LITTLE ROCK — QUOTE OF THE DAY
“It’s mutually assured destruction
if they don’t reach an agreement.”
Matthew Harrigan,
an analyst at Wunderlich Securities, talking about the
programming dispute between Time Warner Cable Inc. and Fox broadcasting.
Article, 1D
FDIC to seek stakes in bank buyers
The Federal Deposit Insurance Corp. plans to seek stakes in the companies bidding for seized banks, aiming to gain when the shares rise and helping recoup the costs of closing lenders.
The arrangement would let the agency share any profits from an increase in the buyer’s stock after a takeover, said James Wigand, the FDIC’s deputy director of resolutions and receiverships. The regulator intends to ask more banks to share any gains, after receiving $23.3 million from New York Community Bancorp Inc. when the lender acquired assets of Cleveland-based AmTrust Bank.
“The market has been evolving to the point where these types of structures make more sense,” Wigand said.
“But it won’t work for every transaction.”
Bank failures have reached 140 this year, the most since 1992, as soured commercial-real-estate loans and mortgage defaults hurt U.S. lenders. The agency said Dec. 15 that it was increasing its budget 56 percent to $4 billion for next year and increasing staff 23 percent to 8,653 to manage bank closings.
The stakes can come in the form of stock units, or warrants, in the purchasing company. The strategy can’t be used if the buyer is a foreign firm or if it’s not publicly traded. The FDIC’s plan was reported Tuesday on The Wall Street Journal’s Web site.
Japan Airlines shares hit record low
TOKYO - Shares of struggling Japan Airlines Corp.
nose-dived to a record low Wednesday on growing fears that the money-losing carrier could be put through bankruptcy court as part of restructuring.
Asia’s biggest airline, also known as JAL, closed down 24 percent at 72 cents on the last trading day for 2009 on the Tokyo Stock Exchange. Earlier in the day, the airline plunged 32 percent to 64 cents.
Wednesday’s finish marked a fall from Japan Airlines Corp.’s closing price of $2.30 at the beginning of this year.
“Investors were very nervous about the fate of JAL.
With recent reports saying the airline could face bankruptcy, investors were panicking [and] their JAL stock ownership could be worthless,” said Masatoshi Sato, market analyst at Mizuho Investors Securities Co. Ltd.
Japan Airlines Corp. is undergoing restructuring to get itself back on solid footing.
Kyodo News agency said a government-backed corporate turnaround body, which is responsible for restructuring the airline, has proposed to the airline’s creditor banks that the struggling carrier be placed in court-backed bankruptcy proceedings.
But the Yomiuri daily, Japan’s top-selling newspaper, said Wednesday that the banks rejected the liquidation proposal because of fears of widening losses and concern that bankruptcy could disrupt the airline’s operations.
Judge refuses to drop shredding case
FORT LAUDERDALE, Fla. - A federal judge in Florida has refused to dismiss charges of illegal document shredding against two former employees of financier Allen Stanford.
Magistrate Judge Robin Rosenbaum on Wednesday rejected defense claims that prosecutors intimidated a key defense witness so that he won’t testify in the trial of Thomas Raffanello and Bruce Perraud.
The two men are accused of illegally shredding thousands of documents as Stanford’s banking empire was collapsing earlier this year.
Prosecutors have refused to give immunity to witness Anthony Belovich because he also may face criminal charges.
Belovich has invoked his Fifth Amendment right not to testify.
Rosenbaum’s ruling still must be reviewed by a federal district judge.
Clients of Stanford’s Little Rock office had $285 million invested in more than 1,200 accounts. More than $50 million was in certificates of deposit.
Cadbury bid data deadline extended
LONDON - The United Kingdom Takeover Panel said Wednesday that it had extended the deadline to allow British chocolate and candy maker Cadbury PLC to disclose any new information about the bid by Kraft Foods Inc. to acquire it.
Cadbury had faced a deadline of Jan. 12 for publishing new information about the hostile takeover, but the Takeover Panel agreed to extend that to Jan. 15 to allow Cadbury to publish estimated trading results for 2009.
Kraft has made a cash-and-shares offer worth $16.3 billion.
The last date for Kraft to revise its offer remains Jan. 19, and it has until Feb. 2 to get acceptance of its offer from holders of a majority of Cadbury shares.
Both companies agreed to the revised date, the Takeover Panel said in an announcement to the London Stock Exchange.
The timetable would be reset if another suitor made a firm offer for Cadbury.
Cadbury said in a statement that it was pleased that its shareholders will have the opportunity to review the most updated information available on its trading performance as they evaluate the Kraft offer.
Cadbury, which is battling to remain independent, has confirmed receiving tentative approaches from The Hershey Co. and Italy’s Ferrero International SA.
Turkmenistan OKs gas-field contract
ASHGABAT, Turkmenistan - Energy-rich Turkmenistan has awarded a $9.7 billion contract to a consortium of companies from China, South Korea and the United Arab Emirates to develop one of the world’s largest natural gas fields, a newspaper there reported Wednesday.
The field near the Central Asian nation’s eastern border with Afghanistan has been the subject of vigorous international lobbying by companies from China, the West and Russia, which are all vying for a share in Turkmenistan’s energy riches.
According to British auditors Gaffney, Cline and Associates, the South Yolotan field is likely to hold about 7.85 trillion cubic yards of gas, making it the fourth- or fifth largest field in the world.
The companies awarded the contract to develop the field and build gas-refining plants include China’s CNPC, LG International Corp. and Hyundai Engineering from South Korea; and London-listed companies Gulf Oil & Gas FZE and Petrofac International from the United Arab Emirates.
Business, Pages 24 on 12/31/2009