Home > Uncategorized > Business this week: 28th April – 4th May 2007

Business this week: 28th April – 4th May 2007

articles from this week’s edition of The Economist
Democracy v secularism in Turkey | Why Rupert Murdoch wants the WSJ | The London bombers, convicted | The case for education vouchers | Can Israel’s Ehud Olmert hang on? | Russia squeezes Estonia | The candidates: Rudy Giuliani | Spanish business | The world goes to town | Religion in Latin America | PayPal v Google’s Checkout | Japan’s newly assertive world role | Rape in ducks | Vaclav Havel | David Halberstam, chronicler of post-war America

Business this week

May 3rd 2007
From The Economist print edition

News Corporation, which counts the Fox television channels among its holdings, confirmed it had made a $5 billion friendly bid for Dow Jones, publisher of the Wall Street Journal. Rupert Murdoch, News Corp‘s boss, described his offer as generous, but the Bancroft family, the controlling shareholders in Dow Jones, rejected a deal. The company’s share price soared by 55% as investors speculated about rival bids. See article

The board of Cablevision Systems accepted a $10.6 billion buy-out from Charles and James Dolan, respectively its chairman and chief executive. The Dolan family founded Cablevision, which serves New York with cable-TV and owns some of the city’s best-known concerns, such as the New York Knicks basketball team and Madison Square Garden. They persuaded the board to go private after a lengthy campaign, but some shareholders are resisting the offer.

Lord Browne resigned as chief executive of BP after a court lifted an injunction against a tabloid newspaper from publishing details about his relationship with a male escort. The judge in the case declared that Lord Browne had lied about the circumstances of the affair. Lord Browne is credited with turning around BP‘s fortunes through a series of transforming deals, but as he is resigning before he was due to retire in July, he will forgo a multi-million pound bonus. See article

Eni, Italy’s biggest oil company, said it would buy assets in the Gulf of Mexico held by Dominion Resources, based in Virginia, for $4.8 billion. Eni has been operating in the United States since 1966 and said the deal would more than triple its production in the Gulf.

Delta Air Lines exited bankruptcy protection after a 19-month restructuring programme that saw it shed some 6,000 jobs. After several difficult years for the industry, Northwest Airlines is now the only big American carrier operating under bankruptcy protection, from which it expects to emerge this summer. See article

David Sidwell said he would retire as Morgan Stanley‘s chief financial officer at the end of the year. Mr Sidwell, 54, wants to spend more time working with a care charity in New York.

Deutsche Börse agreed to acquire International Securities Exchange, which is based in New York and is America’s largest equity-options market. The $2.8 billion deal is a boon for the German exchange, which has been thwarted in its previous efforts to combine with other institutions. However, analysts expect a counterbid for ISE given its fast-growing options business.

Spain’s Telefónica said it and a group of Italian financial institutions would buy the euro4.1 billion ($5.6 billion) controlling stake in Telecom Italia held by Pirelli, a conglomerate. The decision is a disappointment for América Móvil, a Mexican mobile-phone operator, which had tried to secure the stake. Its endeavour (initially in partnership with AT&T)had met stiff resistance from Italian politicians who argued that TI was a strategic asset that should not fall into foreign hands. See article

Carl Icahn intensified his efforts to win a seat on Motorola‘s board by sending a letter to shareholders in which he criticised “oversight and leadership” at the mobile-phone maker. The investor castigated Ed Zander, Motorola‘s boss, for sounding “like something straight out of Alice in Wonderland” when he reportedly said he loved his job but hated his customers.

Edward Whitacre announced that he would retire as chairman and chief executive of AT&T in June. Mr Whitacre, who took up the posts in 1990 and is the longest-serving boss of a large telecoms company, made several huge acquisitions during his tenure and is credited with instigating the industry’s consolidation.

India’s Foreign Investment Promotion Board decided that Vodafone‘s acquisition of a controlling stake in Hutchison Essar, the country’s fourth-biggest mobile-phone operator, did not breach Indian regulations on foreign investment. The government had appeared to be in some doubt about approving the deal.

Ahold, one of the world’s biggest food retailers, agreed to sell US Foodservice, its American distribution business, to a private-equity consortium for $7.1 billion. The sale severs Ahold’s ties with the unit, which caused the Dutch company to restate earnings by $1 billion after an accounting scandal in 2003.

A sluggish housing market was given as the main explanation as to why America’s economy grew at an annualised rate of 1.3% in the first quarter, the slowest growth in four years. See article

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