Category Archives: Corporate
“(Reuters) - Orchard Supply Hardware Stores Corp has filed for Chapter 11 bankruptcy protection, court documents showed on Monday, with rival retailer Lowe’s Companies set to buy the majority of its assets for $205 million in cash.
Orchard, which was spun off by Sears Holdings Corp in late-2011, said it was carrying a high debt load and that it may not be in a position to make scheduled payments when the first tranche of its debt matures in December 2013.
“The company’s substantial debt due, in part, to significant recapitalization dividends paid to Sears, made it difficult, if not impossible for the company to right itself. The ever present prospect of violating the company’s leverage ratio covenants hampered many of its operational strategies,” Orchard said in the court filing.
Management and the board determined that a sale of Orchard through a Chapter 11 process was the best possible outcome for the company and its stakeholders after exploring a range of alternatives, the company said.
The company, which generated revenue of $657 million in the 2012 fiscal year, listed total liabilities of $480.1 million and total assets of $441 million, according to a court filing.
Orchard said it has secured commitments for $177 million in debtor-in-possession (DIP) financing, which will help it to continue meeting its financial obligations throughout the Chapter 11 case.
LOWE’S ACTS AS “STALKING HORSE” BIDDER…”
“LONDON (Reuters) - Britain’s Co-operative Group has agreed a plan to plug a 1.5 billion pound ($2.4 billion) capital hole at its bank which forces bondholders to pay part of the bill, avoiding a repeat of the taxpayer-funded bailouts staged during the financial crisis.
Using a “bail-in” model, bondholders must swap their debt for new bonds and equity in the bank to be listed on the London Stock Exchange, while the Co-op Group, Britain’s biggest customer-owned business, will also provide financial support for its banking unit, the Co-op said on Monday.
The future of the bank, which has 4.7 million customers, has been in question since Moody’s cut the lender’s credit rating to junk status and warned it might need taxpayer support – something the bank denied. Its capital position had come under increased scrutiny since it pulled out of a deal to buy hundreds of bank branches from Lloyds Banking Group in April.
The Co-op Group, which also runs supermarkets, funeral services and pharmacies, said the plans will provide stability for the Co-operative Bank <cpbb_p.l>, generating 1 billion pounds of new capital this year and 500 million pounds in 2014.
“We have put in place a detailed and comprehensive solution to meet the current and longer-term capital requirements of the bank. In doing so we have agreed a plan to ensure its future,” said Chief Executive Euan Sutherland.
The measures will involve an exchange offer to investors in the bank’s subordinated capital securities, resulting in the transfer of ordinary shares which will be listed in October.
Co-op’s debt holders are all ‘junior’, or ‘subordinated’, a type of bond that pays higher interest than ‘senior’ debt, but carries a higher risk. These kinds of bonds suffered heavy losses in rescued banks in Ireland and Spain….”
“(Reuters) – Starboard Value LP, a large shareholder in Smithfield Foods Inc , urged the world’s largest pork producer to explore a breakup rather than go ahead with a planned $4.7 billion takeover by Chinese meat company Shuanghui International.
The activist shareholder, which disclosed a 5.7 percent stake in the company on Monday, said Smithfield might be worth “well in excess” of the $34 per share offered by Shuanghui if it split into hog production, pork and international units and shopped the businesses separately.
Starboard said in a letter dated June 17 to Smithfield’s board its sum-of-the-parts valuation was between $44 and $55 per share.
Officials from Smithfield and Shuanghui were not immediately available to comment….”
“Elan Corp. (ELN) shareholders approved a share-repurchase program, a vote that Elan says will force Royalty Pharma to end its unsolicited $6.7 billion takeover bid.
Investors voted against three other transactions, including an investment in Theravance Inc. (THRX)’s royalties, Elan said in a statement today after shareholders met in Dublin, where both companies are based. Royalty Pharma’s offer has been contingent on investors rejecting all transactions proposed by Elan management, according to a ruling by the Irish takeover panel.
The vote may not necessarily end Royalty Pharma’s pursuit. Elan said last week it will invite Royalty Pharma to participate in a formal sale process with other potential suitors. That suggests the two companies may begin negotiations, ending a standoff that has lasted almost four months, said Adrian Howd, an analyst at Berenberg Bank in London.
“By going into a formal sale process and inviting Royalty in, Elan looks to be taking the hostility out a bit,” Howd said before the vote announcement. “They’re saying, ’Whatever happens on Monday, we’re in a sale process now, so if you’re interested, come and talk with us.’”
“WASHINGTON—Some of biggest banks on Wall Street will get an additional two years to comply with a post-financial crisis rule requiring they move risky swap activities into separate affiliates.
The Office of the Comptroller of the Currency said it granted extensions to seven banks, giving them until July 2015 to comply with so-called “swaps push-out” rules required by the 2010 Dodd-Frank law.
While the move was largely expected, the OCC’s action could further inflame criticism that much of Dodd-Frank remains undone nearly three years after its passage. As of June 3, just 38% of rules required by Dodd-Frank had been finalized, while 63% of rule-writing deadlines have been missed, according to law firm Davis Polk.
The OCC notified Bank of America Corp., BAC -1.37% J.P. Morgan ChaseJPM -1.63% & Co., Citigroup Inc., C -3.96% Wells Fargo WFC -1.50% & Co., HSBC Holdings HSBA.LN +0.33% PLC, Morgan Stanley MS -4.06% and U.S. BancorpUSB -0.51% that they were granted a 24-month extension in response to their requests for a longer transition period.
The banks declined to comment.
The move comes less than a week after the Federal Reserve said foreign banks also will be eligible for the two-year delay in complying with the rule, which is slated to take effect July 16.
The rule is intended to move some of the banks’ riskiest activities to affiliates that aren’t eligible for access to the federal safety net, including federal deposit insurance and the Fed’s discount window. The provision, pushed by then-Senate Agriculture Chairman Blanche Lincoln (D., Ark.), requires banks to spin off some derivatives trading operations into separate units….”
“Pfizer Inc. PFE +0.18% and Takeda Pharmaceutical Co. 4502.TO -1.36% have reached a $2.15 billion settlement with Teva Pharmaceutical Industries Ltd.TEVA -0.43% and Sun Pharmaceutical Industries Ltd. 524715.BY -0.17% for patent-infringement damages resulting from their launches of generic Protonix in the U.S.
The settlement comes after a nearly 10-year legal battle in which Pfizer and Nycomed—now part of Takeda—sought to enforce the patent for the blockbuster acid reflux medicine.
Pfizer will get 64% of the settlement’s proceeds, while Takeda will get the remainder….”
“This is a milestone agreement for both companies that puts years of legal disputes behind us and gives us the opportunity for collaboration,” Rambus Chief Executive Officer Ron Black said yesterday in a statement.
The five-year agreement with SK Hynix will bring in $12 million a quarter, according to the statement.
A federal judge in San Jose, California, last month ordered Rambus to pay $250 million to SK Hynix for destroying documents in their litigation. Rambus, based in Sunnyvale, California, won a $349 million judgment on its patent-infringement claims in 2006.
Representatives of SK Hynix didn’t immediately respond to an e-mail seeking comment on a licensing accord….”
“Three of the largest Internet companies called on the U.S. government to provide greater transparency on national security requests on Tuesday, as they sought to distance themselves from reports that portrayed the companies as willing partners in supplying mass data to security agencies.
In similarly worded statements released within hours on Tuesday, Google,Microsoft and Facebook all asked the U.S. government for permission to make public the number and scope of data requests each receives from security agencies.
Each of the companies, and several others, have come under scrutiny following disclosures in The Guardian and Washington Post newspapers of their role in a National Security Agency data collection program named Prism….”
“News Corp.’s shareholders on Tuesday voted to advance the media company’s plans to split off its publishing assets into a separate publicly traded entity and rename the remaining TV and film-focused business 21st Century Fox.
At a meeting in New York, shareholders easily approved three amendments to News Corp.’s certificate of incorporation that position the company to complete the separation on June 28, News Corp. Chairman Rupert Murdoch said at the meeting.
Following the separation, the new print media company, which will take the name News Corp., will have assets including The Wall Street Journal, New York Post, and Times of London, plus book publisher HarperCollins. 21stCentury Fox will house the Fox broadcast and cable networks and the 20th Century Fox studio, among other properties.
Shares in the two companies will begin trading separately on July 1.
Mr. Murdoch said the separation will “enable us to respond more rapidly to fast-evolving markets.” Mr. Murdoch will continue as chairman and CEO of 21st Century Fox and will become executive chairman of the print media spin-off. The Murdoch family will effectively control both companies.
News Corp.’s board approved the separation late last month. As part of the deal, shareholders will get one share of the new publishing-focused company for every four shares of News Corp. they now own.
The move has been popular with investors who believe the print businesses are a drag on the growing media and entertainment assets. News Corp.’s stock is up about 45% since the company announced the separation nearly a year ago.
Mr. Murdoch and other News Corp. executives have sought to persuade investors that despite the long-term challenges of the publishing and newspaper world—most notably, the continuing shift of advertising from print to online— the print media assets can thrive in a separate company….”
“We’ve all been there: stuck in traffic, frustrated that you chose the wrong route on the drive to work. But imagine if you could see real-time traffic updates from friends and fellow travelers ahead of you, calling out “fender bender…totally stuck in left lane!” and showing faster routes that others are taking.
To help you outsmart traffic, today we’re excited to announce we’ve closed the acquisition of Waze. This fast-growing community of traffic-obsessed drivers is working together to find the best routes from home to work, every day.
The Waze product development team will remain in Israel and operate separately for now….”
“…The company announced new products, features, and a drastically redesigned iPhone and iPad operating system called iOS 7.
Here’s a quick round up of everything you missed…”
“Boeing Co. (BA) raised its 20-year forecast for commercial jet demand by 3.8 percent as air traffic outstrips global economic growth and airlines refresh their fleets with $4.8 trillion in new planes.
Airliner sales will total 35,280 new jets during the next two decades, compared with a 2012 projection of 34,000 planes, Boeing said today in Paris before next week’s Paris Air Show. All the gain will come from purchases of the single-aisle models that are the workhorses of carriers’ fleets, Boeing said.
Boeing is betting on the durability of that expansion as it considers boosting output beyond the record pace already set for narrow- and wide-body planes. There’s no sign of a bubble, Randy Tinseth, marketing vice president for commercial airplanes at Chicago-based Boeing, said in a briefing ahead of the forecast.
“Passenger traffic has been very resilient,” Tinseth said. “Every indicator that we see in the market says that demand is real and there’s a need to increase production.”
Boeing’s order estimate is more important than the projected gain in value — up 8.3 percent from last year’s estimate — because that tally is based on list prices typically subject to discounts. The planemaker’s rivalry with Airbus SAS will change over the coming decades with the arrival of new models such as Bombardier Inc. (BBD/B)’s CSeries and Commercial Aircraft Corp. of China’s C919….”
“Monsanto won another round in a legal battle with organic growers Monday as an appeals court threw out the growers’ efforts to stop the company from suing farmers if traces of its patented biotech genes are found in crops.
The U.S. Court of Appeals for the Federal Circuit affirmed a ruling that found organic growers had no reason to try to block Monsanto from suing them, as the company had pledged it would not take them to court if biotech crops accidentally mix in with organics.
Organic farmers and others have worried for years that Monsanto will sue them for patent infringement if their crops get contaminated with Monsanto biotech crops.
(Read More: Supreme Court Rules for Monsanto in Patent Case)
In its ruling Monday, the appellate court said that organic growers must rely on company assurances on its website that it will not sue them so long as the mix is very slight.
“Monsanto’s binding representations remove any risk of suit against the appellants as users or sellers of trace amounts (less than one percent) of modified seed,” the court stated in its ruling.
In a statement issued Monday, the company said, “The assertion that Monsanto would pursue patent infringement against farmers that have no interest in using the company’s patented seed technology was hypothetical from the outset.”
Monsanto has developed a reputation for zealously defending patents on its genetically altered crops, which include patented “Roundup Ready” soybeans, corn and cotton, genetically altered to tolerate treatments of its Roundup weedkiller….”
“McDonald’s said sales at its established restaurants around the world rose 2.6 percent in May as it expanded late-night breakfasts, tweaked other menus and spent more on advertising value-priced meals.
Analysts polled by Consensus Metrix had expected a 1.9 percent rise…”
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FAYETTEVILLE, Ark. (AP) — Wal-Mart executives are expected to make the case it is improving the way it does business overseas and outline new growth opportunities at the world’s largest retailer’s annual shareholder meeting Friday.
“Wal-Mart faces increasing scrutiny from investors over how it has handled allegations of bribery in its Mexican operations that surfaced a year ago. It also faces pressure to increase its oversight of factory conditions abroad following a building collapse in April in Bangladesh that killed more than 1,100 garment workers. The discounter, based in Bentonville, Ark., is also under scrutiny for how it treats its workers.
Those problems are happening as Wal-Mart Stores Inc. is wrestling with slower sales growth.
Wal-Mart’s annual meeting, at the University of Arkansas at Fayetteville’s Bud Walton Arena, attracts thousands of investors and has historically had the air of a giant pep rally. The company brings in A-list speakers and performers like basketball legend Michael Jordan and pop singer Justin Timberlake.
Wal-Mart is considered an economic bellwether because it accounts for nearly 10 percent of nonautomotive retail spending in the U.S. The company’s first-quarter results, reported last month, showed that its low-income shoppers remain under stress. While the housing market is recovering and the stock market has rallied, low-income people haven’t benefited much. They’re also facing new pressures like higher payroll taxes that have affected spending.
During the first quarter, Wal-Mart said its profit edged up just slightly, but the company reported its first decline in a key revenue measure in its U.S. namesake business in seven quarters.
U.S. Wal-Mart stores account for 59 percent of the company’s total sales, which reached $466.1 billion for the year ended Jan. 31, excluding revenue from membership fees from its Sam’s Club division….”