Citigroup is eyeing a break-up or sale of its business in Germany as part of a global reorganization, sources familiar with the matter have told Reuters. Citi’s German unit, which makes most of its money from loans for everything from televisions to cars, contributed nearly 3 percent of the bank’s global pretax profit in 2006. Citi’s manager in Germany wrote to staff in March, saying the unit would not be sold, but he was replaced last week.
Lehman Brothers has been taking advantage of the Fed’s new borrowing window for investment banks, the Wall Street Journal reported, by using some of the same financial engineering methods that have brought so much chaos to the financial system. In a nutshell: Move $2.8 billion in unattractive debt into a new investment vehicle, get a AAA credit rating, and use as collateral to borrow much-needed cash from Uncle Sam. Fed officials had been worried that the new borrowing window might carry a stigma, but as it turns out, not so much.
U.S. buyout group J.C. Flowers is prepared to walk away from takeover target Friends Provident, frustrated at a lack of contact with the British insurer’s management. “There is no light at the end of the tunnel,” a source close to the matter told Reuters on Friday. Flowers has a regulatory deadline of April 30, by which time it must either make a firm takeover bid or walk away.
Frontier Airlines Holdings filed for bankruptcy protection on Friday, citing unexpected problems with its credit card processor, but said it would operate its flights normally. The low-cost carrier’s attempts to operate normally despite its troubles sets it apart, at least for now, from Aloha Airlines, Champion Air, ATA Airlines and Skybus Airlines — all of which said last week that they would stop flying.
** Virgin Blue Holdings Ltd, Australia’s second-biggest airline, said on Friday a strategic review found buyer interest in airline undervalued the business, and it would not pursue a change of control.
** Philips Electronics NV said it agreed to acquire Chinese patient monitoring company Shenzhen Goldway Industrial Inc. Financial details of the transaction were not disclosed
** London-listed Econergy International said a 27.5p/share all-share approach from carbon credit developer Trading Emissions undervalued the Colorado, United States-based, company.
** Norwegian solar industry group Renewable Energy Corp has acquired 20 percent of U.S. company Mainstream Energy LLC for about $40 million, the company said.
** Electricite de France is drawing up plans to make an offer of more than 700 pence a share for nuclear power firm British Energy, the Times newspaper said on Friday.
** India’s Essel Propack Ltd and Ess Dee Aluminium are jointly bidding for the packaging unit of Rio Tinto, the Economic Times said on Friday.
** Yahoo Inc may have played its top two cards by pulling out possible deals with AOL and Google, but it does not seem to have changed Wall Street’s view that Microsoft will eventually win the takeover battle.
** Quebec’s securities regulator has approved the C$1.02 billion cash and stock takeover of the Montreal Exchange by TSX Group, owner of the Toronto Stock Exchange, saying it is satisfied the combination will produce benefits.
** H&R Block Inc chairman and activist investor Richard Breeden raised his stake in the tax preparer for the second time in a month, bringing his total ownership in the company to 3.2 percent.