Job cuts at Wachovia go right to the top

June 2, 2008

thompson.jpgWhen Wachovia CEO Ken Thompson announced plans to cut up to 500 jobs last month, he probably didn’t expect to be included in the total. The bank ousted Thompson on Monday following a series of disappointments that hurt the fourth-largest U.S. bank and its performance. Wachovia said Thompson is retiring at the request of its board of directors; Lanty Smith, the bank’s chairman, was named interim CEO. The bank’s stock was lower before the open. Wachovia has marked down mortgage and other debt assets by $5 billion so far in the credit crunch.

Harris is not pursuing any transaction. We’re not for sale,” Howard Lance, chairman, president and CEO of the defense communications company, told Reuters in a telephone interview. Lance said Harris normally does not comment on rumors or speculation, but decided to issue a statement because the “level of rhetoric had risen to a point that it was becoming a distraction and could be damaging to the company, and could fuel speculation in our stock.” One industry analyst last week told Reuters that General Dynamics recently made an informal overture to Harris, but dropped it amid its own management succession. Northrop Grumman also looked into a possible bid for Harris but balked at the high valuation, the analyst added.

China unveiled two mega-deals as the government overhauls the world’s largest telecoms industry, with mobile operator Unicom taking over a fixed-line peer and unloading an underperforming network. Unicom, the smaller rival of China Mobile, said it will issue new shares and swap 1.5 shares for every share in Netcom, the smaller of China’s two fixed-line carriers. Unicom is set to pay more than $55 billion for Netcom, but did not say how it arrived at that figure — which would be more than double Netcom’s current market value. Unicom also agreed to sell a wireless network to fixed-line leader China Telecom and its parent for 110 billion yuan ($15.2 billion). The announcements mark the first steps in a sweeping restructuring that is expected to usher China into a more advanced telecoms age while opening the door to foreign investment and billions of dollars in purchases from telecoms gear makers. China Telecom appears to be paying up for a network that only broke even in 2006 after years of losses and which is a third of the size of Unicom’s GSM communications network, which raked in 62.78 billion yuan in revenue in 2007.

Britain’s Bradford & Bingley said U.S. private equity firm TPG Capital would to take a 23 percent stake in the bank, its first major UK bank investment, for around 179 million pounds ($353 million). The purchase makes TPG the single largest investor in the country’s biggest buy-to-let lender. The private equity group’s surprise swoop mirrors moves by strategic investors shoring up U.S. banks as financial institutions across the world have struggled with writedowns, the impact of the credit crunch and the prospect of recession. B&B issued a stark warning on the state of the UK mortgage market, hitting bank shares across Europe. Just three weeks after it last spoke to investors, B&B said it had tumbled to a loss for the first four months of the year and saw continued pressure on margins, as funding costs remain high, and arrears deteriorate more than expected

Other deals of the day:

* General Electric said it had finalized plans of a deal announced in March for GE Commercial Finance to acquire Banco Santander ‘s Italian commercial bank Interbanca, and the Spanish bank agreed to buy GE Money’s businesses in Germany, Finland and Austria, and its card and auto businesses in U.K.

* South Africa’s Telkom has had an offer from a Vodafone unit for its half of mobile operator Vodacom, while Mvelaphanda may lead a bid for the whole group minus the Vodacom stake, Telkom said.

* Royal Dutch Shell said it will pay $739 million for an interest in Arrow Energy‘s coal seam gas projects, as competition heats up for Australia’s vast coal seam gas assets, driving Arrow shares up by a fifth.

* Australian clothing retailer Just Group rejected a hostile A$836 million ($800 million) bid by billionaire investor Solomon Lew, citing an independent adviser as saying the offer was too low.

* Robert Bosch has agreed to buy 50.45 percent of solar power company Ersol for 546.4 million euros ($845.7 million) from Ventizz Capital and plans a public offer for the rest, Bosch and Ersol said.

* Lodging real estate investment trust Sunstone Hotel Investors said it had sold a hotel for about $366.5 million, and cut its second-quarter and full-year adjusted funds from operations outlook.

* French engineering group Alstom denied a newspaper report it was mulling a tie-up with British aero engine and turbines group Rolls-Royce.

* Colonia Real Estate and Merrill Lynch said they had bought a German residential property portfolio for about 103 million euros ($159.4 million) from Bonn-based Wohnbau.

* Finnish builder YIT said it had bought building automation system maker Computec.

* Norwegian oilfield services group Scorpion Offshore advised shareholders to reject a takeover offer by Oslo-listed rival Seadrill.

* Four candidates have been short-listed to buy French electrical engineering firm Cegelec, French daily La Tribune reported.

* Shyam Star Gems said its board has approved a proposal to acquire up to 50 percent stake in Thamina Diamonds International DMCC Dubai.

* Associated British Foods said it was to merge its Ryvita crispbread unit with the UK breakfast cereals Jordans business with AB Foods set to have a 62 percent share of the combined business.

* Australian alcoholic beverages group Lion Nathan said it had acquired U.S. wine importer Cumulus Wine, giving no price details.

One comment so far | RSS Comments RSS

Job cuts at Wachovia go right to the top…wow.

I can imagine just how rough this CEO is going to have it.

Come now.


Posted by Jack | Report as abusive

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