BUSINESS BRIEFS
Microsoft may raise $41.9 billion bid for Yahoo
Associated Press
SAN FRANCISCO — Microsoft Corp.'s directors met yesterday to consider raising the software maker's $41.9 billion bid for Yahoo Inc. instead of pursuing a threatened hostile takeover attempt, according to a published report.
A decision could emerge after the meeting, The Wall Street Journal reported, citing unnamed people familiar with the matter.
Microsoft also is weighing withdrawing its bid — a move likely to cause a precipitous drop in Yahoo's stock, which has been bolstered by the 3-month-old takeover bid.
Investors have been awaiting word of Microsoft's next move since Yahoo let pass an April 26 deadline for accepting the offer.
FDA ORDERS FIXES AT MERCK PLANT
TRENTON, N.J. — The Food and Drug Administration has ordered Merck & Co. to correct numerous manufacturing deficiencies at its main vaccine plant, the latest in a string of setbacks for the drug maker.
The agency yesterday released a warning letter sent to Merck's chief executive, Richard T. Clark, that states FDA inspectors determined manufacturing rules are not being followed at the plant in West Point, Pa., just outside Philadelphia.
The nine-page letter states FDA found "significant objectionable conditions" in the manufacture of vaccines and drug ingredients during repeated inspections from Nov. 26 to Jan. 17.
TIME WARNER WILL SPIN OFF CABLE
NEW YORK — Time Warner Inc. said yesterday it plans to spin off the rest of its cable TV business, answering investor pleas to further simplify the media conglomerate's sprawling corporate structure.
The news came as Time Warner, which also owns Warner Bros., CNN, AOL and Time magazine, reported a 36 percent decline in first-quarter earnings from a year ago, when it had a gain from the sale of AOL's Internet access business in Germany. The results were mainly in line with expectations.
Time Warner didn't offer details on how or when the split with its largest operating division would occur, but said it was close to an agreement with the board of Time Warner Cable and expected to make an announcement soon.
GM CUTS FORECAST AFTER $3.3B LOSS
DETROIT — Bowing to grim reality, General Motors Corp. followed Ford's lead and cut its U.S. sales forecast yesterday after a tough first quarter that saw a $3.3 billion loss.
But unlike Ford, GM faces more unknowns that could complicate its North American turnaround and drag down strong results overseas, including a strike at supplier American Axle, the protracted bankruptcy case of its former parts division, Delphi Corp., and unresolved labor talks in Canada.
GM's loss for the January-March period amounted to $5.74 per share, reflecting $2.9 billion in one-time charges. That compares with a profit of $62 million, or 11 cents per share, in the first quarter of 2007.
Without the one-time charges, GM lost $350 million, or 62 cents per share, handily beating Wall Street's expectations. On that news, investors sent GM's shares up 9.4 percent, or $2, to close at $23.20. Analysts surveyed had expected a loss of $1.60 per share.
AIRLINES CONSIDER WORKING TOGETHER
There's no merger in the works, but American Airlines Inc. and partner British Airways PLC are talking to Continental Airlines Inc. about joining their group, American and British Airways said yesterday.
The talks are focusing on possible ties for frequent-flier programs; code-sharing that would let one carrier sell the other airlines' flights under its own reservations system code and share in the income; and possibly a renewed attempt to get antitrust immunity for American's and British Airways' existing trans-Atlantic alliance.
