BUSINESS BRIEFS
Merrill Lynch's new CEO puts stamp on firm
Associated Press
NEW YORK — It hasn't taken John Thain long to put his stamp on the world's largest brokerage.
After being named chairman and chief executive of Merrill Lynch & Co. just three weeks ago, Thain yesterday secured a capital infusion worth up to $6.2 billion and sold off one of Merrill's lending units. His fast action came at a critical time; some analysts think Merrill is facing credit-related writedowns of $10 billion for the fourth quarter.
Merrill said it will receive a cash infusion from Singapore's Temasek Holdings and U.S. money manager Davis Selected Advisors. It also sold its commercial finance business to General Electric Co.'s finance arm for an undisclosed price.
But Merrill shares, which initially rose on news of the investment, fell as it became clear Temasek and Davis bought in at a 14 percent discount, the price Merrill apparently had to pay to bolster its balance sheet.
Thain initiated both deals upon taking over from ousted CEO Stan O'Neal on Dec. 1.
DROPPED BID COST CERBERUS $100M
GREENWICH, Conn. — Cerberus Capital Management L.P. agreed yesterday to pay United Rentals Inc. a $100 million breakup fee for dropping its $4 billion purchase of the equipment-rental company.
Cerberus agreed to pay the fee after a Delaware court ruled the private equity firm was allowed to scrap the takeover, which it abandoned last month.
Greenwich-based United Rentals had asked the Delaware Court of Chancery to force Cerberus to complete the takeover.
But Court Chancellor William B. Chandler III ruled against United Rentals Friday, the two companies said.
United Rentals, which rents equipment ranging from heavy machines to hand tools, has decided not to appeal the ruling, but requested that Cerberus pay the termination fee required by the merger agreement, it said yesterday.
LAST-MINUTE RUSH HEARTENS RETAILERS
NEW YORK — Just weeks ago, the holiday shopping season seemed headed for disaster. But in the waning hours before Christmas, the nation's retailers got their wish — a last-minute surge of shopping that helped meet their modest sales goals, according to data released late yesterday by research firm ShopperTrak RCT Corp.
And with post-Christmas shopping to come, some malls and stores were downright optimistic.
While consumers jammed stores at the start of the season in search of discounts and hot items such as Nintendo Co.'s Wii game console, a challenging economy prompted them to hold out until the end for bigger discounts.
An extra full weekend before Christmas also caused shoppers to procrastinate. In fact, Christmas Eve is expected to be a bigger shopping day than in past years because many employers gave workers the day off, with the holiday falling on Tuesday.
The spree defied fears that a deepening housing slump, escalating credit crisis and higher gas and food prices would turn shoppers into Grinches — even in the end.
MAXJET AIRWAYS CEASES OPERATIONS
NEW YORK — MAXjet Airways ceased operations yesterday — leaving jets on tarmacs and stranding passengers on Christmas Eve — as the all-business class airline said it would file for bankruptcy protection.
MAXjet cited soaring fuel prices and the deteriorating credit market for what it called a "drastic measure." But analysts said the company's failure may raise questions about the viability of all-business class airlines.
The company also announced the immediate resignations of its non-executive chairman, Ken Woolley, and directors Paul Kehoe and Roger Flynn.
MAXjet launched in 2005 and offered "all-premium" flights between London, New York, Las Vegas and Los Angeles. But analysts said it couldn't compete with deeper-pocketed AMR Corp.'s American Airlines business class.
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