NEWS AT A GLANCE
British Airways profit doubles
British Airways said its annual profit more than doubled, to $1.32 billion, and that it would pay a dividend for the first time in seven years. But it warned that the current quarter would be “particularly difficult” due to high oil prices and the airline’s bungled move into the new Terminal 5 at London’s Heathrow airport. (MarketWatch) British Airways boosted earnings by increasing traffic on its flights between London and the U.S., especially among corporate fliers. It projected a nearly $2 billion rise in fuel costs for the current year. “The figures are slightly ahead of consensus, but the caution for this year on fuel is clear,” said JPMorgan analyst Chris Avery. “At $120 oil, BA won’t make much money in the new year.” (Bloomberg)
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Yahoo! and Icahn square off
Billionaire investor Carl Icahn said he had amassed 59 million shares of Yahoo! and would work to replace the board of directors with a slate that backs a merger with Microsoft. Icahn said the current board “acted irrationally” by refusing Microsoft’s $47.5 billion buyout. (Reuters) Yahoo! Chairman Roy Bostock replied that the board had “kept an open mind and an open ear” during negotiations, but that Microsoft undervalued the company and “has publicly stated that they have moved on.” Icahn reportedly has not received any sign of renewed interest from Microsoft. Icahn has launched 17 proxy battles to date. “If we go to an election, Icahn will win,” said Larry Haverty of Gabelli Funds’ Gamco Investors. (Los Angeles Times, free registration)
British Energy lands suitors
British Energy Group, the largest U.K. producer of nuclear power, said it had received several takeover bids, with some valuing the company at as high as $21.3 billion. The news sent British Energy shares up by as much as 7 percent in London early today. (MarketWatch) British Energy operates eight nuclear power plants, and is an integral part of the British government’s plan to amp up nuclear production and replace aging facilities. (Reuters) Before the announcement, only France’s state-controlled Electricite de France SA, the world’s largest nuclear power company, was known to have bid on the company. “It’s moderately positive to have the indication that there’s more than one party,” said Pali International analyst Angelos Anastasiou. (Bloomberg)
London’s shisha underground
England’s smoking ban has largely pushed shisha dens underground in London’s “Little Cairo” district, and that’s taking its toll on the neighborhood. Smoking shisha, the tobacco water pipe found throughout the Middle East and North Africa, is a social event, and the 66 pre-smoking-ban shisha cafes along Edgware Road were the cornerstone of the area’s nightlife. Smoking is still allowed outside, but poor weather and limited seating have stripped the ritual of much of its appeal. That has led to underground shisha parlors, which risk a $5,000 fine for noncompliance with the ban. They are also, by most accounts, smoky and unpleasant. “You may as well buy your own and smoke it at home,” says Saman Ziaie, 21. (Bloomberg)
