Archive for August, 2010

Potash says in talks for superior deals (Reuters)

Monday, August 23rd, 2010 | Finance News

BANGALORE (Reuters) – Potash Corp's board urged shareholders to reject BHP Billiton's hostile $39 billion offer and said it was in talks with a number of potential suitors for a superior deal.

Potash Corp, the world's largest producer of potash based in the Canadian province of Saskatchewan, said superior offers or other alternatives are expected to emerge.

Discussions are on with several of these third parties in order to generate superior offers, the company said in a statement.

According to a Bloomberg report, Potash has been contacted by China's Sinochem Group and Brazil's Vale.

Potash Corp shares were up 1 percent at $151 on the New York Stock Exchange. They closed at C$157.06 Friday on the Toronto Stock Exchange.

BHP shares are up 2 percent at 1857 pence on the London Stock Exchange.

(Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Aradhana Aravindan.)

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Wall Street set to edge higher (Reuters)

Monday, August 23rd, 2010 | Finance News

LONDON (Reuters) – Wall Street was set to edge up on Monday, with merger and acquisition activity boosting sentiment after major indexes fell for two weeks in a row.

At 0846 GMT (4:46 a.m. EDT), futures for the Dow Jones, S&P 500 and Nasdaq were up between 0.2 and 0.3 percent.

The FTSEurofirst 300 index of leading European shares was up 0.4 percent at 1,033.86 points, with miners gaining on hopes that Australia's election result means plans for higher taxes will be scrapped.

Campbell Soup Co, the world's largest soup maker, is considering making a 1.5 billion pound ($2.3 billion) break-up bid for Britain's United Biscuits, the Sunday Times reported.

Recent M&A activity includes Intel Corp's move to acquire software maker McAfee Inc for $7.7 billion.

There are no major U.S. companies due to report. Results due later in the week include those from bookseller Barnes & Noble, expected to report a quarterly loss on Tuesday.

Economic data due this week include existing housing sales on Tuesday, set to show a 12 percent decline.

U.S. stocks slipped on Friday and the S&P 500 and Dow fell for a second straight week on persistent concerns the recovery has tapered off. For the week, the S&P 500 was down 0.7 percent and the Dow slipped 0.9 percent, while the Nasdaq gained 0.3 percent. It was the second week of declines for the S&P and the Dow.

Even so, major indexes came off Friday's lows as some investors homed in on positive outlooks in the tech sector and used recent M&A news as an excuse for late-day buying.

(Reporting by Brian Gorman; Editing by Michael Shields)

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India’s Mahindra vows to become global SUV player (AFP)

Monday, August 23rd, 2010 | Finance News

SEOUL (AFP) – Indian carmaker Mahindra and Mahindra said Monday it would use its purchase of South Korea's Ssangyong Motor to become a global player in the sport utility vehicle market.

Pawan Goenka, president of Mahindra's automotive and farm sector, said the merger would help both companies expand in the global market.

"We believe that Ssangyong and Mahindra make powerful companies to create a global SUV brand," he told reporters after the Indian company signed a preliminary agreement to buy a controlling stake in Ssangyong.

Ssangyong, South Korea's smallest carmaker, is mainly a manufacturer of low-priced but robust SUVs such as "Rexton," "Kyron" and "Actyon" that sell globally. It also makes sedans.

It was granted court protection from creditors in February 2009 after rising oil prices and slowing demand due to the global crisis hit SUV sales and former Chinese parent Shanghai Automotive Industry Corp declined to inject more funds.

Ssangyong has struggled to stay afloat since a violent strike over job cuts disrupted production for almost 80 days last year.

"Two companies are very compatible. We have similar size and we both are very SUV-focused," Goenka said.

The Indian firm will keep Ssangyong's current management after the acquisition and provide "financial stability", he said.

"We need to bring Ssangyong back to its glory. we believe it's a very strong brand," he said, adding Mahindra would bring in more people in research and development.

Mahindra has ample cash reserves to finance the costly takeover without help from outside investors, he added.

He declined to reveal the takeover cost, which analysts say will be more than 500 billion won (423.3 million dollars), or the size of the stake Mahindra will buy.

Mahindra's vice chairman and managing director, Anand Mahindra, said his company had cash reserves of more than 500 million dollars.

"We intend to be here as a long-term player, so we are not looking to talk to any financiers for the purpose of financing this acquisition," he said.

The Indian's firm's debt-to-equity ratio stands at 0.3 percent, one of the lowest in the industry, he said.

It plans to launch some of Ssangyong's signature models to India, which is Asia's third-largest car market and is enjoying robust growth, the vice chairman said.

"Ssangyong Motor will have a good chance in India, where demand for sport utility vehicles is fast rising," said Anand Mahindra.

If the deal goes through, Mahindra would become the second Indian carmaker to enter the South Korean market after Tata Motors, which bought truck maker Daewoo Commercial Vehicle in 2004.

Due diligence for the Ssangyong deal is expected to begin in September. A Mahindra executive said earlier this month that a definitive agreement was expected in November.

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