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Oct
20
Exelon is not taking hostile bid for NRG of the table
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Exelon Corp, might make a hostile bid for NRG Energy Inc if the company rejects its $6 billion takeover offer.
Exelong is the United States’ largest Nuclear power operator and it announced its bid for NRG on Sunday. The company offered a flat exchange ratio of 0.485 Exelon share for each NRG share, equivalent to about $25.27 a share at current prices.
Exelon’s Cheif executive, John Rowe, said while addressing investors in a conference call “We hope this turns out to be friendly rather than hostile, but we are committed to pursuing this offer and we shall do so,”.
“We did not do this lightly and we were very well advised about what it might take to get this done,”
The news of the takeover plan gave a 25% NRG Energy Inc’s shares, they were one of the big gainers on Wall Street when trading opened but still are values below what Exelon is offering. If the takeover is sucessful Exelon would effectively become the United States No. 1 power company.
Exelon has suspended a $1.5 billion share buy back plan due to worsening market conditions.
Oct
20
Dutch Government to Inject EUR10 billion in ING
Filed Under Economy, Finance, Investing, News | Leave a Comment
After government intervention from the United States to South Korea to Germany, and now the Dutch government is set to take action to protect the nations economy from the global financial crisis. It would be injecting about10 billion Euros into ING Groep NV (ING) in an accord signed with the Dutch Central bank.
ING, banking and insurance group, attempted to pad its capital position in order to brace itself from the effects of the global crisis. ING in an official statement said it would issue EUR10 billion worth of non-voting Tier-1 securities to the Dutch State Bank.
ING Chief Executive Michel Tilmant said “Our capital position was in line with previously targeted levels and regulatory requirements. However, market conditions have changed dramatically in recent weeks and have led to an internationally recognized belief that going forward, in this market environment, capital requirements for financial institutions should be higher,”
The Dutch government would get 2 seats on ING’s supervisory board and 8% annual interest on the securities. Giving the Dutch government veto rights on acquisitions and investments involving more than 25% of the invested funds.
The Dutch financial minister said that ING was a healthy company and the move was made to maintain the company’s strength during the global financial turmoil.
Oct
13
GE Stocks Rally in a Gloomy Market
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Stocks of General Electric Co rose by 13% in New York trading as the company’s third quarter profit matched forecast by analysts despite a financial climate riddled with chaos and panic.
The rise in the value of GE stocks is the greatest in the last 28 years and owes to the company’s positive performance in the third quarter period. GE sales increased by 11% to $47.2 billion in the last quarter. However profits from continuing operations declined by 12% from last year’s $5.11 billion or 50 cents a share to $4.48 billion or 45 cents a share. The announcement of its third quarter results and the fact that they met estimates by analysts pushed GE stocks up by $2.49 to $21.50 at 4:15 p.m in the New York Stock Exchange.
GE Co. is more than a hundred years old and based at Fairfield, Connecticut. It has interests in a wide spectrum of sectors and its products range from light bulbs to power plant turbines and financial services. This year, GE earned the major part of its earnings from its energy, technology as well as NBC Universal businesses. However the crisis prevailing in US credit markets have given rise to investor concerns about the health of the company’s finance units under GE Capital.
Oct
4
Gold Loses Shine On Stronger Dollar
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Gold futures sank by 5% to the lowest level in two weeks as a stronger US currency reduced dollar-denominated prices of the precious metal.
Gold for December delivery fell by $43 or 4.8% to settle at $844.30 per ounce on the Comex division of the New York Mercantile Exchange. This rate marked the lowest closing price since September 17 this year. The fall in prices was seen in other precious metals as well. Silver for December delivery too fell by $1.65 to end at $11.12 an ounce. However platinum suffered the biggest fall as it tumbled below $1000 for the first time since December 2006 by losing as much as $50.10 or 49% to end at $979.60 an ounce for October delivery.
The fall in gold prices came after dollar got a boost by the Senate’s approval of the revised $700 billion finance rescue plan. The dollar rose both against the euro as well as the British pound and this led to a downward pressure on the prices of gold and other precious metals as the US currency became a more attractive investment option as opposed to the precious metals. Analysts in some quarters however believe that the government plan is bullish to gold prices as it could pressure the dollar.
Sep
29
Nomura Holdings Inc. agreed to acquire the Asian operations of Lehman Brothers Holdings Inc.
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According people familiar to the matter stated on Monday that Nomura Holdings Inc.-Japan’s biggest securities firm will obtain the Asian operations of Lehman Brothers Holdings Inc. exclusive of South Korea.
As well as it was expected yesterday that the company will also announce the purchase of some of Lehman’s European operations.
Since losses on U.S. mortgage investments expanded overseas push was turned back by predecessor Nobuyuki Koga in 2007. Now Lehman’s failure possibly will permit Nomura President Kenichi Watanabe to restart overseas push again.
Asian and European firms grabbed an opportunity to grasp market share in trading, underwriting stock sales and advising companies on takeovers in recent weeks due to the redesigning of Wall Street as impact of financial market turmoil. Subsequent to the parent company’s Chapter 11 filing, Lehman’s key units in Japan filed for bankruptcy last week.
According to familiar people over the weekend the company negotiated with other possible buyers that include Barclays Plc and Sumitomo Mitsui Financial Group Inc.
Last week Lehman’s North American business was acquired by the U.K.’s third-biggest bank Barclays.
After losing 31.2 billion yen on the business in the quarter ended June 2007 Nomura blocked buying U.S. subprime mortgage loans and repackaging them as securities.
Sep
22
Goldman Sachs and Morgan Stanley will transform themselves into bank holding companies, reshaping an era of high finance
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On Sunday night Federal Reserve said that subject to far greater regulation, last big independent investment banks on Wall Street- Goldman Sachs and Morgan Stanley will convert themselves into bank holding companies. This step brought an end for The Wall Street that shaped the financial world for two decades. Both the investment banks concluded that as investors have determined the model is broken there is no potential in remaining investment banks now.
Although Congress and the Bush administration hassled to pass a $700 billion rescue of financial firms, the firms asked for to change themselves.
William Isaac, an earlier chairman of the Federal Deposit Insurance Corp. stated it too bad and added that this decision signs the end of Wall Street.
The superiority of the securities firms come to an end with the approval of The Federal Reserve for their bid to turn into banks.
This transformation indicates that they required support of bank deposits to stand on a better position as their model of finance and investing had become too risky. Big commercial banks like Bank of America and JPMorgan Chase took support of the bank deposits in the middle of latest turmoil and were comparatively safe.
This move takes Wall Street to its fundamental position in which it was structured before enforcement of Glass-Steagall Act.
Not only the Securities and Exchange Commission but bank examiners from numerous government agencies doing much closer supervision along with considerably strict regulations are agreed by the firms for becoming bank holding companies.
Since Goldman and Morgan cannot rapidly reduce how much money they borrow relative to their assets, they will need some time to transform into fully regulated banks.
Sep
17
J.P. Morgan Chase & Co. advanced $138 billion to Lehman Brothers Holdings Inc
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According to a filing with the U.S. Bankruptcy Court of the Southern District of New York, on Monday J.P. Morgan advanced $87 billion and a $51 billion on Tuesday to Lehman Brothers Holdings Inc. to help Lehman complete its brokerage transactions. In total J.P. Morgan Chase & Co. advanced $138 billion to Lehman Brothers Holdings Inc.
According to statement in filing in order to clear, and facilitate the settlement of, several securities transactions with customers or clients of Lehman, J.P. Morgan advanced money to or for the benefit of Lehman on the request of Lehman and the Federal Reserve Bank of New York, as well as to evade a disorder of the financial markets.
Further filing stated that Tuesday advance was made at the request of both Lehman and the New York Fed while first advance was repaid Monday night.
According to J.P. Morgan advances were secured by collateral. However it did not stated the source of $138 billion or whether it had taken the help of a Federal Reserve window.
Louis Crandall, an economist at Wrightson ICAP stated that the money to repay the loan at the end of each day most probably came mainly from the Federal Reserve’s Primary Dealer Credit Facility.
In the filing investment bank stated that J.P. Morgan may possibly decide on to make further advances.
Sep
16
In the financially weak atmosphere American International Group Inc. (AIG) is probable to face new difficulties. Standard & Poor’s and Moody’s Investors Service downgraded its credit rating that are threatening efforts to raise emergency funds to allow the company to work smoothly.
In an Aug. 6 filing leading insurer AIG stated that its Chief Executive Officer Robert Willumstad has attempted to raise cash to avoid the cuts, which may perhaps trigger more than $13 billion in collateral calls from debt investors who purchased swaps. Before these cuts, two people proverbial with the condition said that to replenish capital, AIG is in quest of $70 billion to $75 billion in loans approved by Goldman Sachs Group Inc. and JPMorgan Chase & Co.
Last day in New York trading AIG’s shares dived 61 percent, which led the company’s market value to $12.8 billion.
To discuss AIG, which sold the banks and other investors protection on $441 billion of fixed-income assets, with $57.8 billion in securities tied to subprime mortgages, Wall Street’s leading firms assemble at the New York Federal Reserve for a fourth successive day.
According to chief executive officer of Bank of America Corp. Kenneth Lewis AIG fall down would be a much bigger problem that we have ever seen.
In the Dow Jones Industrial Average, AIG has dropped 92 percent this year in New York trading that made it the worst performer in it.
S&P lowered AIG’s long-term counterparty rating three grades to A- from AA-. S&P said the ratings continue on watch for a probable additional downgrade.
Sep
15
BASF will pay $5.5 billion for Ciba to enlarge specialty products
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With a view to expand in specialty chemicals BASF SE- world’s largest chemicals company decided to purchase Ciba Holding AG in a deal valued at 6.1 billion Swiss francs or $5.5 billion.
Monday the Ludwigshafen, Germany-based BASF stated that it would pay 32 percent in excess of the closing price on Sept. 12 for Basel, Switzerland-based Ciba’s share that is to say 50 francs in cash for each Ciba share.
Further BASF stated that Ciba will supplement plastics, coatings and water-treatment products to BASF’s assortment of specialized chemicals.
The company said in the statement that this acquisition will strengthen BASF’s portfolio and enlarge its top position in specialty chemicals with products and services for a variety of customer industries.
On Sept. 12 Goldman Sachs Group Inc. analysts stated that Ciba- Swiss chemical maker is facing noteworthy challenges from elevated raw-materials costs and competition from low-cost producers. The company is the world’s famous plastic colors maker. After posting an unexpected second-quarter loss on rising material costs and writedowns on Aug. 19 Ciba plunged the most since first trading in 1997. Ciba aims savings of as much as 500 million Swiss francs and is cutting 2,500 jobs, or 16 percent of the workforce, by 2009.
Sep
12
Steelmaker Terbium projects to invest US$4.2bn over the next five years to build flat steel plant in Mexico
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On Monday, Terbium- Luxembourg-based steelmaker said that to construct a flat steel plant in Mexico it is looking forward to invest US$4.2bn in coming five years. Further this project will be accepted in to parts according to which around US$2.7bn of investments is required in first part while second part will require nearly US$1.5bn.
Including a direct reduction unit, two electric arc furnaces, two ladle furnaces, a thin-slab-caster and a hot-strip mill, initial phase will contain the outline and construction of a flat-rolled mini mill in the Monterrey area in which 2Mt/y hot rolled coils are anticipated to be produced. Terbium believes that within the next four years this new facility will obtain its full production capacity.
However the construction of a cold rolled and galvanizing plant, with a pickling line and a cold rolled tandem mill is included in second part. To serve the industrial and commercial markets second phase comprise capacity of 1Mt/y cold rolled coils and a hot-dipped galvanizing line with capacity of 300,000t/y. According to Terbium second phase is expected to finish by 2013.
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