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.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Internet: NZ Govt Lifts Target Speeds For Rural Broadband

The government has lifted its expectations on faster broadband speeds for rural New Zealand as it targets increased spending on research and development in the country's information and communications technology sector, which it sees as a key driver for export growth. More>>


Banks: Westpac Keeps Core Government Transactions Contract

The local arm of Westpac Banking Corp has kept its contract with the New Zealand government to provide core transactions, but will have to share peripheral services with its rivals. More>>


Science Investment Plan: Universities Welcome Statement

Universities New Zealand has welcomed the National Statement of Science Investment released by the Government today... this is a critical document as it sets out the Government’s ten-year strategic direction that will guide future investment in New Zealand’s science system. More>>


Scouring: Cavalier Merger Would Extract 'Monopoly Rents' - Godfrey Hirst

A merger of Cavalier Wool Holdings and New Zealand Wool Services International's two wool scouring operations would create a monopoly, says carpet maker Godfrey Hirst. The Commerce Commission on Friday released its second draft determination on the merger, maintaining its view that the public benefits would outweigh the loss of competition. More>>


Scoop Review Of Books: She Means Business

As Foreman says in her conclusion, this is a business book. It opens with a brief biographical section followed by a collection of interesting tips for entrepreneurs... More>>


Hourly Wage Gap Grows: Gender Pay Gap Still Fixed At Fourteen Percent

“The totally unchanged pay gap is a slap in the face for women, families and the economy,” says Coalition spokesperson, Angela McLeod. Even worse, Māori and Pacific women face an outrageous pay gap of 28% and 33% when compared with the pay packets of Pākehā men. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news