FOLLOW THE WEEK ON FACEBOOK
Malls For Sale, Mortgage Firm Sale Fails
January 2, 2008
NEWS AT A GLANCE
Centro’s mall sale
Australia-based shopping mall operator Centro Properties Group put itself up for sale as it struggles to refinance its $3.4 billion debt in the tight credit market. Centro expanded its U.S. holdings to some 700 malls last year, becoming the country’s fifth-largest mall owner. (Los Angeles Times, free registration required) But the company’s stock plunged 86 percent last month after it revealed its refinancing problems. It is seeking bids for some or all of its assets. “The trouble is that when you signal you are distressed, you may have to take a haircut when selling assets, particularly the good ones,” said Michael McCormick at Leyland Private Asset Management in Sydney. (Bloomberg)
Mortgage firm buyout collapses
Mortgage and vehicle leasing firm PHH Corp. said its $1.7 billion sale to GE and Blackstone Group fell through after Blackstone failed to come up with the needed money. (The Wall Street Journal) Blackstone said its banks, J.P. Morgan and Lehman Brothers, balked at financing the purchase of PHH’s mortgage business, as the mortgage market has weakened since the deal was signed last March. (The New York Times, free registration required) Blackstone could owe PHH a $50 million termination fee. There was a record $787 billion worth of leveraged buyouts last year, but a record $186 billion in buyouts collapsed as credit markets tightened. (Bloomberg)
Qualcomm faces court setback
Wireless chip maker Qualcomm said new chipsets that don’t infringe on rival Broadcom’s patents will be in handsets as early as March. (Reuters) A federal judge in California on Monday ordered Qualcomm to cease selling third-generation chips that a court found violated patents held by Broadcom, although the judge allowed Qualcomm to sell certain patent-infringing chips for a year if it paid Broadcom royalites. (Dow Jones in CNNMoney.com) In other chip news, Banc of America Securities downgraded Advance Micro Devices to sell, from neutral, saying AMD’s delayed new computer chips will not be enough to stem market-share loss to Intel. (MarketWatch)
A second wind from advertising
William Shatner’s 10 years as spokesman for the travel Web site Priceline has been good for both Shatner and Priceline—and that’s good news for stars whose celebrity is waning. Shatner’s early lounge-singer TV spots for Priceline helped revive his TV career and boosted Priceline to a nationally recognized brand. Other companies, like Geico, have taken note, hiring the likes of Little Richard and Burt Bacherach. “When celebrities come in and they’re not taking themselves too seriously, it works well,” said Steve Bassett at the Martin Agency, which created the Geico commercials. (Los Angeles Times, free registration required)
Try 4 Risk-Free Issues of The Week magazine.
of The Week magazine.