Guidant to Discuss Higher Bid
Heart-device maker Guidant said its board has decided to enter into discussions regarding Boston Scientific's $25 billion offer for the company, which seeks to scuttle a standing deal with Johnson & Johnson.
The offer is at a premium to Johnson & Johnson's discounted offer of about $21.5 billion. After Guidant suffered through the recall of thousands of implantable heart devices over the summer, Johnson & Johnson talked Guidant down from a $25.4 billion offer made last December.
A combined Boston Scientific-Guidant would create the world's largest dedicated heart-device company.
Bondholders Threaten Calpine
Calpine, a San Jose-based energy producer with more than $17 billion in debt, said bondholders' demand for a $313 million payment threatens the company's solvency. Wilmington Trust, trustee for holders of $3 billion in Calpine notes, said it would declare Calpine in default unless the company returns the $313 million to a bond collateral account.
A Delaware judge gave Calpine until Jan. 22 to repay the money. Calpine asked the judge this week to block a default. Calpine last week said it may file for bankruptcy. Wilmington Trust notes are second in line for payment in a bankruptcy.
3M Names New Chairman, CEO
3M named Brunswick's George W. Buckley, left, chairman and chief executive, only the second outsider to run the 103-year-old company.
Buckley, 58, is credited with leading a turnaround that helped to more than double the share price of the boat and recreational products maker while chairman and chief executive. He replaces Robert Morrison, who served on an interim basis after W. James McNerney Jr. left to run Boeing, 3M said.
Casino Employees Lose Assistance
Thousands of casino employees on the Gulf Coast are losing insurance benefits and salaries as the companies end post-Katrina assistance to concentrate on rebuilding gambling houses hammered by the hurricane.
Two New Orleans casinos remain closed, as do 12 casinos that once dotted Mississippi's Gulf Coast. Most of those were wrecked in the storm. Nearly all the companies agreed to continue paying workers on a temporary basis, but that is ending or has already stopped.
Larry Gregory, executive director of the Mississippi Gaming Commission, said nearly 14,000 casino employees remain out of gambling-related jobs. Mississippi-coast casinos employed 16,000 people before Katrina.
Delta Pilots Threaten to Strike
Delta pilots said they may strike if the bankrupt carrier tries to impose a 19.5 percent pay cut next week. The airline says it has a legal right to cut pilots' pay if a U.S. bankruptcy judge does not rule on Delta's request to impose a new contract by Dec. 16. The Air Line Pilots Association argues that Delta cannot legally impose the changes, which would reduce the average pilot's salary to $136,362 from $169,393. "While our preference would be a negotiated settlement, should management commence imposing their conditions on the 16th, we will consider all legal options to defend our contract," union spokesman John Culp said.
Continental, Union Resume Talks
Continental Airlines and its flight attendants resumed contract talks, but hurdles to an agreement remain, including proposed cuts in wages and benefits.
Last June, the fifth-largest U.S. carrier asked the National Mediation Board to appoint a mediator to help with talks, which have continued on and off since flight attendants in March rejected an $82 million cut. Those efforts have not produced an agreement.
Continental reached pay- and benefit-cut agreements in March with its largest unions except its 9,000 flight attendants.
Not Guilty Plea in Hollinger Case
The accountant who served as chief financial officer of ousted media baron Conrad M. Black's Hollinger International publishing empire pleaded not guilty to fraud charges involving the sale of hundreds of Canadian newspapers. John Boultbee was indicted Nov. 17 along with Black and two other former executives. He is charged with eight counts apiece of mail and wire fraud. Black has pleaded not guilty. According to the indictment, Boultbee helped Black obtain millions of dollars that should have gone to Hollinger by using fraudulent contracts with companies that purchased Hollinger newspapers.
Consumer Borrowing Declines
The Federal Reserve said consumer borrowing unexpectedly plunged in October at an annual rate of $7.2 billion, a record amount in dollar terms. Much of the decline reflected a steep drop in the category that includes auto loans.
Analysts had predicted consumer spending would rise in October at an annual rate of $5 billion. The decline in borrowing is certain to spark concerns about consumer spending in the current holiday shopping season, which got off to a mixed start in late November.
Compiled from staff and news service reports.