EU probes Oracle-Sun deal, cites open-source issue

By AOIFE WHITE , 09.03.09, 10:50 AM EDT

The Internet portal didn't shed light on a possible deal with the software giant as it reported a loss and more job cuts.

Suncor Energy Inc. will acquire Petro-Canada in a US$15.5 billion deal that will unite two of Canada's biggest oil companies, the companies announced Monday.

The move is expected to yield savings in operating costs of over CA (nyse: CA - news - people )$300 million (US$244 million) year, and annual capital efficiencies above CA$1 billion (US$812 million), the companies said.

Under the deal, Petro-Canada (nyse: PCZ - news - people ) common shareholders will receive 1.28 common shares of the expanded company for each share of Petro-Canada, while Suncor shareholders will receive new shares on a one-for-one basis.

The share exchange represents a 25 percent premium for Petro-Canada shares, based on a 30-day weighted average of the share price. Based on the closing price Friday, the deal values Petro-Canada at CA$19.12 billion (US$15.5 billion)

Petro-Canada shareholders will hold 40 percent of the enlarged company and Suncor shareholders will hold 60 percent. Both companies are based in Calgary.

Monday's announcement marks the creation of the largest oil and gas company in Canada by market cap, though the merged entity will be smaller than other global heavyweights such as Exxon Mobil (nyse: XOM - news - people ) and ConocoPhillips (nyse: COP - news - people ), which boast market capitalizations of US$326.6 billion and US$55.97 billion respectively.

"This merger creates a made-in-Canada energy leader with the assets, cost structure and financial strength to compete globally," said Rick George, president and chief executive officer of Suncor, who will continue in those roles in the new company.

The Belgian government reached a fire sale deal Saturday to sell Fortis - the largest bank in Belgium and the Netherlands until the global financial crisis - to France's BNP Paribas.

The deal must be approved by Fortis (other-otc: FORSY.PK - news - people ) Holding shareholders, possibly on April 8 and 9.

The sale of Fortis Bank to Paris-based BNP Paribas (other-otc: BNPQY.PK - news - people ) was first concluded last October at a value of euro14.5 billion ($18.3 billion). But disgruntled shareholders of Fortis Holding won a court ruling saying the government had no right to sell the bank without consulting them.

Under the new deal, BNP Paribas will take a 75 percent stake in Fortis Bank and 25 percent of Fortis' insurance activities in Belgium. The government retains a 25 percent stake in Fortis Bank and Fortis Holding will continue to hold 75 percent of the insurance business.

Fortis shares traded at euro1.04 Friday, valuing the company at only euro2.4 billion ($3 billion).

The deal adds Belgium to BNP Paribas' market. It currently has no presence in the country.

Premier Herman van Rompuy and Finance Minister Didier Reynders concluded negotiations with BNP Paribas chief executive Baudouin Prot early Saturday, several hours after a midnight deadline had passed.

Citigroup shares dived in pre-market trading on Friday after the bank confirmed that U.S. taxpayers would take on a bigger share of the bank as the U.S. government sought to bolster its capital.

Citigroup (nyse: C - news - people ) and the government have reached a deal to convert up to $25.0 billion in government-held preferred shares in the bank into common equity, the bank confirmed Friday. The deal would see the government's voting stake in Citigroup rise to as much as 36.0%, from the current level of 7.0%. This will be accompanied by an infusion of new members on the bank's board, giving it a majority of independent directors, the bank's chairman Richard Parsons said Friday.

Shares of Citigroup plunged 38.2%, or 94 cents, at $2.46, in pre-market trading Friday, suggesting investors feared further dilution of their shareholdings.

Just got an e-mail from Alexander Turcic over at MobileRead.

Turcic, based in Switzerland, writes:

Hi David:

I hope you are doing fine. Got some news regarding Kindle 2 price and release info, plus the first Kindle 2 pics.

Cheers,
Alex

According to the post, the Kindle 2, which is expected to be announced Monday at 10 a.m. in New York, will be available on February 24 and carry a list price of $359--just like its predecessor. All in all, the device looks similar to what we saw in earlier leaked photos, but in these shots the Kindle 2 looks sleeker and decidedly more impressive. While we have no confirmation that this is the real deal, these look like marketing shots if I ever saw them.

More photos after the jump.

Click here for more stories on Amazon's Kindle.

Street Slacks After Dow Deal Crumbles

Steve Schaefer, 12.29.08, 12:20 PM EST

Kuwait bailed on a $17.4B joint venture with the company, dragging the major indexes down.

U.S. markets wobbled Monday, as investors weighed the impact of a collapsed petrochemical deal against good news for a failed bank.

Dow Chemical (nyse: DOW - news - people ) was reeling, after Kuwait said it was pulling out of a $17.4 billion joint venture, which was scheduled to begin at the start of the New Year. By scrapping the deal before Jan. 1, Kuwait dodged having to pay a $2.5 billion breakup fee.

Investors were pondering the impact of the collapsed venture on Dow's acquisition of rival Rohm and Haas (nyse: ROH - news - people ). Dow had planned to use proceeds from the Kuwait deal to finance part of its $15.0 billion purchase of Rohm & Haas. Citigroup analyst P.J. Juvekar said the collapse of the Kuwait deal was a huge negative for Dow investors, and that the company should try to protect its shareholders by renegotiating the Rohm and Haas takeover, or walking away and paying a termination fee. (See "Kuwait, Dow Chemical Deal Fizzles.")

Dow shares slumped $3.45, or 18.7%, to $15.05, Monday morning; Rohm and Haas tumbled $11.91, or 18.7%, to $51.65.

On a broader scale, the Dow Jones industrial average was off 92 points, or 1.1%, to 8,424 by midday; while the S&P 500 fell 10 points, or 1.2%, to 862; and the Nasdaq sank 28 points, or 1.8%, to 1,503.

Financial stocks softened, despite encouraging news regarding one of their fallen brethren. The Federal Deposit Insurance Corp. is nearing a deal to sell assets of failed bank IndyMac to a group composed of private equity firms J.C. Flowers and Dune Capital Management, and hedge fund Paulson & Co. According to reports cited by TradeTheNews.com, the consortium is close to buying the bank, its 33 branches, its reverse-mortgage unit and a $176.0 billion loan-servicing portfolio. The FDIC seized the assets of IndyMac, which had massive exposure to the subprime mortgage meltdown, in July.

Oil prices were on the rise, as Israel's air strikes against Hamas in Gaza jogged geopolitical fears. Crude came off its highs despite the turmoil, but traded up 35 cents, at $38.06 a barrel, heading toward the afternoon. United States Oil Fund (nyse: USO - news - people ), an exchange-traded vehicle that invests in crude and other products, gained 15 cents, or 0.5%, to $29.25.

BCE Inc. said Friday that it plans to buy back up to 5 percent of its common shares and resume paying dividends following the collapse of the deal to take Canada's largest telecom company private in what would have been the biggest leveraged buyout in history.

The parent company of Bell Canada said it will repurchase up to 40 million outstanding common shares and will reinstate its quarterly dividend at 36.5 Canadian cents per share.

"A share buyback is the most efficient method of distributing capital to our shareholders, particularly given the current valuation metrics of the company," said chief financial officer Siim Vanaselja.

The buyback would cost BCE about 840.8 million Canadian dollars ($677 million) at its price at midday Friday.

BCE said earlier this week that it would restore the dividend and buy back stock following the collapse of the proposed $35 billion buyout by an investor group led by the Ontario Teachers' Pension Plan and several U.S. partners. The investors group had expected to complete its deal for BCE on Dec. 11.

But the deal fell through after a review by accounting firm KPMG found it would have left the company in violation of solvency tests of the privatization agreement, partly due to the amount of debt involved in the transaction and current market conditions.

There were also arguments over a breakup fee. The buyers group had said that no breakup fee will be paid, but BCE said in a separate statement it will demand payment of 1.2 billion Canadian dollars ($970 million).

Bell Canada issued a statement Friday saying that it will continue to move forward as a re-energized company and is supportive of BCE's buyback plans.

"Given this steadily improving business trajectory, we view the dividend and share buyback initiatives announced by BCE today as very attractive to our shareholders now and going forward," said George Cope, president and CEO of Bell and BCE.

BCE said the first new dividend payment will be made Jan. 15 to shareholders of record on Dec. 23. BCE also scheduled its annual meeting of shareholders on Feb. 17 in Montreal.

The dividend yields 6.95 percent at Friday morning's share price of 21.02 Canadian dollars, down CA$1.01 in trading in Toronto.

That share price is down from CA$38.35 just before it became apparent on Nov. 26 that Teachers' cash bid of CA$42.75 a share would not proceed.

The Toronto-based Ontario Teachers' Pension Plan -- with assets of CA$108 billion ($87 billion) in 2007 -- invests and administers the retirement funds for Ontario's 353,000 active, inactive, and retired teachers. U.S.-based Providence Equity Partners and Madison Dearborn Partners LLC are also involved in the proposed buyout.

BCE, which has more than 54,000 employees, had annual revenue of CA$17.8 billion ($14.4 billion) in 2007. It had 5.8 million wireless subscribers, 8.64 million phone lines, 1.94 million Internet subscribers and 1.82 million satellite television subscribers in 2006. It is Canada's largest communications company.

One of Yahoo Inc.'s largest shareholders, Ivory Investment Management LP, is urging the Internet company to pursue a sale of its search unit to Microsoft.

In a letter to the company's board, the investment firm proposed a deal Wednesday in which Microsoft (nasdaq: MSFT - news - people ) would acquire Yahoo (nasdaq: YHOO - news - people )'s search engine and Yahoo would retain 80 percent of revenue generated by search queries on its own site.

Ivory said Yahoo could get about $15 billion from Microsoft for the search platform alone, a deal it said would give shareholders a value of $24 to $29 per share, or more than double Yahoo stock's closing share price Tuesday of $12.19.

Yahoo shares rose 62 cents, 5.1 percent, to $12.81 in morning trading Wednesday.

Yahoo Chief Executive Jerry Yang said recently that he would resign, a response to shareholder discontent that brewed after Yahoo rebuffed a $47.5 billion takeover offer from Microsoft for the entire company. Before stepping down, Yang said he was still open to some kind of a deal with Microsoft, after antitrust concerns sank Yahoo's planned advertising partnership with Google Inc. (nasdaq: GOOG - news - people )

Microsoft CEO Steve Ballmer has said a takeover of Yahoo is off the table but has expressed interest in the company's search business.

In the letter Wednesday, Ivory took Yahoo's board to task for not seeking a deal with Microsoft more aggressively and accused the company of ignoring shareholder interests. The firm holds 21.4 million, or about 1.5 percent, of Yahoo's shares.

Congressional aides and a senior administration official say the White House and congressional Democrats have reached an agreement in principle to speed $15 billion in government loans to struggling U.S. automakers.

The plan could see a vote as early as Wednesday. It creates a government "car czar," to be named by President George W. Bush, to oversee the bailout billions and an auto industry restructuring. The czar would have to yank back the federal money if carmakers didn't do enough to reinvent themselves.

The measure is not final and could still face obstacles from congressional Republicans, who have not approved it.

The officials spoke on condition of anonymity because they were not authorized to announce the developments.

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