Cap in hand at Lehman
Lehman Brothers‘ plan to raise $6 billion in new capital wasn’t a shock, but the investment banks’ expected results for the second quarter were still a nasty surprise: A $2.87 billion loss, or $5.14 per share, compared with a Reuters Estimate forecast of a 38 cent-per-share loss. And you know there’s really trouble when net revenue is in the red — the company expects it to be negative $668 million, compared with positive $5.51 billion a year earlier, due to asset writedowns and trading losses.
Moody’s followed by moving its rating outlook on Lehman to “negative” from stable” and the bank’s shares were down 10 percent in pre-open trading. If nothing else, we can probably rule out a huge surge in pronouncements that the credit crisis is over.
Willis Group Holdings, the world’s third largest insurance brokerage, is buying smaller rival Hilb Rogal & Hobbs for $1.7 billion, looking to boost business as insurance rates soften, and expand its presence in the United States. Willis will also take on $400 million of HRH debt in a cash-and stock deal valued at $46 a share — nearly a 50 percent premium to HRH’s closing price on Friday. The acquisition is the largest transaction for this industry since Marsh & McLennan’s 1998 acquisition of Sedgwick Group, and if rates soften further, more consolidation could follow.
Other deals of the day:
** British education and training provider Nord Anglia Education
** Norwegian Eitzen Maritime Services
** Indonesia’s anti-trust agency, KPPU, said it may take legal action against Singapore’s ST Telemedia, over its plan to sell its stake in Indosat
** Private equity real estate firm Benson Elliot Capital Management has bought a 70 percent stake in Spanish developer Promobuilding SL in a bid to cash in on distressed housebuilding projects in Spain’s faltering economy.
** Russian gas export monopoly Gazprom
** Indian drugmaker Cadila Healthcare Ltd
** Construction firm Sadbhav Engineering Ltd
** Great Offshore Ltd
** Irish food group IAWS