NEWS AT A GLANCE
British Energy buyout on the rocks
Shareholders of British Energy, Britain’s largest nuclear power producer, reportedly rejected a $23.7 billion takeover bid from Électricité de France SA, prompting EdF to scratch its offer. EdF had been expected to announce the successful completion of the deal today, after five months of negotiations. (MarketWatch) Several private investors reportedly rejected EdF’s offer as too low, although both sides say the buyout talks are ongoing. “There wasn’t sufficient upside” for investors, said Evolution Securities analyst Lakis Athanasiou. (Bloomberg) The scuppered deal threatens to derail Britain’s plan to build new nuclear power plants; British Energy by itself doesn’t have the necessary money or technology. (Reuters)
Weak U.S. car sales sideswipe GM, dent others
General Motors reported a $15.5 billion quarterly loss—the third-largest in its history—on a combination of slumping North American sales, labor and restructuring charges, and $1.3 billion in writedowns at its GMAC finance unit. The writedowns were on the values of the trucks and SUVs in GMAC Financial Services’ portfolio. In all, GM booked $9.1 billion in one-time charges, including $3.3 billion for the buyout of 19,000 workers. (AP in Yahoo! Finance) The weak U.S. market also led lower-than-expected profits at Nissan, where earnings fell 43 percent, to $489 million, (MarketWatch) and at BMW. BMW, the top luxury automaker, posted a $790 million profit and abandoned its forecast for a profit in 2008. (Bloomberg)
British Airways profit slumps 90 percent
British Airways reported a 90 percent drop in quarterly profit, to $54 million, on record fuel prices and sagging air travel. The airline cut its annual revenue forecast to 3 percent growth, from 4 percent. (MarketWatch) “It is going to be a tough year ahead,” said analyst Douglas McNeill at Blue Oar Securities in London. “British Airways is at least going into it with a good balance sheet.” (Bloomberg) British Airways, in merger talks with Spain’s Iberia, said it will raise fares and cut routes to cope with the rising costs and slowing demand. (Reuters) Similarly, Northwest Airlines said it will add a fuel surcharge of up to $80 for round-trip tickets on 7,000 domestic routes starting next January. (AP in CNNMoney.com)
Housing crimps the flight of the snowbirds
For the first time since 2001, Chicago saw its population grow last year, and it wasn’t alone—Green Bay, Kansas City, St. Paul, Grand Rapids, and Boston all saw their declining populations turn around. But influx slowed in hot areas, both in climate and growth, like Phoenix, Houston, and Dallas. And six of the top 25 biggest population losers were in once-booming Florida. Demographers explain this trend through housing, as retirees and others who want to move to the Sun Belt are unable to sell their houses. The southward migration will probably return when housing recovers, but not quite so heavily, says University of Florida demographer Scott Cody. “A lot of people hope we don’t return to that,” he adds. (MarketWatch)
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