EWS AT A GLANCE
Time Warner and cable unit separate
Time Warner and its Time Warner Cable subsidiary agreed to a legal and structural separation. The complete spin-off of Time Warner Cable, the No. 2 U.S. cable TV company, will be accompanied by a one-time $10.9 billion cash dividend for shareholders, $9.25 billion of which will go to the parent company. (MarketWatch) The cable unit became a publicly traded company about a year ago, in response to shareholder demands that the unwieldy parent company simplify its operations, but Time Warner still owns 84 percent of the cable provider. (AP in Yahoo! Finance) Time Warner said it will distribute its entire stake to shareholders in a to-be-announced “tax-efficient manner.” (Bloomberg)
Staples target makes its own purchase
Dutch office supply distributor Corporate Express, the target of a $2.3 billion hostile takeover bid by U.S. retailer Staples, made its own $2.7 billion deal for French competitor Lyreco SA. The Lyreco buyout would create the largest business-to-business player in Europe, North America, and Asia. (MarketWatch) Corporate Express shareholders will have to choose between the Lyreco deal and Staples’ offer of 8 euros a share. (Reuters) Corporate Express shares, now at just below 8 euros, were trading below 4 euros a share before Staples’ takeover offer. “Corporate Express used its higher stock price to enable this” Lyreco deal, said analyst Fernand de Boer at Petercam in Amsterdam. (Bloomberg)
HP reaps benefits of foreign demand
Hewlett-Packard reported a 16 percent rise in quarterly profits, to $2.1 billion, as strong laptop sales and international growth made up for flat desktop PC revenue and soft U.S. sales. HP now earns about 70 percent of its revenue from outside the U.S. (The San Jose Mercury News) The results were in line with the results prereleased when HP announced its $13.9 billion takeover of Electronic Data Systems. HP’s shares are down about 6 percent since the EDS deal was revealed, amid concerns over how HP will make it pay off. (AP in BusinessWeek.com) “That’s the question I’m getting: How do we know they’re going to pull this off?” said American Technology Research analyst Shaw Wu. (The New York Times)
Trading the pickup for the Vespa
With gas prices at record highs and the economy in the doldrums, sales of trucks, cars, and even motorcycles were down last quarter. Sales of motor scooters, on the other hand, rose 25 percent. Despite the increased risk of riding a 300-pound Vespa to work, the huge gas and insurance savings are creating converts, even among the truck-driving set. Kevin Quinn, who owns an appliance-installation company in California, says he now spends about $6 a day on gas for his scooter, instead of $65 to $75 for his truck. He enjoys his commute more now, too. “You see and hear a lot more on the scooter, and you tend to take the long way,” Quinn says. (The Wall Street Journal)
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