Carlyle Crashes, EA Plays Rough
Mortgage fund Carlyle Capital is heading toward collapse, fast, after failing to soothe nervous lenders. Electronic Arts is sharpening its bid for rival video game maker Take-Two. And fashion retailers are tailoring their Web sites to suit men
NEWS AT A GLANCE
Carlyle fund collapses
Amsterdam-listed mortgage-bond fund Carlyle Capital is on the verge of collapsing after failing to reach a deal with lenders. Carlyle Capital, an affiliate of U.S. private equity giant Carlyle Group, said lenders will “promptly” take over its remaining assets. (MarketWatch) Carlyle Capital has already defaulted on $16.6 billion in debt, and its shares have dropped 78 percent since trouble surfaced Feb. 29. (Reuters) The fund’s implosion sparked fears about other mortgage-backed assets and the broader global economy. “There’s more to come,” said Greg Bundy at InterFinancial Ltd. in Sydney. “The problem is no one can give you an educated guess about how much.” (Bloomberg)
Electronic Arts plays hardball with Take-Two
Video game maker Electronic Arts is launching a $26-a-share tender offer for all outstanding shares of smaller rival Take-Two Interactive, after Take-Two rejected its $1.9 billion offer. Take-Two dismissed the earlier offer as an attempt to buy the company on the cheap just before it releases the latest installment of its hit “Grand Theft Auto” franchise. (Reuters) True hostile takeovers are rare in the technology sector, but analysts think EA will prevail, even if it has to raise its offer a bit. “What the stock and the market are telling you is every day that goes by makes this deal less likely at $26,” said Pacific Crest Securities analyst Evan Wilson. (The Wall Street Journal)
Southwest benches questionable aircraft
Southwest Airlines grounded 43 aircraft to make sure they were safe enough to carry passengers, canceling at least 139 flights by last night. The planes make up about 8 percent of Southwest’s fleet. (AP in BusinessWeek.com) The FAA fined Southwest a record $10.2 million last week for failing to check planes for cracks, and Southwest suspended three employees Tuesday. (The Baltimore Sun) The news could tarnish Southwest’s once-top-notch reputation. “Friendliness and customer service are all important to the brand, but at the root of any brand in this category is safety,” said Allen Adamson at brand consultancy Landor Associates. (The Wall Street Journal)
Fashion sites court men
Men and women shop differently online, and online clothing retailers prefer the male way. Men, it turns out, spend less time deciding on purchases, buy more expensive products, and return items less often than women. Women still spend more on online apparel than men—$103.1 billion versus $57.2 billion—but sales are rising much faster for male e-shoppers. This has prompted retailers to expand their online men’s sections, or even launch new men-only clothing sites, notably making them load quicker and putting more images on one Web page. “Men tend to value their time more,” says Forrester Research analyst Sucharita Mulpuru. (The Wall Street Journal)
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