Hello Company

Most of us thought that the Yahoo-Microsoft saga is over while many were anticipating some covert tactics of hostile takeover of Yahoo by Microsoft. Proving both the groups wrong, the Yahoo-Microsoft saga has been revived from an unexpected quarter. Carl Icahn, the billionaire investor and activist shareholder has entered the picture with 50 million Yahoo shares worth over $1 billion in his kitty, in anticipation of acquiring a seat in the Yahoo board. Icahn wants to launch a proxy war that would eventually bring Yahoo to accept Microsoft’s offer for acquisition.

We might no longer see the Motorola mobile phones on the shop shelves as Motorola is considering quitting its mobile phone business. This might sound shocking news to many but to those aware of the financial condition of the American electronic company’s business will not be surprised by this move. Motorola’s mobile phone business is trailing behind the world leaders Nokia and Samsung with the company facing an 84% revenue loss in the last quarter of 2007.

The main reason of the slump in the mobile phone business is it could not compete with the cheap handsets especially from the Chinese manufacturers. The technology also is not suitable for multimedia activities demanded by the high-end users in America and Europe. By dissociating itself from the mobile phones business, Motorola will concentrate on its core business that includes radios, networking equipments and household electronics.

The US sub prime crisis could lead financial companies to significant losses to the tune of about $400 billion, according to an estimate by the US investment bank Goldman Sachs. The estimate by Jan Hatzius, the chief economist of Goldman Sachs, is higher than the level set by the Federal Reserve but in line with some of the recent independent forecasts.

The economist’s calculation is based on the estimate of investors cutting lending by $10 for every single dollar losses. Mr. Hatzius further predicted that following investment losses investors might have to reduce their lending by $2 trillion.

The macroeconomic consequence of the US mortgage market could be quite dramatic. The uncertainty and associated downward pressure on lending could lead to a substantial recession if the crisis continued for a year and to prolonged weak economic growth if the crisis subsists for over up to four years.

Another significant development following the sub prime lending crisis is that for the first time in several years the bond’s yield for the largest financial institutions exceeded the yield of the average company’s bond. Bond yield is considered a measure of the company’s default risks. Usually higher the risk, the higher the bond yield as the issuer of the bond has to offer investors more compensation for the risk.

This means that now big financial companies have to pay more for borrowing in the corporate bond market than the average financial institutions.

Source:bbc
Image:Economist

Parmalat SpA, the Italian dairy group that went broke about four years back, has reached a deal for an out-of-court settlement with the Italian bank Intesa Sanpaolo. The private arrangement between the two companies, which was announced on Sunday, is worth 327 million Euros ($469.52 million).

The food group also reached simultaneous arrangements with Cariparma and Biberbanca (both are banking companies). These arrangements are worth 83 million Euros and 3 million Euros respectively. The out-of-court arrangements will mark the end of all lawsuits between the companies.

Parmalat had sued the banks for their alleged role in worsening its financial problems that eventually led to the group filing for bankruptcy protection in 2003. The charges were more specifically applicable to the use of credit to conceal company’s financial difficulties. The collapse of Parmalat and the associated companies under 14 billion Euros of debt was Europe’s biggest financial scandals at that time. It cost dear thousands of people who had invested in company’s bonds.

No, despite its previous statement that it has “moved on” after being rebuffed by Yahoo!, in reaction to billionaire investor activist Carl Icahn’s request of taking over the Yahoo! board through hostile bidding, Microsoft remains as interested in acquiring Yahoo! as it was before. Microsoft has now disclosed that it was considering a deal with Yahoo!, which would not involve a full buyout of the company. Microsoft is keeping its fingers crossed. It is not willing to disclose the details of the new deal. It now remains to be seen what Jerry Yang does with the new deal.

The new deal is rather complex and would involve collaboration between Yahoo’s and Microsoft’s online advertising businesses without a complete takeover. It seems likely that Microsoft may later restart its merger negotiations, if the new deal succeeds. The time for the new discussion is crucial for both companies as Yahoo! is likely to announce its new partnership with Google sometime this week. With the Yahoo-Google partnership being subjected to antitrust scrutiny, any further collaboration with Yahoo! will not pay-off for Microsoft. To avoid any tussle with Carl Icahn, Yahoo! might decide to review its deal with Microsoft. The Microsoft-Yahoo saga is unfurling new dramas every day.

Image

Source: BBC

Google’s $3.1 billion purchase of DoubleClick stands amidst controversy as European Commission competition authorities refused to approve the deal.The commission, which rules on antitrust issues for the 27 countries in the European Union, said the merger raised competition concerns and required a more thorough review of its impact on the Internet advertising business.

‘We are obviously disappointed,’ Eric E. Schmidt, chief executive of Google, said in a statement. Saying the company would work with the commission, he added, ‘We seek to avoid further delays that might put us at a disadvantage in competing fully against Microsoft, Yahoo, AOL and others whose acquisitions in the highly competitive online advertising market have already been approved.’

DoubleClick is a company that develops and provides Internet ad serving services. Its clients include agencies, marketers (Universal McCann Interactive, AKQA etc.) and publishers who service customers like Microsoft, General Motors, Coca-Cola, Motorola, L’Oreal, Palm, Inc., Visa USA, Nike, Carlsberg among others.

Google announced on April 14, 2007 that it came to a definitive agreement to acquire DoubleClick for $3.1 billion in cash. The closing of the deal remains uncertain as several companies, including Yahoo, AT&T and Microsoft, have encouraged regulators to examine the deal.

Image

Source

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!

Source: Telegraph

Image credit: CLF

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.

Bindeez and Aqua Dots toys have been a big hit in the US, Australia, South Africa and several other nations. Recent reports claiming that they are contaminated with GHB - chemical linked to date-rape drug (a powerful sedative when swallowed) have compelled Chinese Authorities to stamp down on their exports.

The ban on exports closely follows the news that at least nine children in the US have fallen sick after swallowing the product. The craft toys consist of hundreds of brightly-colored beads that can be arranged as an artwork. Incidentally, Bindeez was named Australia’s Toy of the Year in 2007.

Sub-prime crisis in the US has taken its toll in the markets around the world. Several top American firms are facing some tough times. CEOs are bearing the brunt of investor’s ire. One such man Charles Prince - Citigroup’s top man who resigned on Sunday - might see some good come out of the bank’s huge losses.

The terms and conditions of his leaving the group have been made public. Price will manage a princely exit indeed. On his way out he will pick up $95 million in compensation. The breakup of this exit deal is as follows: $16.05 million in deferred stock, $10.7 million of restricted shares, $1.28 million worth of options and a whopping $12.3 million bonus. This is in addition to the $53 million of Citigroup shares that he already owns.