Hong Kong picks its new chief executive today, after a campaign marked by personal scandals, public discontent over a widening wealth gap and protests for greater democracy.
A 1,193-member committee of billionaires, including Hong Kong
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U.K. Chancellor of the Exchequer George Osborne will need to claw back about 5 billion pounds ($8 billion) a year, largely from the wealthy, to fund giveaways he
With more money sitting in their bank account than some companies are worth, Silicon Valley giant Apple finally decided it was time to pay a dividend.
Tim Cook, CEO of the maker of iPhones, iPads, iPods and Mac computers announced Monday the company would be using some of its $98 billion cash on hand to pay out a dividend for the first time since 1995, as well as buy back stock.
In an industry where paying out a dividend is sometimes seen as a sign that a company is past its innovative best, Cook insisted the $2.65 quarterly dividend will still leave plenty of cash for the company to develop new products, as well as giving it a war-chest to use for takeover opportunities.
News Corp. executive James Murdoch acknowledged Wednesday that he could have done more to investigate the phone hacking scandal that has rocked Britain and threatened his place as the likely heir to his father’s global media empire.
Murdoch’s admission came in a detailed, seven-page letter written to British parliamentarians investigating the scandal. In it, he repeated his insistence that he knew nothing about the criminality which had taken place at the now-defunct News of the World tabloid newspaper, saying that the extent of the wrongdoing had been hidden from him by members of his staff.
“It would have been better if I had asked more questions,” Murdoch said. “However the truth is that incomplete answers and what now appear to be false assurances were given to the questions that I asked.”
Murdoch has already appeared twice before lawmakers, who grilled him in detail about what he knew about the phone hacking scandal and alleged attempts to bury evidence of any illegal activity.
Murdoch was the one who signed off on a massive settlement to one of the first known victims of the practice, a deal which the company’s former in-house lawyer has acknowledged was aimed at keeping a lid on the scandal.
But the cover-up failed after the Guardian and The New York Times revealed that phone hacking was endemic at paper, an expose which has led to dozens of arrests and resignations. Murdoch’s father, Rupert, was forced to close the News of the World following an advertiser boycott. Lawmakers are now sifting through the scandal’s fallout in an effort to find out who was responsible.
In a separate development, police said that a 51-year-old man has been arrested Wednesday on suspicion of intimidating a witness.
Scotland Yard said the man taken into custody Wednesday had been previously arrested on April 5, 2011. Police did not identify the man, but The Associated Press had identified a man arrested that day as former News of the World reporter Neville Thurlbeck, who was 50 at the time.
Thurlbeck did not immediately return a text message seeking details about the arrest. His law firm had no immediate comment.
Wednesday’s developments follow the arrests Tuesday of six other suspects, including former News International executive Rebekah Brooks.
News International, the British newspaper arm of News Corp., has made cash settlements to 58 victims, including celebrities, politicians and the families of crime victims.
Consumer sentiment improved a tad in February to rack up a year high as Americans became more confident about the economy’s resilience, a survey released on Friday showed.
The Thomson Reuters/University of Michigan’s final reading on the overall index on consumer sentiment came in at 75.3, edging up from 75.0 the month before. It was the highest level since February 2011.
It surpassed economists’ expectations of 73.0 and recovered from a decline to 72.5 in February’s preliminary reading.
“It is not that surging oil prices, instability in the Mideast, the European crisis or uncertainties about future tax and spending policies could not ultimately derail the recovery, but that consumers expect the pace of overall economic growth to continue to slowly restore lost jobs despite these potential problems,” survey director Richard Curtin said in a statement.
The survey’s barometer of current economic conditions eased to 83.0 from 84.2, but the survey’s gauge of consumer expectations also rose to its highest level in a year at 70.3 from 69.1.
A third of consumers spontaneously reported hearing about more job opportunities, the highest proportion ever recorded by the survey.
But consumers’ outlook for the economy and job growth was more positive than their views on their own finances. Improving finances were reported by 27 percent of respondents, down from 29 percent in January.
The survey’s one-year inflation expectation held steady at 3.3 percent, while the survey’s five-to-10-year inflation outlook rose to 2.9 percent after sitting at 2.7 percent for four months.
The European Central Bank is considering using its bond holdings to bolster Greece
Solutia’s prowess in developing chemicals found in everything from car tires to office windows throughout the globe drew the interest of Eastman Chemical Co. last summer. Now it’s buying the Town and Country-based company in a deal worth $4.7 billion.
Eastman, a chemical manufacturer based in Kingsport, Tenn., is acquiring Solutia for $3.4 billion in cash and stock, and assuming $1.3 billion in debt. The deal is set to close in mid-2012, pending shareholder approval.
Solutia makes specialty films and chemicals for the automotive and architectural industries, and employs 3,400 people worldwide, including 450 locally.
With $2.1 billion in revenue last year, Solutia is one of the largest public companies based in the St. Louis region.
Solutia has two local facilities - the Town and Country headquarters, with 300 employees, and a Sauget manufacturing plant where 150 people work.
A Solutia spokeswoman said there was no information yet on the fate of local workers, though headquarters jobs are often a cost-cutting target in mergers. On Friday, Eastman said the headquarters of the combined companies will be in Kingsport.
Menawhile, the Sauget plant - which makes chemicals for tire manufacturing - runs 24 hours a day, seven days a week.
Sauget Mayor Rich Sauget said he spoke with Solutia employees as recently as last week who were unaware that a sale was in the works.
“They mean a lot to us,” Sauget said of Solutia’s local workforce. “We hope, whoever comes in, that they see an opportunity with Solutia and their properties here.”
Despite the uncertainty, Eastman won’t be leaving the region, Solutia’s chairman, president and CEO Jeffry Quinn predicted.
“I certainly would expect the combined company to have a significant presence in St. Louis for some time,” Quinn said in an interview with the Post-Dispatch. Quinn, who joined Solutia in 2003, will leave the company once the sale finalizes.
In the sale announcement, the companies did not disclose how much Quinn stands to gain when the deal closes. However, Solutia’s most recent proxy statement stated last year that Quinn’s compensation, including cash severance and stock options, would have totalled $21.6 million based on the company’s stock price at the end of 2010.
Under the deal, Solutia shareholders will receive $22 in cash and 0.12 shares of Eastman stock for each share of Solutia that they own. Based on Solutia’s closing price Thursday, Eastman offered a 42 percent premium for Solutia’s stock.
Eastman, which had $7.2 billion in revenue last year, plans to fund the cash portion of the buyout with available cash and debt.
After the early morning announcement, Eastman’s stock soared. Based on Friday’s closing prices, Solutia shareholders will receive cash and stock valued at $28.05 for each Solutia share.
Meanwhile, Solutia’s stock jumped more than 41 percent after the sale was announced, closing Friday at $27.52 a share.
Eastman expects about $100 million in annual cost savings by the end of 2013, as the acquisition is expected to help lower costs and help the company purchase raw materials at lower prices payday loans. The company said the deal will immediately boost earnings.
Global push
The original Monsanto Co. spun off Solutia in 1997 in an effort to focus on drugs and agriculture. Solutia, burdened with heavy debt loads and retirees’ benefits dating before the spin-off, floundered as raw material prices rose and environmental legal costs increased.
In 2003, Solutia filed for Chapter 11 bankruptcy protection. It didn’t emerge out of bankruptcy until 2008.
During the years in bankruptcy, Solutia grew its international reach while divesting underperforming or non-core brands and businesses such as nylon, acrylic fibers and feed ingredients.
In 2003, only 30 percent of Solutia’s revenue came from international sales. Today, that has jumped to 75 percent.
“We’ve really transformed the company into one of the preeminent specialty chemical companies in the world,” Quinn said. “Many of the products we make are expensive to ship, so we built around the world to serve our customers.”
Growth in the company’s technical specialties division, for example, paralleled the development of infrastructure in places such as China. With the new roads, demand for radial tires - which use a chemical made by Solutia - is on the rise.
That global reach drove the Tennessee company’s interests in Solutia, Eastman’s chairman and CEO Jim Rogers said in a conference call with analysts Friday.
“With the addition of Solutia, Eastman will be adding manufacturing capacity in Asia over the next couple of years to meet growth,” Rogers said.
Eastman, which has 10,000 employees globally, was itself a product of a spin-off. The company was spun-off from camera and film maker Kodak in 1994.
In the conference call, Rogers said Eastman began exploring acquisition opportunities last summer.
“Solutia was number one then, and it has stayed number one through this whole process,” he said.
Talks with Solutia’s board began in the fall and intensified in the past 30 days, Quinn said.
The deal came on the same day Solutia announced fourth quarter and full-year financial results. Solutia’s fourth-quarter net income rose 15 percent to $54 million, or 45 cents per share, from $47 million, or 39 cents per share, a year earlier. Revenue increased 8 percent to $526 million.
For the full-year, Solutia earned $262 million, or $2.16 per share. That compares with earnings of $78 million, or 65 cents per share, in the previous year. Annual revenue climbed 8 percent to $2.1 billion.
Tim Logan of the Post-Dispatch and the Associated Press contributed to this report.
Things are looking up in Europe, at least for now, as borrowing costs in Italy and Spain eased Thursday following strong debt auctions.
Spain’s auction of nearly €10 billion worth of bonds in three different maturities met with strong demand, as did Italy’s €8.5 billion of 12-month bills.
The European Central Bank was "supplying quite a bit of liquidity" by buying an undisclosed amount of bonds to prop up the market, as it typically does, said Frances Hudson, global thematic strategist for Standard Life Investments in Edinburgh, Scotland.
But the auctions were also driven by newfound confidence in the new leadership of the Spanish and Italian governments, she added. "You go into a halo effect because you’ve got a new government so people are willing to give them the benefit of the doubt."
German and Italy sound upbeat on debt crisis
David Rodriguez, quantitative strategist at DailyFX, noted that Spain wound up selling nearly twice the amount it had planned on auctioning, which signals real market demand for bonds, not just support from the ECB.
"Maybe the ECB stepped in, but the ECB wouldn’t have the firepower to put €5 billion into that auction," he said. "I think what investors are seeing is the probability that these nations will remain solvent for the foreseeable future."
The healthy demand for Italian and Spanish bonds helped to drive up European stocks. London’s FTSE () closed higher by 1.2%, the DAX () in Frankfurt rose 2 no teletrack payday loan.5% and the CAC 40 () in Paris jumped 2.3%.
The auction results also helped to drive down bond yields. The average yield for the Italian 10-year bond slipped to 6.63%, remaining below the anxiety benchmark of 7%, and the average yield for the 10-year Spanish bond dropped to 5.13%.
But Hudson cautioned against extrapolating too much from the Italian bond auction and its impact on the 10-year bond yields, since it was for bills, not bonds. Also, she said she wasn’t sure how long the renewed confidence would last.
Don’t get too comfortable with European bonds, urged Marc Chandler, strategist at Brown Brothers Harriman, noting that more auctions lie ahead.
The euro’s fatal problem isnt’ spending
"Risk lies with the bond sale tomorrow, especially with the large increase in Italian bond prices today as the 5-year yield is off 60 [basis points] and the 10-year yield has dropped about 40 [basis points]," wrote Chandler, in a market report. "The year is long, and the amount that the sovereigns and banks need to raise is large."
The euro also got a modest boost Thursday, edging to $1.28 against the U.S. dollar, after hitting an 18-month low of $1.26 on Wednesday.
"At least on the short end of the curve, you see a little bit of confidence returning to the market," said Rodriguez, referring to the euro and European bonds.
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