 a share over the weekend, as it came after a period of tense negotiations between the two companies and its advisers. Akzo will finance the deal by selling its adhesives and electronic materials businesses to Henkel. After gaining support from the ICI, Akzo is now carrying out preliminary offer for the mutual business by August 9. Initially, Akzo had approached ICI with £6-a-share indicative proposal, but the ICI board immediately turned it down as they were hoping the successful deal to be near £7 a share. Later, Dutch chemicals group increased the offer with 50 basic points and came up with £6.5 a share, but was also rebuffed by the board. The board’s decision baffled some ICI shareholders as they assumed it low priced, which goaded the possibility of counter proposal. Dow Chemical, the US chemicals group, is weighting a possible rival to counter the Akzo’s bid, which has already hired investment bank Lazard to advise it on its “strategic options” for ICI. Above all, Dow Chemical has also shown its interest in Akzo. Amid all these, the win-win situation for the Akzo is not certain, however investors have added panic showing apprehensions that Akzo is overpaying for ICI. To move ahead with the deal, both Akzo and Henkel need shareholders’ approval. Some of its shareholders have pitched against the deal as TPG-Axon, which owns around 3.5% of Akzo, has cleared its stance that the company will not support the deal bona-fide. Nobody came forward to comment, however it’s clear that without shareholders’ clearance, the deal can’t be accepted. Image Via: Telegraph
Here’s a shocker(or is it really): A $300 million, super-sized luxury airplane, bought by a Saudi Arabian billionaire. Once done, the Airbus A380, the world’s biggest passenger plane, will be a “flying palace” for Prince Alwaleed bin Talal, the manufacturer announced Monday. Airbus SAS would not give a specific price tag for the VIP double-decker jet, with its football field-length wings, saying only that it would cost more than the aircraft’s list price of $320 million. That doesn’t even include the money the prince will spend to custom fit the nearly 6,000-square foot plane to include whatever he wants. The options include private bedrooms, a movie theater or even a gym with a jacuzzi. He’ll also need a flight crew of about 15 to operate the luxury liner. The A380′s upper deck extends along the entire length of the fuselage. This allows for a cabin with 50% more floor space than the next largest airliner, the Boeing 747-400,and provides seating for 525 people in standard three-class configuration or up to 853 people in full economy class configuration. Al-Waleed bin Talal s a member of the Saudi Royal Family, and an entrepreneur and international investor. He has amassed his fortune through investments in properties and stocks. As of 2007, his net worth is estimated at US$20.3 billion and he is ranked by Forbes as the 13th richest person in the world, and the richest Arab. He has been nicknamed by Time magazine as the Arabian Warren Buffett. “Prince Alwaleed is the first, and so far the only customer of this aircraft,” said David Velupillai, the spokesman of the Airbus, which announced the luxury order at the Dubai International Airshow. It’s all just spending cash for bin Talal — Citigroup Inc.’s biggest individual shareholder and the world’s 13th richest person with assets around $20 billion.
Uncertainty prevailed over the fate of International Bank of Qatar’s (IBQ) takeover bid for Bahrain’s Ahli United Bank as IBQ confirmed the acquisition negotiation has stalled. The main reason of blocking further advancement of the talks are centered around the fact that IBQ is accusing AUB for their unbending attitude as shareholders were insisting for the third party, rather than the Qatari firm, to have access to its books. By imposing such ban, it’s clear that Bahrain’s company doesn’t want to merge with the Qatari firm, as without knowing the entire financial system, it’s impossible to evaluate the financial condition of the firm, which apparently makes IBQ unable to predict the takeover amount. AUB shareholders also seek to limit the viability and scope of the deal to one month from the three months, which added another jitter to IBQ. Protecting shareholders’ vows, AUB second-biggest shareholder, Tamdeen Investment Co. said that the company is septic about the deal and assures that if company will find any sign of deal’s possibility, shareholders will allow to open its books to IBQ. International Bank of Qatar had made proposal in July, in which it offered $2.25 per share in cash and was eying for 55 percent shares. The offer valued the takeover at as much as $6.1 billion. Image Via: Reuters
A US federal judge overturned a jury verdict ordering Microsoft to pay Alcatel-Lucent 1.5 billion US dollars for infringing on the French firm’s patents related to a digital music technology. The US District Judge Rudi Brewster in San Diego ruled that the jury’s damage award could not stand since one of the two patents was not infringed. Brewster further ruled that the second disputed patent was co-owned by a German research institute and Microsoft had a valid license. The music-compression technology was developed in AT&T’s Bell Labs, which later on turned out to be a part of Lucent, and was co-owned by Germany firm Fraunhofer. Microsoft had a licensing agreement with that company to use its technology. The jury had earlier ruled in February that Redmond, Washington-based Microsoft must pay $1.52 billion for violating Paris-based Alcatel’s rights to the inventions. Alcatel-Lucent’s lawsuit against Microsoft had marked the largest patent verdict in US history. The lawsuit centered on origins of the MP3 standard, a digital audio encoding format that was developed nearly two decades back. The two sides argued in court in July over whether the verdict should stand. The patent dispute started with a 2003 lawsuit filed by Lucent Technologies, which was acquired last year by Alcatel. The complaint alleged that Microsoft customers Dell Inc. and Gateway Inc. have infringed 15 patents related to the MP3 technology for encoding and decoding audio files. Alcatel-Lucent had contended in the court that technology used to encode and decode digital audio files in Media Player infringed on two of its patents. On the other hand, Microsoft maintained that it had paid Munich-based licensing firm Fraunhofer-Gesellschaft 16 million US dollars to legally use the disputed MP3 technology. Alcatel-Lucent had also argued that Fraunhofer had no right to license the MP3 technology, however, the federal judge said in the filing that the right to sell the intellectual property in question extended to both Lucent and Fraunhofer. Moreover, the judge also noted that ownership of the second disputed patent was questionable, and a retrial may be needed to resolve that matter. The recent ruling overturning the earlier judgment is no doubt delivered a major setback to Alcatel-Lucent. Reacting to the judgment, Alcatel-Lucent instantaneously said it intended to appeal the ruling. Commenting over the ruling, Alcatel-Lucent spokeswoman Mary Lou Ambrus has said, ‘shocking and disturbing, especially since — after a three-week trial and four days of careful deliberation — the jury unanimously agreed with us, and we believe their decision should stand’. Microsoft general counsel Brad Smith speaking over the development said, ‘The ruling is a victory for consumers of digital music and a triumph for common sense in the patent system.’ Microsoft has said in its statement that there will be no new trial unless the French networking company appeals the decision to the US Federal Circuit Court and succeeds in overturning the San Diego court’s ruling. It further said that even if that is the case, damages from the original ruling will not be reinstated. The recent riling on patent infringement has certainly brought relief to a number of other companies as the jury’s ruling had left other providers of hardware and software that support MP3 files vulnerable to claims from Alcatel-Lucent. However, Alcatel-Lucent seems to be all set to appeal in the higher court against the decision as its spokeswoman has said, ‘we still have a strong case and we believe we will prevail on appeal’.
The private equity owners of the world famous publisher, the Guinness Book of World Records have put up their business for sale and the tag says £60m. Hit Entertainment which also owns brand like Bob The Builder and Pingu, is owned by private equity company Apax. It was brought five years back from Gullane Entertainment. Hit has also hired US investment bank Jefferies to advice on the sale. Guinness Book of World Records is just out with its 53rd edition and the books have been selling like pancakes in the light of Christmas Eve. Through the decades, Guinness has been known to keep an eye on the weirdest and the bizarre. Where the list of the records and record holders has been increasing the fate of Guinness hangs in middle!
