Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


While you were sleeping: Dell deal helps restore mood

While you were sleeping: Dell deal helps restore mood

Feb 6 (BusinessDesk) – Equities advanced on both sides of the pond as a deal led by Michael Dell to take Dell private and a potential bid by Liberty Global for Virgin Media underpinned confidence in stock valuations.

Shares of Dell rose, last up 0.9 percent to US$13.395, after founder and CEO Michael Dell announced a US$24.4 billion leveraged buyout.

The transaction will be financed by Michael Dell, Silver Lake, MSDC Management, a US$2 billion loan from Microsoft, the rollover of existing debt, as well as debt financing from BofA Merrill Lynch, Barclays, Credit Suisse and RBC Capital Markets.

The group will pay shareholders US$13.65 a share.

“If insiders are buying their stock, that’s a positive sign. Here’s the ultimate insider of Dell, basically buying a controlling stake," Rob Morgan, who oversees US$1 billion as chief investment strategist at McLean, Virginia-based Fulcrum Securities, told Bloomberg News.

Meanwhile, the US government is suing Standard & Poor's Ratings Services, seeking US$5 billion in a civil lawsuit accusing the ratings agency of fraud in the lead-up to the 2008 financial crisis.

The lawsuit is "without legal merit and unjustified," S&P said in a statement.

The credit ratings agency said it wasn't alone in underestimating risks involved in mortgage-backed securities, denying it inflated ratings. It also said it wasn't alone in failing to predict the collapse of the US housing market.

“Clearly, we must all do a better job identifying economic trends that could lead to future crises. For their part, governments have established new institutions to identify risks to financial stability," S&P said.

"We have taken to heart lessons learned from the financial crisis and made extensive changes that reinforce the integrity, independence and performance of our ratings, including compliance with today’s enhanced regulatory oversight."

In afternoon trading in New York, the Dow Jones Industrial Average gained 0.77 percent, while the Standard & Poor's 500 Index climbed 0.87 percent, and the Nasdaq Composite Index advanced 1.05 percent.

The Institute for Supply Management’s index of US non-manufacturing businesses slid to 55.2 in January from the prior month’s 55.7. It was still just better than economists' expectations in a Bloomberg poll for 55.

In Europe, the Stoxx 600 Index ended the day with a 0.6 percent increase from the previous close, also boosted by news of a billion-dollar deal. Benchmark stock indexes also rose in London, Frankfurt and Paris, adding 0.6 percent, 0.4 percent and 1 percent respectively.

Shares of Virgin Media soared to a record, up 17.3 percent, after confirming it held talks with Liberty Global. A deal is expected to be announced as soon as today, Bloomberg reported. Virgin Media has a market cap of about US$10 billion.

About 55 percent of the 151 western European companies that have reported earnings since January 8 surpassed analysts’ projections for profit, according to Bloomberg data, while of the 177 that have posted sales, 54 percent beat expectations.

An index based on a survey of purchasing managers in the services industry of the 17 countries that use the euro climbed to 48.6 in January from 47.8 in December, according to Markit Economics today.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Power Outages, Roads Close: Easter Storm Moving Down Country

The NZ Transport Agency says storm conditions at the start of the Easter break are making driving hazardous in Auckland and Northland and it advises people extreme care is needed on the regions’ state highways and roads... More>>

ALSO:

Houses (& Tobacco) Lead Inflation: CPI Up 0.3% In March Quarter

The consumers price index (CPI) rose 0.3 percent in the March 2014 quarter, Statistics New Zealand said today. Higher tobacco and housing prices were partly countered by seasonally cheaper international air fares, vegetables, and package holidays. More>>

ALSO:

Notoriously Reliable Predictions: Budget To Show Rise In Full-Time Income To 2018: English

This year’s Budget will forecast wage increases through to 2018 amounting to a $10,500 a year increase in average full time earnings over six years to $62,200 a year, says Finance Minister Bill English in a speech urging voters not to “put all of this at risk” by changing the government. More>>

ALSO:

Prices Up, Volume Down: March NZ House Sales Drop 10% As Loan Curbs Bite

New Zealand house sales dropped 10 percent in March from a year earlier as the Reserve Bank’s restrictions on low-equity mortgages continue to weigh on sales of cheaper property. More>>

ALSO:

Scoop Business: Chorus To Appeal Copper Pricing Judgment

Chorus will appeal a High Court ruling upholding the Commerce Commission’s determination setting the regulated prices on the telecommunications network operator’s copper lines. More>>

ALSO:

Earlier:

Cars: Precautionary Recalls Announced For Toyota Vehicles

Toyota advises that a number of its New Zealand vehicles are affected by a series of precautionary global recalls. Toyota New Zealand General Manager Customer Services Spencer Morris stressed that the recalls are precautionary. More>>

ALSO:

'Gardening Club': Air Freight Cartel Nets Almost $12 Million In Penalties

The High Court in Auckland has today ordered Swiss company Kuehne + Nagel International AG to pay a penalty of $3.1 million plus costs for breaches of the Commerce Act. Kuehne + Nagel’s penalty brings the total penalties ordered in this case to $11.95 million ... More>>

ALSO:

Crown Accounts: Revenue Below Projections

Core Crown tax revenue has increased by $1.9 billion (or 5.0%) compared to the same time last year. However this was $1.1 billion less than expected and is reflected across most tax types, continuing the pattern of recent months. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news