Feature

The news at a glance

Yahoo: Microsoft’s offer is rebuffed; Autos: GM’s record red ink; Subprime: AIG owns up to a loss; Imaging: Polaroid tosses in the towel; Pharmaceuticals: Merck settles overcharge claims

Yahoo: Microsoft’s offer is rebuffed
You’ll have to do better than $44.6 billion. In so many words, that is what the board of Yahoo told Microsoft this week when it rejected the software giant’s $31-per-share bid for the Web portal, said Benjamin Pimentel in Marketwatch.com. In a response widely interpreted as inviting a higher bid, the board said Microsoft’s bid “substantially undervalues” Yahoo’s assets. But Microsoft has not “signaled any willingness to raise its price,” which is more than 60 percent higher than Yahoo’s market value just before Microsoft announced its bid.

“The next move is now up to Microsoft” and its little-known acquisitions czar, Christopher Liddell, said Andrew Ross Sorkin in The New York Times. Liddell, former chief financial officer of International Paper, is ready to employ “bare-knuckle Wall Street tactics,” including personal visits to Yahoo’s biggest shareholders, to pull off a hostile takeover. And though some analysts suggest that Microsoft might go higher to try to convince Yahoo’s board, Liddell is being coy. “You have to be willing to walk away,” he said. Then again, he also said that to mount a successful takeover, “you have to be disciplined and ruthless.”

Autos: GM’s record red ink
General Motors this week reported an annual loss of $38.7 billion for 2007, a record for the U.S. auto industry, said Sharon Terlep in The Detroit News. Most of the loss resulted from a charge against earnings to reflect the diminished value of future tax credits. Without that charge, GM would have posted a better-than-expected loss of $23 million. GM also announced that it had sweetened its early-retirement incentives. The company’s landmark labor contract with the United Auto Workers three months ago gives the automaker leeway to buy out workers and create a second tier of wages. “Moving out older workers is a central part of GM’s strategy to restore its struggling North American region to profitability.”

Subprime: AIG owns up to a loss

Shares of AIG plummeted this week after the insurance giant acknowledged that it had overestimated the value of some of its mortgage-related holdings, said Chad Clinton in Marketwatch.com. According to AIG’s auditors, PricewaterhouseCoopers, the company overstated the value of credit default swaps, which are a sort of insurance policy against losses on subprime mortgage bonds. The swaps are worth at least $4.9 billion less than the value AIG listed in its latest financial disclosure. The admission, said Morgan Stanley analyst Nigel Dally, “will leave investors worrying about other skeletons in the closet.”

Imaging: Polaroid tosses in the towel

Marking the end of an era, the last two U.S. plants that make Polaroid photographic film are shutting down, said Hiawatha Bray in The Boston Globe. Polaroid said this week that its Massachusetts plant that made professional-grade Polaroid film has been closed permanently, and that its other film manufacturing plant would close soon. For years a leader in photo technology, Polaroid “was unprepared for the surging popularity of digital cameras.” The company is shifting its focus to digital photography and flat-panel TVs.

Pharmaceuticals: Merck settles overcharge claims

Merck will pay the U.S. government $671 million to settle allegations that it overcharged Medicaid and improperly marketed some drugs, said Maryclaire Dale in the Associated Press. Federal law requires drug companies to charge Medicaid the lowest price it charges other customers, but Merck concealed steep discounts it had given to some hospitals, officials said. The $671 million payment also settles charges that Merck improperly gave physicians cash and other inducements to prescribe its drugs.

Recommended

Sri Lanka defaults on its debt for the 1st time
Central Bank of Sri Lanka.
the hits keep comin'

Sri Lanka defaults on its debt for the 1st time

Biden cheers Finland and Sweden's 'momentous' NATO applications
Biden, Niinisto, Andersson
right this way

Biden cheers Finland and Sweden's 'momentous' NATO applications

The Sri Lankan fuel crisis, explained
Sri Lanka unrest.
Briefing

The Sri Lankan fuel crisis, explained

Russian state TV military analyst backpedals criticism of Ukraine invasion
Mikhail Khodarenok
'the colonel has been reined back in'

Russian state TV military analyst backpedals criticism of Ukraine invasion

Most Popular

Russia's failed Ukraine river crossing has pro-Russia war bloggers griping
Failed Russian river crossing
Losing faith

Russia's failed Ukraine river crossing has pro-Russia war bloggers griping

Why 'the Russian army just isn't very good'
Vladimir Putin.
Briefing

Why 'the Russian army just isn't very good'

Letter from a demoralized Pennsylvania voter
PA candidates.
Opinion

Letter from a demoralized Pennsylvania voter