Icahn scratching head over BEEELLLIONS needed for Dell deal
Carl Icahn could be ready to walk away from the Dell rescue deal after reports suggested he’s finding stumping up the cash for the refinancing plan a little more difficult than he’d hoped.
Sources told CNBC and the New York Post that Icahn is having second thoughts about the billions needed to finance the offer for Dell put forward by him and his venture capital partner, Southeastern Asset Management, to compete with the takeover bid by Mike Dell and buddy Silver Lake Partners.
The latest funding gap spotted by the firm’s special committee suggests that another $3.9bn could be needed to recapitalise the firm, on top of the $5.2bn necessary for the $12-per-share dividend Icahn and SAM have offered Dell investors.
The partners don’t have much time to make up their minds either, since shareholders are due to vote on the offer from Dell and Silver Lake on July 18.
Icahn and SAM are trying to stop an attempt by Mike Dell and Silver Lake to take the company private, in a deal they claim doesn’t offer shareholders value for money.
They’ve offered instead to recapitalise the firm, handing more cash to investors in the process, because they believe that Dell’s enterprise services business still has some potential – despite the firm’s recent ropey numbers. ®
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O2 averts strike action over mass Capita outsourcing deal
Comparing virtualization alternatives
The Communication Workers’ Union has called off its strike ballot, scheduled to close today, following a last-minute deal with O2 and outsourcing giant Capita, the details of which haven’t been released.
The union called the ballot last week, following O2′s announcement that call centre staff would be transferred to outsourcing giant Capita before the end of the year.
Those staff were promised two years of employment, but the CWU wanted assurances on the location of that employment and on what would happen beyond the guaranteed 24 months. Unsurprisingly, the union credits its public threat of strike action with having gotten workers what they wanted:
“Since the ballot opened, Telefonica and Capita have intensified discussions with us in an attempt to reach an agreement and to avoid industrial action. Today we have concluded negotiations on a package which includes job security; pay protection; protection on terms and conditions of employment; redeployment and union recognition.”
No fewer than 1,000 O2 staff opted for redundancy rather than going to work for Capita. The mobe operator said at the time the “terms of [voluntary redundancy] have proved an attractive option for a number of people”.
During the negotiations, the union had managed to conjure Shadow Chancellor Ed Balls and Ivan Lewis MP (Labour, Bury South) to meet with Telefonica (the Spanish owners of the O2 brand) and argue the workers’ case.
Given the CWU’s previous stance – that the outsourcing was a betrayal of the staff who made the company great – The Register is keen to hear what assurances it has gained to prompt the withdrawal of the ballot. If the concessions are significant, then, at the very least, the union’s public muscle-flexing has proved effective. ®
Staying ahead of the competition
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Paris Air Show: Airbus Beats Boeing
The world’s biggest air show has started with a huge order for the Airbus superjumbo and deals for Boeing’s troubled Dreamliner.
The two rivals announced a slew of orders at the Paris Air Show, where they traditionally battle for supremacy in the booming market for airliners.
But Airbus came out on top on day one with three times the order book compared to Boeing.
It secured at least £11.6bn in orders compared to £3.87bn for Boeing.
The aviation giants are fighting to get an edge in the market for long-haul wide-body planes at this year’s show, which started north of Paris under black skies, thunder, lightning and torrential rain.
Airbus took centre stage with the big deals, including a mammoth provisional order for 20 A380 double-decker superjumbos.
The deal was with aircraft financing group Doric with a catalogue price of about £5bn.
The European manufacturer also said US aircraft leasing group ILFC had ordered an extra 50 of its new A320neo airliners – which are not yet in service – at a catalogue price of £3.18bn.
German airline Lufthansa said it had completed an order, announced in March, for 100 medium-range Airbus A320 aircraft, worth £8.5bn at list prices.
This took Airbus’ total firms orders so far to £11.6bn. If the A380 deal is firmed up – as both companies said it would be – total orders come to £16.7bn.
The head of Boeing’s commercial aviation division Ray Conner said the show was going to be a “great competition” and added that airlines would “benefit from the fact that both companies are going to have a good wide-body product line.”
“I think we have the better products and at the end of the day, hopefully the better product wins,” Mr Conner said ahead of the show.
On Monday, Boeing announced several orders for its next-generation 787 Dreamliner, its new 737 MAX and its existing long-haul 777 plane.
Japan’s Skymark Airlines said it had put down firm orders for four 737 Max aircraft, becoming the first Japanese airline to set its sights on Boeing’s new medium-haul plane, in a deal worth £255m at catalogue prices.
Leasing firm GECAS, meanwhile, ordered 10 787 Dreamliners worth £1.8bn at list prices, while Qatar Airways announced orders for nine 777s – two firm, and seven options, worth about the same amount.
Boeing and Airbus traditionally vie for the highest number of orders at the Paris Air Show.
However, deals are usually concluded at less than the list prices, depending on discounts and tough negotiations over made-to-measure features.
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World Cup Protests: Violent Clashes In Brazil
More than 100,000 people have marched through cities across Brazil to protest over rising public transport prices and the cost of staging the 2014 football World Cup.
Tens of thousands of people took to the streets of Sao Paolo, while youths clashed with police in central Rio.
Police used tear gas, pepper spray and rubber bullets to disperse small groups of masked youths who started a fire near Rio’s state legislative assembly attempting to break into the building.
In Porto Alegre, some protesters set a bus on fire and threw rocks at empty commuter trains.
Elsewhere, there were peaceful protests through the capital Brasilia, on Monday, where more than 200 youths briefly occupied the roof of the National Congress and some 5,000 later formed a human chain around the building.
Protests also were reported in Curitiba, Belem, Salvador and Belo Horizonte.
“This is a communal cry saying, ‘We’re not satisfied,’” said Maria Claudia Cardoso, in Sao Paolo.
“We’re massacred by the government’s taxes, yet when we leave home in the morning to go to work, we don’t know if we’ll make it home alive because of the violence.
“We don’t have good schools for our kids. Our hospitals are in awful shape. Corruption is rife. These protests will make history and wake our politicians up to the fact that we’re not taking it anymore.”
Sandra Amalfe added: “We need better education, hospitals and security – not billions spent on the World Cup.”
The protests follow the opening games of the Confederations Cup over the weekend, just one month before a papal visit, a year before the World Cup and three years ahead of the 2016 Olympics in Rio de Janeiro.
In a brief statement, President Dilma Rousseff, who faces re-election next year and whose popularity rating recently dipped for the first time in her presidency, acknowledged the protests, saying: “Peaceful demonstrations are legitimate and part of democracy. It is natural for young people to demonstrate.”
The unrest, which began last week after the announcement of increased bus fares, has rapidly spread to other cities with demonstrators focusing their anger not just on the transport fares but also on the £9.5bn the government is allocating for the Confederations Cup and the World Cup.
Royal Ascot Set To Win Back Confidence In Racing
Royal Ascot is one of the highlights of the sporting and social calendars, five days of pomp, pageantry and world-class racing that attracts entrants and attention from around the world.
When the Queen leads the Royal procession she will be adhering to more than 300 years of tradition, but this year the meeting is particularly welcome after a scandalous spring for racing.
The build-up to the Flat season has been overshadowed by a series of scandals that have shaken faith in the sport.
In April, Mahmood Al Zarooni, leading trainer for the Godolphin stables, was banned for eight months after 22 horses at his yard were found to have been given performance-enhancing anabolic steroids.
A separate investigation is under way into a number of other trainers amid allegations that their horses were administered the same drug, stanozolol, in medication. One trainer, Gerard Butler, is already facing charges for this offence.
The scale of the Al Zarooni affair has caused genuine shock in racing circles and raised questions over the way the sport polices the use of drugs, particularly at international meetings like Ascot.
The Royal meeting has become a genuine international event, with entrants from America, Australia and South Africa a key part of its appeal. Overseas sprinters such as the unbeaten Australian great Black Caviar, one of the stars of last year’s meeting, have become a fixture.
But each of those countries has different rules regarding performance-enhancing drugs to the UK, causing some to ask whether Ascot’s famous acres constitute a level playing field.
The international runners are all tested on arrival in the UK and have to declare all medication they have used in the months leading up to the meeting. The benefits of using drugs in training could linger long after the drugs have cleared a horse’s system however, as the BHA has acknowledged by banning all the Al Zarooni horses for six months.
The leading overseas runners at this year’s meeting all insist they are and have been drug-free, but some are frank about the need to use drugs in their domestic racing.
Barry Irwin, co-owner of Animal Kingdom, the Kentucky Derby winner who will be the star-turn of the opening day when it runs in the first race, the Queen Anne Stakes, told Sky News drugs are a regrettable fact of life in American racing.
He is campaigning to have Lasix, an anti-bleeding agent, banned in the USA. Until it is, he says, he has little choice but to use it.
“If we didn’t use Lasix on older horses it would be like Usain Bolt putting his starting blocks five yards behind the others and I am not prepared to do that.
“But I am campaigning harder than anyone else to have the rules changed. The reason we are talking about Lasix is because it is the last drug standing. Once we get rid of that then we will be in better shape.”
Danny O’Brien, who saddles Shamexpress in Tuesday’s King’s Stand Stakes, would like Australia to outlaw anabolic steroids, which can be used out-of-competition.
“I personally don’t use them (steroids) on my horses and I tend to think that going forward our rules will fall into line with British rules,” he said. “The use of them would be very minimal in Australia but I would prefer that they were not used at all.”
Dr Peter Webbon, the chief executive of the Animal Health Trust and Britain’s leading equine vet, is in little doubt that anabolic steroids such as stanozolol, the Al Zarooni drug famously used by Ben Johnson, can confer a distinct advantage, but says their use is unethical and callous.
“I think we all agree that it is really unethical to expect a race and compete other than on its natural merits,” he said.
The British Horseracing Authority and Ascot Racecourse are confident that they have measures in place to ensure that racing is fair and honest at its showpiece event. And Paul Bittar, chief executive of the BHA, says Britain will campaign for reform of rules around the world.
“The rules we have in place are the high-water mark in world racing and we want to encourage others to adopt them,” he said. “We are pretty confident that the procedures are stringent enough to give punters confidence.”
Mr Bittar said the BHA’s response to the Al Zarooni case has demonstrated that it is willing to tackle wrongdoing wherever it arises.
He said: “People can have confidence that the regulator has dealt with it without fear or favour, and I think with Godolphin we have shown we treat everyone the same under the rules, including charging the leading trainer in the country.”