Federal officials continued their quest to reach an agreement between Citigroup and Wells Fargo over the fate of Wachovia Corp. – which could include splitting up the bank.
After the battle for the Charlotte, N.C.-based bank moved to both state and federal courts over the weekend, the parties agreed Monday to a cease-fire of all litigation at the urging of Federal Reserve officials. But that agreement expired at noon yesterday without a resolution on the fate of Wachovia. Citigroup and Wells Fargo agreed to extend the truce until 8 a.m. EST tomorrow.
Some analysts believe the delay in reaching a resolution could be caused by Citigroup's unwillingness to back down from its original deal. “Obviously, Citi is not backing out,” said Nancy Atkinson, an analyst at Boston-based research firm Aite Group. “The longer this goes on, the more it looks like (a matter of) principle.”
Associated Press
MetLife to cut jobs, sell stock
MetLife Inc. said it will cut an unspecified number of jobs by year's end as the life insurance company announced plans to sell common stock to bolster its capital amid rising losses on investments. Third-quarter results will be marked by a drop in investment income and fee revenue amid the downturn in world financial markets, the insurer said.
The news, announced late Tuesday, sent MetLife shares down $9.87 to close at $27 yesterday, after sinking to a 52-week low of $25.76 in the session.
Layoffs would conclude by the end of the year. Those being laid off will be notified toward the end of the month. The public stock offering of 75 million shares, at $26.50 per share, will raise about $2 billion.
Associated Press
BofA, RBC agree to buybacks
Bank of America Corp. has agreed to buy back up to $4.7 billion in auction-rate securities to settle charges it misled thousands of customers about the risky investments. Regulators also announced similar settlements with RBC Capital Markets Corp., which agreed to buy back about $850 million worth of auction-rate securities from roughly 2,200 investors.
The Securities and Exchange Commission's settlements with BofA and RBC are preliminary, subject to review and approval by the agency's commissioners.
The auction-rate securities market involved investors buying and selling instruments that resembled corporate debt, except the interest rates were reset at regular auctions, some as often as once a week. A number of companies invested in the securities because they could treat their holdings almost like cash.
Associated Press
Linens 'n Things sets auction sale
Specialty retailer Linens 'n Things, which filed for bankruptcy protection in May, said it is scrapping a reorganization plan and will put itself up for sale in an auction occurring Tuesday. The company expects a “stalking horse” bidder – which has not yet been named – at the auction. That bidder has proposed liquidating the company, said Rich Tauberman, a representative for the chain's parent company, Linens Holding Co. However, he added that the company is open to other bids. A stalking-horse bid is an initial offer on a bankrupt company's assets from an interested buyer chosen by the company.
Linens 'N Things, based in Clifton, N.J., filed for Chapter 11 bankruptcy protection in May with the U.S. Bankruptcy Court for the District of Delaware.
Associated Press
Netflix to boost fee for Blu-ray
DVD rental company Netflix Inc. said it will begin adding $1 to monthly membership fees to provide unlimited access to high-definition Blu-ray movies. In an e-mail to subscribers, Netflix said the additional charge, to reflect the higher cost of Blu-ray discs, will be automatically added to billing statements Nov. 5. Subscribers who don't want Blu-ray access must adjust their accounts through the Netflix Web site, the company said.
Reuters
N.J. paper hopeful for turnaround
The owner of New Jersey's largest newspaper said that coming operational changes and payroll cuts, including concessions approved by two unions, should return the paper to profitability even if the advertising outlook doesn't improve. The catch is that analysts don't expect the advertising market to stabilize in light of the current economic woes – meaning the latest restructuring might be inadequate.
The Star-Ledger in Newark, N.J., with daily circulation of about 350,000, has posted losses for at least three straight years and was on pace to lose between $30 million and $40 million in 2008 if it had not made the changes.
With 230 nonunion buyouts and 120 union buyouts, the Star-Ledger is eliminating about 350 jobs, or more than a quarter of its roughly 1,250 eligible union and nonunion employees.
Associated Press
Etc.
General Atomics Aeronautical Systems of San Diego was awarded a $40 million contract from the military to overhaul and repair certain unmanned aircraft systems. The work will be performed in San Diego.
ViaSat Inc., a Carlsbad maker of satellite communications equipment, was awarded contracts of $25 million for satellite modems to support the Army, Marine Corps and other Defense Department customers.
The Boeing Co. and its striking machinists union have agreed to return to the bargaining table. A federal mediator will help hammer out details of the resumed negotiations. Union members walked out Sept. 6 in a contract dispute. “We've been keeping the lines of communication open since the strike, and we've agreed to pursue additional talks through a federal mediator,” company spokesman Tim Healy said. “We're interested in exploring whether there's a path forward to resolve the strike.”
Associated Press
