Turning the page on Borders

August 14, 2008

Barnes & NobleBarnes & Noble Inc reportedly has read the market and decided to turn the page on an acquisition of rival Borders Group Inc. The largest U.S. specialty bookseller, which had been looking into a bid for Borders, is likely to take a pass because of tight lending markets that would make it difficult to arrange bank financing, the Wall Street Journal said, citing people familiar with the situation. Borders, which put itself up for sale in March, has struggled with liquidity issues and has been closing underperforming stores and taking other steps to turn around its business.

Reuters’ DealTalk columnists report that overseas metal and mining companies may have U.S. coal assets in their sights. Indian and Russian firms in particular are looking to snap up assets in order to gain a foothold in the U.S. metallurgical coal market, DealTalk says. Metallurgical coal, also called met or coking coal, is used to make coke, the material used to fuel blast furnaces at steel mills. Two assets that could be on the market are privately owned U.S. coal producers United Coal and Bluestone, one source familiar with the matter said.

Shares in Impala Platinum (Implats), the world’s No. 2 producer of the precious metal, raced 9 percent higher on Thursday partly boosted by market talk that BHP Billiton could make a $26 billion bid for the South African company. South African website said BHP may soon have no choice but to make an offer of at least 200 billion rand ($25.65 billion) for Implats. The article said BHP, the world’s largest producer of metals and minerals, had the world’s best and most diversified portfolio of assets in the resources sector — with the exception of platinum, to which it has no exposure. “At the moment it is pure speculation, but yes, for sure the speculation is affecting the (share) price,” Roy Lamb, a trader at Investec Securities in Johannesburg said. BHP declined to comment.

Other deals of the day:

* QBE Insurance Ltd, Australia’s top insurer by premium income, said it had agreed to acquire U.S. mortgage insurance group PMI‘s businesses in Australia and New Zealand and in Asia for a total of A$1.027 billion ($901 million).

* Swiss insurer Swiss Life has taken a stake in German pension sales specialist MLP, upped its holding in rival AWD for 427 million euros ($639.5 million), and will cap share buybacks.

* Dutch Philips Electronics said it has sold its remaining stake in Taiwan Semiconductor Manufacturing Company (TSMC), which will result in a book gain of 260 million euros ($390 million).

* Thailand’s largest music and entertainment group, GMM Grammy, said it would merge with its 79.75 percent owned subsidiary, GMM Media, as part of a business restructuring.

* Gas Natural raised its potential stake in power generator Union Fenosa to over 50 percent after agreeing to buy a 5.15 percent stake from savings bank Caja de Ahorros Del Mediterraneo (CAM).

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