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Companies
Briefs .....
Media group, News Corporation,
agreed a share exchange with
Liberty Media last month. Liberty agreed to exchange its 16.3% stake in News
Corp for a 38.4% stake in satellite television provider
DIRECTV, three US regional
sports networks and $550m in cash. News Corp welcomed the deal saying that it
was able to divest its stake in DIRECTV at an attractive valuation and on a
tax-free basis, it would boost its earnings per share and it would complete a
$11bn share buyback. The transaction is expected to be completed during
2007, subject to shareholder and regulatory approval. Following this, News Corp
said it would end its stockholder rights plan, or poison pill, which had proved
controversial among shareholders, and would consider eliminating its staggered
board.
PartyGaming, which has acquired the
gambling assets of Empire Online and Intercontinental Online Gaming, has
adjusted its incentive schemes for executive directors to ensure that they stay
with the company following the drop of value of the previous scheme after the
outlawing of internet gambling in the US last October. A further 40m shares have
been gifted to its employee shares trust by the company's founders. The total
shareholder return performance target applicable to 20m of the 27m share options
granted to Mitch Garber, the chief executive, last April has been waived and the
vesting schedule has been accelerated. A new 15m share grant was given and he
will receive 2m shares if he stays with PartyGaming until 1 May 2009. A minimum
£2m bonus will be paid if he remains until December and £3m will be paid in 30
monthly instalments while he stays at PartyGaming.
Cordish, a US real
estate company, has filed a lawsuit claiming
Hard Rock Cafe and the Seminole Tribe of California rigged bidding for the
restaurant, hotel and casino chain to ensure the Native American tribe became
the businesses new owner. The suit, filed in a Florida court, alleges Hamish
Dodds, Hard Rock chief executive, conspired with the Seminole Tribe to ensure
Hard Rock USA management would remain in place at the company if the Tribe was
the successful bidder. Hard Rock is owned by Rank
Group, and Cordish claims these talks between Dodds and the Tribe were
taking place months before Rank announced it would seek bids for Hard Rock. Rank
shareholders are set to vote on the Hard Rock sale on 8 January.
Auditors at
Safran have uncovered
unexplained accounting errors to the value of €100m at the French technology
group’s defence security units. Auditing firm KPMG
has been appointed to immediately start a fraud investigation. Meanwhile, Mario Colaiacovo has agreed to resign as
chairman of Safran’s supervisory board in January; while chief executive,
Jean-Paul Béchat, has agreed to leave the company next September when he becomes
65. Francis Mer has been appointed supervisory board chairman, effective 16
January. The management restructure has been agreed in a bid to
end the boardroom in-fighting which has become a feature at the company since it
was formed in 2004 through a merger between Snecma and Sagem.
Eurotunnel bondholders voted to back the company’s restructuring plan,
staving off any immediate risk of bankruptcy for the channel tunnel operator.
This meant that all groups approved the plan and all that was required was the
final approval of the Paris Commercial Court. Jacques Gounon, Eurotunnel
chairman and chief executive, said the vote gave the company a balanced plan
preserving the interests of all stakeholders. A new company will now be created
in the form of Groupe Eurotunnel and an exchange tender offer will be presented
to shareholders. The Eurotunnel board announced that a consortium of
Goldman Sachs and
Deutsche Bank would lead the
financing of the plan while
Citigroup, which had
also offered funding would join the consortium to provide 30% of the financing.
American
International Group (AIG) has settled with its ousted chairman and chief
executive, Maurice “Hank” Greenberg, allowing him to retain
CV Starr & Co as the name of his
company. Cornelius Vander Starr founded what was later to become AIG, and both
AIG and Greenberg claimed they owned the name “Starr” and the brokerages of CV
Starr. Greenberg has in turn agreed not to conduct business as “American
International” or under any related names. The exact terms of the agreement are,
however, confidential. Greenberg was forced from AIG in 2005 as a result of
fraud allegations brought by Eliot Spitzer,
New York State attorney general.
Criminal charges against Greenberg were later dropped.
The Korean Supreme
Prosecutors’ Office (SPO) has announced its investigation into the
acquisition of Korea Exchange Bank (KEB)
by Lone Star, a
US private equity fund, has come to the interim conclusion that the purchase was
illegal. Lone Star responded by stating that the prosecutors’ allegations that
KEB’s financial condition was manipulated prior to the sale is “absurd”. John
Grayken, Lone Star chairman, called the allegations, “the same old conspiracy
theory that never made any sense and still is not supported by any hard
evidence”. He added that the price Lone Star paid for KEB was at a significant
premium to the then share price. “It is time for the investigation to be
concluded,” he said.
All current and former employees of communications company,
Ericsson, were acquitted at Stockholm
City Court following charges of evasion of tax control. When bringing the case
last year Swedish prosecutors alleged that a previously used accounting system
for payments to commercial agents was designed to evade tax control. The company
had admitted that the system was flawed, which had meant it has stopped its use,
but denied the charges and said it welcomed but was not surprised by the
acquittals.
Media company,
SMG, suspended its
search for a new chief executive as a result of an approach from a rival, UTV,
regarding a possible merger. This is the second approach by
UTV – an earlier merger proposal was
discussed, then rejected by SMG, in August. At that time SMG did not believe the
terms under which its shareholders would have received 52% equity interest in
the combined entity were fair. However, since then SMG has reported more
difficult trading conditions and its share price has declined. The present
proposal is for a possible nil premium merger based on relative market values.
Meanwhile, UTV also announced the appointment of Paul O'Brien as its finance
director (FD) and company secretary - he had joined the group in September. Jim
Downey, the previous FD has become group commercial director.
Glass Lewis, a
US proxy advisory firm, is to be acquired by
Xinhua Finance. The Chinese
financial information and investor relations service provider purchased a 19.9%
stake in Glass Lewis in August of this year, and is expected to buy the
remaining 80.1% of the company in early 2007. Glass Lewis will continue to
operate as a separate company.
Infrastructure companies,
Abertis and
Austostrade, have abandoned
a merger, approved by shareholders of both companies, as a result of the Italian
government’s persistent efforts to frustrate the combination. Among the
government’s attempts to prevent Autostrade merging with its Spanish
counterpart, Abertis, were the imposition of conditions on the merger that were
later declared illegal by the European Commission. The companies also advised
shareholders to vote against issuing an extraordinary dividend that was
dependent on the merger going ahead. However, both companies said they hoped to
resume the merger project when conditions allow.
January, 2007 |
