Archive for July, 2008

ArcelorMittal mulling Alpha Natural counter bid: report (Reuters)

Thursday, July 31st, 2008 | Finance News

NEW YORK (Reuters) -
ArcelorMittal, the world's top steel
maker, is mulling breaking up a takeover bid from
Cleveland-Cliffs Inc for U.S. coal miner Alpha Natural
, with a counter bid, the Financial Times reported.

ArcelorMittal had indicated its willingness to make an
all-cash offer for Alpha in June, prompting the latter to seek
other higher bids, the Financial Times said, citing people
close to the companies.

ArcelorMittal's bid was at or near $110 a share, the FT
added, citing its sources.

However, a spokesman for Alpha told Reuters it has a
"definite merger agreement" with Cleveland-Cliffs, for about
$8.3 billion as announced in mid-July, and that Alpha was
determined to see the deal to the finish line.

The spokesman declined to comment on any counter bids the
company may have been offered.

ArcelorMittal could also wait for the deal to break down or
for it to go through, which could make the combined entity a
takeover target as well, the FT said.

An ArcelorMittal spokesman reached via e-mail declined to
comment on the FT report. Cleveland-Cliffs did not immediately
return a call seeking comment.

(Reporting by Aarthi Sivaraman; Editing by Clarence


Gates investment arm trashes Waste Management bid (Reuters)

Thursday, July 31st, 2008 | Finance News

Bill Gates's investment arm has
waded into a brewing takeover battle between Waste Management
(WMI.N) and Republic Services Inc (RSG.N), asking Waste
to walk away.

Just over a month after he left Microsoft Corp (MSFT.O),
Gates's BGI is lobbying the largest U.S. trash hauler to drop
the unsolicited $6.2 billion bid it made this month for
Republic, the third largest.

While his investment vehicles have stakes in dozens of
companies, they have kept low profiles over the years and Gates
has not traditionally been known as an activist investor.

But BGI didn't mince words in its letter to Waste
Management's CEO and board, disclosed on Thursday.

"We can only assume your ill-timed and poorly conceived
pursuit of Republic is designed to disrupt what you perceive as
a competitive threat to your position in the market," wrote
BGI, which manages Gates's investments and those of the $39
billion charity run by him and his wife.

"An acquisition of Republic will most certainly burden the
company with excessive debt, distract your management, result
in significant regulatory burdens, and thereby reduce
shareholder value," BGI wrote in the letter.

"We encourage you to act with the best interests of your
shareholders in mind, in a responsible and prudent manner, and
to abandon this acquisition."

Republic has already struck a deal to buy Allied Waste
Industries Inc
(AW.N) and rejected Waste Management's offer.

Cascade Investment LLC, Gates's investment vehicle, and
Bill & Melinda Gates Foundation Trust LLC together own about
2.3 percent of Houston-based Waste Management, which has grown
since the late 1960s into a trash hauler with more than 350
collection operations and 270 active landfill sites.

A call to a BGI spokesman late on Thursday was not
immediately returned.

Gates on June 27 said a teary goodbye to the company he
built into the world's most valuable technology company to
focus on his foundation, the world's largest charity, funded in
part by his vast fortune and that of his bridge buddy and
another multibillionaire, Warren Buffett.

The move by BGI follows efforts by fellow multibillionaire
and activist investor Carl Icahn to influence a six-month
takeover battle between Yahoo Inc (YHOO.O) and Microsoft.

Icahn is an activist shareholder in a variety of corporate
battles, seeking to boost investor returns at the companies in
which he has stakes.

(Editing by Braden Reddall)


Judge dismisses class-action bond interest lawsuit (AP)

Thursday, July 31st, 2008 | Finance News

RALEIGH, N.C. - A North Carolina judge threw out a class-action lawsuit Thursday filed by North Carolina residents seeking refunds on income tax they paid on interest generated from out-of-state bonds.

Taxpayers Lessie Dunn and Erwin Cook Jr., had argued it was unconstitutional for North Carolina to tax income from out-of-state bonds while exempting income from in-state bonds.

Their lawsuit — which was expanded to a class-action lawsuit to include all such taxpayers — sought refunds for all individuals, companies and entities who had paid such taxes since 2000.

North Carolina officials had said the refunds sought would be difficult to calculate and could harm the state's ability to balance its budget. A 2004 legislative report estimated the refunds could cost the state $150 million.

But Forsyth Superior Court Judge R. Stuart Albright dismissed the case in light of a U.S. Supreme Court ruling in May.

In a 7-2 decision on a case from Kentucky, the high court ruled that states can exempt interest generated on their own bonds from taxes while taxing residents for interest on out-of-state bonds.

"Because of the Supreme Court decision, there was no hope for this case," said Greensboro lawyer Norman Smith, who represented the taxpayers in the North Carolina class-action lawsuit. The lawsuit was filed in 2004.

The court's majority opinion said the state's tax exemptions on bonds used to fund roads, construction and other projects had not injured commerce between states.

That decision calmed the fears of some industry groups, which warned that ending the long-standing practice could cause turmoil in the municipal bond market, and doomed the North Carolina lawsuit.

Dozens of states, including North Carolina, have tax systems similar to Kentucky.

An attorney for the state did not respond to messages seeking comment left through the Department of Revenue.