Another four bite the dust

wachovia.jpgLawmakers are gearing up to vote on a $700 billion financial bailout plan, but the rescue from Capitol Hill didn’t come soon enough for Wachovia — whose assets are being acquired by Citigroup — or for Fortis NV, Hypo Real Estate and Bradford & Bingley, which were nationalized by European governments on Monday.

“Wachovia did not fail; rather, it is to be acquired by Citigroup Inc on an open bank basis with assistance from the FDIC,” the agency said in a statement. Still in doubt is the status of brokerage AG Edwards and asset manager Evergreen, which are not included in the deal.

Wasn’t it only two weeks ago that Wachovia was in talks to merge with Morgan Stanley?


** Nokia Oyj is in advanced talks to sell its security appliances business to a financial investor, while it would halt its corporate software development, it said.

** Italy’s ENEL and Czech CEZ submitted bids to buy up to 76 percent of Albania’s power distributor while Austria’s EVN and Energie Steirmark withdrew, a government commission said.

California Roll

surfing.jpgJapanese banking heavyweight Mitsubishi UFJ Financial Group has tarted up its offer for California bank UnionBanCal by 17 percent to $3.5 billion. That’s $73.5 per share and above the $70 that market insiders were expecting. MUFG already owns 35 percent of the California lender, and is hoping that more exposure to the subprime stricken west coast will help revitalize its core business. Analysts are skeptical this strategy – no matter how cheap or well insulated from the subprime meltdown the U.S. assets appear – will have the desired results. MUFG’s first quarter net profit fell by 66 percent on a lousy economy and anemic credit conditions, and the bank has forecast virtually no growth this year. Investors looking to get a foot in the door could be betting that banks with significant foreign stakes will be more likely to be pursued.

Nothing humming for GM in Asia. Mahindra & Mahindra, India’s top utility vehicle maker, says it is not interested in buying the brand that has become synonymous with the guzzling of gas, but will instead focus on its own models for the key U.S. market. “There has been a lot of speculation. I want to say categorically we are not pursuing Hummer,” Vice Chairman Anand Mahindra said at a news conference. In China, a source says Hunan Changfeng Motor has backed off from preliminary takeover talks. GM has explored a sale in Russia, as well, sources have said. Russian billionaire Oleg Deripaska’s car unit, Russian Machines, last week also denied it was seeking to buy Hummer.

Bankers for Bradford & Bingley have been left to sell over 70 percent of its 400 million pound cash call, the UK lender said, as it hired the former head of rival Alliance & Leicester to draw a line under its troubles. The mortgage bank, which has seen a torrid three months since it first surprised the market with news of an emergency rights issue, named City veteran Richard Pym as chief executive with immediate effect. Underwriters Citi and UBS now have until Friday to place the remainder of the cut-price, twice-restructured offering.

Job cuts at Wachovia go right to the top

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.