LITTLE ROCK — QUOTE OF THE DAY
“This case was the end of bank secrecy in Switzerland.”
Tax attorney Robert Fink
of Kostelanetz & Fink LLP in New York Article, 1DU.S. oil-, gas-rig count declines by 1
HOUSTON - The number of rigs actively exploring for oil and natural gas in the U.S. decreased by one this week to 1,669.
Houston-based Baker Hughes Inc. said Friday that 965 rigs were exploring for natural gas and 695 for oil. Nine were listed as miscellaneous. A year ago this week, the rig count stood at 1,048.
Of the major oil- and gas-producing states, Louisiana gained three rigs; Oklahoma, Pennsylvania and West Virginia each gained two; and California gained one rig.
Texas lost four rigs;, Wyoming and Alaska each lost two rigs; and Arkansas lost one rig. Colorado, New Mexico and North Dakota remained unchanged.
The rig count tally peaked at 4,530 in 1981, during the height of the oil boom. The industry posted a record low of 488 in 1999.
Caterpillar to buy German engine firm
PEORIA, Ill. - Caterpillar Inc. said Friday that it is buying a German engine maker, MWM Holding GmbH, from private-equity firm 3i for about $810 million in cash.
Caterpillar, the world’s largest maker of construction and mining equipment, said the deal will help it expand options for customers of its electric power division.
MWM, which stands for Motoren-Werke Mannheim, specializes in combustion engines for natural gas, special gases and diesel.
The deal comes a day after Caterpillar of Peoria, Ill., reported strong profits for the third quarter and raised its outlook for 2010.
Caterpillar is spending money on several projects to increase production capacity, and earlier this year it acquired locomotive maker Electro-Motive Diesel.
The companies said private-equity firm 3i would see a rate of return in excess of 25 percent for its three-year investment in MWM.
The acquisition is expected to close in the coming months, pending regulatory approval.
Caterpillar shares fell 56 cents to close Friday at $78.33.
GE’s sights set on diagnostics firm
General Electric Co. said Friday that its health-care unit will buy diagnostics company Clarient Inc. in a deal aimed at speeding its expansion into cancer-diagnostic and therapy-selection tools.
GE Healthcare officials say the deal will help them build a $1 billion-plus business developing integrated diagnostic solutions for cancer and other diseases.
GE said it will start a cash tender offer to pay $5 per share for Clarient common stock, a 34 percent premium over its closing price Thursday, and $20 for each preferred share.
GE said the deal values Clarient at about $580 million, net of cash and investments. A spokesman declined to offer a breakdown on how much the share purchases would cost.
But Safeguard Scientifics Inc., which owns a 26 percent stake in Clarient, said the deal values Clarient at $587 million.
Clarient, which is based in Aliso Viejo, Calif., was founded in 1996 as MicroVision Medical Systems. It developed and made digital microscopes to analyze tissue and blood samples before it refocused on cancer diagnostic services.
Clarient board members have approved the deal and recommend that stockholders tender their shares. Safeguard expects to receive about $145 million in sale proceeds for its stake in Clarient.
The transaction is expected to close later this year or in early 2011.
Clarient shares jumped $1.23, or 33 percent, to close Friday at $4.97, while GE stock slipped 5 cents to $16.06.
Safeguard shares rose 91 cents or 6.6 percent, to $14.61.
Supertanker owners unloading ships
Supertanker owners are increasingly seeking to sell vessels as a glut of ships causes rental rates to drop to unprofitable levels, ship-broker SeaLeague A/S said.
“Prices are under pressure as more and more owners are contemplating lightening their balance sheets” by disposing of carriers, Halvor Ellefsen, a broker at Oslo-based SeaLeague, said by e-mail Friday. “The spot market is taking its toll.”
Rental income from very large crude carriers hauling 2 million-barrel crude-oil cargoes on the industry’s benchmark Saudi Arabia-to-Japan route has dropped 92 percent this year, according to the London-based Baltic Exchange.
Friday it gained 0.2 percent to a daily $3,155, leaving returns down 14 percent for the week.
Each ship needs $11,601 a day to pay for its crew, repairs and other operating expenses, according to data from Drewry Shipping Consultants Ltd. The world’s largest supertanker operator, Frontline Ltd., said Aug. 27 that it needed $30,900 a day to break even on very large crude carriers once finance repayments are included.
There are 16 percent more very large crude carriers for hire in the Persian Gulf over the next 30 days than there are cargoes, according to an Oct. 19 Bloomberg News survey of ship-brokers and owners.
UPS expecting 7.5% holiday uptick
United Parcel Service Inc. expects to handle 430 million packages globally between Thanksgiving and Christmas and has added flights in China to meet surging export demand, Chief Executive Officer Scott Davis said.
The projected volume for the peak Christmas season marks a 7.5 percent increase from a year earlier, when the world’s largest package-delivery company had one fewer shipping day. Retailers surveyed by UPS anticipate sales rising about 3 percent, Davis said.
“Our customers are cautiously optimistic,” Davis said.
“It doesn’t sound great, but last year we were flat, and the year before that we were minus 4 percent.”
More consumers are buying gifts in the final seven or eight days before Christmas, breaking from historical patterns of about a month in advance, he said. That means UPS won’t know until a few weeks before Christmas whether retailers will need fresh express shipments of electronics such as Apple Inc.’s iPads, iPhones and laptop computers, Davis said.
Retailers are keeping inventory lean because it’s difficult to predict whether customers will accelerate purchases at the last minute, Davis said. UPS presumes that the pace of shipments is “going to stay roughly where it is,” he said.
Shares rose 24 cents to close Friday at $69.83.
Business, Pages 34 on 10/23/2010