Retailers, consumers and prices
Check out Kraft’s cash hoard. ******Kraft had almost $3 billion of cash on its books at the end of the third quarter, roughly four times what it had a year ago.******The world’s second-largest food maker might have disappointed***analysts with its third quarter sales and a profit outlook that implied a weaker-than-expected fourth quarter. But when it comes to its battle to win Cadbury, at least the company is generating cash – expenses cuts helped Kraft generate $2.7 billion in cash in the first 9 months of 2009.******Also, Reuters Loan Pricing Corp reported on Tuesday that Kraft has arranged $9 billion in financing for a bid.******Sources have told Reuters that Kraft is not likely to raise its initial bid for Cadbury if it makes a formal offer by the Nov. 9 deadline. But analysts do think that shifting the offer to more cash and less Kraft stock — which is down 3 percent on Wednesday after the company posted lackluster third-quarter sales — could be a step in the right direction.******Also in the basket: ******Warnaco beats estimates; Liz Claiborne misses ******Molson Coors higher profit tops view, shares rise ******M&S sees no repeat of blanket pre-Christmas promotions ******Talking shop with Isaac Mizrahi (WWD)******(Reuters photo)
And its never too early to think about deals, as illustrated by dealsnews.com, which has compiled a list of what it predicts will be the best holiday deals to emerge between mid-November and “Cyber Monday” — the Monday after Thanksgiving when office workers go online en masse to shop for specials.
The world’s largest retailer said on Friday that it was successful with its tender offer to acquire Chile’s largest supermarket chain Distribucion y Servicio D&S S.A., winning a strong base in the local market and likely sparking retail competition in the area. In 2008, Chile’s antitrust tribunal nixed a proposed takeover of D&S by regional retailer Falabella.
Wal-Mart’s move comes at a time when acquisitions or takeovers have been few and far between as companies struggle to secure financing for such deals.
Online retailer Overstock.com is pitching a rescue package for shoppers who are neck-deep in debt.
The company’s “Family Bailout” contest will pay off up to $50,000 in debt belonging to the winner or a member of his or her immediate family. The money gets paid directly to “qualified” creditors like mortgage or credit card companies.
The U.S. office supplies retailer offered to buy the Dutch company for $2.65 billion – up from its previous unsolicited offer of about $2.34 billion — even as Corporate Express is trying to fight off the takeover bid with a bid of its own.
The Dutch company said in May that it would buy French rival Lyreco for about $2.2 billion, creating the largest business-to-business distributor of office supplies in Europe, North America and Asia Pacific.
Check out a different weak market for retailers.
Not only are retailers having trouble selling merchandise, they are also having trouble selling themselves.
The days of the buyout boom, when the underlying value of real estate attracted buyers to retail assets is gone, analysts and bankers told Reuters.
But there could be value for some investors.
“These markets will also create opportunistic deals for people willing to dig deep, do some research and wait for a longer payout. The days of sprucing up an asset for a quick flip are over for now,” said one retail investment banker, who declined to be named.
“There’s a lot of folks looking, but not necessarily pulling the trigger,” the banker said.
Also in the basket:
Blockbuster’s Circuit City bid deemed Netflix boon
Retailers get stingy with data (N.Y. Times)
LVHM Bullish on U.S. (WWD)
Supervalu 4th-quarter profit rises, sales edge up
Fred Katayama visits a Wal-mart just outside New York City to see how consumers socked with high gas prices and a sputtering economy are changing the way they shop. His full report hits the reuters.com website on Friday. It’s part of a Reuters multimedia presentation in text, video and pictures.