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SAN FRANCISCO (Dow Jones) — As Yahoo Inc. gets ready to face the wrath of its shareholders, the company may learn from the plight of another tech firm, whose board directors rejected a sweetened takeover offer and are now on the verge of being booted out.
This happened just last week, shortly before Microsoft Corp. withdrew its blockbuster offer to buy the beleaguered Web portal.
At a little-known Massachusetts company called Axcelis Technologies (ACLS), three directors were voted down by investors after the company rejected what many shareholders felt was a generous $616 million takeover offer from Sumitomo Heavy Industries.
The shareholder revolt got some support from a company policy that says director-nominees who don’t win a majority of the votes cast must offer to resign anuncios.
The Axcelis battle underscores a trend in the corporate world where more companies, responding to the clamor for greater boardroom accountability, have adopted similar policies often referred to as a “majority-voting rule.”
Chris Young, director of M&A research at RiskMetrics Group, described the Axcelis case as “the first test case where a hostile M&A transaction and a relatively new innovation of majority voting for the election of directors collide.” Leggi il seguito di questo post »
Circuit City Gives Up the Fight
Circuit City is finally throwing in the towel. Confronted with weak sales, impatient shareholders, and a U.S. consumer pummeled by recession, the electronics chain capitulated on May 9 and retained Goldman Sachs to help negotiate a deal. The same day, Circuit City Stores (CC) agreed to allow three board nominees from activist shareholder Mark Wattles to stand for elections (BusinessWeek.com, 4/8/08).
The moves almost certainly presage a sale of the chain, likely to Blockbuster (BBI), where Carl Icahn has stepped up and agreed to finance (BusinessWeek.com, 5/9/08) a Circuit City acquisition. The billionaire—Blockbuster’s largest shareholder—has bought into a “game-changing” scheme announced last month in which the troubled electronics retailer would be combined with the troubled movie retailer to create a new national chain selling consumer hardware and software. Leggi il seguito di questo post »
American Axle Rift Remains Despite GM Contribution Offer
The two sides in a union strike that has shut down a key supplier of General Motors Corp. signaled no softening of positions after an offer by GM last week to contribute $200 million toward settling the dispute – possibly in hopes of getting the auto maker to increase the offer.
Over the weekend, Ron Gettelfinger, president of the United Auto Workers, said GM’s move encouraged the supplier, American Axle & Manufacturing Inc., to take a harder line in the talks. In an interview with a Detroit radio station, Mr. Gettelfinger called GM’s offer a “mistake” and added that it dealt the negotiations a setback.
American Axle, which gets much of its business from GM, now wants to close a plant in Cheektowaga, N.Y., Mr. Gettelfinger said. That comes in addition to two other plant closures and other concessions the UAW already agreed to in past years.
“It’s going to make the talks increasingly difficult,” he said, referring to American Axle’s latest demand. “I was very, very leery when I saw that General Motors had put in $200 million.”
Despite Mr. Gettelfinger’s tough public reaction to GM’s offer, people close to both sides in the talks said the union and American Axle are hoping to force GM to play a major role in the talks. Brushing off GM’s initial offer could pressure the auto maker into proposing an even large sum.
About 3,600 American Axle workers have been on strike for about two-and-a-half months, crippling GM’s ability to build full-size pick up trucks and sports-utility vehicles. GM estimated the strike lowered its first quarter pre-tax profit in North America by $800 million.
American Axle wants the union to make similar wage and benefit concessions that it has already granted Dana Corp., another axle maker, and to accept closures of some U.S. plants. If it doesn’t get the concessions, American Axle could move more work to plants in Mexico.
According to people familiar with its thinking, American Axle believes the strike could be resolved either by the UAW relenting, or by GM stepping in to help fund a settlement.
The Axle strike puts GM in a tough spot. The company is also involved in the bail out Delphi Corp., another supplier in conflict with the UAW. GM has already committed about $8.3 billion to helping Delphi, which is in bankruptcy protection.
GM is also facing UAW strikes at two of its own plants that has halted production of some key models. A plant near Lansing, Mich., makes highly profitable “crossovers” and another in Fairfax, Kan., makes the highly touted Chevrolet Malibu sedan.
In a pair of regulatory filings made last week, American Axle and GM said the $200 million was for employee buyouts and early retirements. The offer was predicated upon an expedient resolution of the dispute.
Mortgage Holders Find It Hard to Walk Away From Their Homes
As American homeowners fall behind on their mortgages in growing numbers, bankers and policy makers worry that while many of these people cannot pay, some simply will not.
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Marcio Jose Sanchez/Associated Press
A foreclosure can make it hard for borrowers to get other loans.
Related
Housing Bailout Bill Seems to Be on Shaky Ground (May 10, 2008)
Millions of Americans are “upside down” on their mortgages — they owe more on their homes than their homes are worth. So far, however, there is little evidence that people who have the means to pay are walking away from their homes as values sink.
The blogosphere is full of tales of homeowners who supposedly are choosing to mail the house keys to their lenders rather than keep their depreciating homes. And yet “jingle mail,” the term for those tinkling packages of keys, appears to be far rarer than many seem to think.
Freddie Mac, the big government-sponsored mortgage company, estimates that just 0.14 percent of the defaulted mortgages in its portfolio involved properties that were abandoned by borrowers. Fannie Mae, another mortgage company, puts the figure in the single digits. Both companies deal in relatively conservative loans, so the total rate may be somewhat higher. Industry officials say they have no way of knowing for sure.
Even so, the idea that some people are simply refusing to pay their mortgages has gripped the popular imagination. The notion picked up momentum in the last few weeks after “Inside Edition,” the celebrity-focused TV news program, reported that Jose Canseco, the former American League most valuable player who made millions during his baseball career, abandoned his $2.5 million mansion outside Los Angeles to move into a smaller property. Leggi il seguito di questo post »
