Best Buy Buy-Out Offer|
Richard Schulze - Best Buy's largest shareholder, with a 20.1% stake - founder
and former chairman of Best Buy Co. Inc. (BBY) on Monday, offered $24 to $26 a
share for the roughly 80% of the electronics retailer he does not already own.
Schultze said the price represents a 36% to 47% premium over the shares' last
Friday closing price. A Schulze spokesman said the total value of the proposed
deal could reach $9 billion. Schulze said in a press release that he has talked
with some private equity firms about participating in the transactions and that
he, "plans to finance the proposed acquisition through a combination of
investments from the private equity firms, reinvestment of approximately $1
billion of his own equity, and debt financing." Credit Suisse, Schulze financial
adviser, has said it is highly confident that it can arrange the needed debt
financing for the deal. "This proposal represents a unique win-win opportunity
for everyone involved. It would create a new day for Best Buy employees and
provide public shareholders with a significant all-cash premium for their
shares," Schulze concluded.
Baidu (BIDU) spokeswoman Betty Tian on Monday reported that three employees had
been arrested by the police due to the large amounts of money that had been
transferred in exchange for the deletions to the website. Baidu fired four
employees suspected of having taken payments to delete posts from its website.
"Baidu has always firmly cracked down on the illegal behavior of online posts
deletion for payment," the Ms. Tian wrote in an email. Baidu said that illegal
deletion of online posts remains a major problem in China, and that it would
proactively report illegal activity to the authorities. According to Chinese
media reports, it is common for individuals or companies to pay money to have
controversial or negative posts deleted from websites and blogs. Baidu said they
maintain records of original posts and of deletions made by employees, and
verifies the records later.
In a regulatory filing, Jersey City, N.J. based firm Knight Capital Group Inc.
(KCG) reported that investors have agreed to buy $400 million of 2% convertible
preferred stock a 'rescue plan' - a "securities purchase agreement" - which can
be converted into about 267 million shares of common stock, providing a critical
lifeline for the Jersey City, N.J.-based market-maker. The rescue plan will help
fill hole left by errant trading last week as Knight entered into 'securities
purchase agreement' with investor group which includes Jefferies, TD Ameritrade
and Getco. Knight currently has about 89 million shares outstanding and the deal
was anticipated to be consummated Monday. Knight said in a statement, as a
result of the loss it "experienced reduced order flow and liquidity pressures,
and its capital base was severely impacted." Monday morning, the New York Stock
Exchange advised that it has temporarily assigned custodial responsibility for
about 680 stocks listed on its NYSE and NYSE Market exchanges to the
designated-market-maker unit of Knight rival Getco LLC. Upon "completion and
approval of a recapitalization plan" the exchange said the stocks would be
reassigned to Knight - a decision reached "in full cooperation" with Knight and
Getco. Knight typically handles nearly $20 billion of shares a day through the
New York Stock Exchange, most for retail brokerages that serve small investors.
Last Friday, the 17-year-old firm told customers it had received a line of
credit to allow it to stay open for business, but some of the firm's largest
clients continued to steer their business to rivals. According to a research
note Monday from J.P. Morgan Chase & Co. the deal ensures Knight remains afloat
and will able to trade thus, also presage a breakup of the company. Mary
Schapiro, chairman of the Securities and Exchange Commission rejected Knight's
request to be allowed to cancel many of last Wednesday's errant trades which
resulted in a $440 million loss. Goldman Sachs Group Inc. (GS) reportedly bought
the stock in a bulk lot at a discount. The errant trades were triggered a day
after Knight installed software related to the launch of a New York Stock
Exchange platform aimed at attracting more retail investors.
A monthly labor-market report released Monday by the Conference Board showed- a
gauge of employment trends ticked higher in July, signaling that jobs growth may
continue during the next few months at a slow rate. The private research group
said its employment-trends index, which is designed to forecast turning points
in employment, rose 0.41% in July from June. "There is no reason to expect
employers to rapidly expand their workforce in the current economic
environment," said Gad Levanon, macroeconomic research director at the
Conference Board. The employment-trends index is made up of eight labor-market
indicators, five of which made positive contributions in July, led by initial
claims for unemployment-insurance benefits. July's index level is 5.9% higher
than last year. The index reached 108.11 in July, compared with 100 in 1996.
According to a survey released Monday, U.S. banks have made it slightly easier
for companies to obtain loans as well as for consumers to get car loans and
credit cards. The Federal Reserve’s senior loan officer survey did not report
any major change in lending. The Fed said, most banks held lending standards
unchanged for business loans in the face of stronger demand. For the small
percentage of banks that did change their standards, their move was in the
direction of easing. The Fed surveyed 64 domestic lenders and 23 U.S. branches
of foreign banks to help gauge the willingness of banks to lend and the demand
that they were seeing. Lending standards were eased due to more aggressive
competition from other banks and nonbank lenders - not because of a more
favorable economic outlook. The survey found that small firms did not benefit
from the easing of lending terms. Per the Fed survey, U.S. banks continued to
tighten their lending standards to European banks as a result of the debt
crisis. Demand for loans in the consumer sector increased slightly while lending
standards were little changed. There were reports of stronger demand for
mortgages and auto loans with some reporting that they eased standards of auto
loans and credit-card loans.
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