Saturday, June 28, 2008
MERGERS & ACQUISITIONS
Virgin Mobile to Buy Helio
Virgin Mobile USA is buying Helio, a struggling cellphone carrier that was founded to bring the advanced features of South Korean phones to the U.S. market, for $39 million in stock.
At the same time, British billionaire Richard Branson's Virgin Group and SK Telecom, the South Korean carrier that is the majority owner of Helio, will each invest $25 million in Virgin Mobile. That will give SK Telecom a 17 percent stake in Virgin Mobile.
Helio has 170,000 subscribers, down from nearly 200,000 at the beginning of the year.
Virgin Mobile said it will keep operating Helio's advanced data services and its contract-based service plans. Virgin Mobile's own plans are prepaid and lack contracts. But the Helio brand will probably be phased out, said Dan Schulman, Virgin Mobile's chief executive
XM Offers to Pay Higher InterestXM Satellite Radio Holdings agreed to quintuple the interest it would pay on $400 million in debt maturing next year to avoid full repayment if the company's sale to Sirius Satellite Radio succeeds.
Aside from the interest rate, terms will remain substantially the same, XM said.
XM, of the District, said investors won't demand that XM buy back the notes at face value if the merger succeeds. The $2.7 billion combination of XM and its smaller rival Sirius is awaiting final regulatory approval.
AIRLINESDelta Adds Frequent-Flier Fee
Delta Air Lines, the nation's third-largest carrier, is adding fuel surcharges of as much as $50 for frequent-flier tickets to blunt this year's 42 percent surge in jet fuel prices.
Delta joins US Airways and American Airlines in charging to redeem the rewards, a new source of income as carriers try to stem widening losses. Taxes, security fees and airport landing charges collected by many airlines on frequent-flier travel must be passed on to government agencies.
Delta's award tickets for U.S. and Canadian travel will have a $25 surcharge starting Aug. 15; international tickets will be $50, the Atlanta-based airline said.
US Airways in August will add a $25 processing fee on frequent-flier tickets in the U.S. and Canada, $35 to Mexico and the Caribbean, and $50 to Hawaii and international destinations. American charges a $5 processing fee for award tickets; $20 if they are booked by phone.
LEGALVa. Man Guilty in Piracy Case
A federal jury in Virginia yesterday found a former administrator for an Internet piracy Web site guilty of illegally distributing movies, some before their formal release.
Daniel Dove, 26, formerly of Clintwood, Va., was convicted of one count each of conspiracy and felony copyright infringement, according to a news release from the U.S. Department of Justice.
Dove was an administrator for EliteTorrents.org, a site that, until May 25, 2005, distributed copyrighted music and videos. Elite Torrents used BitTorrent peer-to-peer technology to distribute pirated works to thousands of members around the world, the Justice Department said.
The case is the first criminal conviction after jury trial for peer-to-peer copyright infringement. Dove's conviction is the eighth resulting from Operation D-Elite, a nationwide federal crackdown against the illegal distribution of copyrighted movies, software, games and music over P2P networks employing the BitTorrent file distribution technology.
Dove is scheduled to be sentenced Sept. 9. He faces a maximum sentence of 10 years in prison.
REGULATORSNew Fed Governor Confirmed
The Senate confirmed Elizabeth Duke as a Federal Reserve governor, ending a long impasse between the Democratic-controlled body and the Bush administration. The move averts a situation in which the Fed would have been left with only four governors, compared with the seven slots it has by law, after Frederic Mishkin leaves the board late this summer.
Duke, left, an executive at Portsmouth, Va.-based TowneBank and a former chairman of the American Bankers Association, will fill a term that expires in 2012.
FRANCE
Family to Take Clarins Private
Clarins, a French beauty-products company, said the Courtin family, which owns a controlling interest, plans to take the company private.
Executives will give details of the transaction at a news conference Monday, a spokesman said.
Clarins has lost almost a quarter of its market value this year as French consumer confidence has weakened. The stock jumped several times last year on speculation that the company might be sold after the death of its founder.
EARNINGSKB Home reported a wider loss for its second quarter. Net loss for the period ended May 31 was $255.9 million, up from $148.7 million last year. Revenue declined 55 percent, to $639.1 million. The home builder struggled as inventories and foreclosure rates rise across the country.
Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.
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