Archive for March, 2008Welcome to Sprint - Cell Phones, Mobile Phones, Plans for Personal … Business with Reuters - International Herald Tribune Business - San Jose Mercury News Chicago business news, headlines from the Chicago Tribune … Business Intelligence from Business Objects Business - Wikipedia, the free encyclopedia Newsweek Business | Newsweek.com Filed under: Deals, Products and services, Marketing and advertising According to the BBC this morning, Irish rock band U2 have signed a 12-year deal with Live Nation, Inc. (NYSE: LYV) on top of the band’s deal with Vivendi’s Universal Music Group. The deal will see the band consolidate previous arrangements and connections with Live Nation and includes merchandising, digital, and branding rights. U2 follows Madonna into an extensive contract with Live Nation, even though record releases were included for Madonna. Financial arrangements between U2 and Live Nation haven’t been disclosed, but it wouldn’t be surprising to see the band enjoy a similar deal to Madonna, who reportedly signed for $120 million over 10 years. Both deals are part of a bigger trend of so-called “360 degree deals”, according to the BBC, where artists “combine their recording, publishing and touring revenues.” U2’s lead singer Bono told the BBC as well that U2 and Live Nation had been in a “relationship for 20 years” so the new deal has been a long time coming. U2’s move is quite unsurprising given the latest trends for artists, but it should be noted that record label Universal retained a relationship with the band. As previously stated, Madonna’s deal included Live Nation taking charge from Warner Music Group (NYSE: WMG) to release her new albums (after the upcoming release). The fact that Universal was able to keep U2 in some degree means that either a larger deal for the release of albums was already in place, or the record labels are seeing the shift and making amends to keep artists in traditional outlets. Filed under: Deals, Fortune Brands (FO)
Now, Pernod Ricard, a French liquor company, is buying the brand for $8.89 billion. Absolut is the third largest spirit brand in the world, and the sale attracted the interest of many of the industry’s top players: Fortune Brands (NYSE: FO), Diageo and Bacardi. What makes the high valuation afforded to Absolut so interesting is that Pernod Ricard is paying almost $9 billion for a brand that only really came to prominence in its current form in the 1980s. With its racy and provocative ads (like the one on this post), Absolut was one of the first mainstream brands to aggressively target the gay community. Back when the sale effort was first announced, I opined that targeting gay media outlets was a decision that paid off, as this big, and often affluent population group, now counts Absolut as its vodka of choice. Perhaps a company like Budweiser, which has been widely criticized for spending money on ads (such as the Super Bowl) that have done tiny for the brand, could learn something from Absolut’s edgy marketing. The M&A field is in a rough patch right now, struggling from a tough debt market and general economic malaise. But apparently, strategic buyers are still able to pay up for strong brands. Filed under: Before the bell, Deals, Launches, Yahoo! (YHOO), Apple Inc (AAPL), General Electric (GE), Citigroup Inc. (C), Boeing Co (BA), Merck and Co (MRK), Teva Pharm Indus ADR (TEVA)
Citigroup Inc. (NYSE: C)’s Vikram Pandit was brought in to make changes at the struggling bank, and that’s exactly what he’s doing (or at least trying). After much management changes the past weeks, today the financial services company unveiled a restructuring plan that includes setting up an independent credit-card unit and overhauling consumer banking along geographical, rather than product, lines. Schering-Plough (NYSE: SGP) stock is dropping nearly 17% and Merck (NYSE: MRK) is dropping over 10% in premarket trading after a study published in the New England Journal of Medicine concluded that physicians should cut their use of cholesterol drugs Vytorin — a combination of Merck’s Zocor and SGP’s Zetia — and Zetia. Teva Pharmaceutical (NASDAQ: TEVA) is buying Bentley Pharmaceuticals (NYSE: BNT) for $360 million in cash, or $15.02 a share, in a move to expand operations in Spain. Bentley’s drug delivery business will be spun off to shareholders prior to the Teva transaction. The buy price represents a 9% premium to Bentley’s closing stock price Friday of $13.74. General Electric Co (NYSE: GE) is apparently in talks with Boeing Co (NYSE: BA) to buy 40 to 50 of its 737-800 jetliners to meet demand from airlines upgrading their fleets, for a total deal value — at list price — of $3.53 billion. Also, the Bell Boeing Program Office announced the US Department of Defense has awarded a $10.4 billion, five year Multi-Year Procurement contract to deliver 167 V-22 Osprey tiltrotor aircraft of which 26 CV-22 aircraft will be for the Air Force Special Operations Command and 141 MV-22 aircraft for the US Marine Corps. Bell Boeing is a strategic alliance between Bell Helicopter, a Textron Inc. (NYSE: TXT) company and Boeing. The contract includes an option for additional aircraft. Will Apple Inc. (NASDAQ: AAPL) sell 45 million iPhones by 2009? That’s what Piper Jaffray analyst Gene Munster thought back when the iPhone was first introduced and that’s what he’s thinking today. He explained his reasoning in a note this day, saying that Apple will achieve this by introducing a 3G iPhone within the next 3 to 6 months, offering a family of 2 to 3 iPhones by Jan 2009 at the latest, entering new countries and adding new features. Munster supports his argument further here. Yahoo Inc. (NASDAQ: YHOO) announced the launch of Yahoo! Shine. According to the press release, Shine is “a new website for women that aims to provide the information most relevant to their daily lives, ‘ with nine categories ranging from Fashion & Beauty to Parenting. Also, Yahoo! has a new editorial team in place to develop original stories on a daily basis. We’ve mentioned before how Yahoo! may be looking to expand its content and this is perhaps a first step to try to do it on its own before it embarks on any alliances with other companies.
31
03
2008
 
Before the bell: Futures mixed as Wall Street awaits Paulson’s planPosted by: in Latest NewsFiled under: Before the bell, Deals, Market matters, Economic data, Lehman Br Holdings (LEH)
U.S. stocks ended lower on Friday after some weak economic data and a warning from J.C. Penney gave bears back control. The Dow Jones Industrial Average finished down 86 points, or 0.7%, the S&P 500 lost 10 points, or 0.79%, and the Nasdaq composite declined 19 points or 0.86%. For the week, the Dow industrials fell 1.2%, but for the quarter so far it lost 7.9%. While the S&P 500 declined the same as the Dow for the week - 1.2%, it droped 10.4% for the quarter so far. Last, the Nasdaq Composite actually managed a 0.1% advance for the week, but leads the decline in the quarter so far with a 14.8% tumble. With the housing market correction, the subprime mess and credit crunch, along with the economic concerns investors are facing, it is no wonder the quarter has fared as it had. This week is full of economic releases, including the monthly employment report that’s due Friday, but this day only the Chicago-area manufacturing poll for March is scheduled to be reported at 9:45 a.m. EDT. The index is actually expected to increase somewhat. Still, what many will be eying today is the announcement by Treasury Secretary Henry Paulson at 10:00 a.m. EDT. It is expected the secretary will announce the the biggest overhaul of Wall Street’s regulatory structure since the Great Depression that aims to help prevent the kind of risky investments that led to the near-collapse of Bear Stearns. Meanwhile, oil prices fell to near $105 a barrel Monday as supply concerns eased. In corporate news, Lehman Brothers (NYSE: LEH) filed a suit Monday against major Japanese trading company Marubeni, demanding $350 million in damages in a case of alleged fraud. In major deal news, Pernod Ricard SA , the French liquor group, outbid three other companies to buy Sweden’s state-owned Vin & Sprit, the maker of Absolut vodka, for $8.89 billion. Filed under: Deals, Management, Bank of America (BAC), Countrywide Financial (CFC) Countrywide (NYSE: CFC) CEO Angelo Mozilo, perhaps the most reviled executive in corporate America, will get $10 million as part of a Bank of America (NYSE: BAC) takeover of the mortgage broker. Investors and members of Congress are incensed. The “bonus” is described in SEC filing as “performance based.” Countrywide shares are down from $42.24 to $5.63 over the past year. One powerful senator may go after the payment. “It’s perverse for Bank of America to reward the principal architects of the bad business practices that caused this housing crisis,” stated Sen. Charles Schumer, D-NY, said in a statement, according to the AP. Perhaps shareholders will get lucky and Schumer will fight the pay-out of the money. It is a shame that Bank of America would hurt its own reputation by doing this. Countrywide was available for sale because it was in such deep trouble. BAC didn’t need to “pay off” Mozilo to get a deal done. Douglas A. McIntyre is an editor at 247wallst.com. Filed under: Deals, Bad news, Scandals, Lehman Br Holdings (LEH), Bear Stearns Cos (BSC) There has been concern for several weeks that Lehman Brothers (NYSE: LEH) might have problems similar to Bear Stearns (NYSE: BSC). Customers might be worried about Lehman’s financial health and, if they were to withdraw huge sums of money, the brokerage could face liquidity problems. Just as those concerns appear to be falling, Lehman has been hit by a fraud that might involve amounts as great as $250 million. According to The Wall Street Journal (subscription required), “swindlers used forged documents from one of Japan’s biggest trading companies to bilk it out of as much as $250 million.” The money was to go to a division of Japanese firm LTT Bio-Pharma. The capital was secured by certificates from Marubeni, a large trading company. Marubeni may have to pay Lehman back the capital, but that’s not yet clear. One consequence of the news is likely to be that investor confidence in Lehman will be eroded again. Why the brokerage would extend the money without complete due diligence is certainly a fair question for shareholders to ask. One more straw on the pile of Lehman’s troubles. Douglas A. McIntyre is an editor at 247wallst.com. Business | www.kentucky.com Business Roundtable JS Online: Business Ohio Business Gateway Business Administration Degree information and overview at DeVry Business & Small Business Business.com - The Business Search Engine® and Business Directory for Columbian.com - Business & Markets Business News, Stock Market & Financial Advice - BusinessWeek Business - Idaho high tech, agriculture, real estate | Idaho Statesman Filed under: Deals, Industry, Employees, Delta Air Lines (DAL) Northwest (NYSE:NWA) does not care what the pilots union thinks. It plans to go ahead with a merger with Delta (NYSE:DAL) despite resistance from the sky captains. Pilots have held up a deal while they negotiate seniority provisions for a combined company. According to The Wall Street Journal “a jumpstarted deal wouldn’t include terms of a combined pilot labor agreement and the salary enhancements previously foreseen.” Aside from regulatory approval, the deal has two real problems. The first and most obvious is that the pilots might strike the airlines if they feel they have been mistreated. A shutdown, especially if it is prolonged, could cost tens of million of dollars in lost passenger revenue. In addition, it is not clear that merging airlines has a clear benefit. Fuel costs don’t change. The number of employees might fall, but some of the unions involved might ask for higher compensation in exchange for supporting cuts. Customer service department mergers nearly always cause problems because putting together incompatible reservations platforms can take several quarters. This can damage relationships with consumers and cause them to use other carriers. Pushing the merger may be a bad idea, whether the pilots are on board or not. Douglas A. McIntyre is an editor at 247wallst.com. Filed under: Deals, Industry, Employees, Delta Air Lines (DAL) Northwest (NYSE:NWA) does not care what the pilots union thinks. It plans to go ahead with a merger with Delta (NYSE:DAL) despite resistance from the sky captains. Pilots have held up a deal while they negotiate seniority provisions for a combined company. According to The Wall Street Journal “a jumpstarted deal wouldn’t include terms of a combined pilot labor agreement and the salary enhancements previously foreseen.” Aside from regulatory approval, the deal has two real problems. The first and most obvious is that the pilots might strike the airlines if they feel they’ve been mistreated. A shutdown, especially if it is prolonged, could cost tens of million of dollars in lost passenger revenue. In addition, it isn’t clear that merging airlines has a clear benefit. Fuel costs do not change. The number of employees may fall, but some of the unions involved might ask for higher compensation in exchange for supporting cuts. Customer service department mergers nearly always cause problems because putting together incompatible reservations platforms can take several quarters. This can damage relationships with consumers and cause them to use other carriers. Pushing the merger might be a bad idea, whether the pilots are on board or not. Douglas A. McIntyre is an editor at 247wallst.com. |
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When the Swedish government put Vin & Spirit, parent company of 
